Energy producers drilling in the Gulf of Mexico contribute to the energy needs of California. One of those producers, Talos Energy Inc., has completed a deal to acquire Whistler Energy II, LLC, which will significantly expand its access to future reserves of oil and gas. For a purchase price of $52 million, Talos gained Whistler’s annual production of 1,900 barrels of oil equivalent per day.
The financial details of the transaction included the release of roughly $77 million of cash collateral previously securing surety bonds for Whistler. Talos collected $31 million and Whistler received the other $46 million.
The assets acquired by Talos focused on three blocks in the Central Gulf referred to as the Green Canyon 18 Field. This 16,494-acre region has water depths of about 750 feet with drilling leases under the status of held by production. To date, the field has produced 117 million barrels of oil.
The President and CEO of Talos said that the acquisition represented an ideal step for the company because of low costs, production facilities and existing resources. He added that Talos will begin immediately to survey the newly acquired areas and plan new drilling locations.
Mergers and acquisitions require an analysis of numerous details before committing to a deal. A person charged with looking for companies to acquire or who has been approached by an interested buyer could discuss the possibilities with an attorney. Legal advice could inform a person about crucial elements to investigate and highlight unexpected liabilities. An attorney might also research regulatory issues and strive to ensure compliance with financial laws during the transaction. When going forward with a deal, the lawyer could advance the client’s interests while negotiating the terms of sale.