U.S.-based independent exploration and production company Talos Energy entered into and completed a transaction to acquire Whistler Energy II LLC on August 31, 2018.
Talos said on Tuesday that the purchase price was $52 million and, as part of this acquisition, the company negotiated the release of approximately $77 million of cash collateral that secured Whistler’s surety bonds that the company would not need to replace.
As a result, of the total cash collateral released, Talos received $31 million, with the seller entitled to the remaining $46 million. Talos also benefited from the $7 million available cash balance at Whistler at the time of the close, resulting in a net cash consideration of $14 million to Talos.
According to Talos, year to date gross production from Whistler’s assets is approximately 1,900 barrels of oil equivalent per day (boepd), or net production after royalties of approximately 1,500 boepd, of which 82 percent is oil.
The acquired assets include a 100 percent working interest in three blocks in the Central Gulf of Mexico – the Green Canyon 18, Green Canyon 60, and Ewing Bank 988 blocks – collectively the Green Canyon 18 field.
Green Canyon 18 field
The 16,494-acre field is developed with a fixed production platform in approximately 750 feet of water. It is worth noting that all leases are held-by-production.
The Green Canyon 18 field was originally developed by ExxonMobil and sold to Whistler in 2012. It has cumulative production of over 117 million barrels of oil equivalent to date. The GC18 production facility, some 18 miles north of the Talos-operated Phoenix Field and Tornado discovery, currently has a nameplate production capacity of 30 thousand barrels of oil per day and 30 million cubic feet of gas per day or approximately 35,000 boepd of total capacity with potential for additional expansions.
The company said that the strategic benefit of this acquisition was beyond the current producing leases. Talos had already licensed recent vintage wide azimuth seismic data in the area, which will be reprocessed to assist in the re-mapping of the producing reservoirs and potentially generate additional drilling prospects.
Additionally, in the latest Federal lease sale in the Gulf of Mexico, the company was the high bidder on new leases containing at least three drilling prospects that could be tied back to the GC18 production facility.
Talos president and CEO, Timothy S. Duncan, said: “We are excited about this bolt-on transaction, as it represents exactly what we look for when buying producing assets in our core areas: low entry costs, production facilities with unused capacity, and new seismic in a known hydrocarbon prolific area.
“We will immediately engage in a detailed field study that we expect will lead to identifying additional drilling locations on the producing asset to complement our broader portfolio in the area, providing us with optionality on how we allocate capital. We believe the Green Canyon 18 Field is a great addition to our Green Canyon core area.”