1.4 billion barrel discovery at 11,000 feet – en route to 14,000
Sierra Oil & Gas, Talos Energy and Premier Oil (ticker: PMO) have announced the discovery of a massive oil field in offshore Mexico, with more than 1 billion barrels of oil recoverable. According to the Financial Times, this is the fifth-largest oil discovery in the world in the last five years.
This discovery is the result of the Zama-1 offshore well, which was spudded in late May. Zama-1 is the first private offshore well in Mexico in nearly 80 years. Located about 35 miles off the coast of Mexico, the well was drilled in 550 feet of water. Zama-1 has so far drilled to a vertical depth of about 11,000 feet, and has encountered up to 650 feet of net oil bearing reservoir.
Source: Premier Oil
Based on initial analysis, gross original oil in place for the discovery ranges from 1.4 to 2.0 billion barrels, although some of this could extend into a neighboring block. Considering Premier estimated the prospect would yield 100-500 million barrels, this discovery has significantly exceeded expectations.
Zama-1 is not done yet
Zama-1 has only reached its shallow target, at 11,000 feet, and intends to continue drilling. To protect the discovered reservoir, a liner is currently being set. After this is complete, the well will be drilled to its total depth of 14,000 feet.
Sierra Oil & Gas has the largest stake in the play, holding 40%. Talos Energy is the operator and holds 35%, while Premier, the only public company in the consortium, holds 25%.
Talos reports that it will begin to analyze the data from the well to calibrate its previously-obtained seismic data. According to the company it is too early to know the details for development, such as first oil date and production rates. However, Talos does report that the typical timeframe for first oil in similar discoveries is three to five years after FID.
