Talos Energy Provides Additional Update On Zama Appraisal Program

HOUSTON, April 15, 2019 /PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today provided an additional update on the Zama appraisal program in Block 7, located in the offshore portion of Mexico's prolific Sureste Basin. Talos is the operator of Block 7 in a consortium (the "Consortium") with its partners Sierra Oil & Gas, a company of DEA Deutsche Erdoel AG, and Premier Oil Plc.

The Zama-2 ST1 appraisal well is the second of three appraisal penetrations drilled by the Consortium to better define the resource potential of the Zama discovery. Building upon the success of the first appraisal penetration (Zama-2), the goals of the Zama-2 ST1 well were to test the northern limits of the reservoir, acquire a whole core to collect detailed rock properties, and perform a well test in several perforated intervals. The Zama-2 ST1 well was drilled 589 feet (180 meters) updip of the Zama-2 well and approximately 1.4 miles (2.1 kilometers) north of Zama-1 exploration well, and generated the following results:

• The well logged 873 feet (266 meters) of gross true vertical depth ("TVD") pay, within expectations for the northern extension of the Zama discovery and confirming a consistent net-to-gross ratio range of 68%-73% through multiple penetrations. Talos also captured an unprecedented 714 feet of whole core with 98% recovery, the longest whole core acquired in a single well in the history of offshore Mexico.
• The well was cased and perforated totaling 248 gross feet of perforated section with varying rock properties. Hydrocarbon flow was established without stimulation in two separate flow tests and achieved a combined rate of 7,900 barrels of oil equivalent per day ("Boe/d"), of which 94% was oil with API gravity ranging from 26-30 degrees, and 6% was gas. The flow rate was restricted with limited pressure drawdown and each zone was shut-in for an extended period to establish a significant radius of investigation for each test, and neither gave any indication of depletion or significant barriers within the reservoir.
• The operation to sidetrack from the Zama-2 location, drill, core and reach total depth ("TD") of 11,643 feet (3,549 meters) of measured depth ("MD") was completed approximately 9 days ahead of schedule and 16% below budget. The well test operation was completed approximately 5 days ahead of schedule and more than 30% below budget. Operations were safely coordinated and executed with the assistance of several local contractors, including the Mexican-flagged floating storage and production vessel utilized in the flow test.

Talos President and Chief Executive Officer Timothy S. Duncan commented, "The Zama-2 ST1 operation was another success for the Consortium. With each stage of the appraisal program, our experience and understanding has continued to strengthen in the region, and this is evident in our operational performance. The coring operation allowed us to gather important rock samples, which indicate excellent rock properties with similarities to world-class reservoirs in the United States Gulf of Mexico. The production rate of 7,900 Boe/d from two zones in a very simple rate-restricted test over only a portion of the total pay column confirmed our expectations that the Zama wells will provide exceptional productivity. The tests also confirmed our geologic model of well-connected reservoirs, which should allow for a high ultimate oil recovery. Given the water depth of approximately 550 feet (168 meters), we believe that a combination of fixed platforms, dry trees and short-cycle development wells will maximize both capital efficiency and optionality with regard to how many total wells and completions per well will be necessary to maximize recovery. Also, given the deliverability of the perforated intervals demonstrated in the flow test, we believe a peak production rate between 150,000 – 175,000 Boe/d is achievable."