Talos Energy Announces Elimination Of $37.2 Million Of Its 11% Second Lien Notes

Rhea-AI Summary

Talos Energy announced a debt reduction via an exchange transaction involving its 11.00% Second Lien Notes, effectively decreasing outstanding debt by approximately $37.2 million. This transaction, set to close on June 18, 2020, will eliminate around $7.5 million in future cash interest payments. CEO Timothy S. Duncan highlighted this move as part of their strategy to maintain a competitive leverage profile and respond to market conditions. Talos, active in the U.S. Gulf of Mexico and offshore Mexico, aims to strengthen its balance sheet further.

Positive

• Reduction of outstanding debt by approximately $37.2 million.
• Elimination of future cash interest payments of around $7.5 million.

Negative

• None.

HOUSTON, June 16, 2020 /PRNewswire/ -- Talos Energy Inc. ("Talos," or the "Company") (NYSE: TALO) today announced a reduction in outstanding debt resulting from an exchange transaction with its 11.00% Second Lien Notes (the "Notes").

On June 15, 2020, Talos entered into an agreement to exchange approximately $37.2 million, or approximately 10%, of principal of the Company's Notes for 3.05 million shares of Talos Energy common equity. The exchange is scheduled to close on June 18, 2020. The transaction will eliminate future cash interest payments on the Notes of approximately $7.5 million from settlement through maturity.

President and Chief Executive Officer Timothy S. Duncan commented: "Yesterday's exchange follows on our commitment to maintaining a competitive leverage profile and to remaining flexible in responding to evolving market conditions. We opportunistically took advantage of the ability to retire a meaningful portion of our Notes on a cashless basis for a fixed number of shares, and will continue to evaluate other pathways to further strengthen our balance sheet moving forward."

ABOUT TALOS ENERGY

Talos Energy (NYSE: TALO) 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. As one of the U.S. Gulf of Mexico's largest public independent producers, we leverage decades of geology, geophysics and offshore operations expertise towards the acquisition, exploration, exploitation and development of assets in key geological trends that are present in many offshore basins around the world. Our activities in offshore Mexico provide high impact exploration opportunities in an oil rich emerging basin. For more information, visit www.talosenergy.com.

INVESTOR RELATIONS CONTACT

Sergio Maiworm
+1.713.328.3008
investor@talosenergy.com 

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

This communication may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this communication, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "forecast, "may," "objective," "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, including the sharp decline in oil prices beginning in March 2020, the impact of the coronavirus disease 2019 ("COVID-19") and governmental measures related thereto on global demand for oil and natural gas and on the operations of our business, the ability or willingness of the Organization of Petroleum Exporting Countries ("OPEC") and non-OPEC countries, such as Saudi Arabia and Russia, to set and maintain oil production levels and the impact of any such actions, lack of transportation and storage capacity as a result of oversupply, government regulations and actions or other factors, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, the possibility that the anticipated benefits of recent acquisitions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of such acquisitions, and other factors that may affect our future results and business, generally, including those discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, to be filed with the SEC subsequent to the issuance of this communication.

Should one or more of these risks occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, to reflect events or circumstances after the date of this communication.

Estimates for our future production volumes are based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and gas will continue at levels that allow for economic production of these products. The production, transportation, marketing and storage of oil and gas are subject to disruption due to transportation, processing and storage availability, mechanical failure, human error, hurricanes and numerous other factors. Our estimates are based on certain other assumptions, such as well performance, which may vary significantly from those assumed. Therefore, we can give no assurance that our future production volumes will be as estimated.

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SOURCE Talos Energy

FAQ

What debt reduction did Talos Energy announce on June 16, 2020?

Talos Energy announced a reduction of approximately $37.2 million in outstanding debt through an exchange transaction involving its 11.00% Second Lien Notes.

When is the debt exchange transaction closing for Talos Energy?

The exchange transaction is scheduled to close on June 18, 2020.

What will be the impact of the debt exchange on Talos Energy's cash interest payments?

The transaction will eliminate approximately $7.5 million in future cash interest payments on the Notes.

Who commented on the debt reduction strategy of Talos Energy?

CEO Timothy S. Duncan commented on the debt reduction strategy, emphasizing its importance for maintaining a competitive leverage profile.