Talos shells out US$640m for Gulf of Mexico assets

Commenting after Talos Energy, in its pursuit of growth in the US Gulf of Mexico, announced a series of purchases, worth $640 million assets in the region, Mfon Usoro, from Wood Mackenzie’s Gulf of Mexico upstream team, said: “Earlier in the year, Talos added to its exploration prospect and discoveries inventory through transactions with BP and Exxon Mobil. This transaction allows Talos to increase its 2019 production and 2P reserves by 35% and become one of the top 10 producers in the US Gulf of Mexico (including both shelf and deepwater).

“The assets acquired have some of the most competitive economics and Wood Mackenzie estimates the point-forward breakeven for majority of the assets at less than US$15/bbl (Brent, NPV10).

“The deal allows Talos to strengthen its position in the US Gulf of Mexico and diversify its portfolio beyond its core Green Canyon and Mississippi Canyon area. The transaction provides a strong inventory of opportunities for its traditional Infrastructure-led developments in the Miocene and also an entry point into high-impact Paleogene discoveries and acreage.

“The transaction allows private equity companies, Riverstone holdings (ILX and Castex) and Warburg Pincus (Venari), to monetise a portion of funds formed in 2010 and 2014, respectively.

“We expect future M&A activity in the US GoM to be driven by other mature private equity funds needing to exit.”