Why Talos Energy Sticks To Drilling For Oil And Gas Offshore

Talos Energy is a Houston-based oil and gas company that performs offshore exploration and production. This company was founded in 2012 by Tim Duncan, John Harrison, John Parker, and Stephen Heitzman. They have a number of assets in and around the Gulf of Mexico.

Chief Executive Officer Tim Duncan says that he was in the midst of completing a $2.5 billion merger between his company and Stone Energy when Hurricane Harvey hit the Houston area. His home was flooded and so he evacuated his family out of state where they would be safe. He, however, needed to stay put in order to finish the merger negotiations. He ended up staying at his parent’s house where he spent several weeks continuing to negotiate with the team at Stone Energy Company.

Tim Duncan recalls that he told himself he couldn’t use Hurricane Harvey as an excuse to not getting this deal completed. He says that he worked from the kitchen table late into each night until the two parties came to an agreement. The main consequence of this deal was that, as Stone Energy was a publically traded firm, once the two companies merged Talos Energy took over the public listing.

After the merger was completed Talos Energy became a company with $900 million in annual revenues. Virtually all of their assets are in and around the Gulf of Mexico. Their balance sheet is also in great shape with $2.3 billion in assets and $700 million in debt. However, they take a high risk/high reward approach so where they drill the platforms can cost up to a few hundred million each.

Tim Duncan says that most oil drilling companies stick to the Permian shale. He says that while that is a safer bet the problem is that the wells stop producing after a few years. Where Talos Energy drills for oil it is more risky with one out of three drillings turning out to be dry. However, when oil is hit it can produce oil and gas for a decade. It is for this reason that Talos Energy has not joined the stampede to onshore drilling.

Read More : www.indeed.com/cmp/Talos-Energy

Leave a Reply

Your email address will not be published. Required fields are marked *