Talos Energy Inc is in talks to acquire Bain Capital-controlled EnVen Energy for about $1 billion and also take on the debt of the U.S. Gulf of Mexico operator, according to people familiar with the matter.
The deal would be among the most significant in recent years in the Gulf, creating a bigger company that would be better placed to take advantage of higher oil prices.
Talos Chief Executive Tim Duncan said in May the offshore oil and gas operator was looking for acquisition targets in the U.S. Gulf of Mexico to boost its production.
Talks between the two companies have reached an advanced stage and a deal would see Talos buy EnVen using either mostly or all stock, the sources said.
The deal value is expected to be higher after including EnVen’s debt, which stood at $288 million at the end of 2021, according to a March presentation on EnVen’s website.
The sources, who requested anonymity as the discussions are confidential, cautioned that the deal talks could still end without an agreement.
Neither Talos, which has a market value of $1.6 billion and reports earnings on Aug. 4, or EnVen responded to requests for comment. Bain Capital declined to comment.
Houston-headquartered Talos has grown to become one of the largest operators in the Gulf since being formed around a decade ago. It has used periodic dealmaking to boost its scale, making around a dozen acquisitions, including the buyout of Stone Energy in 2018.
EnVen is backed by Bain Capital, which has three directors on the company’s seven-person board, according to EnVen’s website. Fellow buyout firms Adage Capital and EIG also hold stakes in EnVen, according to an April 2021 report from rating agency Moody’s Investors Service.
Adage declined to comment, while EIG did not respond to a comment request.
Source: Reuters.com