Significant new oil discovery offshore Mexico

Premier (25%), together with its joint venture partners Talos Energy (operator, 40%) and Sierra Oil & Gas (35%), is pleased to announce that the Zama-1 exploration well in block 7, in the Sureste Basin located in the shallow waters offshore south-east Mexico, has made a world class oil discovery. The Zama-1 well is the first offshore exploration well drilled by the private sector in Mexico’s history.

Initial gross original oil-in-place estimates for the Zama-1 well are in excess of 1bn barrels of light oil, with API gravities between 28° and 30°, which could extend into a neighbouring block. There is some associated gas.

According to Sierra, under the terms of the production sharing agreement for the Zama-1 block, the Mexican government will receive a 68.99% profit share from every barrel produced. Across the whole project this could amount to over 80%, including taxes and fees.