Talos Energy Inc. said Thursday it has reached agreement to acquire privately held EnVen Energy Corp. for $1.1 billion cash and stock. Under the terms of the deal, EnVen shareholders will receive 43.8 million shares and $212.5 million in cash, along with the assumption of EnVen’s debt of about $50 million. Once the deal closes, Talos shareholders will own about 66% of the pro forma company, while EnVen owns the remaining 34%. The deal is expected to close by year-end. Talos is expecting the move to add 24 MBoed of production. It will increase production by 40% and gross acreage by 36%. The deal will add $170 million of estimated free cash flow in 2022 and generate at least $30 million in annual run-rate synergies in 2023. “The enhanced cash flow profile will provide us with increased capital allocation optionality, including additional high-impact subsea tie-back opportunities, opportunistic acquisitions, accelerating our low-carbon initiatives and positioning Talos for a potential shareholder return of capital program in the future,” Talos CEO Timothy S. Duncan said in a statement. Talos shares jumped 4% premarket on the news and have gained 93% in the year to date, while the S&P 500 has fallen 20%.
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