MercoPress. South Atlantic News Agency

Premier and partners make world class oil discovery in Mexico. Shares soar more than 30%

Premier said initial gross original oil in place estimates for the Zama-1 well are in excess of 1 billion barrels, which could extend into a neighboring block

Premier Oil (with strong interests in Falklands' oil industry), together with its joint venture partners Talos Energy (Operator) and Sierra Oil & Gas, announced on Wednesday that the Zama-1 exploration well in Block 7, offshore 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. Premier holds a 25% interest in the block.

Shares in Premier Oil rocketed by more than 30% as it announced a “world class” oil discovery in the Gulf of Mexico.

According to a Premier release preliminary analysis indicates: Initial gross original oil in place estimates for the Zama-1 well are in excess of 1 billion barrels, which could extend into a neighboring block; A contiguous gross oil bearing interval of over 335 meters, with up to 200 meters of net oil bearing reservoir in Upper Miocene sandstones with no water contact. Initial tests of hydrocarbon samples recovered to the surface contain light oil, with API gravities between 28° and 30° and some associated gas

The well spudded on 21 May 2017 utilizing the Ensco 8503, a moored floating drilling rig. Located in 166 meters of water and approximately 60 kilometers offshore Dos Bocas, it has reached an initial shallow target depth of 3,383 meters. The Operator is currently setting a liner to protect the discovered reservoirs, prior to drilling deeper exploratory objectives to a total vertical depth of approximately 4,200 meters.

CEO Tony Durrant commented, “We are delighted to be announcing this significant new oil discovery offshore Mexico. We have encountered a very substantial oil bearing interval which indicates over 1 billion barrels of oil in place, a commercial standalone development which adds materially to Premier’s portfolio of assets worldwide. It is particularly pleasing that our strategy of focusing our exploration portfolio on high impact opportunities in proven but under-drilled basins has led to this world class discovery with our first well in Mexico.

”The oil discovered in the Zama-1 well is an extremely important event for Premier, the joint venture and for Mexico and we look forward to working with the Government and our partners to realise the full potential of this exciting discovery.”