Talos sees spud at Puma West, reports Mexico finds

BP in October spud a potentially high impact well at the Puma West target near the Mad Dog field in the deep-water Gulf of Mexico, US independent Talos Energy said.

The probe, in which Talos has a 25% stake, is being drilled by the drillship Seadrill West Auriga, the company said, and will target Miocene sands like those in the massive BP field some 15 miles away. BP is operating at the prospect and Chevron has also joined in on the prospect with a 25% stake, it said.

Talos also reported two discoveries in Block 31 off Mexico, where it has a 25% stake alongside operator Pan American Energy, with both the Xaxamani-2EXP and Tolteca-1EXP well yielding positive results.

The Xaxamani-2EXP came across 148 feet (45 metres) of gross total vertical depth pay, with a net to gross ratio of 78% in the two shallow oil sands.

For its part, the Tolteca-1EXP well logged about 123 feet (37 metres) of gross TVD pay, with a net to gross ratio of approximately 97% in the deeper sand seen in the Xaxamani-2EXP well.

"The Tolteca-1EXP well expected to find an oil-water contact but logged hydrocarbons 'full to base,' exceeding pre-drill expectations for reservoir thickness and areal extent, thereby increasing resource expectations not only in the drilling program to date, but also increasing expectations of similar geophysical anomalies that could open up a shallow oil play in the contract area," Talos said in a statement.

Xaxamani is located a scant one mile from shore in under 100 feet of water.

Talos did not have much new to report on the unitisation process for its Zama discovery off Mexico, which is believed to span a shared reservoir, and has continued early front-end engineering and design work on development planning.

"Zama unitisation discussions with Petroleos Mexicanos ("Pemex") are ongoing," the company said.

Talos said it also was looking for partners to farm down at the Hershey prospect, which it took over from ExxonMobil in the third quarter and covers Green Canyon Blocks 326, 327, 370 and 371.

The company estimates a oil-weighted, gross unrisked resource of between 100 million and 300 million barrels of oil equivalent.

The company also said it was finalising rig agreements for 2020, including one drillship and one platform rig.

Talos reported net income of $73.3 million for the quarter on revenue of $228.9 million, with realised prices of $59.54 per barrel of oil and $2.12 per thousand cubic feet of natural gas.

That compared to net income of $13.1 million in the year-ago period.

Production was 52,600 barrels of oil equivalent per day, of which 73% was oil, a figure impacted by the deferral of 4000 boepd due to Hurricane Barry.