Stone Energy Corporation

Stone Energy Corporation was an American upstream oil and gas company headquartered in Lafayette, Louisiana. Founded in 1993 by James Hiram Stone, the company developed an operating portfolio in the Appalachian Basin and the Gulf of Mexico, with its activities centered on oil and natural-gas production, platform acquisitions, and the reworking of existing wells. Its business model was more strongly associated with acquiring and improving producing platforms and wells than with maintaining a purely exploration-led drilling program. The company expanded its Gulf of Mexico exposure over time and also attempted to participate in deepwater development. That strategy increased its exposure to capital-intensive projects and the financial risks associated with offshore production. Between 2013 and 2016, drilling decisions and obligations connected with deepwater activity left Stone vulnerable when the oilfield downturn sharply reduced commodity prices and weakened the economics of offshore assets. The 2016 oil-price collapse was the decisive setback for the company. According to the referenced account, prices fell by roughly $60–75 per barrel from the levels that had supported earlier industry investment. Stone was unable to recover fully from the downturn, in part because its earlier drilling choices and deepwater commitments created continuing financial and operational burdens. The resulting deterioration ultimately led to the end of Stone Energy as an independent company. Stone was formerly listed on the New York Stock Exchange under the symbol SGY. Houston-based Talos Energy acquired Stone Energy on May 10, 2018. Following that transaction, Stone ceased to operate as an independent listed oil and gas corporation. Its history illustrates the exposure of smaller exploration and production companies to commodity-price cycles, offshore project risk, and the financing demands of deepwater development.

Stone Energy Corporation was established in 1993 by James Hiram Stone and operated as an American oil and gas company from Lafayette, Louisiana. Its production and development activities covered the Appalachian Basin and the Gulf of Mexico, giving it exposure to both onshore and offshore petroleum markets. The company became particularly associated with platform acquisition and well rework. Rather than being known primarily as a frontier exploration driller, Stone built much of its identity around acquiring producing or previously developed offshore assets and seeking additional value through workovers and redevelopment. This approach connected the company to the mature-asset economics of the Gulf of Mexico while still leaving it exposed to exploration, development, and commodity-price risks. During the years leading up to 2016, Stone made drilling and development decisions that increased its obligations and exposure to deepwater operations. Deepwater projects require substantial capital, long development timelines, and confidence that future oil and gas prices will support the investment. When the oilfield crash arrived in 2016 and prices fell sharply, the company’s financial and operating position weakened. The combination of lower commodity prices, prior drilling choices, and deepwater-related commitments prevented Stone from returning to its earlier trajectory. Stone was listed on the New York Stock Exchange under the ticker SGY. The company ultimately lost its independence as the downturn’s effects continued. Talos Energy, a Houston-based oil and gas company, acquired Stone Energy on May 10, 2018. The transaction marked the end of Stone Energy Corporation as a standalone listed business and placed its relevant assets and operations within Talos Energy’s corporate structure.

• 2018

  Talos Energy completes acquisition

  [1]Stone Energy Corporationen.wikipedia.org

  Talos Energy acquired Stone Energy on May 10, 2018, ending Stone’s independent corporate existence.

• 2016

  Oilfield crash exposes deepwater and drilling risks

  [1]Stone Energy Corporationen.wikipedia.org

  The sharp oil-price downturn affected Stone’s economics and left the company carrying obligations associated with earlier drilling and deepwater activity.

• 1993

  Stone Energy is founded

  [1]Stone Energy Corporationen.wikipedia.org

  James Hiram Stone founded Stone Energy Corporation in the United States.

• Operations expand across two major U.S. producing regions

  [1]Stone Energy Corporationen.wikipedia.org

  Stone operated in the Appalachian Basin and the Gulf of Mexico, developing an upstream portfolio that included offshore platform assets and well-rework activity.

An independent upstream oil and gas operator emphasizing platform acquisitions, well rework, and production operations, with later exposure to higher-risk deepwater development.

• Upstream energy

  Crude oil production

  Crude oil was one of Stone Energy’s principal upstream outputs. The company’s oil exposure came from assets in the Gulf of Mexico and other operating areas, with production economics affected by offshore operating costs, development requirements, and changes in global oil prices.

• Upstream energy

  Natural gas production

  Stone also operated natural-gas assets in its Appalachian Basin and Gulf of Mexico portfolio. Gas production formed part of the company’s broader exploration and production business rather than a separately branded consumer product line.

• Oil and gas asset development

  Platform acquisitions and well rework

  Platform acquisition and well rework were central operating capabilities associated with Stone Energy. The company sought to acquire existing offshore infrastructure and improve or extend production through interventions, workovers, and redevelopment of established wells.

• Offshore upstream energy

  Deepwater oil and gas development

  Stone tested its position in deepwater drilling and development. This activity exposed the company to higher capital requirements and longer project cycles, and the associated obligations became more difficult to manage after the 2016 oil-price collapse.

• 2018

  Sale to Talos EnergyM&A

  Background

  Stone’s financial and operating position had deteriorated after the oilfield downturn and the burdens associated with its earlier development strategy.

  Action taken

  Talos Energy acquired Stone Energy on May 10, 2018.

  Aftermath

  Stone ceased to exist as an independent listed oil and gas company.

  Source

• Increase exposure to deepwater drillingStrategy

  Background

  Stone sought to test the potential of deepwater operations in addition to its established platform-acquisition and well-rework activities.

  Action taken

  The company undertook deepwater-related drilling and accepted the capital and operating obligations associated with those projects.

  Aftermath

  When oil prices collapsed in 2016, the resulting obligations and earlier drilling decisions contributed to Stone’s inability to recover as an independent company.

  Source

1. 1Stone Energy Corporationen.wikipedia.org