Oil and gas company Talos Energy said it will acquire privately held QuarterNorth Energy in a $1.29 billion cash and stock deal to bolster its presence in Mexico.
QuarterNorth is a privately held U.S. Gulf of Mexico exploration and production company with ownership in six major fields. Talos expects the acquisition to improve its base decline rate by approximately 20%.
QuarterNorth Energy will receive about 24.8 million shares of Talos’s common stock and about $965 million in cash.
More than a dozen companies including Chevron and Repsol had quit offshore oil and gas exploration areas in Mexico last year after disappointing results. Only a handful of companies had made significant finds in the areas which included Talos.
The Houston-based Talos said that the acquisition will add about 30 thousand barrels of oil equivalent per day (Mboe/d) for the full current year and adds about 69 million barrels of oil equivalent (MMBoe) in proved reserves.
Talos Energy along with Grupo Carso hold 17.4% of Zama, a Mexican oil and gas project in the Gulf of Mexico with gross recoverable resources estimated at 735 million barrels, which can produce up to 190,000 barrels per day (bpd) of medium crude and associated gas.
“The addition of QuarterNorth’s overlapping deepwater portfolio with valuable operated infrastructure will increase Talos’s operational breadth and production profile while enhancing our margins and cash flow,” said Talos CEO Timothy S. Duncan.
The company said it expects annual run-rate synergies of approximately $50 million by year-end 2024.
The deal is expected to close by the end of first quarter of current year.
