Helix Energy Solutions Group, Inc. (NYSE: HLX) has entered into a definitive agreement to sell Energy Resource Technology GOM, Inc. (ERT), the Company’s oil and gas subsidiary, to Talos Production LLC, a wholly owned subsidiary of Talos Energy LLC, a privately held Houston-based oil and gas company. 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. In addition, the parties have agreed to adjust the purchase price at closing, upward or downward, depending upon the results of the Wang exploration well. The estimated value of the transaction is approximately $700 million if the Wang exploration prospect is successful and meets expectations. If the Wang exploration prospect is determined to be unsuccessful, the estimated value of the transaction to Helix is closer to $600 million. ERT is currently drilling the Wang well and expects to evaluate the results in the next few days.
Jefferies & Company, Inc. served as the exclusive financial advisor to Helix in conjunction with the transaction. The transaction has an effective date of December 1, 2012 and is expected to close in the first quarter of 2013, subject to customary closing conditions.
The divestment of ERT is in line with Helix’s strategy of focusing on providing Well Intervention and Robotics services, and Helix intends to use the proceeds from this transaction to repay debt as well as accelerate the Company’s plans to grow these businesses.
The Company will host a conference call on Thursday, December 13 at 3:00 p.m. Central Standard Time to provide more details surrounding the transaction, as well as answer any questions pertaining to the Company’s strategy moving forward. The call will be audio webcast live from the “Investor Relations” page of Helix’s website. Investors and other interested parties wishing to listen to the conference via telephone may join the call by dialing 888-550-1479 for persons in the United States and +1-954-357-2908 for international participants. The passcode is “Tripodo”. A replay of the conference will be available under “Investor Relations” by selecting the “Audio Archives” link from the same page beginning approximately two hours after the completion of the conference call, and will remain active for approximately 30 days after the call.