Talos makes two deepwater US Gulf of Mexico finds; first oil expected early 2024

Talos Energy has made two US deepwater Gulf of Mexico discoveries, both containing oil and natural gas, during consecutive drilling operations in late 2022, the small offshore operator said.

Both the Lime Rock and Venice prospects are located several miles from the company's 100%-owned Ram-Powell production hub located in the Viosca Knoll area of the US Gulf offshore Louisiana and due south of Mobile, Alabama, Talos said in a statement late Jan. 3.

Ram-Powell is sited in about 3,200 feet of water and located roughly 125 miles southeast of New Orleans. First production is expected in 2024.

Pre-drill recoverable reserve estimates range for the twin finds combined range from 20 million boe to 30 million boe, with around 15,000 b/d to 20,000 b/d combined gross production projected to be produced from the two wells, Talos said.

The wells will produce through a shared Ram-Powell riser system.

"These two discoveries are case studies of the exciting potential that infrastructure-led development can bring in the US Gulf," Talos CEO Tim Duncan said. "For Talos, that translates to providing material production and cash flow in 2024 and beyond while reducing our operating cost structure through [production-handling] fees and our carbon intensity through low emission subsea production."

'Blueprint for future optimization'

"Ram Powell provides a blueprint for future optimization, development and exploration potential around [our] assets," which will expand with the company's pending acquisition of EnVen Energy. EnVen comes with six production hubs, more than doubling Talos' US Gulf infrastructure.

Well completions are expected in second-half 2023, with first production from both wells projected in Q1 2024 through subsea tiebacks or hookups to Ram-Powell. Lime Rock is located nine miles from the hub and Venice is located four miles away from it.

Talos characterized the two discoveries as having "excellent" geologic qualities.

The dual finds are located on two separate blocks in lower Viosca Knoll, with Lime Rock located south of Venice.

Production from the discoveries will average about 40% oil and 60% liquids.

The discoveries uncovered modest pay volumes of 78 feet of net hydrocarbon pay for Lime Rock and 72 net feet of pay at Venice.

Raises Ram-Powell production

The company said it expects the Lime Rock and Venice discoveries to bring Ram Powell's production rates to levels last seen about 15 years ago but did not immediately disclose those volumes.

Lime Rock and Venice are the first two deepwater exploitation wells in Talos' current open-water drilling program that started in Q4 2022 and which continues in first-half 2023 with the Rigolets, Lisbon and other prospects, Talos said.

In addition, Talos expects results from its operated Mount Hunter development well and also its non-operated Puma West exploration well in first-quarter 2023. The company's non-operated Pancheron exploration well is also anticipated to spud in first-half 2023.

Talos produced 53,000 boe/d in Q3 2022; EnVen will add another 24,000 boe/d.