Houston offshore explorer Talos Energy Inc., which has holdings throughout the Gulf of Mexico, said it has bolted on 16 natural gas-heavy assets in its core U.S. holdings.

Gulf of Mexico Natural Gas Production

The properties on the Outer Continental Shelf offshore Louisiana, in which Talos already has stakes, are being acquired from Castex Energy 2005 for an estimated $65 million, consisting of $6.5 million cash and 4.95 million Talos shares.

Talos CEO Timothy S. Duncan said the company appreciated the “continuing strong support we’ve received from our bank group, considering the historic dislocation in our industry in recent months…

“The bolt-on acquisition includes additional ownership in an attractive set of positive cash flowing assets in which we already have interests, and securing operatorship for the majority of these assets also provides us with greater control moving forward. This tactical deal, with a compelling valuation, highlights the importance of continuing to remain opportunistic and commercial in the current environment.”

As of April 1, the proved reserves being acquired totaled an estimated 17.6 million boe, with more than 66% proved developed. Year-to-date, average production from the new assets has been about 6,400 boe, 85% weighted to natural gas.

The acquisition also gives Talos operatorship of 11 fields. Among the assets are “multiple prolific, producing fields that were originally discovered and/or operated by predecessor companies led by current Talos management,” it noted.

Talos also said its borrowing base under its reserves-based lending facility was recently reduced by 14% to $985 million. Pro forma for the redetermination, Talos at the end of May had about  $121 million of cash on hand and $650 million drawn on the borrowing base.

Talos also works offshore Mexico, where it is planning to make a final investment decision by the end of the year on its Zama discovery. The sanctioning decision is pending clarification on sharing the field with Mexican state company Petróleos Mexicanos.