OFS Financier Leykum Plans Blank Check Co. Talon Capital

Energy financier Charlie Leykum is planning a SPAC, Talon Capital Corp., to potentially acquire in the E&P, power, technology and infrastructure sectors.

The Houston-based special purpose acquisition corporation (SPAC) expects to sell 22.5 million units in a $225 million IPO. Shares are to trade on the NASDAQ as TLNCU, according to the S-1 filing with the Securities and Exchange Commission (SEC).

The sole book-running manager is Cohen & Co. Capital Markets.

Cohen is also the sole book-running manager of Dynamix Corp. III, the SPAC of other former energy executives planning to build a PDP-focused E&P. It is also manager of NGP Partner Chris Sorrells’ recently filed plan to IPO a third SPAC, Spring Valley Acquisition III, to invest in the oil and gas, decarbonization or metals mining sectors.

“The conventional energy value chain has experienced underinvestment over the past several years, exacerbated by limited access to capital markets and a decline in energy-focused private equity formation and IPO activity,” Leykum, Talon’s chairman and CEO, wrote in the S-1.

“This capital scarcity has created attractive entry points into high-quality, cash-generative businesses with defensible moats and steep barriers to entry.”

C-suite

Leykum was the founder and chairman of oilfield services firm Ranger Energy Services, which bought Basic Energy Services’ non-California assets, Patriot Completion Solutions and PerfX Wireline Services, in 2021.

He also served as a director of Sentinel Energy Services, a SPAC that went public in 2017 in a $345 million IPO and planned to merge with Strike Capital LLC in 2018. That deal didn’t close and Sentinel distributed the $345 million in escrow back to unit holders.

“We believe there are long-term secular tailwinds for the U.S. energy sector driven by growing demand from economic growth, industrial reshoring, electrification and data centers,” Leykum reported in the Talon S-1.

Leykum’s Houston-based private equity firm CSL Capital Management has invested more than $2 billion in energy services, power and infrastructure beginning in 2008. Prior, he was an energy portfolio manager for Soros Fund Management LLC and held an investment banking post at Goldman Sachs.

His RNWBL LLC, which he founded and chairs, is a wind, solar and power storage developer.

In 2018, CSL bought Weatherford International’s laboratory services business for $250 million in cash in a partnership with Carlyle Energy Mezzanine Opportunities Fund II.

Gerald Cimador, Talon’s CFO, is CFO at CSL, was CFO for the Sentinel SPAC and was a Ranger board member. Prior, he was the controller for Moore Capital Management and an audit manager for Ernst & Young.

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Aging infrastructure

The planned SPAC comes at a time of growing energy demand and infrastructure constraints, Leykum said.

“The U.S. energy sector is undergoing a significant transformation, presenting a compelling market opportunity driven by structural shifts in power demand, natural gas consumption, aging infrastructure and a constructive political environment,” he said.

U.S. gas exports total some 23 Bcf/d, with about 16 Bcf/d exiting as LNG and 7 Bcf/d via pipe to Mexico.

Intra-U.S. on-demand power supply is growing as data center developers look to secure power supply for 24/7 operations that power generator NextEra Energy estimates will require the equivalent of some 71 Bcf/d of additional demand.

“We believe this growing demand, combined with supply volatility from geopolitical factors abroad, underscores the importance of continued investment in conventional upstream gas production and infrastructure,” Leykum wrote.

Aging energy infrastructure also poses “significant challenges in the face of surging energy demand and the global push toward more resilient energy systems.”

In addition to the Dynamix III and Spring Valley III plans, other recently filed SPACs looking at the energy space include Pyrophyte Acquisition II, which raised $175 million in July and is led by retired Weatherford CEO Bernard Duroc-Danner.

In addition, energy finance executive Jerry Silvey raised $420 million in July for his EQV Ventures Acquisition II. His first EQV plans to buy Anadarko Basin-focused Presidio Petroleum, which produces 26,000 boe/d, for $480 million, including debt.

And Riverstone Holdings co-founder David Leuschen plans to raise $250 million in a SPAC, CH4 Natural Solutions Acquisition. He reported in the S-1 that CH4 intends to buy and build a company that would “benefit from accelerated methane-mitigation initiatives at scale.”