On May 10, the company formed from the mergers of Talos Energy and Stone Energy began trading as “TALO” on the NYSE. The company’s Chief Executive Officer, Timothy S. Duncan, announced that this combination will benefit their shareholders from an increase in value. He believes that the portfolio of Talos Energy contains potential with programs located offshore Mexico and within the United States’ Gulf of Mexico.
It’s estimated that in 2017 the 2 companies produced oil equivalent in the range of around 47,000 barrels a day. This is expected to go up after the discovery of oil in Zama that is considered historic. The deal included access to credit of around $600 million and a high level of liquidity, The shareholders of Stone Energy Corporation will be given 1 Talos Energy share for each of their existing shares.
The shareholders of Talos Energy will own approximately 63% with the remainder being held by shareholders of Stone Energy. An enterprise value of the company has been placed at around $2.5 billion. In addition, based on the $35.49 stock price of Talos in November, they estimate the market capitalization at $1.9 billion.
The CEO hopes to eventually be able to build the company to be the best when it comes of exploration off offshore sites and production. By combining the experts and resources of the 2 companies, he believes that this plan will be accelerated more opportunities will be able to be discovered and taken advantage of. By combining Talos Energy and Stone, they will become a frontrunner in the Gulf of Mexico.
During the agreement, the companies agreed to be held under a holding company as subsidiaries. This new company became a publicly traded entity after the completion of the merger and is now “Talos Energy Inc.”. The executive team of this new holding company will include important figures from both Stone and Talos Energy.
Citigroup acted as the financial advisor for the transaction along with UBS Investment Bank for Talos. Stone Energy was advised financially by Petrie Partners Securities, LLC. The merger was completed in 2018 during the second quarter.
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