Premier Oil’s second appraisal well in the Zama project offshore Mexico showed more potential for oil, raising hopes of a huge discovery.
Shares of Premier, which holds a 25% interest in the block alongside Talos Energy Inc. and Sierra Oil and Gas, rose more than 4% in morning trading.
The company said net-to-gross ratio, which represents the volume of rock that is able to store hydrocarbons, came in at 73%, higher than pre-drill estimates and topped its first appraisal well’s 63% ratio.
“This is an excellent start to the Block 7 Zama appraisal program in Mexico. It enhances our interpretation of the large Zama discovery and increases our confidence in our resource estimates,” Tony Durrant, Premier’s CEO, said.
Premier said the reservoir quality was similar to that at Zama-1 and in line with expectations.
BMO Capital Markets analyst David Round said the result was positive and that he expects this to “improve confidence around higher Zama volumes estimates.”
However, the company said it did not hit oil in a deeper exploration prospect called Marte.
Premier said it will now drill a secondary wellbore away from the original hole of the Zama-2 appraisal well, which was deepened to evaluate the high-risk Marte exploration prospect.
Talos Energy said on Jan. 23 that the initial phase of the appraisal program was completed about 28 days ahead of schedule and 25% below initially projected costs.
Recommended Reading
Stena Evolution Upgrade Planned for Sparta Ops
2024-03-27 - The seventh-gen drillship will be upgraded with a 20,000-psi equipment package starting in 2026.
E&P Highlights: Jan. 12, 2024
2024-01-15 - Here’s a roundup of the latest E&P headlines, including an SLB-Nabors collaboration and new contract awards.
Tech Trends: Halliburton’s Carbon Capturing Cement Solution
2024-02-20 - Halliburton’s new CorrosaLock cement solution provides chemical resistance to CO2 and minimizes the impact of cyclic loading on the cement barrier.
Tech Trends: SLB's Autonomous Tech Used for Drilling Operations
2024-02-06 - SLB says autonomous drilling operations increased ROP at a deepwater field offshore Brazil by 60% over the course of a five-well program.
Trio Petroleum to Restart McCool Ranch Oilfield
2024-01-07 - California’s Trio Petroleum plans to restart oilfield production at McCool Ranch, where six wells that previously reached a production peak of 400 bbl/d.