Guggenheim Securities, LLC acted as lead financial advisor to Talos and provided a fairness opinion with respect to the ILX Acquisitions and Castex Acquisitions. J.P. Morgan Securities LLC also provided financial advice to Talos related to financing and led the arrangement of increased commitments with respect to the Company’s revolving credit facility and borrowing base. Vinson & Elkins L.L.P. acted as legal advisors to Talos. Evercore Inc. and Latham & Watkins L.L.P. are serving as financial and legal advisors to Riverstone Holdings LLC, respectively.
Riverstone Holdings LLC has agreed to the sale of offshore Gulf of Mexico producing assets, exploration prospects and acreage from affiliates of ILX Holdings, LLC, ILX Holdings II, LLC and ILX Holdings III, LLC and Castex Energy 2014, LLC (all of which are managed by Riverstone) to Talos Energy Inc.
Specifically, Talos has signed definitive agreements to acquire all producing assets, primary term acreage and prospects of ILX Holdings and ILX Holdings II, all primary term acreage and prospects of ILX Holdings III and a subsidiary of Castex Energy 2014. Closing of the ILX and Castex acquisitions is expected in the first quarter of 2020.
The net consideration at closing of the ILX Acquisitions and Castex Acquisitions is expected to be funded with the issuance of new Talos shares and cash from existing sources of liquidity. Talos will issue 11.0 million shares to sellers at closing, or $250 million in equity consideration based upon the volume-weighted average price for the 30 trading days ending December 5, 2019. Effective December 10, 2019, the borrowing base under the Company’s revolving credit facility increased from $850 million to $950 million as part of the regular fall redetermination process, and will be further increased to a total size of $1,150 million simultaneous with the closing of the ILX Acquisitions and Castex Acquisitions.
Talos Energy Inc. operates as an oil and gas company. The Company engages in exploration, development, and production of oil and natural gas properties.
Riverstone Holdings LLC operates as a holding company. The Company, through its subsidiaries, invests in exploration and production, midstream, oilfield services, power, and renewable sectors.
Latham & Watkins LLP represented Riverstone in the transaction with a Houston-based team led by partner Jeff Muñoz (Picture) with associates Sean McKinley, Corey Allen, Sam Bentley and Luke Strother. Advice was also provided by Houston partner Tim Fenn with associate Jim Cole on tax matters; by Washington, D.C. partner Adam Kestenbaum on benefits and compensation matters; by Los Angeles partner Drew Levin with San Diego associate Denis Griffin on insurance related matters; by Houston partner John Greer on capital markets and securities matters; and by Washington, D.C. partner Jason Cruise, Brussels partner Héctor Armengod with Washington, D.C. counsel Peter Todaro on antitrust matters.
Involved fees earner: Corey Allen – Latham & Watkins; Héctor Armengod – Latham & Watkins; Sam Bentley – Latham & Watkins; Jim Cole – Latham & Watkins; Jason Cruise – Latham & Watkins; Timothy Fenn – Latham & Watkins; John Greer – Latham & Watkins; Denis Griffin – Latham & Watkins; Adam Kestenbaum – Latham & Watkins; Drew Levin – Latham & Watkins; Sean McKinley – Latham & Watkins; Jeffrey Muñoz – Latham & Watkins; Luke Strother – Latham & Watkins; Peter Todaro – Latham & Watkins;
Law Firms: Latham & Watkins;
Clients: Riverstone Holdings LLC;