New company name and NYSE ticker
Talos Energy LLC and Stone Energy Corporation (ticker: SGY) announced today that their boards of directors have unanimously approved the combination of Talos and Stone in an all-stock transaction, creating an offshore-focused E&P company. The new company will be named Talos Energy, Inc. and the NYSE ticker will be “TALO.”
Combined company highlights
- Pro forma estimated 2017 average daily production of approximately 47 thousand barrels of oil equivalent
- Pro forma proved reserves of 136 million barrels of oil equivalent as of June 30, 2017 based on SEC pricing, which are 69% oil and 74% located in the Deepwater Gulf of Mexico
- Two recent discoveries, Tornado II and Rampart, provide near-term opportunities for growth
- Zama oil discovery in the shallow waters of Mexico
Each outstanding share of Stone common stock will be exchanged for one share of Talos Energy, Inc. common stock. Current Talos stakeholders will be issued an aggregate of approximately 34.2 million common shares. At closing, Talos stakeholders will own 63% of the combined company, with Stone shareholders owning the remaining 37%. The transaction is expected to close in late first quarter or early in the second quarter of 2018.
Based on Stone’s stock price of $35.49 on November 20, 2017, Talos Energy, Inc. will have an initial equity market capitalization of approximately $1.9 billion and an enterprise value of approximately $2.5 billion.
Talos said that the combined company will benefit from a deep inventory of identified exploration and development prospects, and a significant acreage footprint in the Gulf of Mexico, including over 1.2 million combined gross acres, of which approximately 160,000 acres is offshore Mexico.
The Zama oil discovery, operated by Talos, was the first private sector offshore exploration well in the history of Mexico and was previously disclosed as having between 1.4 billion and 2.0 billion gross barrels of original oil in place. The combined company expects to have up to $25 million in annual pre-tax synergies from supply chain management and other operational efficiencies by year end 2018.
Leadership and corporate governance
Timothy S. Duncan, Talos’s CEO, will be the CEO of Talos Energy, Inc. with additional members of current Talos and Stone management serving in other key leadership roles.
The combined company’s board of directors will be comprised of ten members, including six members designated by Talos and four members designated by Stone from its current board of directors. Neal P. Goldman will serve as non-executive chairman of the board of directors.
Talos Energy, Inc. will be headquartered in Houston, with additional offices in Lafayette and New Orleans, Louisiana.
