Riverstone Energy Limited (LON:RSE) shares sank on Wednesday as it agreed to sell all of its offshore assets in the Gulf of Mexico to Talos Energy Inc (NYSE:TALO) in return for shares in the US-listed firm.
Talos has existing operations in both the US part of the Gulf and offshore Mexico, where it aims to develop assets and “focus on safely and efficiently maximizing cash-flows and long-term value”, Riverstone said.
READ: Riverstone Energy sells Sierra Oil & Gas to Germany’s DEA
The transaction, which is expected to close in the first quarter of next year, includes the sale of assets owned by Castex Energy 2014, in which Riverstone owns a 25.1% stake, as well as undrilled primary term acreage and prospects controlled by ILX III Holdings, of which it owns 33.3%.
Riverstone said the Castex sale represented the “full realisation” of its US$52mln investment into the assets as well as being consistent with a valuation conducted in the third quarter of 2019.
The shares dropped 6.1% to 402p in mid-morning trading.
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