Talos Energy Inc. (TALO - Free Report) recently announced authorization for its Zama discovery appraisal program by the National Hydrocarbons Commission (CNH). Currently, the drilling permits applied by Talos Energy are being reviewed by the CNH — the oil and natural gas regulator of Mexico.
With the appraisal plan, the company will likely make its way into three new reservoirs. Talos Energy is expected to commence the appraisal program with the drilling of the Zama-2 well.
For conducting Marte test, the Zama-2 wellbore is anticipated to be drilled by roughly 1,640 feet. The company expects the well to hold recoverable oil and gas reserve of 60 million barrel of oil equivalent (MMBoE) to 150 MMBoE. Of the total gross expense of roughly $10 million for drilling the wellbore, Talos Energy is likely to bear $3.5 million. It is to be noted that for the entire appraisal program, the company has received approval for a $325-million budget from the CNH.
Talos Energy will likely start drilling the Zama-2 appraisal well by the fourth quarter of this year. The company intends to wrap up the entire appraisal work by mid-2019.
For the appraisal program — which will employ a semi-submersible rig — the Block 7 Consortium has signed an accord with offshore contract driller Ensco plc (ESV - Free Report) . Operator Talos Energy has 35% stake in the block. The other players in the consortium are Sierra Oil and Gas and Premier Oil with respective stakes of 40% and 25%.
Headquartered in Houston, TX, Talos Energy is an oil and gas explorer. Over the past year, the stock has rallied 13%, outperforming the 11.8% collective gain of the stocks belonging to the industry.
Talos Energy currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy sector are Shell Midstream Partners LP (SHLX - Free Report) , and Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) . Both Shell Midstream Partners and Petrobras sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shell Midstream Partners has an average positive earnings surprise of 7.9% for the last four quarters.
Petrobras’ bottom line beat the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 10.4%.
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