Readying an E&P broadside at the Gulf of Mexico, Talos Energy LLC and Stone Energy Corp. said Nov. 21 they will merge in an all-stock transaction that the companies say represents an equity value of $1.9 billion.
The combined company will be named Talos Energy Inc. and stocked with pro forma proved reserves of about 136 MMbboe, of which 70% is oil. The reserves have a strip-priced PV-10 value of $2.28 billion, the companies said.
A Talos-Stone leviathan would give the company reign over 1.2 million combined gross acres, including 160,000 acres offshore Mexico. Estimated 2017 average daily production for the new company is anticipated to be 47,000 boe/d. Talos, based in Houston, reported that its third-quarter production averaged 28,700 boe/d.
The boards for both companies unanimously approved the combination. The deal value is partly based on Lafayette, La.-based Stone's stock price of $35.49 as of Nov. 20, or about $700 million in equity value.