Page 12 - NorthAmOil Week 09

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NEWS IN BRIEF
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UPSTREAM
Talos Energy announces closing of previously announced acquisitions and associated borrowing base increase
Talos Energy today announced the closing of the acquisition of affiliates of ILX Holdings, among other entities, on February 28, 2020. The Transaction was previously announced on December 10, 2019. Concurrently with
the closing of the Transaction, Talos also closed on the increase of its borrowing base to $1,150.0mn.
After taking into account customary closing adjustments based on an effective
date of July 1, 2019, total cash consideration paid by Talos was reduced from $385.0mn to $291.7mn, as the acquired assets generated approximately $100.0mn of free cash flow in the eight-month period since effective date, partially offset by a small working capital position acquired in conjunction with one of the assets. The cash consideration was funded primarily through the company’s revolving credit facility and cash on hand. In addition to the cash consideration, the company delivered 110,000 shares of Series A Convertible Preferred Stock to certain of the sellers. The preferred shares will automatically convert into 11.0mn common shares on the 20th
day following the mailing to investors of the company’s definitive information statement on Schedule 14C related to the transaction.
Concurrently with the closing of the transaction, the borrowing base under Talos’s credit facility was upsized from $950.0mn to $1,150.0mn, effective immediately. Pro forma for the closings, Talos had approximately
$600mn of available liquidity. Talos expects to use free cash flow anticipated in 2020 to pay down a portion of the borrowings under the credit facility, even at the current commodity price environment.
The acquired assets’ average production in the fourth quarter of 2019, after accounting for certain downtime, was 18,700 barrels
of oil equivalent per day. The company is currently drilling the Claiborne #3 well and first production is expected at the end of the second quarter of 2020. Also included in the Transaction are over 700,000 gross acres, of which 480,000 are primary term.
TALOS ENERGY, March 02, 2020
MIDSTREAM
Industry Veterans form
Tatanka Midstream, secure
an initial $500mn capital
commitment from EnCap
Flatrock Midstream
Tatanka Midstream today announced the formation of the company and an initial capital commitment of $500mn from EnCap Flatrock Midstream (“EnCap Flatrock”). Tatanka is an independent energy company focused on acquiring and building midstream assets in North America. Tatanka’s goal is to create value by improving the operations, maintenance and overall efficiency of acquired businesses and building highly competitive new assets that serve the continually growing and changing needs of the North American energy market.
Tatanka is led by three founders: chief executive officer Keith Casey, president and chief investment officer Nate Weeks and
chief financial officer Carlos Mata, CFA. The founders have worked together in various capacities for more than a decade and have more than 75 years of collective experience
in the midstream and downstream energy sectors. They share distinctive track records in strategic growth and transformation as well as a commitment to continuously improving all aspects of business operations and community engagement.
“We are excited to partner with EnCap Flatrock to create a company that provides innovative midstream solutions that are
safe and environmentally responsible, forge optimal and efficient pathways to market, and create exceptional value for all stakeholders,” said Tatanka Midstream CEO Keith Casey. “EnCap Flatrock thinks about midstream and the midstream opportunity set the same way we do, the firm’s values are aligned with ours, and the EnCap Flatrock team brings a wealth of contacts and technical and commercial expertise that complement our own. We think it’s a powerful pairing.”
“EnCap Flatrock is fortunate to be working with Keith, Nate, Carlos and the team they are assembling,” said EnCap Flatrock Managing Partner Gregory C. King, who is also a member of the Tatanka board of directors. “We are proud to partner with the best management teams in midstream, and the Tatanka Midstream team is no exception. We were attracted to the founders’ extraordinary skill sets, strong track records and reputations. We support their early dedication to creating a socially responsible company.”
TATANKA MIDSTREAM, March 02, 2020
Summit Midstream Partners reports fourth quarter and full-year 2019 financial results & provides 2020 financial guidance
Summit Midstream Partners announced today its financial and operating results for the three months ended December 31, 2019, including a net loss of $327.1mn, adjusted EBITDA of $77.5mn, DCF of $47.1mn, and a quarterly distribution coverage ratio of 4.0x. Net loss for the quarter was primarily related to a $336.7mn non-cash impairment associated with our equity investments in Ohio Gathering and Ohio Condensate due to an expected decrease in customer activity as a result of lower forward commodity prices. Net loss also included a $14.2mn non-cash impairment related to the $12.0mn sale of a
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Week 09 05•March•2020