Houston's Talos Energy makes 'significant' find in Mexico's waters

FILE - An undated photo shows Talos Energy Chief Executive Tim Duncan. The Houston offshore company claims to have found a rich oil field in the Gulf of Mexico, likely containing up to 2 billion barrels of oil. FILE - An undated photo shows Talos Energy Chief Executive Tim Duncan. The Houston offshore company claims to have found a rich oil field in the Gulf of Mexico, likely containing up to 2 billion barrels of oil. Photo: Brett Coomer, Staff Photo: Brett Coomer, Staff Image 1 of / 32 Caption Close Houston's Talos Energy makes 'significant' find in Mexico's waters 1 / 32 Back to Gallery

The first exploration well drilled by a private company off the coast of Mexico has struck oil.

The Houston offshore production company Talos Energy announced on Wednesday morning a "significant" oil discovery about 37 miles from Puerto Dos Bocas, along the southern coast of the Gulf of Mexico.

Talos said the well, called Zama-1, is in 546 feet of water and has reached an initial vertical depth of about 11,000 feet. The company estimated the field holds at least 1.4 billion barrels of oil-in-place, and as much as 2 billion. The oil is light, with gravities between 28 and 30 degrees and some associated gas.

Analysts and company executives alike called it an important find.

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"The Zama discovery by Talos is the most important achievement so far of Mexico's Energy Reform," said Pablo Medina, an analyst at energy research firm Wood Mackenzie. Medina called Zama "one of the 20 largest shallow-water fields discovered globally in the past 20 years."

In 2014, Mexico deregulated its oil and gas market and broke the monopoly of the state oil company, Petróleos Mexicanos, known as PEMEX, inviting foreign companies to take part, with hopes of spurring exploration and production and boosting the country's sagging energy profits.

Over the past year, oil and gas companies from around the globe began bidding on Gulf blocks.

Tuesday's announcement marks the first find by a private company in almost 80 years.

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"This is both a historic and significant discovery, and we could not be more proud of the highly skilled personnel from Mexico and the US who have been working together in a safe and efficient manner to make it a reality," said Talos President and CEO Tim Duncan.

"We believe this discovery represents exactly what the energy reforms intended to deliver: new capital, new participants and a spirit of ingenuity that leads to local jobs and government revenues for Mexico," Duncan said.

Talos and its partners plan to continue drilling Zama to 14,000 feet.

Talos holds a 35 percent interest in the well; Mexican independent oil company Sierra Oil and Gas S. de R.L de C.V. holds 40 percent; London-based Premier Oil, 25 percent.