Talos Energy Takes a Risk in the Gulf of Mexico

After two days of intense rain in Kingwood, Texas, Tim Duncan was worried about more than Hurricane Harvey’s attack on his neighborhood. The night was soon to come, and the power was out when Tim Duncan received news that six feet of floodwaters were on the way. Tim waded through the water to lift his wife, son, and two dogs on a FEMA boat. As the chief executive of Talos Energy, Tim Duncan had more than one worry on his mind. For the previous four months, he had strategically calculated and positioned the $2.5 billion merger of his company with a publicly traded and bankrupt company, Stone Energy.

It was a risky move to merge with the large company that was almost as big as his, but there was an advantage if the risky move paid off. Acquiring and merging with Stone Energy would make Talos Energy a publicly traded company without having to go through the expense of a public offering. Duncan was determined to make the deal go through and wouldn’t let the flood intervene in the merger. Duncan used a private plane to head to Alabama, and once he returned to Texas, he stayed at his parent’s Houston home which was safe from Harvey’s wrath. He worked every evening for weeks from his parent’s kitchen table and negotiated the merger.

Once the merger was complete Talos Energy scheduled to take on Stone’s listing in May. The new ticker will read TALO. Tim Duncan will control the oil company with an estimated annual revenue of nine hundred million dollars. Talos’ total assets will be located in the Gulf of Mexico. Talos is like a wildcatter. Tim Duncan is taking a risk. When others are focused on the Permian Basin, he is taking a risk in politically uncertain Mexico. Talos can produce 48,000 barrels a day but aims for more in the future.

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