With Mergers And New Discoveries. Talos Energy Poised For Future Growth

Houston-based Talso Energy Inc. is on a roll. In the past two years the company became the first American company to drill for oil in Mexico territory in more than 80 years. It also completed a major merger, an acquisitions and scored a major oil discovery in the Gulf of Mexico.

On Sept. 4, Talso Energy finalized the acquisition of Whistler Energy II, a company that currently produced the equivalent of 1,900 barrels of oil per day. This follows the late 2017 merger with Stone Energy Corporation. That all-stock transaction bolstered the position of Talos as one of the premier energy exploration companies in America.

Talos Energy made history in July of 2017 when it sunk a well off the coast of Tabasco, Mexico, in partnership with a British and Latin American partner. Mexico nationalized oil industry in 1938 and so no foreign entity has been allowed access to that country’s natural resources since that time.

But Mexico is now eager to change course and revitalize a flagging energy industry. To that end, they allowed Talso Energy, Sierra Oil and Gas and Premier Oil to make a foray into Gulf waters off the Mexican coast. Better yet, the newly-named ZAMA-1 well appears to have been a significant discovery. Early estimates suggest the site may hold $2 billion barrels of oil.

Talso Energy commands a 35% interest in ZAMA-1 and will take the lead on bringing this asset to full operation in coming years.

As for the Whistler deal, the purchase price for the company was $52 million. Talos negotiated the release of $77 million in cash collateral owned by Whistler. In short, Talso will gain $31 million and the seller will receive $46 million. Because Whistler also had a $7 million available cash balance when the deal was finalized, a $14 million cash consideration resulted for Talos Energy.

Industry observers described the Talos-Whistler deal as a “win-win” for both companies. The ultimate result was a transaction that makes for the equivalent of $9,333 acquisition metric of net Boepd.

With the Stone Energy Corporation merger, Talso Energy began to appear on the stock exchange as TALO.