New York-listed Talos Energy said it spud the Zama-2 appraisal well in Block 7 offshore Mexico, kicking off the Zama discovery appraisal program.
The program, expected to be completed by mid-year 2019 with an investment of US$250 million, will consist of three reservoir penetrations, including two wells and one sidetrack, Talos said in a statement.
The first well, the Zama-2, will be drilled to the north of the Zama discovery well and will aim to confirm the oil water contact and collect information to better understand the reservoir's aquifer support.
Talos Energy's President and Chief Executive Officer, Timothy S. Duncan, said, "There is a significant amount of Mexican presence in our workforce in the Zama project, both on the rig and in the local communities that support offshore operations and we are proud of the impact this project will have in the local Mexican economy. The timing of the commencement of the appraisal program will allow us to stay on track of our goal, which is to achieve initial production from the Zama discovery in 2022."
Talos is the operator of Block 7 offshore Mexico, which includes Zama, with a 35 per cent participating interest, while Premier Oil holds 25 per cent interest and Sierra Oil & Gas has the remaining 40 per cent.
The Zama-2 well will also be deepened approximately 500 meters below the Zama reservoir to test the Marte exploration prospect. This will then be followed by an up-dip vertical sidetrack from the main bore hole, which will be cored and a drill stem test ("DST") will be performed, which is expected in the second quarter of 2019.
The second appraisal well, Zama-3, will be drilled to the south of the original discovery well and will help delineate reservoir continuity and quality in the southern part of the field and will be cored to be better understand the reservoir geology.
The Ensco 8503 rig is contracted and will be utilised for the entirety of the appraisal program. Talos is also working with several local Mexican suppliers who support the operations with many critical services, including shore base support, casing supply, anchor handling, helicopters, and communications, amongst others.
Talos said engineering professionals from McDermott's Mexico City office are assisting in the pre-FEED analysis of the potential development options post-appraisal.
Overall, Talos and its partners plan to spend approximately $250 million, excluding contingencies, in Mexico during this appraisal program while exceeding the National Content requirements of the contract through the exploration and appraisal phase.