U.S. oil firm Talos Energy said Tuesday that its two deepwater wells in the U.S. Gulf of Mexico had discovered commercial quantities of oil and gas during drilling operations in the fourth quarter of 2022.
Talos holds a 60% working interest in the two deepwater discoveries, Lime Rock and Venice, both of which are located near the company's Ram Powell platform, where future production from both wells will flow via subsea tiebacks.
Talos encountered 78 feet, and 72 feet of net hydrocarbon pay in the primary targets at Lime Rock and Venice, respectively, with, the company says, excellent geologic qualities. The company collected pressure, fluid and core samples from the wells to confirm the discoveries.
Expected combined gross production rates are in-line with pre-drill estimates of approximately 15-20 thousand barrels of oil equivalent per day ("MBoe/d"). The two wells will produce through a shared riser system at the Ram Powell platform.
Talos said the expected combined gross recoverable resources were in-line with pre-drill estimates of 20-30 million barrels of oil equivalent ("MMBoe"), averaging approximately 40% oil and 60% liquids. The first production from both wells is expected by the first quarter of 2024.
Subsea tieback distance to the Ram Powell facility is 9 miles for the Lime Rock discovery and 4 miles for the Venice discovery.
Talos President and Chief Executive Officer Timothy S. Duncan said: "I'm proud of our team for starting our deepwater drilling campaign with consecutive early successes. These two discoveries are case studies of the exciting potential that infrastructure-led development can bring in the U.S. Gulf of Mexico.
"For Talos, that translates to providing material production and cash flow in 2024 and beyond while reducing our operating cost structure through PHA fees and our carbon intensity through low-emission subsea production. Demonstrating our ability to successfully leverage existing infrastructure also reinforces the strategic merits of our pending acquisition of EnVen Energy Corporation, which will double our deepwater infrastructure footprint by adding six major facilities. Ram Powell provides a blueprint for future optimization, development and exploration potential around those assets and our own."
As for the Ram Powell platform, Talos said that following its installation as the deepest production facility in the world at the time, Ram Powell produced approximately 250 MMBoe until Talos acquired the asset in 2018.
Talos then initiated optimization projects that, its says, increased production rates, reduced costs, and initiated a third-party production handling agreement. Simultaneously, Talos applied proprietary seismic reprocessing techniques to multiple recent vintage seismic surveys to identify new drilling prospects near Ram Powell, including Lime Rock and Venice.
The company expects the Lime Rock and Venice discoveries to bring Ram Powell's production rates to levels last seen approximately 15 years ago.
Lime Rock and Venice are the first two deepwater exploitation wells in the company's current open-water rig program that started in the fourth quarter of 2022 and which will continue in the first half of 2023 with the Rigolets and Lisbon prospects, among others. Separately, Talos expects results from its operated Mount Hunter development well and its non-operated Puma West exploration well in the first quarter of 2023. The Company's non-operated Pancheron exploration well is also expected to spud in the first half of 2023.