June 29, 2020 [Houston Business Journal] – Houston-based Talos Energy Inc. has made a deal to pick up a series of assets from Castex Energy 2005 LP in a bolt-on acquisition.

Talos will pay $65 million for the assets, of which 10% will be cash and the rest will be stock, according to a press release. The deal includes 16 fields in the Gulf of Mexico, and the assets have produced operating cash flow of about $31.2 million in the yearlong period preceding March 31.

Talos already had a working interest in the assets, but the deal gets the company operator status over 11 of them.

“Securing operatorship for the majority of these assets … provides us with greater control moving forward,” CEO Timothy Duncan said in the press release.

Talos is an upstream oil and gas exploration and production company focused on offshore operations in the Gulf of Mexico and offshore Mexico.

The fields produce about 6,400 barrels of oil equivalent per day, about 15% of which is crude oil, according to the press release. They feature about 17.6 million barrels of oil equivalent in proved reserves. Many of the fields were discovered or operated by companies led at the time by current members of Talos’ management team.

The deal is expected to close in the third quarter.

Castex emerged from bankruptcy in 2018, and it’s still controlled by its previous creditors, according to the press release.

Talos went public in May 2018 when it closed a deal acquiring Louisiana-based Stone Energy Corp.

Intrepid Partners LLC advised Castex in the transaction. The release does not list an adviser for Talos.

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