Talos Energy’s $65 Million Acquisition of Castex Energy 2005

Vinson & Elkins advised an affiliate of Talos Energy Inc. in connection with its acquisition of 16 selected assets from affiliates of Castex Energy 2005. Thompson & Knight, LLP represented certain subsidiaries of Castex in the deal.

On June 19, 2020, Talos executed a definitive agreement to acquire selected assets from affiliates of Castex Energy 2005. Castex Energy 2005 emerged from bankruptcy in 2018 and is controlled by prior first lien lenders. The Acquired Assets consist of 16 properties in which the Company currently holds a working interest, all located in the Company’s U.S. Gulf of Mexico Shelf core area. As of April 1, 2020 and based on an early June 2020 strip price case, the Acquired Assets had proved reserves of approximately 17.6 MMBoe, with over 66% classified as proved developed reserves. For the year-to-date period ended May 31, 2020, the Acquired Assets had an average daily production of approximately 6.4 MBoe/d, comprised of approximately 15% oil and 85% natural gas.

The transaction includes the purchase price of $65 million to be paid through the issuance of approximately 4.95 million Talos Energy common shares at closing and $6.5 million of cash. The effective date of the transaction is April 1, 2020, with closing expected to occur in the third quarter of 2020 and is subject to customary closing purchase price adjustments.

Talos Energy is a technically driven independent exploration and production company focused on safely and efficiently maximizing cash flows and long-term value through its operations, currently in the United States Gulf of Mexico and offshore Mexico.

The V&E corporate team was led by partners John Grand (picture) and Lande Spottswood with counsel Tan Lu and associates Erin Mitchell and Helen Xiang. Also advising were partners Ramey Layne, Jason McIntosh, David Peck, Larry Nettles, Matthew Dobbins, Brian Moss and Guy Gribov.

The Thompson & Knight team was led by Barry Davis and included Heath C. DeJean and Brooke Alger, Stacy Smith Brown, Stephen W. Grant, Ashley T. K. Phillips and Kathleen Gerber.

Involved fees earner: Brooke Alger – Thompson Knight LLP; Stacy Smith Brown – Thompson Knight LLP; Barry Davis – Thompson Knight LLP; Heath DeJean – Thompson Knight LLP; Kathleen Gerber – Thompson Knight LLP; Stephen Grant Jr. – Thompson Knight LLP; Ashley Phillips – Thompson Knight LLP; Matthew Dobbins – Vinson & Elkins LLP; John Grand – Vinson & Elkins LLP; Guy Gribov – Vinson & Elkins LLP; Ramey Layne – Vinson & Elkins LLP; Tan Lu – Vinson & Elkins LLP; Jason McIntosh – Vinson & Elkins LLP; Erin Mitchell – Vinson & Elkins LLP; Brian Moss – Vinson & Elkins LLP; Larry Nettles – Vinson & Elkins LLP; David Peck – Vinson & Elkins LLP; Lande Alexandra Spottswood – Vinson & Elkins LLP; Helen Xiang – Vinson & Elkins LLP;

Law Firms: Thompson Knight LLP; Vinson & Elkins LLP;

Clients: Castex Energy 2005, L.P. (Independent Board Members); Talos Energy LLC;

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Author: Ambrogio Visconti