Talos inks Gulf of Mexico exploration deals with BP, ExxonMobil

Talos Energy has entered into two separate U.S. Gulf of Mexico agreements with BP and ExxonMobil related to “new exploration opportunities.”

With regards to the deal with BP, the U.S. company said Thursday it would work with the British oil major to drill and evaluate the Puma West prospect. The prospect is located in Talos-owned Green Canyon Block 821 in the U.S. Gulf of Mexico and is located 15 kilometers from BP’s prolific Mad Dog field.

Under the agreement with BP, Talos will keep a 25 percent interest with BP as operator taking the remaining interest.

Talos said that the initial exploration well at the West Puma prospect would be spud by the end of October 2019, using Seadrill’s West Auriga ultra-deepwater drillship.

Talos said:”The [ West Puma ] 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 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.”

Talos CEO Timothy Duncan said: “Exploration of the Puma West prospect is a timely and material opportunity for Talos. 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.”

Buying Hershey from Exxon

Separately, Talos has agreed to by Exxon’s 100% interest in the Hershey prospect located in the Green Canyon Blocks 326, 327, 370 and 371, which constitute approximately 23,000 gross acres.

According to Talos, 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 – 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,” Talos said.

Duncan added, “The acquisition of the Hershey prospect, located less than 10 miles from our Phoenix complex, adds another high-impact exploration opportunity to our portfolio that can leverage our nearby infrastructure and operating experience in the area. The transaction structure, which is 100% contingent-based and contains no well commitment, provides Talos with significant financial and commercial optionality in evaluating the potential resource. I applaud both teams for identifying and developing this win-win opportunity following our acquisition of the Antrim prospect from ExxonMobil earlier this year.”

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