In 1938, Mexico nationalized its oil industry, creating a monopoly for the state-run company, Petroleos Mexicanos or Pemex.
The Mexican government has decided to open up the country’s oil reserves to exploration and drilling by private companies. Talos Energy is one of the pioneering companies meeting the challenge.
Talos Energy formed a joint venture with Premier Oil Plc (based in London) and Sierra Oil & Gas (based in Mexico) for the Zama-1 well. It’s in the Sureste Basin which is offshore from the state of Tabasco. Experts estimate Zama-1 holds from 100 million to 500 million barrels of crude oil. Drilling began on May 21. They expect to finish in 90 days. According to Edison Investment Research, based on the structure of the Sureste Basin, the offshore drilling there has a geologically high probability of success.
The joint venture won the right to drill Zama-1 in 2015 in the first round of bidding. Mexico passed its Constitutional Energy Reforms in 2013 to allow foreign energy companies into the company for the first time since 1938.
Talos Energy owns 35% of the project and operates the well. Sierra Oil & Gas owns 40% and Premier Oil owns 25%.
For Tim Duncan, Talos Energy represents a triumph of patience and hard work. During the 2008 financial crisis he had to return capital to the bank. He retained just enough to work the most lucrative energy opportunities. By 2011 he doubled Phoenix Exploration in size. Then he sold it to Apache Corporation.
Tim Duncan and partners started Talos Energy in 2012 with $600 million from previous investors Apollo Management and Riverstone Holdings. Based in Houston, they have 60 geoscientists and other employees at headquarters and the same number operating in the field along the Gulf Coast.
WorkplaceDynamics named Talos Energy as the best small business to work for because they are sharing equity with their employees. This gives everyone an incentive to work hard, because it’s their company too. Talos Energy is not big enough to patch the compensation the large oil and energy companies pay, so they are allowing employees to share in the company’s profits as it grows.