Talos Energy, Grupo Carso accelerate Zama development with $125 million transaction
(WO) – Talos Energy Inc. announced that Zamajal, S. A. de C.V., a wholly owned subsidiary of Grupo Carso ("Carso"), has agreed to acquire a 49.9% interest in Talos' Mexican subsidiary ("Talos Mexico"), which holds the company's 17.4% stake in Zama. Carso is one of the world's largest conglomerates and is headquartered in Mexico City, Mexico.
Talos will remain the controlling shareholder of Talos Mexico. The transaction is expected to close within the third quarter of 2023, as is subject to approval by Mexico's Federal Economic Competition Commission ("COFECE").
- Purchase price of $124.75 million for the 49.9% stake, implying a minimum valuation of approximately $250.0 million for the full 17.4% stake in Zama, potentially increasing to $262.50 million if certain milestones are reached.
- $74.85 million will be paid at closing, with the remaining $49.90 million due at first production.
Talos President and Chief Executive Officer Timothy S. Duncan commented, “As we accelerate recent momentum and advance Zama toward FID and first production, we are confident that Carso is the right partner at the right time. Carso's investment is a testament to the economic potential of Zama, and the joint venture will also benefit from Carso's critical presence in Mexico and global commercial experience.”
Duncan continued, "This transaction establishes a baseline Zama valuation for Talos shareholders while providing material upfront cash proceeds. Most importantly, Talos shareholders retain significant valuation upside as we advance the project toward first production."
Talos announced in March 2023 that the Zama Unit Development Plan was submitted to Mexico's National Commission of Hydrocarbons for formal approval. Additionally, an Integrated Project Team comprised of individuals from all four Zama Unit Holders was established to manage the development and operation of Zama going forward. Talos will co-lead the planning, drilling, construction, and completion of all Zama wells as well as the planning, execution, and delivery of Zama's offshore infrastructure.