Premier Oil, together with its joint-venture partners Talos Energy and Sierra Oil & Gas, has announced that the Zama-1 exploration well (in Block 7 off the coast of Mexico) has made a world-class oil discovery.

Preliminary analysis indicates that the initial gross “original oil in place’ is more than a billion barrels, which could extend into a neighbouring block.

Initial tests of hydrocarbon samples brought to the surface contain light oil and some associated gas. The Zama-1 well is the first offshore exploration well drilled by the private sector in Mexico’s history. Premier has a 25% interest in the block.

The operator, Talos Energy, is currently ‘setting a liner’ to protect the discovered reservoirs, prior to drilling deeper exploratory objectives to a total depth of about 4,200m.

Tony Durrant, chief executive of Premier, said: “This is a commercial development that adds materially to Premier’s portfolio of assets world-wide.

“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.”