A new energy giant, Talos Energy Incorporation, has been created following a merger between Talos Energy and Stone Energy in a deal, analysts say will be closed sometime in the first quarter of 2018. According to a report published online on November 21, 2017 in the Houston Business Journal, Talos Energy, LLC from Houston revealed it will acquire Stone Energy Corp in a deal estimated to cost $2 billion. The new company will have an enterprise value of about $2.5 billion based on Stone’s share price pegged at $35.49. In terms of productivity, the merged entity will have a significant 1.2 million gross acres spread across the Gulf of Mexico and proven oil reserves equivalent to 136 million barrels.
The company’s average daily oil production in 2017 stood at 47,000 barrels. Talos Energy, Inc will also enjoy greater financial muscle with a ready credit facility of $1 billion and initial borrowing capacity tied at a decent $600 million. The funding plan will attract no material note maturities for a period of 4 years. At the completion of the transaction, 63% of the new company will be owned by Talos stakeholders, with the remaining 37% stake going to Stone stakeholders. Like the parent company, the new entity will continue to trade on the NYSE. In addition to robust projects inventory, the CEO of Talos, Tim Duncan said the new company will enjoy a wider pool of talent and resources. The development comes at a time when Talos has continually been ranked one of the best workplaces, a fact Tim attributes to, among other things teamwork, productive work environment and attractive compensation. Duncan will take charge as the new Talos Energy, Chief Executive Officer at the completion of the deal.
A board of directors constituting 6 members from Talos and 4 from Stone will also be established to oversee the management of the new outfit. The company will have its main offices in Houston and field offices in neighboring Louisiana. Citigroup Corp is the lead financial advisers for Talos while Petrie Partners Securities, LLC will stand for Stone.The respective legal counsels for Talos and Stone in the highly anticipated deal are Vinson & Elkins LLP and Akin Gump Srauss Hauer & Feld LLP. The core operations of Talos Energy, LLC will remain oil and gas exploration, an excerpt on Businesswire reveals. The privately owned upstream oil and gas company is backed financially by three major financial and investment giants, Riverstone Holdings, Inc, Apollo Global Management, LLC and Talos management. As of September 2012, the bigger of the partners Apollo Global Management, LLC had over $100 billion worth of assets under its management. The multinational firm maintains offices in cities like New York, London, Los Angeles and Hong Kong.