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Tag: NYSE:TALO

  • Insider Buying Boosted Investor Confidence In TALO Stock

    Insider Buying Boosted Investor Confidence In TALO Stock

    Talos Energy Inc. (NYSE: TALO) demonstrated remarkable stability in its stock price during the recent trading session, exhibiting a modest increase of 0.95% to settle at $12.73. This positive performance was attributed to a noteworthy insider buying activity, adding a layer of confidence to the market sentiment.

    In a Securities and Exchange Commission (SEC) filing last Friday, it came to light that Control Empresarial de Capital, a 10% owner of Talos (TALO), had acquired nearly 19.66 million company shares. This significant insider investment amounted to approximately $230 million, with shares purchased at a per-share price of $11.70.

    This infusion of capital takes on added significance as Talos recently unveiled its strategic move to acquire QuarterNorth Energy Inc. for $1.29 billion. QuarterNorth, a privately-held U.S. Gulf of Mexico exploration and production company, boasts ownership in several prolific offshore fields. The assets of QuarterNorth are poised to augment Talos’s operational scale, featuring high-quality deepwater assets with a favorable base decline profile and promising future development prospects.

    The transaction, structured with 24.8 million shares of Talos’s common stock and approximately $965 million in cash, has received unanimous approval from the boards of directors of both Talos and QuarterNorth. The deal, which is expected to close by the end of the first quarter of 2024, is pending regulatory clearance and usual closing conditions.

    For Talos, this acquisition represents a critical turning point in the company’s ongoing development into a major offshore exploration and production enterprise. The integration of QuarterNorth’s deepwater portfolio, coupled with valuable operated infrastructure, is expected to broaden Talos’s operational scope and production profile while enhancing margins and cash flow.

    Aligning with Talos’s overarching strategy, which emphasizes leveraging existing infrastructure and complementary acreage, this transaction is poised to accelerate shareholder value creation. The expanded footprint in the U.S. Gulf of Mexico positions Talos to realize meaningful operating synergies.

    The financing structure of the transaction not only expedites de-leveraging but also immediately enhances the company’s credit profile, proving accretive on key metrics. This strategic move positions Talos to consider additional capital return initiatives in the near term, underscoring the company’s commitment to sustained value creation for its shareholders.

  • What Caused Talos (TALO) Stock To Drop In Extended Trades?

    Talos Energy Inc. (TALO) shares were down -5.90% in after-hours trading at $17.55. During the last session, Talos shares closed at $ 18.65, increasing 2.75% or $ 0.5. Over the course of the day, TALO stock fluctuated between $ 18.16 and $ 18.93.

    In the past six months, TALO stock has increased by 132.25%, and the stock has risen by 50.28% in the past three months. TALO stock returns so far this year have been 126.33%.  Even after announcing changes to its reserves-based lending facility, TALO stock fell.

    How did that financing work?

    Talos is a technically-driven publicly traded energy company focused on getting the most out of its operations both in the U.S. and offshore Mexico. Exploration and production of crude oil and natural gas make up upstream operations at TALO, and emissions capture and storage operations comprise downstream operations of the company. Through its joint venture in carbon capture and storage along the Gulf Coast and Gulf of Mexico, TALO is also using its expertise to reduce industrial emissions.

    Talos announced the completion of amendments to its reserves-based lending facility (the “credit facility”), which includes an extension of its maturity date until November 2024.

    • After this amendment, TALO expects to be significantly free cash flow positive by the end of 2021 due to its minimal near-term debt maturities, strong liquidity and anticipated free cash flow.
    • Based on TALO’s liquid-weighted assets, the loan agreement approved $950 million as the borrowing base, reflecting the high quality of its diverse, liquid-weighted portfolio.
    • As a result, the maturity date for the credit facility has been extended from May 2022 to November 2024, or about three and a half years after the amendments were made.
    • TALO currently has $655 million under its credit facility.
    • TALO expects liquid assets of approximately $300 million at June 30, 2021, compared to $465 million on March 31, 2021.
    • The next scheduled redetermination of the borrowing base will occur in November 2021.
    • TALO’s borrowings in accordance with its credit facility are expected to decrease as a result of the supportive commodity price environment.
    • Thus, TALO will increase liquidity and return to pre-pandemic levels of leverage ahead of expectations.

    TALO’s financial strategy:

    Since Dec 2020, Talos (TALO) has raised over $1.3 billion in four separate transactions spanning the entire capital structure as a result of these commitments and maturity extension of its credit facility. By executing these transactions, TALO has strengthened its financial position considerably.