Talos to Acquire US Gulf of Mexico E&P Company for $1.3B

© nattapon7 / Adobe Stock
© nattapon7 / Adobe Stock

Talos Energy has executed definitive agreements to acquire QuarterNorth Energy, a U.S. Gulf of Mexico exploration and production company with ownership in several prolific offshore fields, for $1.29 billion.

The acquisition will boost Talos’ production for approximately 30 thousand barrels of oil equivalent per day (MBoe/d) expected for the full year 2024, averaging about 75% oil from approximately 95% operated assets.

It also adds proved reserves of approximately 69 million barrels of oil equivalent (MMBoe) with a PV-10 of $1.7 billion.

According to Talos, QuarterNorth's assets will provide additional scale from high quality deepwater assets with a favorable base decline profile along with attractive future development opportunities.

Consideration for the transaction consists of 24.8 million shares of Talos's common stock and approximately $965 million in cash.

The board of directors of both Talos and QuarterNorth have unanimously approved the transaction. The deal is expected to close by the end of the first quarter of 2024, subject to certain customary closing conditions and regulatory approvals.

"Today's announcement marks one of Talos's most significant milestones as we build a large-scale offshore exploration and production company. The addition of QuarterNorth's overlapping deepwater portfolio with valuable operated infrastructure will increase Talos's operational breadth and production profile while enhancing our margins and cash flow.

“This Transaction aligns with Talos's overall strategy of leveraging existing infrastructure and complementary acreage to accelerate shareholder value creation.

“The pro forma footprint in the U.S. Gulf of Mexico should allow us to capture meaningful operating synergies. The expected financing structure of the Transaction accelerates de-leveraging, immediately improves our credit profile, is accretive on key metrics, and positions us to consider additional capital return initiatives following deleveraging in the near term,” said Timothy Duncan, Talos’ President and Chief Executive Officer.

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