Talos-Stone merger creates GoM heavyweight
USA
HOUSTON, November 22, 2017 – Two US operators focused on the Gulf of Mexico (GoM), Talos Energy and Stone Energy, will merge to create an E&P entity worth around USD 2.5 billion, the companies announced Tuesday in a joint statement.
“This combination represents an important step in our goal of becoming the premier offshore exploration and production company,” Talos CEO Timothy S. Duncan said in the statement.
“The combined talent, technical resources and balance sheet of the resulting company will allow us to accelerate development of our own robust project inventory, while also giving us the horsepower to pursue compelling transactional and exploration opportunities.”
The new company, which will keep the Talos name, will have average daily production of 47,000 boe, along with 136 million boe in proven reserves in 2017. The companies said that 69% of those reserves are oil, with nearly three quarters located in the Gulf of Mexico.
The merger will see Talos take a 63% interest in the new company, while Stone will hold the remaining shares. According to the statement, the new company is expected to have a “new USD 1-billion credit facility with an expected USD 600 million in initial borrowing capacity, and no material long-term note maturities until 2022.”
Stone only holds assets in US territory, while Talos has a presence in both the USA and Mexico. As part of a consortium including Premier Oil and Sierra Oil & Gas, Talos drilled the first private well in Mexico. Zama-1 was drilled in the GoM’s shallow-water Block 7 in July, discovering 1.4 billion-2 billion gross barrels of original oil in place.
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