The potential merger would allow Harbour to list in New York, US, in line with its decision to exit from the North Sea operations and diversify its operations overseas, after Britain imposed an extra tax on oil and gas producers, last year
Harbour in talks to merge with Talos. (Credit: Ben Wicks on Unsplash)
UK-based oil and gas company Harbour Energy is reportedly in talks to merge with Talos Energy, which is engaged in exploration, development, and production in the US Gulf of Mexico.
Harbour Energy has a market value of about $2.5bn, while Talos Energy is valued at around $1.7bn, reported Reuters.
Both companies were intermittently in discussions about a potential business combination for the last six months, but negotiations revived in recent weeks, said the publication.
The merger would allow Harbour to list in New York, in line with the company’s plans to exit from the North Sea operations.
Also, it enables the company to diversify its operations overseas, after Britain imposed an extra tax on oil and gas producers, due to a rise in energy prices last year.
In November last year, the UK government increased the tax on oil and gas companies to 35% from 25%, bringing the total tax on the sector to 75%, which is the world’s highest.
Harbour Energy CEO Linda Cook wrote to the UK chancellor: “Independent companies like Harbour Energy account for half of UK oil and gas investment and production. We have invested twice as much as major oil companies since 2017.
“Our businesses use capital to acquire assets from larger companies and reinvest in them to extend their life, contributing to domestic energy supply and sustaining UK jobs.
“We are also beginning to invest in repurposing infrastructure to store millions of tonnes of CO₂ each year, helping the UK meet its energy transition targets and create new jobs for thousands.”
Harbour’s exit from the UK and listing in New York will provide the company with access to oil and gas-focused investors and banks, reported Reuters.
Talos is anticipated to produce up to 71,000 barrels of oil equivalent per day (boed) this year, while Harbour is expected to produce up to 200,000boed, primarily from the UK North Sea.
The two companies are already partners in the Zama oil development offshore Mexico.
Furthermore, Harbour is currently in the process of reducing its UK workforce by around 350 people, out of its total headcount of 1,700 people worldwide.
Earlier this year, Talos completed the $1.1bn acquisition of EnVen Energy to achieve growth in both traditional oil and gas, along with carbon capture and sequestration.