Helix Energy Solutions Group HLX has entered into a definitive
agreement to sell Energy Resource Technology GOM, Inc. (ERT), the Company's
oil and gas subsidiary, to Talos Production LLC, a wholly owned subsidiary of
Talos Energy LLC, a privately held Houston-based oil and gas company. The
selling price involves a base purchase price of $610 million plus contingent
consideration in the form of overriding royalty interests on ERT's Wang
exploration prospect as well as certain other exploration prospects. In
addition, the parties have agreed to adjust the purchase price at closing,
upward or downward, depending upon the results of the Wang exploration well.
The estimated value of the transaction is approximately $700 million if the
Wang exploration prospect is successful and meets expectations. If the Wang
exploration prospect is determined to be unsuccessful, the estimated value of
the transaction to Helix is closer to $600 million. ERT is currently drilling
the Wang well and expects to evaluate the results in the next few days.
Jefferies & Company, Inc. served as the exclusive financial advisor to Helix
in conjunction with the transaction. The transaction has an effective date of
December 1, 2012 and is expected to close in the first quarter of 2013,
subject to customary closing conditions.
The divestment of ERT is in line with Helix's strategy of focusing on
providing Well Intervention and Robotics services, and Helix intends to use
the proceeds from this transaction to repay debt as well as accelerate the
Company's plans to grow these businesses.
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