Talos Energy has announced that Zamajal, S. A. de C.V., a wholly owned subsidiary of Grupo Carso, has agreed to acquire a 49.9% interest in Talos's Mexican subsidiary ('Talos Mexico'), which holds the Company's 17.4% stake in Zama. Carso is one of the world's largest conglomerates and is headquartered in Mexico City, Mexico. Talos will remain the controlling shareholder of Talos Mexico. The transaction is expected to close within the third quarter of 2023, as is subject to approval by Mexico's Federal Economic Competition Commission ('COFECE').
Transaction Highlights:
- Purchase price of $124.75 million for the 49.9% stake, implying a minimum valuation of approx. $250.0 million for the full 17.4% stake in Zama, potentially increasing to $262.50 million if certain milestones are reached.
- $74.85 million will be paid at closing, with the remaining $49.90 million due at first production.
Talos President and Chief Executive Officer Timothy S. Duncan commented: 'We are thrilled to partner with Grupo Carso. Our relationship dates back to the 2015 offshore lease sales in Mexico. As we accelerate recent momentum and advance Zama toward FID and first production, we are confident that Carso is the right partner at the right time. Carso's investment is a testament to the economic potential of Zama, and the joint venture will also benefit from Carso's critical presence in Mexico and global commercial experience. We are excited about this broad partnership in Mexico.'
Duncan continued: 'This transaction establishes a baseline Zama valuation for Talos shareholders while providing material upfront cash proceeds. Most importantly, Talos shareholders retain significant valuation upside as we advance the project toward first production.'
Talos announced in March 2023 that the Zama Unit Development Plan was submitted to Mexico's National Commission of Hydrocarbons for formal approval. Additionally, an Integrated Project Team ('IPT') comprised of individuals from all four Zama Unit Holders was established to manage the development and operation of Zama going forward. Talos will co-lead the planning, drilling, construction, and completion of all Zama wells as well as the planning, execution, and delivery of Zama's offshore infrastructure.
Background
According to Talos Energy's announcement of March 23 2023 - Talos Energy and its Partners Announce Submission of Unit Development Plan for Zama Project in Mexico:
Zama was discovered in 2017 and fully appraised in 2019 by the Block 7 consortium, which includes Talos, Wintershall Dea and Harbour. Zama is being developed to produce up to 180,000 barrels of oil equivalent per day, which represents over 10% of Mexico's current oil production. Production is expected to be comprised of approx. 94% oil of excellent quality, with API gravities of between 26° and 29°. Zama has been awarded 'strategic project' status by Pemex and the Mexican Government. As per the Unitisation Resolution from March 2022, initial participating interests are Pemex 50.4%, Talos 17.4%, Wintershall Dea 19.8% and Harbour 12.4%.
Source: Talos Energy
