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Talos approved for new plan on Zama block

US independent will relinquish 50% of block after concentrating on areas of greatest interest

Talos Energy has seen approval of a new exploration plan for the Zama block off Mexico after it was granted additional time to further study and drill on the area, and will relinquish 50% of the block surface area to focus on its areas of greatest interest.

The plan will see about 233 square kilometres of the block returned to the Mexican government, with the company keeping the north-east corner and western side of the tract.

The plan contemplates three options. The first would simply include additional reprocessing and seismic work being performed on the acreage.

The second would involve the drilling of one additional well, Xlapak-1, which would have two objectives, one Pleistocene and one Pliocene. An unrisked resource estimate would be around 55 million barrels, according to the CNH.

A third scenario would also include drilling of that first prospect as well as a second, Pok-a-Tok-1. That prospect would have a Miocene target with a prospective resource of 96 million barrels.

Both targets are derived from amplitude anomalies that appear similar very similar to the one observed with Zama, CNH staffers said.

Xlapak-1, if drilled, could come as soon as April 2020 with drilling to last two months. Pok-A-Tok would come later, as soon as January 2021, and last 86 days. But that activity could come somewhere within the first six months of 2021.

The first scenario would see investments of up to $6.4 million, the second of up to $61.95 million and the third up to $117.2 million.

The area in question, Block 7, was awarded in Mexico's very first Round 1.1 bid offering in 2015. Zama became the first major offshore exploration discovery made by a company other than Pemex, the CNH said.

The find is, however, expected to extend onto the neighhouring block controlled by Pemex, and Talos is currently engaged in unitisation talks with the state-led Mexican company.

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