Talos Energy has received approval for up to two more years to further study and drill on the block containing the Zama discovery off Mexico, the first exploratory find in the country's offshore sector by a company other than state-led Pemex.

The US independent was also granted approval by the National Hydrocarbons Commission (CNH) regulator for an exploration plan that could see it drilling up to two additional wells by mid-2021.

In addition to the 2017 discovery, the company has also carried out an appraisal campaign with two more wells and various sidetracks that wrapped up this year.

Talos told the CNH that it plans to relinquish 50% of the block's surface area to focus on its areas of greatest interest, meaning about 233 square kilometres of the block would revert to the Mexican government.

The company plans to keep the north-east corner and western side of the tract, which it would explore with a plan that contemplates three options for additional work.

While the first would include seismic reprocessing and geological studies, a second would involve the drilling of one additional well, Xlapak-1, which would have two objectives, one Pleistocene and one Pliocene.

An unrisked resource estimate for this structure would be around 55 million barrels, according to the CNH.

A third scenario would also include drilling of that first prospect as well as a second, Pok-A-Tok-1. That prospect has a Miocene target with a prospective resource of 96 million barrels.

Both targets are derived from amplitude anomalies that appear very similar to the one observed at Zama, CNH staffers said.

Xlapak-1, if drilled, could come as soon as April 2020 with drilling to last two months. Pok-A-Tok would come later, as soon as January 2021, and last 86 days. But that activity could come somewhere within the first six months of 2021.

The first scenario would see investments of up to $6.4 million, the second of up to $61.95 million and the third up to $117.2 million.

The area in question, Block 7, was awarded in Mexico's very first Round 1.1 bid offering in 2015. Zama became the first major offshore exploration discovery made by a company other than Pemex, the CNH said.

The find is, however, expected to extend onto the neighbouring block controlled by Pemex, and Talos is currently engaged in unitisation talks.

The CNH signed off on the extension, set to run for up to two years, at a meeting this week. The initial exploration period was four years, starting with the effective date of the contract on 4 September 2015.

In order to be approved, the company in question must have completed its initial work programme on the block and commit to drilling at least one additional well.

Talos — led by chief executive Tim Duncan — has met its one-well commitment and has also completed additional work covering the drilling of two appraisal wells.

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Talos to explore further at Zama