Talos Energy: Merger with the Stone Energy Corporation

After tapping the jackpot deep within the Gulf of Mexico, Talos Energy has become much better than before. The company announced that it would be undergoing a future merger with the Stone Energy Corporation. The decision came in after the board of directors of the company voted in favor of acquiring the Stone Energy Corporation. The company will then be renamed and rebranded as the Talos Energy Inc. Talos Energy is one of the largest oil and petroleum exploration firms in the country. Currently, they are stationed in the Gulf of Mexico, and they are continuing their operations gathering resources deep within the sea. The directors of both companies stated that the merging would be good for the growth of the Stone Energy Corporation and Talos Energy.

While the merging will take place in the months to come, the newly established organizational officials are now working to put the company at the New York Stock Exchange. Currently, Talos Energy has been given the ticker symbol named “TALO.” People who are behind this decision are backing it up, saying that trading the company open to the public would dramatically increase its value. According to reports, the total cost of the merger will be around $1.9 billion, and this is considered as one of the largest transactions in the history of the company.

The chief executive officer of Talos Energy, Timothy S. Duncan, stated that he is positive about the merger between the two companies. He is expecting more growth as the two companies merge, and he stated that their stock market value has the potential to skyrocket because of the merger. Another point raised by Timothy S. Duncan is the division of ownership that would take place after the merger – 63% of the new company would be under the control of the stakeholders from Talos Energy, while 37% of the remaining company would be under the control of the stakeholders from Stone Energy Corporation.

Talos Energy can extract 47,000 barrels of oil in the Gulf of Mexico each day. The company is dedicated to bringing only the best oil and petroleum products to their customers, and according to Timothy S. Duncan, they are still on the process of exploring the vast Gulf of Mexico in search for more oil and petroleum hotspots. He wanted to make the company the best when it comes to exploration and extracting the resources deep beneath the waters of the gulf.

Talos Energy is the Operator of the First Non-Pemex Oil Well in Mexico

When she decided to nationalize her oil sector in 1938, Mexico thought it would reap immensely (economically) from the move. The immediate reaction to Mexico’s decision included a boycott of the country’s products by the U.S, UK, Netherlands, etc. Several years later, the repercussions of nationalization became so apparent that Mexico changed her constitution in 2013 to encourage foreign investments in the sector. The change in the country’s laws meant that the state-owned Petróleos Mexicanos (better known as Pemex) would no longer enjoy the monopoly on the energy sector—for over 75 years, Pemex had no competitors.

Two years after Mexico amended her constitution, she invited foreign companies (in the energy sector) to bid for an opportunity to prospect oil in the country. Two foreign companies, UK’s Premier Oil and America’s Talos Energy, won rights to the prospect in the first round of bidding. With the two foreign investors, the future of the country’s oil sector would take a new turn.

Talos Energy, Premier Oil, and Mexico’s Sierra Oil & Gas settled on working together to drill the first non-Pemex well, the Zama-1 Well. Drilling of the well commenced on May 21, 2017. Premier Oil, through a statement issued by the company in May, speculated that the well would be fully drilled in 90 days. The report further speculated that the Zama-1 Well, located in the Sureste Basin, holds between 100 million and 500 million barrels of crude oil. The UK based Premier Oil owns 25% stake in the project. The company expects that it will advance $16 million towards the drilling of the well. To know about Talos Energy click here.

Of course, the move by Mexico to open her borders excited investors and analysts from different investment firms all over the world. For example, Elaine Reynolds and Charlie Sharp of Edison Investment Research and Canaccord Genuity respectively have high hopes in the Zama-1 Well.

Houston’s Talos Energy owns 35% stake in the Zama Well, and it operates the well. The Zama project rightly suits the private company as it is interested in oil and gas projects in Gulf Coast and the Gulf of Mexico. The company has been scaling the heights of the energy sector since it was founded in 2012. Thanks to the able stewardship of Tim Duncan, the co-founder and CEO.