BP and Exxon Make Green Canyon Deals with Talos
Talos Energy Inc. reported Thursday that it has struck two separate agreements with BP plc and Exxon Mobil Corp. tied to new exploration opportunities in the U.S. Gulf of Mexico.
“Our strategy of leveraging deep technical expertise across our extensive seismic database and our growing infrastructure footprint is applicable to both the acreage we acquire and control as well as to third-party acreage where we can execute on new opportunities,” Timothy S. Duncan, Talos’ president and CEO, said in a written statement emailed to Rigzone.
Through its agreement with BP, Talos will drill and evaluate the Puma West prospect in Talos-owned Green Canyon Block 821 during the fourth quarter of this year. Talos stated that it will keep a 25-percent working interest on Puma West and that operator BP will own the remaining 75 percent. The company anticipates the Seadrill West Auriga ultra-deepwater drillship will spud the Puma West exploration well by the end of next month.
Separately, Talos has acquired from ExxonMobil the Hershey prospect on Green Canyon blocks 326, 327, 370 and 371.
“As these transactions prove, Talos is well-positioned to continue unlocking material resource opportunities in our basin through multiple creative business development avenues,” continued Duncan. “We are excited to add these two significant, oil-weighted prospects to our portfolio.”
Puma West features sub-salt, Miocene target zones that could be similar to the prolific Mad Dog field less than 15 miles (24 kilometers) away, Talos stated. The company noted the original Mad Dog spar has produced more than 230 million barrels of oil equivalent (MMBoe) since inception. It added that BP is constructing the Argos platform for the Mad Dog II project, which will boost the field’s production capacity by 140,000 barrels of oil per day.
“Exploration of the Puma West prospect is a timely and material opportunity for Talos,” said Duncan. “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’ 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.”
Having acquired a 100-percent working interest in the Hershey prospect from ExxonMobil, Talos will become designated operator of the four Green Canyon blocks noted above that span approximately 23,000 gross acres. Talos stated that Hershey is a large, sub-salt Miocene prospect with potential for several stacked horizons.
Preliminary estimates suggest Hershey may contain oil-weighted, gross unrisked resources of 100 to 300 MMBoe if successful, Talos added. The company also noted that Hershey could be developed as a subsea tie-back to the multiple Green Canyon facilities controlled by the company or with new, dedicated infrastructure.
“The acquisition of the Hershey prospect, located less than 10 miles (16 kilometers) 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,” commented Duncan.
Duncan added that the structure of the Hershey transaction is 100-percent contingent-based and contains no well commitment.
“I applaud both teams for identifying and developing this win-win opportunity following our acquisition of the Antrim prospect from ExxonMobil earlier this year,” concluded Duncan.
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