Talos Energy Sells CCS Business for $125M

Talos Energy Inc. (NYSE: TALO) has made a significant move by announcing the sale of its wholly owned subsidiary, Talos Low Carbon Solutions LLC (TLCS), to TotalEnergies E&P USA, Inc. for a purchase price of $125 million, plus customary reimbursements, adjustments, and retention of cash, totaling approximately $148 million. This transaction was based on an effective date of January 1, 2024, and was set to close on March 18, 2024.

The sale includes Talos's entire carbon capture and sequestration (CCS) business, encompassing three projects along the U.S. Gulf Coast: Bayou Bend CCS LLC, Harvest Bend CCS LLC, and Coastal Bend CCS LLC. Talos may also stand to gain additional future cash payments upon the achievement of certain milestones at the Harvest Bend or Coastal Bend projects, or upon a subsequent sale of these projects by TotalEnergies.

After the sale, Talos plans to use the proceeds to immediately repay borrowings under its credit facility and for general corporate purposes. The company's President and CEO, Timothy S. Duncan, expressed that the transaction will enable Talos to prioritize cash flow generation and optimal capital allocation in its core upstream business. Additionally, Talos is looking to explore business development and strategic M&A opportunities.

Furthermore, Robin Fielder, Talos's Executive Vice President of Low Carbon Strategy and Chief Sustainability Officer, will continue to serve in her role for a transition period before pursuing other opportunities.

Talos Energy, a technically driven, innovative, independent energy company, is focused on maximizing long-term value through its upstream exploration and production business in the United States Gulf of Mexico and offshore Mexico. The company leverages decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while maintaining a focus on safe and efficient operations, environmental responsibility, and community impact. Following these announcements, the company's shares moved 1.8%, and are now trading at a price of $13.08. If you want to know more, read the company's complete 8-K report here.

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