Fitch places Talos on positive watch

Fitch Ratings said it placed the B- long-term issuer default rating of Talos Energy Inc. and Talos Production Inc. on rating watch positive. Fitch also placed the first-lien revolver and the senior second-lien notes on rating watch positive.

The rating action follows Talos' announcement it agreed to buy EnVen Energy Corp., which has a B- issuer rating, for $1.16 billion, the agency said. Talos’ first lien revolver is rated BB-/RR1 and the second lien notes B/RR3.

“The acquisition increases production scale by 30%, is credit accretive given the large equity component, provides for $30 million of expected synergies, and adds assets contiguous to Talos' existing portfolio. Fitch views the action as a credit positive to Talos, which may lead to an upgrade upon the close of the acquisition,” Fitch said in a press release.

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