Talos Energy has agreed to acquire EnVen Energy, a US-based private operator in the deepwater US Gulf of Mexico, in a deal worth $1.1bn, including debt.
Under the deal, Talos will issue 43.8 million of its shares and $212.5m. Upon completion of the deal, Talos will assume the net debt of EnVen, which is estimated at approximately $50m at the end of 2022.
Talos shareholders will hold an approximately 66% stake in the combined company while the remaining shares will be held by EnVen’s equity holders.
Subject to customary closing conditions, the transaction is planned to close by the end of this year. The acquisition of oil-weighted, deepwater assets, with significant infrastructure, is expected to increase Talos’ production capacity by 24,000 barrels of oil equivalent per day. It will also double the firm’s operated deepwater facility footprint.
Talos president and CEO Timothy Duncan said: “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.”
EnVen is primarily involved in the development, exploitation, exploration, and acquisition of oil properties in the US Gulf of Mexico.
One of the largest operators in the Gulf, Talos acquired approximately a dozen energy companies, including Stone Energy, to capitalise on higher oil prices, reported Reuters.