Talos Energy was recently heard making some bold moves in the ever-changing chronicles of the Gulf saga. As CEO Timothy S. Duncan puts it, they will be acquiring Stone Energy Corp to the tune of $1.9 billion through a merger. When combined the two companies will form Talos Energy Inc, and will still trade on NYSE under the symbol “TALO.”
Many are anticipating updates, with news of a late first quarter or early second quarter closing. Having the goal of becoming something similar to the premier offshore exploration as well as production company, Talos is ready to thrive. Not only will development be accelerated, the combination of talent as well as project inventory sends a message of continuity in regard to merger news.
Talos stakeholders should be thrilled to know that in addition to being a majority stakeholder, they will also hold around 63 percent. Stone shareholders will in turn hold the remaining 37 percent, as stated by the release. Talos is thriving and the climate is right for a deal closing ceremony. To put this into perspective, Talos Energy Inc. will have a huge amount of resources at hand when their 1.2 million combined acreage is finalized. Having such a stronghold on these reserves insures that Talos will be a strong player in the field for years to come.
In addition to their proven reserves of 136 million barrels of oil, the newly formed company will have much more flexibility financially. This flexibility allows for growth, since it is expected they will have a $1 billion credit facility. As expected, these reserves are paying out in more ways than one. When it comes to financial flexiblity, you must listen closely to your advisors in order to stay on the right path. Citigroup as well as UBS Investment banks happen to be advisors to Talos, with Stone sticking with Petrie Parnters Securities LLC.
Stone ended up filed for a bankruptcy, when they checked the books and found $1.23 billion in assets along with $1.75 billion as a debt. As much as this merger shows Stone’s success in terms of a restructure, it also shows Talos is willing to do what it takes to ensure the continuity of expoloration. Talos has been known to mention the competition down in the Gulf, as well as the intensity with which business must be done in that climate. Back in 2015 Talos was victorious in winning a bid in Mexico, a way to increase it’s reach in the region.