From Chris Helman/Forbes
It’s been a few years of soul-searching for Tim Duncan, the CEO of Talos Energy. The Houston-based oil company has long specialized in the shallow waters of the Gulf of Mexico off Louisiana and Texas. Yet the oil bust that began in 2014 has made the region deeply unpopular. Facing dwindling prospects for big new finds offshore, companies have instead flocked to the Permian basin of west Texas, where layer upon layer of oil-saturated rock promises decent returns even at stubbornly low oil prices.
“We resisted the temptation to join the land race onshore,” says Duncan. But Talos did go somewhere new: Mexico. In 2015 they hooked up with U.K.-listed Premier Oil and Sierra Oil & Gas to bid for one of the first prospects offered up by Mexico under the historic oil sector reforms spearheaded by President Enrique Pena Nieto. The grand hope: that the prolific oil trends in U.S. waters extended south of the border.
Earlier this year the partners spudded the Zama-1 well, the first in 80 years not drilled by state monopoly Pemex. Sure enough, they found as much as 2 billion barrels of oil trapped in a layer of porous Miocene-era sandstone hundreds of feet thick. Zama has turned out to be “multiples of what we thought,” says Duncan, similar in size …
