Reporting by Mariana Parraja Editing by David Gregorio
Talos is working on the engineering design for the Zama oil and gas project in Mexico
HOUSTON, Nov 7 (Reuters) – Talos Energy (TALO.N) is conducting a final review of the engineering design and working to secure financing for Zama, a Mexican oil and gas project in the Gulf of Mexico, before making a final decision. investment decision (FID), the company’s CEO said on Tuesday.
The US company in late September completed a $125 million deal with Mexico’s Grupo Carso (GCARSO1.MX) that included the sale of 49.9% of its subsidiary Talos Mexico, CEO Tim Duncan said during the company’s third-quarter results presentation.
Duncan did not give a specific date for when sanctions would be imposed on Zama, but said 2024 would be “an important year for this asset” after time was lost due to a standoff over who would run the key project, which led to changes to its design.
Zama’s operator and largest shareholder is Mexican state company Pemex, with a 50.4% stake. Talos and Grupo Carso now own 17.4% of Zama, Wintershall Dea (WINT.UL) owns 19.8%, and Harbor Energy (HBR.L) the remaining 12.4%.
Duncan said the company is “glad we’re back on track, and happy to have Carso. We’ve gotten past some debates and some frustration.”
“It’s certainly been long enough. It’s time to move the ball on this. It’s important for our shareholders… I think we’re in a better position with those assets than we have been over the last couple of years,” he added.
Talos said in a presentation in September that two platforms were planning to be deployed at water depths ranging between 500 and 585 feet in the Zama field, capable of producing up to 190,000 barrels per day of intermediate crude and associated gas.
The production will be transported via pipelines to the Dos Bocas terminal in Mexico. Talos estimated a breakeven price of $25 per barrel and a cumulative 3-year net cash flow of approximately $650 million.
Total recoverable resources at Zama are estimated at 735 million barrels.
Talos on Tuesday reported revenue of $383.1 million in the third quarter. This result resulted in a net loss of $2.1 million, or $0.02 per diluted share, in the period.
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