Talos Energy Inc.’s appraisal plan for the Zama discovery was approved by the Mexican oil and gas regulator, the company said on Sept. 27.

The National Hydrocarbons Commission is reviewing the application for drilling permits, which are required to start drilling operations, Talos said.

The regulator approved a gross budget of $325 million for the appraisal plan, which includes about $75 million of contingent operations, the company said.

Last week, a consortium led by Talos reached a preliminary agreement with Mexican state oil firm Pemex to evaluate whether its’ find in the Gulf of Mexico extended into a neighboring Pemex block.

“This approval allows us to maintain an accelerated schedule of investments on the Zama project in Mexico, and begin drilling operations on the appraisal plan by the end of this year.” CEO Timothy Duncan said.