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Talos Energy Revenue Up 40% QoQ; Production 28.7 Mboe/d

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PE-backed Talos Energy reported its third quarter 2017.

Production : 28.7 mboe/d

Total Revenue : $100 million (vs $63.8 million third quarter 2016)

Successful exploration test on the Zama-I well in the shallow waters off the coast of Mexico.

United States Gulf of Mexico — Drilling Portfolio

In October 2017, the Company completed the Tornado II deepwater drilling campaign in the Phoenix Field of the Gulf of Mexico in approximately 2,700 feet of water. The Tornado II drilling campaign consisted of an exploratory test penetration in a fault block adjacent to the Company’s initial Tornado discovery in 2016, followed by a sidetrack well to delineate the initial reservoir.

The test penetration was drilled to a total vertical depth of approximately 21,107 feet and logged approximately 222 feet measured depth (176 feet total vertical depth) of net oil pay across the B-5 and B-6 sands. The discovered resource increases the Company’s existing drilling inventory and will be considered in the development of the 2018 drilling campaign.

The sidetrack delineation well, known as the GC 281 #2ST well, was drilled to a total vertical depth of approximately 21,057 feet and logged approximately 297 feet total measured depth (282 feet total vertical depth) of net oil pay across the B-5 and B-6 sands. Initial production from the GC 281 #2ST is expected during the fourth quarter of 2017 and will be tied into the existing Phoenix Field subsea infrastructure, which flows to the Helix Producer I ("HP-I”), a dynamically positioned floating production facility. To execute the Tornado II drilling program, the Company contracted the Ensco 8503, a dynamically positioned floating drilling rig that also drilled the Company’s historic Zama-1 discovery in Mexico.

In October 2017, the Company finalized drilling plans and executed an offshore day work drilling contract with Ensco Offshore Company to utilize the Ensco 75 to drill the EW 306 A-15ST#3 well, a deeper pool exploration well targeting two amplitude-supported Upper Miocene objectives. The sidetrack well will be drilled from the existing EW 305A platform and is expected to spud in January 2018. If the sidetrack is successful, Talos would immediately commence completion and hook-up operations with initial production occurring by the end of the first quarter 2018.

Offshore Mexico

In July 2017, the Company completed drilling operations on the offshore Mexico Zama-I exploration well, reaching a total depth of 13,480 feet. The Zama-I well is the first offshore exploration well to be drilled in Mexico by the private sector. Well results confirmed the base of the reservoir section, with no penetration of an oil-water contact. The well was also drilled deeper into a higher risk formation, but no additional commercial quantities of hydrocarbons were encountered. The gross oil bearing interval is over 1,100 feet with petrophysical data indicating excellent rock properties and an oil sample with 30 degree API gravity oil. Initial gross oil in-place estimates for the Zama-I well are from 1.4 to 2.0 billion barrels. The well has been suspended as a future producer. The Company is now analyzing all the data gathered from Zama-I and evaluating the optimal methods for appraisal and development of the discovery.