Talos Energy LLC based in Houston will acquire Stone Energy Corp based out of Lafayette, Louisiana in a merger of almost two billion dollars. The new company will be Talos Energy Inc., “TALO” will be what it trades under on the NYSE. The deal is expected to close during the end of the first quarter or start of the second quarter in 2018.Talos’ CEO, Timothy S. Duncan has said the goal of being an offshore production and exploration company is closer to being met with the merger. The project inventory development will be accelerated by the combined technical resources, balance sheet and talent. The company will also be able to follow through on opportunities for exploration and transactions.Sixty-three percent will be owned by stakeholders in Talos and the other thirty-seven percent by shareholders in Stone.
The November twentieth stock price for Stone was thirty-five dollars and forty-nine cents making almost two billion dollars the initial equity market capitalization with two and a half billion being the enterprise value. There will be a combined gross acreage of one point two million in the Gulf of Mexico for Talos Energy Inc. There were one hundred and thirty-six million barrels of oil and forty-seven thousand barrels of oil equivalent as of the end of June. There will be more flexibility financially which gives room for more growth for the new company. There is not expected to be material long term note maturities until the year 2020. The company is expected to have an initial capacity for borrowing six hundred million, and the initial credit facility is expected to be a billion dollars.
Talos Energy Inc CEO will be Duncan, and the board will four members from Stone and six from Talos. The new company headquarters will be in Houston with New Orleans and Lafayette having additional offices. The financial advisors for stone are Petrie Partners Securities LLC, and Talos’ financial advisors are UBS Investment and Citigroup banks. Legal counsel for Stone was Akin Gump Strauss Hauer & Feld LLP, while Paul, Weiss, Rifkind, Wharton & Garrison LLP and Vinson & Elkins LLP were legal council for Talos.Tim Duncan and partners used six hundred million dollars to start Talos Energy. The equity came from prior backers and assets that produced more than sixteen thousand barrels of oil each day. Talos has already acquired Helix Energy Solutions.