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Talos Energy (TALO) & Block 7 Consortium Operators Sign PUA

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Talos Energy Inc (TALO - Free Report) , the operators of the Block 7 consortium and Petroleos Mexicanos (Pemex) have inked a Pre-Unitization Agreement (PUA) related to two areas located offshore Mexico in the prolific Southeast Basin. Earlier, the Ministry of Energy (SENER) gave consent for the PUA. The Block 7 Consortium includes Talos Energy, Sierra Oil and Gas as well as Premier Oil.

The area includes certain tracts within the Amoca-Yaxche-03 allocation (allotted to Pemex as part of Round 0) and the adjacent Block 7 production sharing contract (allotted by the National Hydrocarbons Commission as part of the first tender of Round 1).

This represents the first PUA to be signed in Mexico. Recently, the country’s legal and regulatory framework was revamped. Per the alterations, this two-year agreement will facilitate information sharing related with the newly announced Zama discovery and its potential extension into Pemex's neighboring block.

In case a shared reservoir is discovered, the PUA will enable the signing of a Unit Agreement and Unit Operating Agreement, as it  will clarify the process for ascertaining participation of each party in the overall development.

Consequent to the agreement, the parties will form a Working Group to reap benefits from operational and informational efficiencies. The companies will work toward defining activities on each tract that maximize the collection of data in the area and reduce risksto boost prospects for México. The Working Group will consist of legal and technical representatives from the member companies.

About the Consortium

Talos Energy, the operator of the Block 7 Consortium,holdsaninterest of 35%. Other partners include Sierra Oil and Gas and Premier Oil, holding 40% and 25%, respectively.

Price Performance

In the past year, Talos Energy’s shares have improved 8.8% compared with the industry’s 12.6% rise.



 

Zacks Rank & Stocks to Consider

Talos Energy currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Petroleo Brasileiro S.A. (PBR - Free Report) or Petrobras SA, Helix Energy Solutions Group, Inc (HLX - Free Report) and TC Pipelines, LP . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.

Helix Energy offers specialty services to the offshore energy industry. The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.

TC Pipelines purchases, owns and actively participates in the management of U.S.-based natural gas pipelines and related assets. The company delivered an average positive earnings surprise of 3.7% in the last four quarters.

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