U.S.-based independent exploration and production company Talos Energy has started trading on the New York Stock Exchange, following completion of its $2 billion merger with compatriot Stone Energy.
The boards of both companies approved the combination of the two companies in an all-stock transaction last November, paving the way for the creation of a new, offshore-focused exploration and production company, Talos Energy, Inc.
After the transaction, it was agreed for Talos stakeholders to own 63% of the combined company, with Stone shareholders owning the remaining 37%. Based on Stone’s stock price of $35.49 on November 20, 2017 and the terms of the proposed transaction, Talos Energy, Inc. has an initial equity market capitalization of approximately $1.9 billion and an enterprise value of approximately $2.5 billion.
Following the completion of the merger, the combined company started trading on the NYSE on Thursday, May 10 under the new ticker symbol “TALO”. The company will be headquartered in Houston, Texas.
Chief Executive Officer, Timothy S. Duncan, commented, “This is a transformational combination, in which shareholders will greatly benefit from our increased scale and liquidity.
“Talos is very well positioned to capitalize on its high quality asset portfolio and returns focused capital programs in the U.S. Gulf of Mexico and offshore Mexico, as well as take advantage of potential business development opportunities.”
The company expects to provide detailed financial and operational guidance in the coming weeks; however, at the closing, Talos has entered into a new credit facility agreement with an initial borrowing base of $600 million, of which $300 million is available.
Furthermore, the company’s liquidity of $450 million, inclusive of approximately $150 million of cash on hand, net of transaction related costs.
The company’s pro forma year-end 2017 2P reserves, at SEC pricing, were approximately 205 MMBoe (roughly 80% liquids), of which approximately 150 MMBoe were proved reserves.
Offshore Energy Today Staff