Talos Energy has announced the execution of a definitive agreement to farm into the Block 29 development offshore Mexico, operated by Repsol. Talos will acquire a 50% working interest for a contingent $30 million payment at final investment decision ('FID'), a cash carry of up to $20 million on the next exploration well, and reimbursement of certain pre-closing costs.
Strategic Rationale:
- Expands Resource Base with Material Greenfield Development: Adds a 50% working interest in a pre-FID development containing the Polok and Chinwol oil discoveries, which are estimated to contain more than 200 million barrels of oil equivalent ("MMBoe") of gross recoverable resource.
- Strategic Infrastructure: Features a floating production, storage and offloading ('FPSO') based development concept anchored by existing oil discoveries that is well-positioned to serve as a hub for future developments and nearby discoveries in the area.
- Future Exploration Upside: Establishes a platform for additional resource expansion through multiple identified exploration prospects within Block 29.
- Leverages Proven Deepwater Technical Expertise: The discoveries and identified prospects target amplitude-supported Miocene reservoirs analogous to fields Talos has successfully developed and produced in the Gulf of America, reinforcing our strategic focus on opportunities where our deepwater subsurface expertise provides a competitive advantage.
Talos President and Chief Executive Officer Paul Goodfellow commented, 'We are excited to participate in this pre-FID development opportunity and look forward to working alongside Repsol as we advance Block 29. The farm-in adds a high quality, large-scale development opportunity and meaningful exploration upside in a proven deepwater basin, further advancing Pillar Three of our strategy and strengthening our long-term growth portfolio. Together with the recently announced Gulf of America bolt-on acquisition, these transactions are expected to extend our resource life and further support long-term value creation as we continue to advance our strategy to build a long-lived, scaled portfolio and become the leading pure-play offshore E&P.'
OFFSHORE MEXICO FARM-IN TRANSACTION
The acquired assets include a 50% working interest in Block 29, located in the Salinas-Sureste Basin in the southern Gulf of Mexico, an area that has seen more than a dozen deepwater discoveries. Operated by Repsol, terms include a contingent $30 million payment if Talos elects to take a FID, a cash carry of up to $20 million on the next exploration well, and reimbursement of certain pre-closing costs, subject to customary terms, conditions (including Mexican regulatory approvals), and closing adjustments. Upon closing, Talos will hold a 50% working interest and, together with Repsol, will be the sole participants in the block. Block 29 contains the Polok and Chinwol oil discoveries, which together are estimated to contain more than 200 MMBoe of gross recoverable resource, along with multiple additional exploration prospects. The partners expect to progress the project toward FID in 2027.
The transaction is subject to approval by Mexico's Secretaría de Energía ('SENER') and the National Anti-trust Commission of Mexico.
Source: Talos Energy
