Talos Energy has agreed to acquire EnVen Energy, a private US-based deepwater operator in the Gulf of Mexico, in a deal worth $1.1 billion including debt.
As part of the deal, Talos will issue 43.8 million of its shares and $212.5 million.
Once the deal is completed, Talos will assume EnVen’s net debt, which is estimated to be around $50 million at the end of 2022.
Talos shareholders will hold an approximate 66% stake in the combined company while the remaining shares will be held by EnVen shareholders.
Subject to customary closing conditions, the transaction is expected 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 footprint of the deepwater facility operated by the company.
Talos President and CEO Timothy Duncan said, “This transaction adds significant scale and diversity to our business through a logical expansion in the basin, with an excellent strategic fit. EnVen’s high-margin, oil-weighted assets in key deepwater regions, operated infrastructure and significant overlapping acreage footprint will strengthen our ability to accelerate shareholder value creation.
“The acquisition is financially attractive, broadening our operating margins and increasing free cash flow per share while immediately improving our credit profile, before taking into account significant expected cost synergies.
“The improved cash flow profile will provide us with an option for increased capital allocation, including additional high-impact subsea connection opportunities, opportunistic acquisitions, the acceleration of our low-carbon initiatives and the positioning Talos for a potential capital return program to shareholders in the future.”
EnVen is primarily involved in the development, operation, exploration and acquisition of oil properties in the Gulf of Mexico in the United States.
One of the largest operators in the Gulf, Talos has acquired a dozen energy companies, including Stone Energy, to take advantage of rising oil prices, Reuters reported.