Houston-based Talos Energy purchased a 21.4% interest in Monument—a large Wilcox oil discovery in Walker Ridge blocks 271, 272, 315 and 316—for $32 million, the company announced in its second quarter earnings.

Monument is post-final investment decision (FID), with appraised proved plus probable gross reserves of 115 MMboe. First production is slated for late 2026.

Located in the deepwater Gulf of Mexico (GoM), Talos said the plan is to develop Monument as a subsea tieback to the Shenandoah production facility. The company said it purchased the interests during the second quarter.

First production from Monument of 20,000 boe/d to 30,000 boe/d gross is expected by late 2026, Talos said, under restricted flow due to facility rate-constraints.

The proved and probable PV-10 value of Monument's reserves is $265 million, according to Talos.

“Here's a project that we're able to come in post-FID, risk is off the table,” Duncan said Aug. 8 during Talos’ second quarter webcast with analysts. “Someone else got it to the FID point. We’re entering post-FID at a low entry cost and an immediate value add.”

Talos said there is an additional 25 MMboe to 35 MMboe in drilling locations adjacent to Monument that could extend the resource and Talos' pipeline of drill-ready opportunities.

“Monument represents the first of several potential investments in this well-established geological trend,” Talos CEO Tim Duncan said Aug. 7 in a company press release.

Talos has not changed its 2024 capex guidance and looks to make net investments of $25 million in 2024 and $160 million over 2025 and 2026 at Monument.

“Talos strategically reallocated a portion of its 2024 capital investments for the Monument discovery, given the later-than-anticipated arrival of the West Vela rig,” Talos said.

Talos acquired a 12.86% interest in Monument from operator Beacon Offshore Energy and an 8.57% interest from Repsol E&P USA Inc., consultancy Welligence Energy Analytics said Aug. 12 in a research report. After the deal, Talos partners’ interest in Monument include Beacon (30%), Navitas Petroleum (28.6%) and Repsol (20%), according to Talos.

Talos GoM updates

Talos also provided updates on its involvement in several other projects in the GoM.

Talos successfully drilled and completed the waterflood (down-hole water injection) well in the Lobster Field in first-quarter 2024. The well began injecting water into the BUL-1 sand at 7,000 bbl/d in May 2024. Production is expected to increase by over 2,000 gross boe/d over the coming 12 months to 18 months.

Talos holds a 67% interest in Lobster with partner Chevron Corp., which holds 33%. 

Talos is currently drilling the Walter-operated amplitude-supported exploitation well in Ewing Bank 953. The well will target a Pliocene age reservoir at 19,000 ft with an estimated gross resource potential of 15 MMboe to 25 MMboe. Duncan said results were expected by the end of third-quarter 2024.

Talos holds a 33.3% interest in Ewing Bank 953 with partners Walter Oil & Gas (56.7%) and Gordy Oil (10%).

Talos looks to take possession of the Seadrill-owned drillship West Vela and start drilling the Katmai West #2 well in late third-quarter 2024. Drilling at the well is to further appraise the field, potentially adding significant reserves.

First production from Katmai West #2 is expected in the second quarter of 2025. Modifications to the facility, Tarantula, will increase capacity from 27,000 boe/d to 35,000 boe/d, Talos said in the release.

Talos holds a 50% interest in Katmai West #2 with partner Ridgewood Energy (50%). Talos is the sole owner and operator of the Tarantula facility.

“[We] will begin drilling three consecutive high-impact subsalt wells, including the Katmai West #2 appraisal in 2024, followed by the Daenerys and Helms Deep prospects in 2025,” Duncan said.

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