The joint venture will leave Talos as operator and values Talos’ stake in the Zama Project offshore Mexico at up to $262 million. (Source: Shutterstock.com)
A wholly-owned subsidiary of Grupo Carso has agreed to acquire a 49.9% interest in Talos Energy’s Mexican subsidiary, which holds a 17.4% stake in the Zama Project offshore Mexico, the U.S. E&P said in a May 25 press release.
Grupo Carso subsidiary Zamajal SA de CV agreed to purchase nearly half of Talos’ subsidiary for $124.75 million. Talos said the price suggests its 17.4% Zama stake has a “minimum valuation” of approximately $250 million. The value could potentially increase to $262.50 million if certain milestones are reached.
Talos will be paid $74.85 million at closing. The remaining $49.9 million is due at first production.
Talos will remain the controlling shareholder of Talos Mexico. The transaction is expected to close in third-quarter 2023, subject to approval by Mexico's Federal Economic Competition Commission (COFECE).
President and CEO Timothy S. Duncan said the transaction establishes a baseline Zama valuation for Talos shareholders while providing material upfront cash proceeds.
“Most importantly, Talos shareholders retain significant valuation upside as we advance the project toward first production," he said.
Duncan also said Talos was thrilled to partner with Grupo Carso and noted that the companies’ relationship dates back to the 2015 offshore lease sales in Mexico.
“As we accelerate recent momentum and advance Zama toward FID [final investment decision] and first production, we are confident that Carso is the right partner at the right time. Carso's investment is a testament to the economic potential of Zama, and the joint venture will also benefit from Carso's critical presence in Mexico and global commercial experience. We are excited about this broad partnership in Mexico."
RELATED: Pemex Submits Zama Field Plan with Talos, Partners to Mexican Authorities
In March, Talos said it had submitted its Zama Unit Development Plan to Mexico's National Commission of Hydrocarbons for formal approval. Additionally, an integrated project team comprised of individuals from the four Zama unit holders was established to manage the development and operation of the project.
Talos will co-lead the planning, drilling, construction and completion of all Zama wells and the planning, execution and delivery of Zama's offshore infrastructure.
Zama is being developed to produce up to 180,000 boe/d — the equivalent of more than 10% of Mexico's current oil production.
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