Talos Energy in conjunction with their Zama project recently announced the discovery of over 2 billion barrels of oil in the Gulf of Mexico. The area in question is however located adjacent to a block owned by PEMEX, Mexico’s state-run oil company. Tim Duncan, Chief Executive Officer of Talos Energy immediately called for a partnership with PEMEX in order to better research the areas around the newly discovered oil deposit. The partnership would include the sharing of data with PEMEX as well as a consortium with Britians Premiere oil and Mexico’s Sierra Oil and Gas.
The goal of reaching a partnership deal with PEMEX was however seen as wishful thinking at the time. This was due to a long-standing tradition by the Mexican government to bar all partnerships with outside entities. The practice goes back to the early days of the current Mexican government and was placed to protect the countries resources. However, in the years to come, PEMEX would grow to be so corrupted that the Mexican government cut the funding and began a 14-year slump for the oil company.
Tim Duncan, however, would find his opportunity in recently elected President-elect Andres Manuel Lopez Obrador. Throughout his campaign, President-elect Obrador promised the restoration of PEMEX to its once glory days of economic power. Both parties quickly agreed to a partnership and with the quick approval of the Zama project appraisal plan by Mexico’s oil regulator the plan to explore two new wells was underway. The Zama project calls for an investment by Talos Energy and partners of $325 million to drill two new wells and conduct research on other areas of the Gulf of Mexico throughout 2019. Drilling will begin in late November of 2018 with an estimated 150,000 barrels per day being produced by 2023. Although Talos Energy stated that they will still need time to construct additional platforms, the time will allow them to conduct patient and precise research in order to collect the best possible data.
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Market analysts are raising concerns about a looming oil production gap that could hit the world economy hard, possibly within five to seven years. That’s because pending sanctions on Iran will take that major supplier out of the global equation. Analysts say that more major new discoveries are needed to head off an uncertain future.
Those same analysts cited Houston-based Talos Energy as one company that is part of the solution. The young and hungry deepwater wildcatter recently made a major find in Mexican territorial waters off the coast of Tabasco last year. The well, dubbed the Zama-1, might hold as much two billion barrels of crude oil equivalent.
The energy consultancy firm Wood Mackenzie said a supply gap is likely to show up in the middle of the 2020 decade. The shortage could surge to 3 million bpd by 2030.
That’s why more companies with the Talos Energy philosophy and approach are much needed in today’s industry. Under CEO Tim Duncan, Talos is determined to innovate, leverage high technology and put the smartest people in the business to work on developing locations that other entities consider “unreachable.”
Talos is not only buying up blocks in both shallow water and deepwater locations across the Gulf of Mexico, it is entering into creative partnerships with entities like Pemex and Hokchi Energy. The former is the Mexican national oil company and the later is a subsidiary of the Argentinian Pan American Oil.
For an Pan American Oil company to partner with Pemex is nothing less that historic because Mexico has not allowed foreign entities to operate within its territories since it nationalized its oil industry in 1938. But now Talos has joined with Pemex and scored a major find.
More innovation like this will be needed if the world oil supply is to remain robust and stable — or at the very least — avoid a looming shortage.
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Talos Energy is a company that was founded in 2012 by Timothy Duncan with an equity raise of $600 million from River stone Holdings and Apollo Global Management. The company majors in the assessment, development, and manufacture of oil and gas. The company has its headquarters in Houston, Texas but also operate in Mexico and the Gulf Coast but have sold some of the companies which brought remarkable returns after the sale. The U.S petroleum market has experienced difficulties with the flooding of crude oil which has affected the pricing of the same. With time though, the market has experienced problems with the bankruptcy of some of the oil drilling companies.
Again, the market has become affected adversely as there has developed unexpected eventualities in the market. Either way, with the intervention of Talos Energy, the hassle of oil is likely to end as it is an independent company that has vast experience in offshore oil exploration and production. In that case, with its constant production of oil, the prices will stabilize with time-solving any anxiety in the oil market especially among the primary users of the commodity.
Talos Energy incorporates the use of technology in their extraction of oil and gas and hires professionals and experienced individuals for the job especially in geophysical technology and innovative drilling methods. By so doing, the company gets to exploit the identified areas for drilling thoroughly without wasting resources as they are productive as initially expected. The realization that a lot of industries rely solely on oil for production makes Talos Energy stand out as it works towards meeting the demand in the market. The company as well liaises with other institutions with a similar goal like Premier Oil and Sierra Oil & Gas to have sustainable and reliable production.
The company also develops good relationships with the local communities where they carry out their activities. As appreciation for their peaceful stay among these communities, they take time to give back by contributing to charity and establishing not for profit organizations. Their employees as well enjoy a conducive working environment considering that their work is involving and risky and requires proper measures to be taken.
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Hurricane Harvey may have devastated the neighborhood of Talas Energy’s CEO Tim Duncan, but it didn’t keep him from completing the biggest business deal of his life. The electricity in the town of Kingwood, Texas was already off due to the flooding and several more feet of water was expected. The Talos Energy Chief Executive Officer took action and helped his family including his wife, child, and their two pet dogs into the rescue boat belonging to FEMA.
He and his family were devastated, but he knew that there was no way that he could give up. He had been working on a merger between his company, Talos Energy, and Stone Energy Company for the last 4 months. He knew that it was a risky move, but the $2.5 billion merger would allow Talos Energy a public entity without them having to make a public offering.
He knew that he couldn’t allow a flood to prevent the future success of Talos Energy. Duncan flew his family to Alabama to escape the disaster before spending time in Texas at the home of his parents. While in Houston, he worked well into the night and negotiated the remainder of the deal between Talos Energy and Stone from the dining room in his parents’ house. The flood didn’t deter him from his aspirations of success.
The merger was completed between Stone and Talos Energy in May of that year. The stock listing for Stone was taken over by Talos Energy and Duncan will head a company worth over $900 million in revenue year. The assets of Talos Energy are almost entirely located in the Gulf of Mexico. Their assets are currently valued at approximately $2.3 billion and the debt of $700 million is considered relatively low risk for Talos Energy.
Tim Duncan was raised in Florida, Texas, and Egypt and grew up in oil business. He has shown himself to be able to fight through less than ideal conditions for the success of Talos Energy and his family. He has been in the oil industry himself since 1996 and has shown a knack for finding new reserves.
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