Talos Energy acquires Whistler Energy II

Sept. 5, 2018
Talos Energy Inc., Houston, has entered into and completed a transaction to acquire Whistler Energy II LLC. The bolt-on acquisition includes production facilities with unused capacity and new seismic data to be used in a field study to potentially identify additional drilling locations on the producing asset.

Talos Energy Inc., Houston, has entered into and completed a transaction to acquire Whistler Energy II LLC. The bolt-on acquisition includes production facilities with unused capacity and new seismic data to be used in a field study to potentially identify additional drilling locations on the producing asset.

The acquired assets include a 100% working interest in three blocks in the central Gulf of Mexico—Green Canyon Block 18, Green Canyon Block 60, and Ewing Bank Block 988—collectively known as Green Canyon 18 field and comprising 16,494 acres—and a fixed production platform on Green Canyon Block 18 (GC18 Production Facility) in 750 ft of water. All leases are held-by-production.

Green Canyon 18 field was originally developed by ExxonMobil Corp. and sold to Whistler in 2012. To date, it has cumulative production of more than 117 million boe. The GC18 Production Facility—18 miles north of Talos-operated Phoenix field and Tornado discovery—currently has a nameplate production capacity of 30,000 b/d of oil and 30 MMcfd of gas, or 35,000 boe/d of total capacity, with potential for additional expansions. Year-to-date gross production from Whistler’s assets is 1,900 boe/d, or net production after royalties of 1,500 boe/d, 82% of which is oil.

Talos holds license to recent vintage-wide azimuth seismic data in the area that will be reprocessed to assist in the remapping of the producing reservoirs and potentially generate additional drilling prospects. Additionally, in the latest federal lease sale in the gulf, the company was the high bidder on new leases containing at least three drilling prospects that could be tied back to the GC18 Production Facility (OGJ Online, Aug. 15, 2018).

The purchase price was $52 million. As part of the deal, Talos negotiated the release of $77 million in cash collateral that had secured Whistler’s surety bonds that it will not need to replace. As a result, of the total cash collateral released, Talos received $31 million, with the seller entitled to the remaining $46 million. Whistler held $7 million in cash at closing, resulting in a net cash consideration of $14 million to Talos.

Talos Energy began business in May after the stock-swap merger of Talos Energy LLC and Stone Energy Corp. (OGJ Online, Nov. 21, 2017).