HOUSTON – Talos Energy Inc. says that it has entered into a series of definitive agreements to acquire a broad portfolio of US Gulf of Mexico producing assets, exploration prospects and acreage from affiliates of ILX Holdings, Castex Energy and Venari Resources for $640 million.
Specifically, Talos has signed definitive agreements to acquire all producing assets, primary term acreage and prospects of ILX Holdings; all producing assets and certain primary term acreage and prospects of ILX Holdings II; all primary term acreage and prospects of ILX Holdings III; and certain subsidiaries of the Castex 2014 and Castex 2016 entities.
In a separate transaction, Talos says it executed a purchase and sale agreement and closed on the acquisition of all primary term acreage and prospects from Venari Resources.
The acquired assets produced approximately 19,000 boe/d in 3Q 2019 and had proved and probable (2P) reserves of approximately 68 MMBoe as of the effective date of July 1, 2019. Some 83% of the proved reserves are considered proved developed. In addition, the Transaction includes over 40 identified exploration prospects located on a total acreage footprint of approximately 700,000 gross acres. Closing of the ILX Acquisitions and Castex Acquisitions is expected in the first quarter of 2020.
Talos President and Chief Executive Officer Timothy S. Duncan commented: “The acquisition of these assets significantly strengthens Talos’s position as a basin leading independent E&P company, providing increased scale and free cash flow, greater operational diversity and broader optionality in future growth. We are executing the transaction at an attractive valuation that is accretive to our shareholders and with a funding structure that preserves our strong balance sheet and liquidity. What makes this transaction unique is the combination of high-margin production and a deep portfolio of prospects. As we consider the full scale of the pro forma business, the combined cash flow profile and the significant exploration portfolio, we are excited about the tremendous potential to build long-term value, not only from these assets alone but from the optimization of the combined asset base, high-grading of investment opportunities, follow-on business development and M&A activity.”