Talos Energy Inc. (NYSE: TALO) announced that its wholly owned subsidiary, Talos Production Inc., has commenced an offering of $800 million in aggregate principal amount of Second-Priority Senior Secured Notes due 2034.

According to a press release, the company intends to use the net proceeds to fund a portion of the cash consideration for a pending Gulf of America acquisition, redeem all outstanding 9.000% Second-Priority Senior Secured Notes due 2029, and pay related fees and expenses.

If the acquisition is not completed by December 31, 2026, if the company notifies the trustee it will not pursue the acquisition, or if a third-party preferential right to purchase certain assets is exercised, $175 million in principal amount of the new notes will be subject to a special mandatory redemption at 100% of principal plus accrued and unpaid interest.

The new notes are expected to be guaranteed on a senior basis by Talos and certain subsidiaries, and will initially be secured on a second-priority basis by substantially the same collateral as the company's existing senior reserves-based revolving credit facility.

The notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933 in the United States, and to persons outside the United States under Regulation S. The notes have not been registered under the Securities Act.