Talos Energy Acquires EnVen Energy for $1.1 Billion
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Talos Energy has executed definitive agreements to acquire EnVen Energy Corporation, a private operator in the deepwater U.S. Gulf of Mexico, for $1.1 billion. The strategic transaction expands Talos’s Gulf of Mexico operations with high margin, oil-weighted assets. The transaction, which is expected to close around year end 2022, is subject to customary closing conditions.
“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,” said Talos President and Chief Executive Officer Timothy S. Duncan.
“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. We are excited for the numerous benefits that this transaction provides and look forward to closing around year end,” added Duncan.
KEY TRANSACTION HIGHLIGHTS:
• Adds ~24 thousand barrels of oil equivalent per day of production (more than 80 percent oil, more than 90
operated)
• Increases production by 40 percent and gross acreage by 35 percent, significantly increasing operational scale
and diversity
• Doubles Talos’s operated deepwater facility footprint, adding key infrastructure in existing Talos operating areas
• At least $30 million in expected annual run-rate synergies to be achieved in 2023
• Reduces Talos’s GHG emissions Intensity with deepwater operating footprint
• Enhances board of directors with seven fully independent directors plus Talos CEO
• Talos will introduce a proposal to eliminate its classified election structure such that all directors are elected
annually
LEADERSHIP & GOVERNANCE
There are no anticipated changes to Talos senior management resulting from the transaction. Tim Duncan will remain chief executive officer and will retain one seat on the expanded board of directors, which will include six Talos directors (CEO and five independents) and two independents from the EnVen board of directors, Shandell Szabo and Richard Sherrill. The board of directors will have no private equity representatives post-closing. Robert Tichio, the appointed Riverstone Holdings representative currently on Talos’s board of directors, will resign from the board simultaneous with closing of the transaction. Riverstone Holdings (~10 percent pro forma ownership) and EnVen’s top two equity holders (~20 percent pro forma combined) will enter lock-up agreements at closing.
Shandell Szabo is currently an independent director of EnVen and previously spent 19 years with Anadarko Petroleum Corporation, most recently as the vice president of U.S. Exploration. She has technical expertise in the deepwater Gulf of Mexico and other key basins. Richard Sherrill is also currently an independent director of EnVen and is the president of Clean Aire Partners, a private energy transition company. He was previously the chief operating officer of Duke Energy Corporation.
About Talos Energy
Talos Energy is a technically driven independent exploration and production company focused on safely and efficiently maximizing long-term value through its operations, currently in the United States and offshore Mexico, both upstream through oil and gas exploration and production and downstream through the development of future carbon capture and storage opportunities. As one of the Gulf of Mexico’s largest public independent producers, they leverage decades of technical and offshore operational expertise towards the acquisition, exploration, and development of assets in key geological trends that are present in many offshore basins around the world. With a focus on environmental stewardship, they are also utilizing their expertise to explore opportunities to reduce industrial emissions through carbon capture and storage initiatives along the U.S. Gulf Coast and Gulf of Mexico.
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