The Zama-1 Well, a project of Talos Energy, Premier Oil, and Sierra Oil & Gas, in the Sureste Basin, is the first well to be drilled by closely held companies, more so international firms. The three companies are private, but while Sierra Oil & Gas is Mexican, Premier Oil and Talos Energy are based in the UK and Houston respectively.
According to a press statement issued by Premier Oil in mid-May, the Zama Well would be complete in three months if the planned drilling commenced a week later. The statement further intimated that the well boasts of between 100 million to 500 million barrels of crude oil. Premier owns a 25 percent stake in the venture and, is expected to fund the drilling of the well to the tune of $16 million. Talos Energy and Sierra Oil & Gas own 35 percent and 40 percent stake respectively.
As the first non-Pemex well since Mexico nationalized her oil sector in 1938, Zama is the talk of the town not only in Mexico but also other parts of the world. Notably, investors in London are taking the “wait and see” approach before they embark on investing in Mexico. The successful drilling and operation of the Zama Well is likely to encourage investors to channel resources to the Mexican ailing oil industry. Elaine Reynolds and Charlie Sharp, both fellows at Edison Investment Research and Canaccord Genuity, respectively are confident that the Zama Well will have huge implications on the Mexican Oil sector.
Created in 2012 and backed with investment funds affiliated with Apollo Global Management and Riverstone Holdings, Talos Energy is interested in oil and gas properties in Gulf Coast and the Gulf of Mexico. Talos Energy’s partnership with Sierra and Premier cements the company’s presence in the Gulf of Mexico. What’s more, Talos Energy is the operator of the Zama Well
Tim Duncan, the CEO of Talos, is employing both organic and inorganic growth strategies to expand the presence of the company in Latin America. In 2013, Talos acquired Energy Resource Technology GOM, a subsidiary of Helix Energy Solutions Group whose assets were located in the Gulf of Mexico.
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