US-based oil and gas company Talos Energy said its wholly-owned subsidiary, Talos Production, has completed the acquisition of Helix Energy Solutions Group’s oil and gas subsidiary, Energy Resource Technology (ERT), for $620m.
Under the deal, Talos will have rights to ERT’s assets, located in the Gulf of Mexico, which averaged 16,155 barrels of oil equivalent per day in December 2012 and are about 70% oil-weighted.
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ERT recently drilled the Wang exploration well, which encountered more than 100ft of high quality net oil pay in the Phoenix Field in Green Canyon Block 237.
As part of the agreement, Helix will also hold the overriding royalty interest in the Wang discovery and other exploration prospects.
Talos Energy president and CEO Tim Duncan said that the results of Wang discovery are encouraging, while the company achieved an important milestone in closing the ERT transaction.
"We believe that combining these high cash flowing, oil-weighted assets with our 24,000 square miles of seismic data and a talented team of professionals leave us well-positioned to build a significant E&P company in the Gulf of Mexico and lower Gulf Coast," added Duncan.
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By GlobalDataTalos Energy is a portfolio company of funds affiliated with Apollo Global Management and Riverstone Holdings, which made commitments of about $600m in equity to Talos in February 2012.
Jeffries & Company will serve as the exclusive financial advisor to Helix in relation to the latest transaction.
The company will use some of the cash proceeds from the divestment of ERT to repay its term loans and revolving credit facility indebtedness.
Helix president and chief executive officer Owen Kratz said, "The sale of ERT is an important milestone in the Company’s previously announced strategic plans to grow its well intervention and robotics businesses."
Image: Talos will have rights to ERT assets, which are located in the Gulf of Mexico with an average 16,155 barrels of oil equivalent per day. Photo: courtesy of Bob Jenkins.
