Talos Energy: Setting Foot in The Mexican Oil Sector
For almost 80 years the Mexican energy sector has been a preserve of the government only. Since 1938 the sector has been monopolized by the state-run Petroleos Mexicanos when the oil industry was nationalized. However, that is not the case now as the country is trying to effect changes in the oil sector by inviting private and other international players in the Mexican oil industry.
In 2015, three companies; Premier Oil Plc., Talos Energy LLC, and Sierra Oil $ Gas won a bid start an offshore exploration of oil in Mexican waters. In a joint venture between the three companies, on May 21st, 2017 they started a three-month digging of Zama-1 well. The well is located in along Sureste Basin in Tabasco State and is estimated to cost about $16 million to its completion.
The well is estimated to produce between 100 million and 500 million barrels of crude oil. This venture has drawn a lot of attention from both international and local investors who want to venture into the Mexican sector. The attention comes as a result of it being the very first of its kind after a long time.
Some of the interested parties include Edison Investment Research Ltd. In a note to clients, Edison Investment’s analyst Elaine Reynolds asserts that the exploration will be closely monitored as it is the first pillar in the country’s energy industry reforms. Also in another note to investors, Ganaccord Genuity Ltd analyst, Charlie Sharp says that Zama well is one of the most interesting wells to be drilled in the industry this year and has a lot of implications for the Mexican economy.
The joint venture is shared proportionately. Talos Energy operates the well and has a 35% stake in the venture. Sierra Oil and Gas takes much of the chunk with a 40% stake while Premier Oil is comfortable with 25% stake.
About Talos Energy
Talos Energy is an American privately owned oil and company. It is based in Houston. The company chooses to focus on the exploration and acquisition of oil properties in Gulf Coast and the Mexican Gulf. Talos Energy is affiliated with Apollo Global Management, Talos Management, and Riverstone Holdings.
The company emphasizes on optimization of assets, exploitation, and exploration. The company has had successful deals the latest being the landmark exploration of Zama-1 well in Mexico. The company has also won many renowned prizes including its CEO, Timothy Duncan being named the EY Entrepreneur of the Year in 2016.
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