Talos Energy Inks $1.3B Deal for QuarterNorth Energy

Talos Energy, an oil and gas company, acquired QuarterNorth Energy Inc., a privately held US deepwater explorer in the Gulf of Mexico, for $1.29 billion in cash and stock.

The transaction consists of approximately $965 million in cash and 24.8 million shares of Talos’ stock.

The acquisition will add approximately 30,000 barrels of oil equivalent per day (boepd) for the full-year 2024, averaging about 75% oil from approximately 95% operated assets. QuarterNorth’s producing assets include six major fields. The acquisition will also add proved reserves of approximately 69 million barrels of oil equivalent.

Houston-based Talos said the transaction is expected to improve its base decline rate by approximately 20%.

“The addition of QuarterNorth’s overlapping deepwater portfolio with valuable operated infrastructure will increase Talos’s operational breadth and production profile while enhancing our margins and cash flow,” said Talos president and CEO Timothy S. Duncan.

Talos has secured $650 million in bridge financing from a syndicate of banks to help finance the deal.

The board of directors of both Talos and QuarterNorth have unanimously approved the deal, which is expected to close by the end of the first quarter of 2024.

Talos’ acquisition is the latest in a wave of consolidation that has altered the oil and gas business, following megadeals last year by ExxonMobil for Pioneer Natural Resources and Chevron for Hess.