Talos Energy today provided an interim update regarding the unitization process for the Company's Zama discovery in offshore Mexico. Talos's interim update clarifies information recently disclosed by Petróleos Mexicanos ("Pemex") in its Annual Report. Talos, Block 7 partners and Pemex, with involvement from the Mexican Ministry of Energy ("SENER"), are working to finalize terms of a Unitization and Unit Operating Agreement ("UUOA") based on international best practices and considering inputs from the parties. The UUOA will address initial tract participating interest splits, the mechanism to re-determine those splits in the future and operatorship, among other key topics. A third-party reservoir engineering firm engaged by the Block 7 partners and Pemex to evaluate Initial Tract Participation ("ITP") within the Zama reservoir recently concluded that the Block 7 consortium led by Talos holds 49.6% of the gross interest in Zama and Pemex holds 50.4%. The UUOA will separately provide for specific milestones upon which participating interest splits among the Zama parties will be re-determined and adjusted based on evolving data collected over the asset lifecycle. Redetermination provisions are standard in unitizations and ensure equitable participation over time. Under the redetermination provisions in the Zama UUOA, Block 7 partners and Pemex will reevaluate the ITP and subsequently determined splits in line with international best practices.

Talos President and Chief Executive Officer Timothy S. Duncan commented: 
"We continue to push in earnest to reach full agreement on the commercial terms of the unitization. We believe the recent third-party analysis underestimates relevant data obtained during the appraisal campaign. As you will recall, Talos engaged Netherland, Sewell & Associates to prepare an independent evaluation last year which concluded that the Block 7 consortium holds 59.6% and Pemex holds 40.4% of the gross interest in Zama, respectively. Regardless of the ITP established in the final UUOA, we expect that the true percentages will ultimately be realized through the re-determination process, which is a standard component of any unitization agreement and a global best practice, and other factors. ITP percentages are a single variable among those still being determined, most importantly operatorship. We remain confident that Talos is best positioned to operate the field moving forward and we will further update the market once a commercial agreement on the unitization has been reached."

KeyFacts Energy: Talos Energy Mexico country profile