Talos Energy acquires Whistler Energy II
HOUSTON -- Talos Energy Inc. has announced that the Company has entered into and completed a transaction to acquire Whistler Energy II, LLC, on Aug. 31, 2018. Year to date gross production from Whistler's assets is approximately 1,900 boed, or net production after royalties of approximately 1,500 boed, of which 82% is oil.
The purchase price was $52 million and, as part of this acquisition, Talos negotiated the release of approximately $77 million of cash collateral that had secured Whistler's surety bonds that the Company 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. In addition, Talos also benefited from the $7 million available cash balance at Whistler at the time of the close, resulting in a net cash consideration of $14 million to Talos.
This transaction represents a significant win for both Whistler and Talos, where the seller received approximately $100 million in cash, but the Talos net cash payment was only $14 million, which represents an acquisition metric of $9,333 per net boed.
The acquired assets include a 100% working interest in three blocks in the Central Gulf of Mexico – Green Canyon 18, Green Canyon 60 and Ewing Bank 988 (collectively the Green Canyon 18 field), which comprises 16,494 acres – and a fixed production platform located on Green Canyon Block 18 (GC18 Production Facility) in approximately 750 ft of water. All leases are held-by-production.
The Green Canyon 18 field was originally developed by ExxonMobil and sold to Whistler in 2012. It has cumulative production of over 117 MMboe to date. The GC18 Production Facility, which is approximately 18 mi north of the Talos-operated Phoenix field and Tornado discovery, currently has a nameplate production capacity of 30,000 bopd and 30 MMcfgd, or approximately 35,000 boed of total capacity, with potential for additional expansions.
The strategic benefit of this acquisition goes beyond the current producing leases. Talos had already licensed recent vintage wide azimuth seismic data in the area, which will be reprocessed to assist in the re-mapping of the producing reservoirs and potentially generate additional drilling prospects. Additionally, in the latest Federal lease sale in the Gulf of Mexico, 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.
