August 11, 2014, marked a new dawn for Mexico as President Peña Nieto signed into law a comprehensive energy reform. The new rules governing the Mexico’s energy sector favor foreign investors in the sector, unlike the 1938 regulations that banished foreign investors. A year later, international companies including Britain’s Premier Oil and America’s Talos Energy won rights to prospect for oil in the Gulf of Mexico.
The two international energy companies alongside Mexico’s Sierra Oil & Gas are working together to drill the first non-Pemex oil well in almost 80 years, the Zama-1. The oil well according to Premier oil contains between 100 million to 500 million barrels of unrefined oil. The statement issued by Premier in Mid-May, 2017, went on to suggest that once drilling, which was scheduled to commence on May 21, begins, it would take about 90 days to reach completion. Premier owns a 25 percent stake in the venture, and at the start of drilling, the London based company contributed $16 million to jump-start the drilling works.
Once the news about the Zama Well hit the headlines across the globe, analysts, investors, and other interested parties became interested in the goings-on in the Mexico oil sector. Investment analysts such as Charlie Sharp and Elaine Reynolds shared the same sentiments that the Zama Well, if successful, would alter Mexico’s dwindling fortunes in oil sector. Reynolds is an analyst at Edison Investment Research while Sharp is an analyst at Canaccord Genuity.
Houston-based Talos Energy owns a 35 percent stake in the joint venture. The private company was established in 2012 to focus solely on the Gulf of Mexico and Gulf Coast. The company which is backed by investment funds from Riverstone Holdings LLC and Apollo Global Management explores or acquires oil and gas properties in the mentioned areas.
In an interest to cement its presence in the Gulf of Mexico, Talos Energy through its subsidiary Talos Production LLC acquired Energy Resource Technology GOM, an oil and gas subsidiary of Helix Energy Solutions Group for a whopping $620 million. The transaction took place in 2013. The Zama Well is the beginning of Talos Energy’s reins in the Gulf of Mexico.
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