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Talos Energy (TALO) News - May 26

Posted: Fri May 26, 2023 7:56 am
by dan_s
From OilPrice.com
"Billionaire Buys Into Mexico’s New Megafield. Once the richest man on earth, Mexican billionaire Carlos Slim bought a 49.9% minority stake in Talos Energy’s (NYSE:TALO) Mexico unit for $125 million, seeking to tap into the hydrocarbon riches of the Zama field which is believed to contain up to 2 MMbbls."

Read details here: https://finance.yahoo.com/news/billionaire-buys-stake-mexico-mega-213000754.html

Re: Talos Energy (TALO) News - May 26

Posted: Fri May 26, 2023 8:25 am
by ChuckGeb
Sounds like a good move by Talos. Maybe Slim can help the Pemex graft on operations to a minimum.

Re: Talos Energy (TALO) News - May 26

Posted: Fri May 26, 2023 11:38 am
by dan_s
Roth MKM note this morning:
"We rate Talos Energy (TALO) a Buy based on its improving balance sheet, high oil cut, low
production declines, below average valuation and material potential upside from its carbon
capture business." Price Target $22

Note from Stephens this morning:
First Look: Half of TALO's Zama Interest Fetches $125MM
INVESTMENT CONCLUSION:
After yesterday's market close, TALO announced that it sold 49.9% of
its interest in its Mexican subsidiary to Grupo Carso for $124.75MM.
We view the release as positive.

KEY POINTS:
The price equates to a value of $250MM (potentially increasing to
$262.5MM if certain milestones are achieved) for TALO's 17.4%
interest in Zama. The transaction could add ~$2.30/share to our NAV
estimate of $34.65/share, which excludes Zama.
We view this news
positively as we believe most investors ascribed no value to the
discovery (consistent with our NAV estimate) due to its history of delays
over disputed interests. The $250MM value is nearly 2.5x the roughly
$110MM that TALO invested at Zama where it drilled a discovery well in
2017 and three successful appraisal wells in 2018 and 2019. Moreover,
the transaction with one of Latin America's largest conglomerates
($12.75B market cap) could alleviate political headwinds surrounding
the project, implying upside to TALO's remaining 8.2% interest. Grupo
Carso will pay $74.85MM at closing (expected in 3Q23) and the
remaining $49.90MM at first production.

Prior to this press release, Stephens rated TALO "Overweight" with a price target of $21.

At the time of this post TALO was trading at $12.64.