Category Archive Energy


Tim Duncan’s Talos Energy Big Risk With Big Returns

Tim Duncan, Talos Energy’s chief executive, has been negotiating a $2.5 billion merger between Talos Energy and Stone Energy. As risky as it was, this move made Talos Energy a public entity without sacrificing a public offering. Tim Duncan was eager to close the deal. He returned to Texas, settled at his parent’s home, to negotiate with Stone Energy Corporation for several weeks. Some meetings would go until late at night.

Finally, in May, Talos Energy would merge with Stone Energy and Duncan would preside over the oil company that has a yearly revenue of $900 million. Tim Duncan has set all of Talos’ assets around the Gulf of Mexico. Tim Duncan found Talos Energy from an equity funding of $600 million by Riverstone and Apollo. The company offsets the risk involved with the Gulf of Mexico with a balance sheet of $700 million in debt versus its $2.3 billion in assets. Over the years, Talos Energy acquired assets such as Phoenix field for $620 million. Unlike other companies that operate around the Permian Basin using the new technology hydraulic fracturing, Talos Energy uses more traditional methods. Talos takes a chance with wells in U.S. waters and the risky waters of Mexico. Here, Talos produces 48,00 barrels per day.

The gulf is the second biggest oil province in the United States, just behind Permian Basin, pumping nearly 1.6 million barrels each day. Most of the oil is in waters owned by the government, bringing oil royalties to a value of $3 billion to the United States Treasury yearly. However, the Trump administration opened more federal waters for leasing. Nonetheless, drilling in the gulf is still high risk and expensive. Drilling 5 miles down cost $200 million and Bernstein Research says that there is a one-in-three chance that the location will be dry. However, Talos Energy has been more successful than that, having only 7 insufficient wells out of 28 attempts. It would be cheaper if they use hydraulic fracturing, but Duncan refuses to do land drilling. Nonetheless, it would seem that Talos Energy still has a promising future in Mexico’s gulf.

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Oil And Gas Exploration Company Talos Energy Will Merge With The Stone Energy Corporation

Talos Energy, LLC has recently announced that it will merge with the Stone Energy Corporation. The privately held Talos and the publicly traded Stone Energy Corporation revealed that their board of directors approved of the merger of Talos Energy with the public corporation Stone Energy through an all-stock transaction. The newly merged company will bear the name of Talos Energy, Inc. We expect that the newly merged company will soon have stock on the New York Stock Exchange. The ticker symbol of TALO will be used for trading.

Talos Energy primarily focuses on oil and gas exploration in the United States part of the Gulf of Mexico and also off the coast of Mexico. Talos has experience in exploring locations, acquiring assets, and exploiting and developing deepwater assets. The Stone Energy Corporation is based in Lafayette, Louisiana, and deals in oil and natural gas exploration. It is clear that the merger of these two companies will be a significant benefit to them in their exploration of oil gas and the natural gas and in acquiring production properties in the Gulf of Mexico basin.

Timothy Duncan, the Chief Executive Officer for Talos, has stated that the merging of Talos and Stone is an important step forward to becoming a leading company in the field of offshore exploration and production. The newly merged company will focus on the deepwater exploration in the U.S section of the Gulf of Mexico and the Zama discovery. The Zama oil discovery is located in the shallow waters in the Sureste Basin. The combination of technical resources with educated and experienced employees will help to accelerate new project inventories rapidly. The transaction is essential for both companies as their combined resources will lead to more success in the exploration of oil and gas. Once the merger is complete Talos stakeholders will end up owners of sixty-three percent of the merged company and Stone stakeholders will own thirty-seven percent.

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The Growth And Development Of Talos Energy

Duncan is the Chief Executive Officer of Talos Energy which has been operational since 2012. He formed this company with a capital of $600 million through equity funding from Riverstone and Apollo. The firm made a purchase of the Phoenix land and other assets that cost $620 million in 2013. It is a precisely oil and gas survey and production company which sells its merchandise to the Gulf of Mexico. In addition, the organization can be able to extract the assets in deep waters using improved and advanced seismic technologies. The company is managed by a supervising team, which has a lot of experience in exploration and production of the products.

Duncan has been complaining about the 2.5 billion mergers of his own company with Store Energy Company. It has been trading publicly and is said to be bankrupt by the reports. The acquisition of the Store Energy was a great play since the customers will head to the firm thinking it’s a public unit while it is a private company. If the merger agreement goes on, Talos Energy will highly benefit from the contract and Duncan is eagerly waiting for the processes to speed up. Furthermore, he will have the entire list of Store energy and also have yearly revenue of $900 million.

The Talos Energy is investing more on the wells in U.S waters and Mexico. Since most of the entire assets are in the Gulf of Mexico, it becomes easier and protective to risk the resources and development in that area. A drilling tool costs hundreds of millions which makes it a huge investment to rely on and the risk involved is beyond doubt. The new firm can yield 48000 barrels on a day-to-day basis while it is not enough since it has not reached the target set.

Talos Energy propels 16000 barrels daily from Phoenix which brings a variety of environmental issues in the area. It was able to evaluate the data, ensuring it to create other discoveries at 3000 deeper than the other reservoirs. Talos Energy sold two of its great oil companies like Phoenix Exploration and Gryphon Exploration.

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