Talos Energy Inc. has entered into two separate agreements on Sept. 19 with BP Plc and Exxon Mobil Corp. related to new exploration opportunities in the U.S. Gulf of Mexico (GoM).
The company will work with BP to drill and evaluate the Puma West prospect, located in Talos-owned Green Canyon Block 821, in the fourth quarter of 2019. Additionally, Talos has acquired from Exxon Mobil the Hershey prospect, located on Green Canyon Blocks 326, 327, 370 and 371.
On the Puma West opportunity, Talos will retain a 25% working interest, with BP, as operator, holding the remaining working interest. The initial exploration well is expected to be spud before the end of October 2019 using the Seadrill West Auriga ultradeepwater drillship. The prospect consists of sub-salt, Miocene target zones believed to be similar to the prolific Mad Dog field located less than 15 miles from the proposed well location.
The original Mad Dog spar has produced over 230 million barrels of oil equivalent (MMBoe) since inception, and BP is currently constructing the Argos platform for the Mad Dog II project, which will add 140 thousand barrels of oil per day of additional production capacity to the field. The Puma West prospect was identified and permitted by Talos following a significant seismic reprocessing effort in the Company's Green Canyon core area.
Under a separate agreement with Exxon Mobil, Talos has acquired a 100% working interest in the Hershey prospect from Exxon Mobil and will become designated operator of Green Canyon Blocks 326, 327, 370 and 371, which constitute approximately 23,000 gross acres. Hershey is a large, sub-salt Miocene prospect with potential for several stacked horizons. Based on preliminary estimates, Talos believes that the prospect may contain oil-weighted, gross unrisked resources of 100 to 300 MMBoe if successful. Hershey could be developed as a subsea tie-back to multiple Talos-controlled Green Canyon facilities or with new, dedicated infrastructure.
“I am extremely proud of the Talos team for identifying and accelerating this opportunity through a rigorous exploration portfolio review and technical evaluation that leveraged our substantial seismic database and reprocessing experience in the basin. Exploration of the Puma West prospect is a timely and material opportunity for Talos,” Timothy S. Duncan, Talos president and CEO, said.
“While not scheduled in our original 2019 drilling program, by moving quickly the Company is able to work with a world-class operator in a potentially significant subsea tie-back project located on Talos acreage. We believe that coupling Talos's initial prospect evaluation with BP's known expertise in the region provides the best opportunity for success, and we look forward to initiating the project within the next 30 days,” he added.
Similar to another acquisition made by Laredo Petroleum in the Permian Basin earlier this quarter, the bolt-on in Glasscock County, Texas, continues to shift the company’s production mix toward oil.
The JV partnership is the second Devon Energy has formed with Dow in recent years as E&Ps are increasingly left with fewer capital options.
Second-half 2019 results show glimmer of hope for a promising 2020. This section profiles 43 major U.S. shale players operating in the Permian, Eagle Ford, Rockies, Midcontinent and Appalachia and covers their latest 2019 production results and 2020 forecasts.