Houston offshore oil and gas company Talos Energy will acquire Louisiana-based Stone Energy in a near-$2 billion merger.
Private equity-backed Talos will go public on the New York Stock Exchange through the merger with the publicly traded Stone.
Talos was founded five years ago to focus on exploration and production in the Gulf of Mexico with the financial backing of major private equity firms Apollo Global Management and Riverstone Holdings. The idea was to take Talos public through an initial public offering in 2014 or 2015, but the oil bust sunk those plans until now.
Stone Energy has operated out of Lafayette for more than 20 years, but filed for bankruptcy protection last year amid the collapse in oil prices before emerging earlier in 2017.
Talos struck it big this summer with the so-called Zama discovery offshore of Mexico after the company successfully won some of the first offshore bids in Mexico’s energy reform process that opened offshore blocks up to foreign investors. Zama is the first major discovery in the country’s deregulation process
The Talos Energy LLC merger with Stone will create a new company, Talos Energy Inc., that trades under the “TALO” stock ticker. The deal is expected to close in the second quarter of 2018.
Talos Chief Executive Timothy Duncan will remain CEO of Talos, which will maintain its Houston headquarters and keep offices in Lafayette and New Orleans. A 10-person corporate board will have six Talos members and four from Stone
Talos will own 63 percent of the combined company and Stone shareholders will hold 37 percent. Stone’s combined shares were valued on Wall Street on Monday at a total of $710 million. Talos said the combined company will have a Wall Street market capitalization value of $1.9 billion.
The goal is to create an offshore leader on both the U.S. and Mexican sides of the Gulf as much of the energy sector instead focuses on onshore U.S. shale.
“This combination represents an important step in our goal of becoming the premier offshore exploration and production company,” Duncan said. “We will have two core areas in the deepwater U.S. Gulf of Mexico and the outstanding new Zama discovery located in the shallow waters of offshore Mexico.”
Stone Chairman Neal Goldman called the deal the successful culmination of the company’s bankruptcy restructuring. Stone already had sold off most of its onshore assets, leaving it as a Gulf-focused company.
Talos and Stone aren’t strangers to each other either. Three years ago, Talos acquired some of Stone’s Gulf acreage for $200 million.
This first appeared on the Houston Chronicle – an Energy Voice content partner. For more click here.
