Success in business has always been about taking risky moves. This is a fact that Talos Energy, an oil and gas company that operates predominantly in the Gulf of Mexico and South Louisiana proves best.
Though small in comparison to the integrated E&P companies it competes with, Talos Energy continues to take over the E&P market through the known technique of expansion through acquisition and also by capitalizing on emerging opportunities. For instance, a few months after the completion of Whistler energy II acquisition transaction, Talos energy is now planning on developing its Zama-1 discovery on the Mexican Gulf. The plans were announced and authorized by Mexico’s own National hydrocarbons commission late last year.
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— talosenergy (@talosenergyllc) February 12, 2013
Why it’s a bold move.
To help you understand why Talos Energy’s plans to develop the Zama-1 discovery project is a bold move, first take a walk down memory lane. Before 2015, no private E&P company could explore or produce oil from the Mexican waters, following a law that was put in place in 1938, which nationalized this field of economic growth. Hence for the last seven decades or so, only Pemex, a state-owned petroleum company was allowed to capitalize on the rich Mexican resources.
However, the embezzlement of funds and poor management saw Pemex become severely undercapitalized. It is at this point that reality hit the Mexican government hard because compared to other governments such as America which had allowed private companies such as Shell and Chevron develop resources, Mexico’s E&P sector was lagging.
In respect to this, Mexico’s congress passed an amendment in 2014 which allowed private investors and operators to tap into the rich Mexican’s gulf’s waters, and it became active in 2015. A horde of private companies led by Talos Energy made a go for it, but integrated companies decided to hold back due to the high geopolitical risks that came with developing the Mexican side.
Despite most notable companies holding back, Talos energy took the risk and looking at the success that it has enjoyed since the discovery of the Zama-1 field, there is no doubt that it made the right move. Even though Talos energy does not disclose the actual size of Zama-1, it is listed among the 20 largest shallow water oil field discoveries in the world and is set to have a production capacity of approximately 1.4 and 2 billion barrels of oil.
The project has not only boosted Talos energy leverage in the E&P realm but also saw it bag the Discovery of the year 2017 awards, and is expected to help the company generate substantial revenues once it commences.
About Talos Energy
Based in Houston, Talos Energy is a gas and oil exploration company that has been in successful play for more than 17 years. Led by Tim Duncan and a panel of other innovative leaders, the company continues to take over the oil and gas realm through the acquisition of other smaller companies, as well as capitalizing on emerging opportunities as shown above.
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