Daenerys discovery a game-changer for Talos in GoA

Addressing Talos Energy’s announced discovery at the Daenerys prospect in the Walker Ridge protraction area of the deepwater Gulf of America/Mexico (GoA), said Miles Sasser, senior research analyst, upstream for Wood Mackenzie said, “For Talos, the discovery is a game-changer. The company's GoA portfolio was ageing, but Daenerys could add more than 50 millions of barrels of oil equivalent (mmboe) net proved reserves. That would increase its YE2024 proved reserves of 194 mmboe more than 25%.

“This is the company’s largest discovery to date in the GoA. While Talos has not released volumes, a 200 mmboe discovery would make Daenerys GoA’s biggest find since Shell’s Whale in 2017.”

The discovery well was drilled to a total vertical depth of 33,228 feet, finishing 12 days early and US$16 million under budget, demonstrating strong operational execution by the Talos-led consortium.

Wood Mackenzie’s preliminary prospect valuation suggests peak production could reach 65,000 barrels per day. The company notes the discovery marks a strategic shift for Talos, which has traditionally focused on lower-risk infrastructure-led exploration (ILX) projects. Beyond Daenerys, the company has two additional large exploration projects in its pipeline – Enterprise and Hershey – both with pre-drill estimates exceeding 100 mmboe each, signaling Talos's embrace of a more aggressive high-impact exploration strategy.

Combined with bp’s Far South discovery in April, 2025 is the best year for exploration success on a volumes discovered basis since 2020, noted Sasser. With multiple exploration wells still planned for the year, 2025 has the potential to move even further up the list.

"The timing is particularly significant with December's lease sale approaching,” said Adrian Tjokro, research analyst at Wood Mackenzie. “The discovery proves there are still major prizes to be found in the sub-salt Miocene, potentially intensifying competition in the Walker Ridge area as companies look to capitalize on favorable royalty terms."

Other key elements of find:

• Shell taking a minority non-op stake is telling. The backing signaled real confidence in Daenerys as the supermajor operates 95% of its GoA net production.
• Potential for tieback or new hub: A 24-mile tieback to the Oxy-operated Heidelberg field is feasible given the facility’s ample spare capacity. However, the remote location could warrant a new hub, which Wood Mackenzie estimates the total project PV10 of US$745 million, with an IRR of 18% at US$65 Brent, and a payback period of six and a half years from project sanction.
• The One Big Beautiful Bill Act could open more such finds. A provision of the act allows for production of multiple stacked reservoirs through a single wellbore. Daenerys could be the first stand-alone Miocene project planned with this rule in place – offering Talos flexibility on well design and development plans.

“The Daenerys discovery could reshape the exploration strategy for Gulf of America's Walker Ridge area," said Tjokro. "While the Big Foot discovery marked the first subsalt Miocene find in the Walker Ridge margin, Daenerys confirms that the Subsalt Miocene trend extends westward into the region and into an area that previously only held Paleogene-aged fields. This success could trigger a re-evaluation of the area for other overlooked sub-salt Miocene potential after a multi-year absence of 100+ mmboe discoveries in the region."