Talos Energy Inc. (NYSE:TALO) entered into an agreement to acquire QuarterNorth Energy, Inc. for $1.6 billion on January 13, 2024. Consideration for the Transaction consists of 24.349 million shares of Talos's common stock and approximately $1.2 billion in cash. Talos has secured $650 million in bridge financing from a syndicate of banks and will fund the consideration with the amount. In support of the recently announced merger between Talos Energy Inc. (Talos or the Company) (NYSE: TALO) and QuarterNorth Energy Inc. for $1.29 billion, Talos has: Secured $650 million in bridge financing from a syndicate of banks representing most of the Company's reserves-based loan lender group. Completed an upsized underwritten public offering of 30,000,000 shares of its common stock, for total gross proceeds of approximately $351.0 million. Priced an upsized $1.25 billion offering of new Second-Priority Senior Secured Notes due 2029 and due 2031. The offering will be used to fund a portion of the cash consideration of the transaction. As of January 25, 2024, Talos Energy upsized its previously announced offering from $1,000 million to 1,250 million and the company intends to use the net proceeds from the Offering to fund a portion of the cash consideration. The Talos senior management team will remain unchanged. Talos's Board of Directors will be expanded to include one additional independent director. If the Merger Agreement is terminated by QuarterNorth, then QuarterNorth would be required to pay Talos a termination fee equal to $10 million. As of January 17, 2024, cash portion of the consideration is revised to $1,273.861 million. QuarterNorth reported cash and cash equivalents of $387.722 million, total assets of $1706.361 million, total liabilities of $613.955 million and Total stockholders? equity of $1092.366 million as of September 30, 2023. As of March 12, 2024, Quarternorth reported the revenue of approximately $826.642 million, EBIT of approximately $286.173 million and net income of approximately $211.496 million for the period ended September 30, 2023.

The board of directors of both Talos and QuarterNorth have unanimously approved the Transaction. The transaction is subject to regulatory approvals, QuarterNorth's top equity holders and expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, approval for the listing on the NYSE of the shares of Talos Common Stock to be issued in connection with the Merger, execution of Registration Rights Agreement. The transaction is expected to close by the end of the first quarter of 2024. Transaction will be immediately accretive on free cash flow per share and cash flow per share and NAV per Share.

PJT Partners Inc. acted as financial advisor to Talos. Greenhill & Co., Inc. acted as financial advisor to Talos. J.P. Morgan Securities LLC acted as financial advisor to Talos. Intrepid Partners, LLC acted as financial advisor to Talos. John Goodgame, Stephen M. Boone Jr., Dasha K. Hodge, Alison L. Chen, Julia Pashin, Sarah Link Schultz, David H. Quigley, Andrew Oelz, Leana N. Garipova, Aaron D. Vera and Aaron S. Farovitch of Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to Talos. Barclays acted as financial advisor to QuarterNorth. Tim Samson, Paul Monsour, Roger Aksamit, Jim Noe, Neely Munnerlyn, Tony Campiti, Ashley Phillips and John Dierking of Holland & Knight LLP acted as legal advisor to QuarterNorth.

Talos Energy Inc. (NYSE:TALO) completed the acquisition of QuarterNorth Energy, Inc. on March 4, 2024.