For many years, Talos Energy was one of the largest private oil drilling companies in the country. The company focused on oil drilling in the Gulf of Mexico. With updated technology, it is easier than ever to drill for oil in the ocean. Talos Energy recently acquired a company called Stone Energy. Buying another business is common in the energy industry for multiple reasons.
When the price of oil falls, many oil companies struggle financially. Oil drilling requires a ton of capital, and many companies are highly leveraged. Talos Energy saw an opportunity to grow with Stone Energy. As part of the acquisition, Talos Energy will become a publicly traded company.
Acquiring Another Company
The process to acquire another company is arduous. In many cases, the entire acquisition process can take several years. Some people are worried that the acquisition will cost more time and money than the company believers.
The leaders of Talos Energy bought Stone Energy for multiple reasons. Not only will Stone Energy increase sales, but Stone Energy has a ton of land available for drilling. One of the most expensive aspects of oil drilling is simply gaining drilling rights to the property.
Future Growth Plans
When a company becomes publicly traded, there is a new level of scrutiny that the executives must deal with. Every quarter, publicly traded companies are required to speak about financial results. Many people believe that Talos Energy is ready to take the next step and become a significant player in the oil industry. With the right technology and the recent acquisition of Stone Energy, Talos Energy could become a major competitor to prominent oil drillers like Transocean.
Many employees are excited about the news. When a company goes public, it gives employees the opportunity to invest in the new business. Talos Energy has been an enormous benefit to the local economy where it is located.