October 6, 2014 / 3:53 PM / in 3 years

Exclusive: Apollo, Riverstone plan IPO for Talos Energy - sources

Leon Black, Chairman and CEO Apollo Global Management, LLC, takes part in Private Equity: Rebalancing Risk session during the 2014 Milken Institute Global Conference in Beverly Hills, California April 29, 2014. REUTERS/Kevork Djansezian

(Reuters) - Apollo Global Management LLC (APO.N) and Riverstone Holdings LLC are preparing Talos Energy LLC for an initial public offering that could value the oil and gas company at over $2 billion, including debt, according to people familiar with the matter.

Private equity firms Apollo and Riverstone are working with a group of banks including Goldman Sachs Group Inc (GS.N) and Citigroup Inc (C.N) to register Talos with U.S. regulators for the potential IPO as early as this month, the people said.

The roles of banks in the IPO have not yet been finalized, the people added.

The sources asked not to be identified because the discussions are private. Representatives of Apollo, Riverstone, Talos and Goldman Sachs did not immediately respond to requests for comment, while a Citigroup spokesman declined to comment.

News of Talos’ IPO preparations comes one week after Canada’s Encana Corp (ECA.TO) agreed to buy for $5.9 billion another company that Apollo took public last year - Athlon Energy Inc ATHL.N. Apollo stands to make more than seven times its money on that deal, according to a person familiar with the matter.

Apollo and Riverstone formed Houston, Texas-based Talos in 2012, committing up to $600 million in capital for the company so it can acquire and develop oil and gas assets in the Gulf Coast of the United States and the Gulf of Mexico.

The Talos management team’s previous company, Phoenix Exploration, was sold to Apache Corp (APA.N) in 2011 for an undisclosed sum. Before that, the team worked at Gryphon Exploration, which was sold to Woodside Petroleum Ltd’s (WPL.AX) U.S. unit for around $300 million.

Using seismic data to identify promising properties, Talos said on its website it plans to have drilled 15 prospects in 2014 and 15 to 18 additional prospects in 2015, both in shallow water and on its developed deepwater acreage.

Reporting by Greg Roumeliotis and Soyoung Kim in New York; editing by Matthew Lewis

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