Australia-based Otto Energy Ltd. said March 29 it had joined Talos Energy Inc. in a new joint venture (JV) aimed at developing the “Bulleit” oil discovery in the U.S. Gulf of Mexico.

As part of the JV agreement, Otto will take a 16.67% working interest in the Green Canyon 21 (GC-21) lease in the Gulf Mexico by paying 22.22% of the cost of the drilling of the Bulleit appraisal well in GC-21.

The Bulleit appraisal well will be drilled by Talos Energy, a Gulf of Mexico operator based in Houston. Talos has the Noble Don Taylor drillship contracted to undertake the drilling of the Bulleit prospect with drilling expected to start in the middle of second-quarter 2019.

Otto Energy said it expects further upside from a secondary exploration target to be tested with the same well.

Tie back is planned to Talos operated Green Canyon 18A production platform. If successful, Talos expects production to between 8 and 15,000 barrels of oil equivalent per day from mid-2020, largely oil weighted, according to the Otto press release.

The JV with Talos compliments Otto’s Gulf of Mexico growth strategy, according to Matthew Allen, the company’s managing director.

“Participation in drilling of the Green Canyon 21 ‘Bulleit’ oil discovery, provides Otto access to one of the best drilling opportunities that the Otto team has screened with a high quality and proven operator in Talos Energy,” Allen said in a statement. “Otto has successfully identified and captured farm-in’s to some of the best opportunities available within its core focus area since establishing the Gulf of Mexico only three years ago.

Allen went on to add that discoveries at the South Marsh Island 71 and Lightning projects have established Otto’s production and cash flow generating base with significant, high-impact drilling planned for the remainder of 2019, which he sees continuing the rapid delivery on the company’s strategy.

Offshore