Houston’s Talos Enegry And Louisiana’s Stone Energy Merger

Talos Energy is a Houston based offshore oil and gas producer. It has now officially become public with the acquisition of Stone Energy. The closing was nearly a $2 billion merger with Louisiana’s Stone Energy. The merger between the two companies created a humungous offshore energy player that’ll be focusing on the U.S. and Mexican sides of the Gulf of Mexico.

Talos was founded in 2012 to focus on the Gulf region. Private equity firms that included the likes of Apollo Global Management and Riverstone Holdings invested in Talos. The vision was take Talos public through an IPO, but due to the oil bust in 2014 through 2015, it sabotaged those plans.

In 2018, when Talos Energy and Stone Energy merged, the CEO Tim Duncan highlighted deal as an enhanced combination. The Houston based Talos company began trading on the NYSE under the “TALO” ticker. When the deal closed, Talos stakeholders will own 63 percent of the company and Stone shareholders will own the remaining 37 percent. The equity capital market capitalization is estimated at $1.9 billion with an enterprise value of approximately $2.5 billion.

The Talos company will have over 1.2 million combined gross acres in the Gulf region, a daily production estimated at 47 thousand barrels of oil equivalent and reserves of 136 million in 2017. In addition, the new company will have greater financial flexibility, because it’s expected to have a $1 billion credit facility, $600 million initial borrowing capacity, and no material long-term maturities until 2022. In addition to the merger, it is underscored by the historic, world-class Zama oil discovery in the shallow waters of Mexico.

Tim Duncan the Chief Executive Officer from Talos Energy Inc. and the 10-member board of directors will consist of six members from Talos and four from Stone. The headquarters will be based out Houston, TX with additional offices in Lafayette and New Orleans.

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