Talos To Buy EnVen Energy For $1.1 Billion
Oil and gas company Talos Energy has executed definitive agreements to acquire private U.S. Gulf of Mexico deepwater operator EnVen Energy for $1.1 billion.
Talos Energy said that the strategic transaction expanded its Gulf of Mexico operations with high margin, oil-weighted assets.
Consideration for the transaction consists of 43.8 million Talos shares and $212.5 million in cash, plus the assumption of EnVen's net debt upon closing, currently estimated at approximately $50.0 million at year-end 2022.
Following the transaction, Talos shareholders will own approximately 66 percent of the pro forma company and EnVen's equity holders will own the remaining 34 percent. The transaction has been unanimously approved by both Boards of Directors with closing expected by year-end 2022.
"This transaction adds significant scale and diversity to our business through logical, in-basin expansion with an excellent strategic fit. EnVen's high-margin, oil-weighted assets in key deepwater regions, operated infrastructure, and significant overlapping acreage footprint will enhance our ability to accelerate shareholder value creation. The acquisition is financially attractive, expanding our operating margins and increasing Free Cash Flow per Share while immediately improving our credit profile before accounting for significant expected cost synergies.”
“The enhanced cash flow profile will provide us with increased capital allocation optionality, including additional high-impact subsea tie-back opportunities, opportunistic acquisitions, accelerating our low-carbon initiatives, and positioning Talos for a potential shareholder return of capital program in the future. We are excited for the numerous benefits that this transaction provides and look forward to closing around year-end," Talos President and Chief Executive Officer Timothy S. Duncan stated.
As a result of the transaction, Talos will add 24,000 barrels of oil equivalent per day of production. This increases production by 40 percent and gross acreage by 35 percent, significantly increasing operational scale and diversity. Talos will also double its operated deepwater facility footprint, adding key infrastructure in existing Talos operating areas.
It is worth noting that EnVen operates numerous platforms, including five major deepwater facilities with significant open capacity and holds an acreage footprint of approximately 420,000 gross acres in core deepwater areas for future infrastructure-led development, exploitation, and exploration opportunities.
Tim Duncan will remain CEO after the EnVen buy and the expanded Board of Directors will include six Talos directors and two from the EnVen Board of Directors – Shandell Szabo and Richard Sherrill.
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