Gulf of Mexico producers to become Talos Energy Inc.

Nov. 21, 2017
Talos Energy LLC, Houston, and Stone Energy Corp., Lafayette, La., have agreed to merge in an all-stock transaction creating a Gulf of Mexico producer named Talos Energy Inc. Both companies recently have reported discoveries in the deepwater Gulf of Mexico. And Talos this year reported an oil strike in shallow water off Mexico in its Zama 1 exploratory well.

Talos Energy LLC, Houston, and Stone Energy Corp., Lafayette, La., have agreed to merge in an all-stock transaction creating a Gulf of Mexico producer named Talos Energy Inc.

Both companies recently have reported discoveries in the deepwater Gulf of Mexico. And Talos this year reported an oil strike in shallow water off Mexico in its Zama 1 exploratory well (OGJ Online, July 12, 2017).

The combined company will have initial equity market capitalization estimated at $1.9 billion. It will be owned 63% by current Talos stakeholders and 37% by Stone shareholders.

Combined 2017 production of the companies is estimated at 47,000 boe/d. The midyear reserves estimate is 136 million boe, of which 69% is oil and 74% is in deep water.

Tornado II drilling

Deepwater work by Talos includes the completion last month of an exploratory well drilled into a fault block adjacent to the company’s 2016 Tornado discovery in the Green Canyon area of the Gulf of Mexico.

The test, part of the company’s Tornado II drilling program, went to 21,107 ft TVD and logged 222 ft MD (176 ft TVD) of net oil sandstone pay in 2,700 ft of water.

A sidetrack to delineate the initial discovery, GC 281 No. 2ST, went to 21,057 TVD and logged 297 ft TMD (283 ft TVD) of net oil pay in two sand layers.

The sidetrack will be tied into existing Phoenix field subsea equipment and begin producing in December through the Helix Producer I dynamically positioned floating production facility.

The Tornado discovery well flowed about 16,800 boe/d in September.

Rampart discovery

In September, Stone Energy reported a discovery of gas and liquids in the well operated by Deep Gulf Energy III LLC in deep water on Mississippi Canyon Block 116.

Stone generated the prospect, called Rampart Deep. It holds a 40% interest in the MC 116 No. 1 well, which cut 130 net ft of pay in three primary zones. The results lower exploratory risk of Stone’s Derbio prospect updip of Rampart Deep.

Stone says the Rampart partners are reviewing drilling plans for Derbio.

Deep Gulf Energy III and a group of entities managed by Ridgewood Energy Corp. hold 30% interests each in the Rampart well. They may elect to participate in the Derbio prospect for a total interest of 60%, leaving Stone with 40%.