Helix to divest oil and gas subsidiary to grow well intervention business

International offshore energy company Helix Energy Solutions Group Inc. has agreed to sell its oil and gas subsidiary to privately-held upstream oil and gas company Talos for roughly $700 million.

Ranked by total gross revenue, Houston-based Helix has been noted as one of the top US-based oilfield service and supply companies. The energy company came in at No. 34 in the OGJ150 quarterly ranking in total assets for 2Q12.

The divestiture of its oil and gas subsidiary comes as the company looks to shift its strategy to focus on providing well intervention and robotics services. Proceeds from the sale will be used to repay debt and to help grow the service side of the business.

The definitive agreement calls for Houston-based Helix Energy to sell Energy Resource Technology GOM Inc. (ERT) to Talos Production LLC, a wholly owned subsidiary of Talos Energy LLC.

The selling price involves a base purchase price of $610 million plus contingent consideration in the form of overriding royalty interests on ERT’s Wang exploration prospect as well as certain other exploration prospects.The parties have agreed to adjust the purchase price at closing, upward or downward, depending upon the results of the Wang exploration well.

Depending upon the well's success, the purchase price is estimated to be valued somewhere between $600 million and $700 million. ERT is currently drilling the Wang well and expects to evaluate the results in the coming days.

Jefferies & Company Inc. served as the exclusive financial advisor to Helix in conjunction with the transaction.

Talos Energy is focused on exploration and the acquisition/exploitation of oil and gas properties with a focus in the Gulf of Mexico and Gulf Coast. The company is backed by investment funds affiliated with Apollo Global Management LLC (NYSE: APO), Riverstone Holdings LLC, and Talos management.

The transaction is expected to close in the first quarter of 2013.



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