Talos cheers another success at Zama discovery offshore Mexico

U.S.based exploration and production company Talos Energy has conducted a successful appraisal well and production test of the giant Zama discovery, which is located in Block 7 in the offshore portion of Mexico’s prolific Sureste Basin.

Talos is the operator of Block 7 in a consortium with its partners Sierra Oil & Gas, a company of DEA Deutsche Erdoel AG, and Premier Oil. As a whole, Zama is estimated to hold 400 million to 800 million barrels of recoverable oil equivalent and expected to start production by 2022/23.

The Zama-2 ST1 appraisal well is the second of three appraisal penetrations drilled by the consortium to better define the resource potential of the Zama discovery.

Building upon the success of the first appraisal penetration (Zama-2), Talos said on Monday that the goals of the Zama-2 ST1 well were to test the northern limits of the reservoir, acquire a whole core to collect detailed rock properties, and perform a well test in several perforated intervals.

The Zama-2 ST1 well was drilled 589 feet (180 meters) updip of the Zama-2 well and approximately 1.4 miles (2.1 kilometers) north of Zama-1 exploration well.

The well logged 873 feet (266 meters) of gross true vertical depth (TVD) pay, within expectations for the northern extension of the Zama discovery and confirming a consistent net-to-gross ratio range of 68%-73% through multiple penetrations. Talos also said it had captured an unprecedented 714 feet of whole core with 98% recovery, the longest whole core acquired in a single well in the history of offshore Mexico.

The well was cased and perforated totaling 248 gross feet of perforated section with varying rock properties. Hydrocarbon flow was established without stimulation in two separate flow tests and achieved a combined rate of 7,900 barrels of oil equivalent per day (Boe/d), of which 94% was oil with API gravity ranging from 26-30 degrees, and 6% was gas.

The flow rate was restricted with limited pressure drawdown and each zone was shut-in for an extended period to establish a significant radius of investigation for each test, and neither gave any indication of depletion or significant barriers within the reservoir.

The operation to sidetrack from the Zama-2 location, drill, core and reach total depth (TD) of 11,643 feet (3,549 meters) of measured depth (MD) was completed approximately 9 days ahead of schedule and 16% below budget. The well test operation was completed approximately 5 days ahead of schedule and more than 30% below budget. Operations were executed with the assistance of several local contractors, including the Mexican-flagged floating storage and production vessel utilized in the flow test.

Talos President and Chief Executive Officer Timothy S. Duncan commented, “The Zama-2 ST1 operation was another success for the consortium. With each stage of the appraisal program, our experience and understanding has continued to strengthen in the region, and this is evident in our operational performance. The coring operation allowed us to gather important rock samples, which indicate excellent rock properties with similarities to world-class reservoirs in the United States Gulf of Mexico. The production rate of 7,900 Boe/d from two zones in a very simple rate-restricted test over only a portion of the total pay column confirmed our expectations that the Zama wells will provide exceptional productivity.

Duncan added: “The tests also confirmed our geologic model of well-connected reservoirs, which should allow for a high ultimate oil recovery. Given the water depth of approximately 550 feet (168 meters), we believe that a combination of fixed platforms, dry trees and short-cycle development wells will maximize both capital efficiency and optionality with regard to how many total wells and completions per well will be necessary to maximize recovery. Also, given the deliverability of the perforated intervals demonstrated in the flow test, we believe a peak production rate between 150,000 – 175,000 Boe/d is achievable.”

Next stage of appraisal

In the next stage of the appraisal program, the Zama-3 appraisal well will be drilled to the south of the original Zama-1 exploration well and will assist in delineating the reservoir continuity and quality in the southern part of the field. The Zama-3 appraisal operation includes collecting an additional core to better understand the reservoir geology.

Duncan added, “We will now move to the southern end of the discovery with the Zama-3 appraisal well to continue to collect data before concluding appraisal operations. Concurrently, we are working with Petróleos Mexicanos (Pemex) on unitization prior to submitting a development plan to the regulator. Our goal is to reach final investment decision (FID) and first production as soon as possible.”

Talos is using the Ensco 8503 rig semi-submersible drilling rig for the program, which has also been used for the original Zama discovery. The semi-sub will be used for the entire appraisal program, which is expected to be completed by mid-year 2019.

In a separate statement on Tuesday, Premier Oil said that the rig will now move to drill the third and final Block 7 appraisal well (Zama-3) to confirm lateral reservoir continuity and quality in the southern part of the field. The program remains ahead of schedule and under budget.

Tony Durrant, Premier Oil Chief Executive, commented: “We are very pleased by the productivity demonstrated by this well and we continue to collect further evidence that Zama has a world-class reservoir with excellent quality and well-connected sands. This has positive implications for the expected ultimate recovery from the field and will help us to optimize the field development. We look forward to the conclusion of the Block 7 appraisal program with the Zama-3 well.”

Juan Manuel Delgado, Managing Director of Deutsche Erdoel México and country representative for DEA’s businesses in Mexico, said: “With every well, we are growing our understanding of the reservoir. The results confirm that the recent acquisition of Sierra was the right step for DEA. We have gained access to a promising license portfolio.”

To remind, DEA gained interest in the giant Zama offshore oil discovery in Mexico through the acquisition of Sierra Oil & Gas, an independent Mexican oil and gas company. Sierra holds interests in a portfolio of six exploration and appraisal blocks in Mexico, including the world-class Zama discovery.

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