Talos Energy Inc. (TALO - Free Report) has been granted a two-year contract term extension along with regulatory approvals for further exploration activities at Mexico’s offshore Block 7. Talos Energy-operated Block 7 is located in the Mexico’s productive Sureste Basin.
Block 7 is operated by a consortium led by Talos Energy with its partners Sierra Oil & Gas and Premier Oil plc (PMOIY). This contract win by Talos Energy and partners from Mexico’s oil regulator National Hydrocarbons Commission of Mexico (“CNH”) will enable it to potentially assess other exploration prospects on this lease.
Except this Houston-based E&P company’s Zama discovery, the remaining exploration acreage at Block 7 was subject to expiration. This extension will help Talos Energy maintain its feasible objectives without any additional commitments and charges.
As the consortium’s Zama asset has already been evaluated, it does not require any further extension consent from the Mexican regulator for making its development as well as Final Investment Decision (FID).
With the completion of the Zama appraisal earlier this year, the consortium keeps its unitization planning intact with the Mexican state-owned petroleum company Pemex in the hope of reaching an agreement and moving toward an anticipated project FID next year.
Talos Energy with its consortium spotted a lot of potential exploration targets at Block 7 including the Xlapak and Pok-A-Tok prospects among others with typical gross unrisked resources varying between 75 and 150 million BOE each.
Zacks Rank & Key Picks
Talos Energy carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include BP Midstream Partners (BPMP - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and World Fuel Services Corporation (INT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BP Midstream’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters.
Dril-Quip earnings beat the Zacks Consensus Estimate in three of the previous four quarters.
World Fuel Services earnings beat the Zacks Consensus Estimate in all the last four quarters.
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