Talos Energy Provides Updates On Pending Acquisitions And U.
HOUSTON, Jan. 31, 2020 /PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced the filing of a preliminary Schedule 14C information statement with the Securities and Exchange Commission ("SEC"), an important regulatory step towards closing of the Company's previously announced acquisition of affiliates of ILX Holdings, among other entities (the "Acquired Assets", the "Acquisition", or the "Transaction"). The Company also provided an operational update regarding selected projects in the U.S. Gulf of Mexico, including existing Talos assets as well as Acquired Assets.
The Acquisition and 14C Information Statement
The Company has filed a preliminary information statement with the SEC to inform the Company's stockholders about the Acquisition. At the time the parties entered into the Transaction on December 10, 2019, holders of approximately 62.9% of the Company's outstanding shares acted by written consent to approve the Transaction and the proposed issuance of 11.0 million new shares as consideration in the Transaction, so the Company is not seeking additional stockholder approval.
The filing is an important milestone that helps pave the way for the closing of the Acquisition. The Company expects to close the Transaction approximately 20 days after a definitive information statement is mailed to stockholders, the timing of which will depend on any review of the preliminary information statement by the SEC. If the SEC does not review the filing, Talos expects to close the Transaction on or before March 16, 2020.
Upon closing of the Acquisition, the Company will issue 11.0 million shares of Talos's common stock to the sellers and pay the cash consideration. The cash consideration of $385.0 million will be reduced at closing by the approximately $31.8 million deposit paid into escrow upon the signing of the definitive agreements. The cash consideration will be further reduced at closing by the cash flow generated by the Acquired Assets between the July 1, 2019 effective date of the Acquisition and the closing date. As previously announced, Talos expects to fund the remaining cash component of the Acquisition with borrowings under the Company's upsized reserves based lending credit facility and cash on hand.
Talos President and Chief Executive Officer Timothy S. Duncan commented, "The filing of the information statement is an important step towards closing the Acquisition. Talos continues to be very excited with the addition of the Acquired Assets to our portfolio and to strengthen the partnerships with great operators in our basin. We are pleased to see numerous key projects included in the Acquired Assets advancing in line with or faster than our expectations. These diverse, high cash flowing assets continue to be a great fit for the Talos portfolio moving forward. We look forward to achieving a successful closing in the first quarter of this year and integrating these assets into our business."
Acquired Assets Updates
Talos provided the following status updates and results from the Acquired Assets:
U.S. Gulf of Mexico Updates
Talos provided the following status updates and results from the Company's existing U.S. Gulf of Mexico Assets:
Since December 10, 2019, Talos entered into additional West Texas Intermediate crude oil ("WTI") hedge positions for 2020 and 2021 totaling approximately 1.2 MMBbl of oil at a weighted average price of $56.30 per barrel. Therefore, as of January 24, 2020, the Company's consolidated hedge position included:
Duncan continued, "We are happy to see tangible results from Orlov by encountering another pay zone and achieving first oil within twelve months of initiating the subsea project. In the Puma West prospect, we are very encouraged by the drilling progress thus far, and look forward to continuing drilling operations to the target zones when BP returns to the well later this year. Finally, we look forward to utilizing our recently contracted rigs to conduct a balanced campaign of short cycle development and high impact exploration activities. As mentioned before, we will provide additional 2020 guidance as we move closer to closing our recently announced Transaction."
ABOUT TALOS ENERGY
Talos Energy (NYSE: TALO) is a technically driven independent exploration and production company focused on safely and efficiently maximizing cash-flows and long-term value through our operations, currently in the United States Gulf of Mexico and offshore Mexico. As one of the US Gulf's largest public independent producers, we leverage decades of geology, geophysics and offshore operations expertise towards the acquisition, exploration, exploitation and development of assets in key geological trends that are present in many offshore basins around the world. Our activities in offshore Mexico provide high impact exploration opportunities in an oil rich emerging basin. For more information, visit www.talosenergy.com.
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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This communication may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this communication, regarding our strategy, future operations, financial position, estimated revenues and losses, estimated production volumes, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "may," "objective," "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, failure to find, acquire or gain access to other discoveries and prospects or to successfully develop and produce from our current discoveries and prospects, geologic risk, drilling and other operating risks, well control risk, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, risks related to our acquisition and integration of the Acquired Assets, including the possibility that the proposed acquisitions do not close when expected or at all because any conditions to the closing are not satisfied on a timely basis or at all, uncertainties as to the timing of the acquisitions and the possibility that the anticipated benefits of the acquisitions are not realized when expected or at all, uncertainties as to whether flow test results for the Aspen J. target that are announced herein are indicative of long-term performance or ultimate recovery, as well as other factors that may affect our future results and business, generally, including those discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission on March 13, 2019.
Estimates of future production volumes are based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and gas will continue at levels that allow for economic production of these products. The production, transportation and marketing of oil and gas are subject to disruption due to transportation and processing availability, mechanical failure, human error, hurricanes and numerous other factors. Our estimates are based on certain other assumptions, such as well performance, which may vary significantly from those assumed. Therefore, we can give no assurance that our future production volumes will be as estimated.
Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified hereby, to reflect events or circumstances after the date of this communication.
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SOURCE Talos Energy