In May, the oil and gas companies Talos Energy Inc. And the Stone Energy Corporation merged into Talos Energy. Stone Enery filed for bankruptcy in 2016. Tim Duncan, the CEO of Talos Energy, said this merger will be beneficial for shareholders through scale and liquidity increases. Talos has a quality asset portfolio, as well as capital programs in Mexico and the US Gulf of Mexico. Tim spent 4 months on the $2.5 billion merger.
Oil prices have increased to $60 per gallon since the price collapse of 2015, with the production of crude oil peaking in 2017. Talos will produce 47,000 barrels per day and has 136 million barrels in reserve. They will have 1.2 million acres in the Gulf of Mexico. Their borrowing base was $600 million with $300 million availble. Their liquidity was $450 million dollars with $150 million being cash on hand. Their Pro forma Year-End 2017 2P Reserves were 205 MMBoe with 150 MMBoe being proved reserves. Tim Duncan believes the E&P sector innovations will occur due to financial flexibiity and the ability of independent pruducers.
Talos Energy released its’ 2018 financial and operating guidance. They are the basin’s largest pureplay public company. Their capital program is internally financed and their guidance leads to a free cash flow that generates business. They manage their liquidity and balance sheet flexibility well. Tim Duncan believes this flexiblity will let them be one of the basin’s natural consolidators.
Their Financial and Operating Guidance includes expectations of generating positive free cash flow after debt service, successful driling of Mt Providence well, and the spudding of the Tornado #3 well. Tim Duncan made the Phoenix field very productive after the Hurricane Rita disaster. He also discovered the Zama-1 field in Mexico with Premier Oil and Sierra Oil & Gas. His constant work has helped Talos Energy be successful.
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