Talos Energy, the operator of the large Zama discovery offshore Mexico, has received approval for the Zama appraisal drilling plan.
The company on Friday said that the Mexican authorities were reviewing the application for drilling permits, required to start drilling operations.
The Zama-1 discovery made in July 2017, was the first offshore exploration well drilled by the private sector in Mexico’s history and the Zama field’s oil in place is expected to be between 1.4 and 2.0 billion barrels of oil equivalent.
Talos expects to spud the first appraisal well, the Zama-2, in the fourth quarter of 2018 and that the appraisal program will be completed by mid-2019.
In addition, Talos on Friday confirmed it entered into a firm contract with a subsidiary of Ensco PLC to use the Ensco 8503 semi-submersible rig for the appraisal plan.
The contract covers the drilling of two wells, a sidetrack, and a well test. The rig is expected to be on location ready to start operations in November.
Production in 2022
The appraisal plan includes three new reservoir penetrations. The first well in the program, the Zama-2, will be deepened by approximately 500m to test an exploration prospect called Marte, which has an unrisked recoverable resource range between 60 MMBoe and 150 MMBoe. The estimated cost to deepen the Zama-2 wellbore for the Marte test is approximately $10 million gross, with Talos’s share expected to be approximately $3.5 million.
The CNH approved a gross budget of $325 million for the appraisal plan, which includes approximately $75 million of contingent operations.
The budget includes the cost of drilling the wells, performing a drill stem test to gather information about the reservoir continuity and productivity, hole coring across the Zama reservoir, and collecting a number of rock and fluid samples.
President and Chief Executive Officer Timothy S. Duncan said: “We are very pleased to meet another important milestone with our partners in Mexico, following last week’s announcement of the Pre-Unitization Agreement with Pemex. 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. This should allow us to stay on track for our ultimate goal of achieving initial production from the Zama discovery in 2022, thereby providing local jobs, increasing government revenues to Mexico, and materially adding to Mexican domestic production.”
Talos, the U.S. based operator of the block containing the Zama project has previously said it expected to announce the final investment decision for the project in 4Q 2019 or 1Q 2020, with first oil expected in 2022. Production would be ramping up through 2024, as additional facilities are installed in the field.
Talos has said that Zama discovery could contribute nearly 10% of Mexico’s oil production by 2024.
The plan is to develop Zama with three production platforms across the structure. The field will continue to be developed through 2024 when Platform C is expected to be installed.
Offshore Energy Today Staff