Talos Energy Announces Pricing of Upsized Underwritten Public Offering of Common Stock

Rhea-AI Summary

Talos Energy Inc. announced the pricing of its upsized underwritten public offering of 30,000,000 shares of its common stock, for total gross proceeds of approximately $351.0 million. The Company also granted the underwriters a 30-day option to purchase up to an additional 4,500,000 shares of its common stock at the public offering price. The offering is expected to close on January 22, 2024. The net proceeds from this offering will be used to fund a portion of the previously announced acquisition of QuarterNorth Energy Inc. The offering is being made pursuant to a shelf registration statement on Form S-3, including a base prospectus, which was filed with the U.S. Securities and Exchange Commission (the 'SEC') and became effective on June 14, 2022.

Insights

Financial Analyst

Talos Energy's announcement of an upsized underwritten public offering of shares is a strategic financial maneuver aimed at raising capital. The significant amount of $351.0 million in gross proceeds reflects a robust demand for the company's equity, which could be indicative of investor confidence in Talos Energy's growth prospects. The underwriters' option to purchase additional shares, often referred to as a 'greenshoe' option, provides a mechanism for price stabilization post-offering.

From a financial perspective, the deployment of raised funds towards the acquisition of QuarterNorth Energy Inc. suggests a calculated move for expansion and consolidation within the energy sector. The stipulation that, in the absence of the acquisition's completion, the proceeds will be redirected to general corporate purposes, is a standard safeguard that protects the company's financial flexibility.

The involvement of prominent financial institutions as joint book-running managers underscores the offering's credibility and could potentially enhance its success. However, investors should consider the dilutive effect of issuing new shares on existing shareholders' equity, which might impact the stock price in the short term.

Market Research Analyst

The energy sector is characterized by high capital expenditure requirements and Talos Energy's move to raise funds through a public offering aligns with industry norms for financing large-scale acquisitions and operations. The QuarterNorth Acquisition, if completed, could potentially increase Talos Energy's market share and operational capacity, which are critical factors in the competitive energy landscape.

Market dynamics, such as oil prices and regulatory changes, will continue to play a significant role in the company's performance. Investors should monitor these variables alongside the company's ability to integrate acquisitions effectively, which can be a challenging process with both operational and cultural implications.

Long-term implications for stakeholders include the potential for increased revenue streams and a stronger competitive position. However, successful integration and realization of synergies are key to achieving these benefits and any integration setbacks could adversely affect the company's financial health and stock performance.

Legal Expert

The offering's adherence to SEC regulations, evident from the filing of a shelf registration statement on Form S-3 and the subsequent prospectus supplements, demonstrates Talos Energy's compliance with legal and regulatory frameworks. This compliance is crucial for investor protection and the legitimacy of the transaction.

Investors should be aware that the final prospectus supplement will provide detailed information regarding the offering's terms, risks and the company's financial position. This document serves as a critical source of information for making informed investment decisions.

It is also important to note that the press release's disclaimer regarding the offer's legality in certain jurisdictions is a standard legal precaution to prevent unlawful securities transactions. This highlights the complex legal environment in which public offerings operate and the importance of adhering to securities laws across different jurisdictions.

HOUSTON, Jan. 17, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced the pricing of its upsized underwritten public offering of 30,000,000 shares of its common stock, for total gross proceeds of approximately $351.0 million. In connection with the offering, the Company also granted the underwriters a 30-day option to purchase up to an additional 4,500,000 shares of its common stock at the public offering price. The offering is expected to close on January 22, 2024, subject to customary closing conditions.

The Company intends to use the net proceeds from this offering to fund a portion of the previously announced acquisition of QuarterNorth Energy Inc. (the "QuarterNorth Acquisition"). In the event that the QuarterNorth Acquisition is not completed, the proceeds from this offering will be used for general corporate purposes.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Mizuho are acting as joint book-running managers and representatives of the underwriters and Citigroup, Morgan Stanley, Capital One Securities, Inc., DNB Markets, Inc., KeyBanc Capital Markets Inc. and Regions Securities LLC are also acting as joint book-running managers.

The offering is being made pursuant to a shelf registration statement on Form S-3, including a base prospectus, which was filed with the U.S. Securities and Exchange Commission (the "SEC") and became effective on June 14, 2022. The preliminary prospectus supplement, and accompanying base prospectus, relating to the offering, have been filed with the SEC and are available on the SEC's website at www.sec.gov. The final prospectus supplement, when available, will be filed with the SEC and will be available on the SEC's website at www.sec.gov. Copies of the preliminary prospectus supplement, and accompanying base prospectus, relating to the offering, and the final prospectus supplement, when available, may be obtained by sending a request to: J.P. Morgan, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (866) 803-9204, prospectus-eq_fi@jpmchase.com ; Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ny.email.gs.com ; Mizuho Securities USA LLC, ATTN: Equity Capital Markets, 1271 Avenue of the Americas, 3rd Floor, New York, NY 10020, telephone: (212) 205-7600, or by emailing US-ECM@mizuhogroup.com , or by accessing the SEC's website at www.sec.gov .

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the shares of common stock or any other securities, nor shall there be any sale of such shares of common stock or any other securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

ABOUT TALOS ENERGY

Talos Energy (NYSE: TALO) is a technically driven, innovative, independent energy company focused on safely and efficiently maximizing long-term value through its Upstream Exploration & Production and Low Carbon Solutions businesses. We currently operate in the United States and offshore Mexico. We leverage decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while developing opportunities to reduce industrial emissions through carbon capture and storage projects along the U.S. Gulf Coast.

INVESTOR RELATIONS CONTACT

investor@talosenergy.com

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 "will," "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, our ability to consummate the proposed transaction with QuarterNorth Energy Inc. on the terms currently contemplated, the anticipated future performance of the combined company, risks and uncertainties related to economic, market or business conditions, satisfaction of customary closing conditions related to the proposed offering, and the other risks discussed in "Risk Factors" in the Registration Statement on Form S-3, our Annual Report on Form 10-K for the year ended December 31, 2022, our Quarterly Reports on Forms 10-Q filed with the U.S. Securities and Exchange Commission and our other filings with the SEC, all of which can be accessed at the SEC's website at www.sec.gov .

Should one or more of the risks or uncertainties described herein 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, included in this communication 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, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this communication.

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SOURCE Talos Energy

FAQ

What is the total gross proceeds from the offering of 30,000,000 shares of common stock by Talos Energy Inc.?

The total gross proceeds from the offering are approximately $351.0 million.

What is the expected closing date of the offering by Talos Energy Inc.?

The offering is expected to close on January 22, 2024.

What will the net proceeds from the offering be used for by Talos Energy Inc.?

The net proceeds from this offering will be used to fund a portion of the previously announced acquisition of QuarterNorth Energy Inc.

Under which registration statement is the offering being made by Talos Energy Inc.?

The offering is being made pursuant to a shelf registration statement on Form S-3, including a base prospectus, which was filed with the U.S. Securities and Exchange Commission (the 'SEC') and became effective on June 14, 2022.