Talos Energy has reported a total US$37.7mn in capital expenditures for plugging and abandonment (P&A) and settled decommissioning obligations for the third quarter 2024.
Besides comittment to end-of-life activities, the company's total capital expenditures for the period stands at US$118.9mn. Its quarterly report also revealed an increase of spending on P&A and decommissioning to US$100-110,000.
Talos' decommissioning services up untill 2028 has been covered by Helix Energy Solutions Group under an agreement signed early last year. This agreement empowers Helix with the first right of refusal involving significant segments of Talos’ decommissioning schedule in the US Gulf of Mexico. Helix will be in charge of leading Talos' abandonment goals, including offshore wells, pipelines and platforms. For the campaign, Helix Alliance, the company's shallow water abandonment wing from Louisiana, will be deployed for structure removals by using its derrick barges, liftboats for plug and abandonment activities, and dive support vessels (DSVs) for pipeline abandonments. The initiative will see multiple offshore supply vessels (OSVs) among a divwerse range of other assets as well.
Speaking of the agreement, Helix’s President and Chief Executive Officer, Owen Kratz, had said, “We are excited to have been awarded this significant framework agreement for well and structure removal and decommissioning. Helix and Talos have worked together on field production, well intervention and decommissioning in the deepwater arena for many years, and this framework expands the relationship onto the shelf, further demonstrating Helix’s position as the preeminent company for full-field decommissioning in the Gulf of Mexico.”
Events leading up to the P&A
The second and third quarters of 2024 saw significant decommissioning obligations for Talos, during which time the plugging and abandoning of the Sebastian prospect also took place. While operated by Murphy Oil Corporation at a 26.8% interest, Talos holds a 25.0% interest in the prospect. Other partners include Westlawn Americas Offshore at 18.2%, Alta Mar Energy at 20.0%, and Houston Energy at 10.0%.
Drilled in the third quarter 2024, Murphy had to finally plug and abandon the Sebastian number 1 exploration well after only non-commercial hydrocarbons were encountered. This involved the removal of various tubulars and equipment, which can only be initiated once all safety and sustainability measures are put into place.
Talos had eneterd into an agreement regarding the Sebastian prospect in the Mississippi Canyon Block 387 of the US Gulf of Mexico, where drilling began in the later half of August 2024. The drilling aimed to reach a true vertical depth of approximately 12000 ft of the rich Upper Miocene K-1 reservoir situated in the region. There were plans to tie back the Sebastian prospect to the Delta House facility, where Talos holds interests as well.
While initial tests suggested an estimated gross resource potential of 9-16 mn boe with an aticipated early production rate of 6-10 mn boe per day, from this amplitude-supported prospect, post drilling results hardly matched expectations. The well had to be plugged and abandoned even though stakeholders initially considered it as one of the 'tactical, lower-risk opportunities' that can be 'brought online relatively quickly' to aid bigger upstream projects.
To know more about Gulf of Mexico's decommissioning and abandonment scene, click here.
