Talos Energy has recently disclosed that it has acquired a significant stake in a noteworthy deepwater oil and gas discovery in the Gulf of Mexico.
This acquisition marks a major move for the company, which has also updated its production and exploration plans for other key assets.
Monument Discovery
In a strategic move, Talos Energy has secured a 21.4% working interest (W.I.) in the Monument oil and gas discovery. This significant find is located in the Walker Ridge blocks 271, 272, 315, and 316, and the acquisition cost was $32 million.
The Monument project will be developed through a subsea tie-back to the Shenandoah production facility situated in Walker Ridge.
The Monument discovery, which is post-Final Investment Decision (FID), boasts appraised proved plus probable gross reserves of approximately 115 million barrels of oil equivalent (MMboe).
Initial production is projected to commence between 20 and 30 thousand barrels of oil equivalent per day (Mboed) by late 2026, subject to facility rate constraints.
The proved and probable present value (PV-10) of Monument’s reserves is estimated at around $265 million, with an additional 25 to 35 MMboe of drilling locations nearby that could extend the resource base and Talos’s potential drilling opportunities.
Talos anticipates a net investment of about $25 million in 2024 and approximately $160 million over 2025 and 2026, with no adjustments to its 2024 capital expenditure guidance.
Executive Insights
Tim Duncan, President and Chief Executive Officer of Talos, commented on the significance of the Monument discovery:
“The Monument project offers a compelling subsea tie-back opportunity with gross resource potential exceeding 150 MMboe, including potential drilling prospects beyond the initial discovery. We have established a substantial acreage position within the prolific Wilcox play in the deepwater Gulf of Mexico, and Monument is just the beginning of several potential investments in this well-established geological trend.”
Operational Updates
Katmai
Talos is preparing to acquire the Seadrill-owned drillship West Vela to begin drilling the Katmai West #2 well in late Q3 2024. This well aims to further appraise the Katmai field, potentially adding significant reserves.
First production from Katmai West #2 is expected in Q2 2025. Additionally, modifications to the Tarantula facility will enhance its capacity from 27 Mboed to 35 Mboed, allowing for extended flat-to-low decline production.
Talos holds a 50% W.I. in Katmai, with Ridgewood Energy holding the remaining 50%. Talos also owns and operates the Tarantula facility.
Sunspear Completion
Talos is finalizing a rig contract for the completion of the Sunspear discovery. Successfully drilled in July 2023, the Sunspear well is set to begin production in Q2 2025, with output directed to the Prince platform.
The partners in this project include Talos with a 48.0% W.I., Ridgewood Energy Corporation with 47.5% W.I., and Houston Energy with 4.5% W.I.
Lobster Waterflood
In Q2 2024, Talos completed a waterflood operation in the Lobster Field, a project initiated in Q1 2024. The well began injecting water into the BUL-1 sand at a rate of 7,000 barrels per day in May 2024.
This is expected to boost production by over 2 Mboe/d gross in the next 12-18 months. Talos holds a 67% W.I. in the Lobster Field, with Chevron owning 33%.
Daenerys
Following the Katmai West #2 well, Talos plans to use the West Vela drillship to drill the Daenerys exploration well.
This high-impact subsalt project aims to explore the Middle and Lower Miocene sections, with an estimated gross resource potential of 100 to 300 MMboe.
The well is part of a broader farm-in agreement executed in 2023, covering approximately 23,000 gross acres in Walker Ridge.
The Daenerys well is expected to spud in Q1 2025, with Talos holding a 27% W.I., alongside partners Red Willow, Houston Energy, and Cathexis.
Helms Deep
After completing the Daenerys well, the West Vela drillship will move on to drill the Helms Deep well.
Scheduled for Q3 2025, Helms Deep is an amplitude-supported, subsalt Pliocene exploitation well with a proposed depth of about 18,000 feet and an estimated gross resource potential of 17 to 27 MMboe. Talos plans to hold a 50% W.I. in this project.
Conclusion
Talos Energy’s latest acquisition and operational updates underscore its strategic focus on expanding its deepwater operations in the Gulf of Mexico.
With significant investments and multiple ongoing projects, Talos is positioning itself as a key player in the oil and gas sector, leveraging its assets to drive future growth and production.