Talos Energy Inc. plans to acquire privately held deepwater Gulf of Mexico (GOM) operator EnVen Energy Corp. in a $1.1 billion deal, the Houston-based independent said.

The acquisition, slated to close by the end of the year would expand the company’s production by 40% and gross acreage by 35%. The buy would give Talos another 24,000 boe/d of production, more than 80% oil-weighted and 90%-plus operated.

The GOM transaction also would add “key infrastructure in existing Talos operating areas” and double the company’s operated deepwater facility footprint. 

[Shale Daily: Including impactful news and transparent pricing for shale and unconventional plays across the U.S. and Canada, Shale Daily offers a clear snapshot of natural gas supplies for analysts, investors and global LNG buyers. Learn more.]

“This transaction adds significant scale and diversity to our business through logical, in-basin expansion with an excellent strategic fit,” said CEO Timothy S. Duncan. “EnVen’s high-margin, oil-weighted assets in key deepwater regions, operated infrastructure and significant overlapping acreage footprint will enhance our ability to accelerate shareholder value creation.”

In addition to its U.S. GOM operations, Talos is the former operator of Block 7 offshore Mexico. Still a Block 7 partner, Talos said it expects a final investment decision on the Zama field development in 2023.

“EnVen operates numerous platforms, including five major deepwater facilities with significant open capacity and holds an acreage footprint of approximately 420,000 gross acres in core deepwater areas for future infrastructure-led development, exploitation and exploration,” management said. Talos would be “more than 70% oil-weighted, more than 75% operated and more than 80% focused on deepwater regions.”

In addition to accelerating upstream segment growth, the upsized company’s greater scale and diversity would allow it to speed up expansion of the proposed carbon capture and storage operations.

Talos shareholders would own about 66% of the combined company, with EnVen’s equity holders owning the remaining 34%. Both companies’ boards have approved the transaction

Duncan would remain CEO and keep his seat on the expanded board, which would include six Talos directors plus current EnVen directors Shandell Szabo and Richard Sherill. Talos expects no changes to its senior management with the transaction.