Stone Energy — Merger or Acquisition (November 2017)
17 slides from Stone Energy's merger presentation, Nov 21, 2017
Slide 1: Combination of Talos Energy and Stone Energy
Combination of Talos Energy and Stone Energy November 2017 Filed by Stone Energy Corporation Pursuant to Rule 425 under the Securities Act of 1933, as amended, And deemed filed pursuant to Rule 14a-12 Under the Securities Exchange Act of 1934, as amended Subject Companies: Stone Energy Corporation (
Slide 2: Cautionary Statements
Cautionary Statements November 2017 This presentation and the oral statements made in connection therewith may contain “forward looking statements” within the meaning of securities laws. Any forward looking statements involve risks, uncertainties and assumptions. Although we believe that the assumpt
Slide 3: Cautionary Statements
Cautionary Statements November 2017 In connection with the proposed transaction, Sailfish Energy Holdings Corporation, a subsidiary of Stone that will be renamed Talos Energy, Inc. as of the closing of the proposed transaction (“Newco”), will file with the SEC a registration statement on Form S-4 th
Slide 4: Transaction Terms
Transaction Terms 100% stock transaction 34.16 MM shares issued to Talos (20.06 MM Stone shares, 54.22 MM total shares) Combined company initial Equity Value of ~$1,900 MM (1) Combined company initial Enterprise Value of ~$2,500 MM (1) Stone’s 2nd Lien Notes will be exchanged into Talos’s 2nd Lien N
Slide 5: High quality, diversified GOM exposure led by Talos's team
High quality, diversified GOM exposure led by Talos’s team with peer-leading F&D costs(1) and Stone’s proven operating track record Control through > 84% operatorship of production, development and exploration Significant oil exposure (~70% of Strip Proved Reserves) Strong Pro Forma Balance Sheet Le
Slide 6: Talos Pro Forma Overview
Talos Pro Forma Overview November 2017 Strip Proved Reserves (1) 135 MMBoe Strip 2P Reserves (1) 172 MMBoe Strip Proved PV-10 (2) $2,277 MM Strip 2P PV-10 (2) $2,976 MM 2017E Production 47 MBoe/d Pro Forma 2017E EBITDA (3) $440 MM Net Debt / PF 2017E EBITDA (3)(4) 1.4x PUD PDP PROB PDNP Strip Proved
Slide 7: Talos and Stone are Stronger Together
Talos and Stone are Stronger Together Talos High quality production base with shallow decline curve and low-risk development Concentrated asset base with operatorship of key assets Pompano has infrastructure in place, reduced capital intensity for new drilling (key hub) Key producing asset in covete
Slide 8: Pro Forma Capital Structure and Liquidity
Pro Forma Capital Structure and Liquidity Stone to issue 34.2 MM shares to Talos for 63% Talos pro forma ownership Based on Stone’s equity value of ~$700 MM, creates a pro forma combined Equity Value of ~$1,900 MM and Enterprise Value of ~$2,500 MM Pro Forma borrowing base expected to be $600 MM wit
Slide 9: Well Positioned Relative to Offshore Peers and Onshore Basins
November 2017 Oil (% of Strip Proved Reserves) All-in 3 Year F&D ($/Boe) (2) 2017E EBITDA Margins ($/Boe) (1) ü ü ü Net Debt / 2017E EBITDA (1)(3) ü Talos Pro Forma vs. Offshore Peers 2017E EBITDA Margins ($/Boe) (1) Oil (% of Strip Proved Reserves) All-in 3 Year F&D ($/Boe) (2) Net Debt / 2017E EBI
Slide 10: Highly Experienced Team
Name Position Prior Companies Years of Experience President & CEO 22+ years EVP & COO 44+ years EVP of Exploration 34+ years EVP & CFO 20+ years EVP & General Counsel 22+ years SVP – Engineering and Major Projects 28+ years SVP – Drilling & Production 22+ years November 2017 Key executives have work
Slide 11: Benefits of Combined Business
Benefits of Combined Business Production – More aggressive exploitation of PDNP, Tornado, and Pompano development due to less concentration risk and more redundancy Expenses – Shore base duplication, transportation duplication, G&A duplication, “right-sizing” services and personnel, and consolidatin
Slide 12: Phoenix Complex – Typhoon, Boris and Tornado Fields
Since Talos acquired the Phoenix field, the company has materially grown reserves in the asset by >100% Name plate capacity on the HP-1 Floating Production Unit is 45k BOPD New seismic and reprocessing led to an inventory of development and exploration wells Five new subsea wells drilled to date, tw
Slide 13: Pompano/Cardona Fields & Offset Opportunities
Pompano/Cardona Fields & Offset Opportunities Rampart Pompano Highlights Derbio MC72 Derbio MC27 MC28 MC29 MC71 VK989 VK990 Cardona MC117 MC113 Pompano Field Rampart Mt. Providence 100% owned infrastructure in ~1,300’ of water Current Field Production of 11.5 Net MBoe/d 2017E LOE & PHA ($/Boe): $4.2
Slide 14: Mexico Block Zama Discovery Overview
Mexico Block 7 Zama Discovery Overview Source: Premier Oil and Wood Mackenzie. Zama Pre-drill Volume Range Offshore Oil Discoveries with Recoverable Resource >300 MMBoe Since 2012 Key Notes full stack reprocessed seismic data in depth Flat Spot Likely indicates oil/water contact Zama-1 Well Zama-1 W
Slide 15: Talos Pro Forma Net Asset Value
Talos Pro Forma Net Asset Value Sources: Talos and Stone. Strip Proved Reserves as of 6/30/2017 at 10/31/2017 Strip Pricing. 2P NAV PUD: Proven wells to be drilled Proved Behind Pipe: Asset Management PDP: Producing wells ($mm) Performance Probable: Capital-Free Upside Tornado 2 & 3 Rampart Zama Der
Slide 16: High quality, diversified GOM exposure led by Talos's team
High quality, diversified GOM exposure led by Talos’s team with peer-leading F&D costs(1) and Stone’s proven operating track record Control through > 84% operatorship of production, development and exploration Significant oil exposure (~70% of Strip Proved Reserves) Strong Pro Forma Balance Sheet Le
Slide 17: Talos Energy LLC
ENERGY LLC EN ER GY