Talos Energy to spend $640 million acquiring Gulf of Mexico acreage and prospects

Talos Energy has entered into a series of definitive agreements to acquire a broad portfolio of U.S. Gulf of Mexico producing assets, exploration prospects and acreage from affiliates of ILX Holdings, Castex Energy and Venari Resources for $640 million as of the effective date.

Talos president and CEO Timothy S. Duncan commented, "The acquisition of these assets significantly strengthens Talos's position as a basin-leading independent E&P company, providing increased scale and free cash flow, greater operational diversity and broader optionality in future growth.”

Specifically, Talos has signed definitive agreements to acquire all producing assets, primary term acreage and prospects of ILX Holdings, all producing assets and certain primary term acreage and prospects of ILX Holdings II, all primary term acreage and prospects of ILX Holdings III and certain subsidiaries of the Castex 2014 and Castex 2016 entities. In a separate transaction, Talos executed a purchase and sale agreement and closed on the acquisition of all primary term acreage and prospects from Venari Resources.

The acquired assets produced approximately 19,000 boepd during the third quarter of 2019 and had proved and probable reserves of approximately MMboe as of July 1, 2019. Up to 83% of the Proved reserves are considered proved developed. In addition, the Transaction includes more than 40 identified exploration prospects located on a total acreage footprint of approximately 700,000 gross acres. Closing of the ILX Acquisitions and Castex Acquisitions is expected in the first quarter of 2020.

The net consideration at closing of the ILX and Castex acquisitions is expected to be funded with the issuance of new Talos shares and cash from existing sources of liquidity. Talos will issue 11.0 million shares to sellers at closing, or $250 million in equity consideration based upon the volume-weighted average price for the 30 trading days ending December 5, 2019. Effective December 10, 2019, the borrowing base under the company's revolving credit facility increased from $850 million to $950 million as part of the regular fall redetermination process, and will be further increased to a total size of $1,150 million simultaneous with the closing of the ILX Acquisitions and Castex Acquisitions. The purchase price is subject to customary purchase price adjustments between the July 1, 2019 effective date and the expected close date, which will significantly reduce Talos's cash requirements at closing. In advance of the Transaction, Talos entered into WTI swaps, including 1.1 MMBoe for 2020 at a weighted average price of $55.46 per barrel.

Fuente: https://www.worldoil.com//news/2019/12/16/talos-energy-to-spend-640-million-acquiring-gulf-of-mexico-acreage-and-prospects

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