Talos Energy acquires stake in “significant” Monument oil and gas discovery offshore U.S. Gulf of Mexico
(WO) – In a recent financial update, Talos Energy revealed it acquired an over 20% stake in a significant deepwater discovery offshore the U.S. in the Gulf of Mexico. Additionally, Talos provided production and exploration updates for its other important oil and gas assets.
Monument discovery. Recently, Talos agreed to acquire a 21.4% W.I. in Monument, a large Wilcox oil and gas discovery located in Walker Ridge blocks 271, 272, 315, and 316, for $32 million.
Monument will be developed as a subsea tie-back to the Shenandoah production facility in Walker Ridge. The Monument discovery is post-FID with appraised proved plus probable gross reserves of approximately 115 MMboe. First production is expected between 20 – 30 Mboed gross by late 2026 under restricted flow due to facility rate-constraints.
The proved and probable PV-10 of Monument's reserves is valued at approximately $265 million. There is an additional 25 – 35 MMboe drilling location adjacent to the discovery that could extend the resource and Talos's pipeline of drill-ready opportunities.
Talos expects a net investment of approximately $25 million in 2024 and approximately $160 million over 2025 and 2026, with no changes to its 2024 capital expenditures guidance.
"The Monument discovery presents an attractive post-FID subsea tie-back opportunity with gross resource potential exceeding 150 MMboe, including a potential drilling opportunity beyond the appraised discovery,” Talos President and Chief Executive Officer Tim Duncan said.
He continued, “We have built a meaningful acreage position within the prolific Wilcox play in the deepwater Gulf of Mexico, and Monument represents the first of several potential investments in this well-established geological trend.”
Operational updates
Katmai. Talos expects to take possession of the Seadrill-owned drillship West Vela and commence drilling the Katmai West #2 well in the late third quarter 2024 to further appraise the field, potentially adding significant reserves.
Talos projects achieving first production from the Katmai West #2 well in the second quarter 2025. Modifications to the facility, Tarantula, will increase capacity from 27 Mboed to 35 Mboed.
The Katmai wells will be rate-constrained under the upgraded capacity allowing for extended flat-to-low decline production from the facility. Talos will hold 50% W.I. and Ridgewood Energy 50% in Katmai. Talos is the 100% owner and operator of the Tarantula facility.
Sunspear completion. Talos is in the final stages of securing a rig contract to complete the Sunspear discovery. The Sunspear well, successfully drilled in July 2023, is expected to commence first production during the second quarter 2025, with production flowing to the Prince platform.
Partners are Talos 48.0% W.I., an entity managed by Ridgewood Energy Corporation 47.5% W.I., and Houston Energy 4.5% W.I.
Lobster waterflood. In the second quarter 2024, Talos completed the waterflood (down-hole water injection) well in the Lobster Field, which Talos successfully drilled in the first quarter of 2024.
The well began injecting water into the BUL-1 sand at 7,000 barrels of water per day in May 2024. Production is expected to increase by over 2 Mboe/d gross in the next 12-18 months. Talos owns 67% W.I., and Chevron owns 33% W.I.
Daenerys. Talos expects to utilize the West Vela drillship to drill the Daenerys exploration well subsequent to the Katmai West #2 well. The Daenerys well is a high-impact subsalt project that will evaluate the regionally prolific Middle and Lower Miocene section and carries an estimated gross resource potential between 100 – 300 MMboe.
The prospect is part of a broader farm-in transaction executed in 2023 with a combined approximately 23,000 gross acres in the Walker Ridge area. The well is expected to spud in the first quarter 2025 after drilling Katmai West #2. Talos holds a 27% W.I. Partners include Red Willow, Houston Energy, and Cathexis.
Helms Deep. Talos expects to mobilize the West Vela drillship to Helms Deep after completing drilling operations at Daenerys. The West Vela is set to commence drilling at Helms Deep, an amplitude-supported, near-infrastructure subsalt Pliocene exploitation well, in the third quarter 2025.
The Helms Deep well has a proposed depth of approximately 18,000 feet and an estimated gross resource potential between 17 - 27 MMboe. Talos is targeting 50% W.I.