Talos Energy to commence drilling second Katmai appraisal well in U.S. Gulf of Mexico following QuarterNorth acquisition

May 06, 2024

(WO) – In its quarterly financial report, Talos Energy announced it expects to commence drilling the Katmai West #2 well in Q3 2024 to further appraise the field, potentially adding significant reserves.

Source: Talos Energy

According to Talos, first quarter 2025 modifications to the host facility, Tarantula, will increase capacity from 27,000 boed to 35,000 boed, which will be constrained relative to the full rate capacity of the Katmai wells, allowing for extended flat production.

Talos acquired a 50% interest in the Katmai discovery in its acquisition of QuarterNorth Energy, which closed in Q1 2024. Katmai is located in the Green Canyon region of the U.S. Gulf of Mexico.

Additionally, Talos expects to drill the Daenerys exploration well, a high-impact subsalt project in the Gulf of Mexico, that will evaluate the Miocene section and carries a gross unrisked recoverable resource potential between 100 – 300 MMBoe. Talos has a 30% working interest in the initial test well. The prospect is part of a broader farm-in transaction that was executed in 2023 with a combined approximately 23,000 gross acres in the Walker Ridge area.

Talos also said it successfully drilled through the BUL-1 and Tex-Mex-E sand in the Lobster field in Q1 2024. The well is being completed as a waterflood (down-hole water injection) well and is expected to increase the oil and gas recovery of the existing producing wells in the prolific BUL-1 field pay. Production is expected to increase by over 2,000 boed gross in the next 12-18 months.

"Talos' drilling program is underway, balancing a mix of low-risk and high-impact projects that could provide a material increase to our reserves. Projects for the second half of 2024 are in final preparations to execute upon rig delivery, including further appraisal of the Katmai discovery and drilling the high-impact Daenerys prospect. We remain focused on our strategic priorities to generate substantial free cash flow and have increased our total debt reduction target from $400 million to approximately $550 million in 2024,” said Talos President and Chief Executive Officer Tim Duncan.

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