Financial Data and Key Metrics Changes - The company achieved record production of 100,900 barrels of oil equivalent per day, marking the fifth consecutive quarter of record production [11][33] - Record EBITDA of $363 million was reported for the first quarter, with an EBITDA netback margin of approximately $40 per barrel of oil equivalent [12][33] - The company generated record free cash flow of $195 million for the quarter, maintaining a leverage ratio of 0.8 [13][30] Business Line Data and Key Metrics Changes - Production consisted of 68% oil and 78% liquids when including NGL barrels [12] - Capital expenditures (CapEx) for the quarter were $118 million, with an additional $10 million spent on plugging and abandonment activities [12][13] Market Data and Key Metrics Changes - The company expects production for 2025 to range between 185,000 barrels of oil equivalent per day, with approximately 69% expected to be oil and 79% liquids [27] - The second quarter production is anticipated to be between 188,000 barrels of oil equivalent per day, reflecting increased operational activities [28] Company Strategy and Development Direction - The company is focusing on enhancing efficiency and reducing costs across operations, with a strategic plan built around near-term, medium-term, and long-term goals [10] - The board approved an increase in stock repurchase authorization to $200 million, with plans to allocate up to 50% of annual free cash flow to share buybacks [13][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic viability of key projects, with breakeven costs averaging around $35 per barrel [22][39] - The company is monitoring market conditions and may postpone certain projects if oil prices deteriorate significantly [23][39] Other Important Information - The company is advancing multiple projects, including the Sunspear and Katmai West discoveries, with first production expected by late Q2 2025 [15][16] - The company has a strong liquidity position of approximately $960 million, with no near-term debt maturities [30] Q&A Session Summary Question: Share repurchase authorization increase timeline - Management confirmed that the plan is effective immediately and can be executed outside of blackout windows [36][37] Question: Flexibility in the current program - Management indicated that guidance remains flat due to robust projects, with flexibility to adjust CapEx if market conditions worsen [38][39] Question: Programmatic approach to share repurchases - Management explained that the programmatic approach allows for a balanced decision on returning cash to shareholders based on market conditions [44] Question: Right debt load for the company - Management stated that maintaining leverage below one is important, and they are comfortable with the current debt level [47][50] Question: Cost side deflation and rig availability - Management noted early signs of potential softness in the rig market but emphasized the importance of maintaining robust breakeven projects [57] Question: Cash on hand target for potential opportunities - Management clarified that there is no specific cash balance target, focusing instead on the best deployment of cash for various opportunities [60] Question: LOE trends and future expectations - Management indicated that operating costs are currently low due to efficient operations, with expectations to maintain similar levels moving forward [65] Question: M&A opportunities in the current environment - Management confirmed that they are actively looking for both organic and inorganic growth opportunities, including potential acquisitions [68] Question: Visibility on next year's production - Management stated that the investment program for next year aligns with current levels, with several projects in the pipeline [74] Question: Impact of weather and unplanned downtimes on production - Management acknowledged that weather disruptions, particularly hurricanes, are factored into production guidance, but they maintain a conservative outlook [87][90]

Talos Energy (TALO) Q1 2025 Earnings Call May 06, 2025 10:00 AM ET Speaker0 Good morning, ladies and gentlemen, and welcome to the Talos Energy First Quarter twenty twenty five Earnings Conference Call. This call is being recorded on Tuesday, 05/06/2025. I would now like to turn the conference over to Clay Johnson. Please go ahead. Speaker1 Thank you, operator. Good morning, everyone, and welcome to our first quarter twenty twenty five earnings conference call. Joining me today to discuss our results are Pa ...

Financial Performance - Talos Energy reported revenue of $513.06 million for Q1 2025, a year-over-year increase of 19.3% [1] - The EPS for the same period was $0.06, compared to -$0.13 a year ago, indicating a significant improvement [1] - The reported revenue exceeded the Zacks Consensus Estimate of $499.97 million by 2.62% [1] - The company delivered an EPS surprise of 160.00%, with the consensus EPS estimate being -$0.10 [1] Production Metrics - Average net daily production volumes for oil were 68.3 million barrels, slightly below the estimated 68.58 million barrels [4] - Average net daily production volumes for natural gas were 135.7 million cubic feet, exceeding the estimated 132.56 million cubic feet [4] - Total average net daily production was 100.9 million barrels of oil equivalent, compared to the estimated 100.04 million barrels of oil equivalent [4] - Average net daily production volumes for NGL were 10 million barrels, above the estimated 9.37 million barrels [4] Pricing and Revenue Breakdown - Average realized price for natural gas was $4.32 per mcf, higher than the estimated $3.70 [4] - Average realized price for oil was $71.73 per bbl, compared to the estimated $70.05 [4] - Average realized price for NGL was $21.78 per bbl, exceeding the estimated $19.88 [4] - Revenue from oil was $440.72 million, surpassing the estimated $436.01 million [4] - Revenue from NGL was $19.60 million, compared to the estimated $16.99 million [4] - Revenue from natural gas was $52.74 million, exceeding the estimated $43.20 million [4] Stock Performance - Talos Energy shares returned +4.7% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Acquisitions and Operational Enhancements - The company completed the acquisition of an incremental 8.3% working interest in the Monument oil discovery in the U.S. Gulf of America on March 7, 2025[112]. - The company acquired QuarterNorth Energy Inc. on March 4, 2024, enhancing its operational capabilities in the Deepwater U.S. Gulf of America[114]. Financial Performance - Total revenues for the three months ended March 31, 2025, increased by $83.1 million, or approximately 19.3%, to $513.1 million compared to $429.9 million in the same period of 2024[140]. - Oil revenues rose by $47.5 million, or 12.1%, driven by a production increase of 971 MBbls, while natural gas revenues surged by $29.0 million, reflecting a production increase of 3,555 MMcf[140]. - Total production volumes increased by 1,832 MBoe, or 25.3%, to 9,080 MBoe, primarily due to contributions from the QuarterNorth Acquisition and the recompletion of operated wells[140]. - Cash flows from operating activities increased by $171.8 million to $268.2 million for the three months ended March 31, 2025, compared to $96.4 million in the same period of 2024[162]. Expenses and Cost Management - Lease operating expenses decreased by approximately $7.4 million, or 5%, to $127.8 million, with a notable reduction in workover expenses[141]. - Depreciation, depletion, and amortization expenses increased by $65.1 million, or 30%, to $280.7 million, driven by higher production volumes[142]. - General and administrative expenses decreased by approximately $35.2 million, or 50%, to $34.6 million, primarily due to reduced transaction costs related to the QuarterNorth Acquisition[143]. - The company recorded a price risk management expense of $15.9 million for the three months ended March 31, 2025, compared to $87.1 million in the same period of 2024[146]. Tax and Liquidity - The income tax benefit for the three months ended March 31, 2025, was $0.1 million, a decrease from $21.6 million in the same period of 2024[149]. - The company reported available liquidity of $960.2 million as of March 31, 2025, which includes $125.0 million subject to lender approval[155]. - The company’s liquidity is primarily sourced from operational cash flow and borrowings under its Bank Credit Facility, with interest costs influenced by federal funds rate changes[153]. Capital Expenditures and Financing - Total capital expenditures for the three months ended March 31, 2025, amounted to $127.6 million, with $89.2 million allocated to U.S. drilling and completions[157]. - The company anticipates funding its remaining 2025 capital spending program of $500.0 million to $540.0 million through cash flows from operations and available capacity under the Bank Credit Facility[158]. - The company’s Bank Credit Facility has a borrowing base of $925.0 million, with an availability cap of $800.0 million[155]. - The company issued 9.000% and 9.375% Second-Priority Senior Secured Notes due in 2029 and 2031, respectively, to secure financing for operations and acquisitions[165][167]. Market Conditions and Risks - Daily spot prices for NYMEX WTI crude oil ranged from a high of $80.73 per Bbl to a low of $66.31 per Bbl during the period from January 1, 2025, to March 31, 2025[118]. - The U.S. Energy Information Administration expects NYMEX WTI spot prices to average $63.88 per barrel in 2025 and $57.48 per barrel in 2026[119]. - The company is navigating various external factors, including volatility in energy prices and inflation, which could adversely impact future revenues and overall profitability[115]. - The company continues to monitor the impact of prolonged increases in global tariffs, which could materially affect its financial condition and results of operations in fiscal year 2025 and beyond[123]. - The future of offshore leasing remains uncertain due to ongoing legal challenges and executive actions affecting lease sales in the Gulf of America[137]. Impairment and Risk Management - The company did not recognize any impairment based on the ceiling test computations for the three months ended March 31, 2025, with SEC pricing of $74.52 per Bbl of oil[124]. - If the average commodity price for crude oil had been 10% lower, the company's oil and natural gas properties would have been impaired by approximately $610.0 million[125]. - The company has secured performance bonds totaling $1.5 billion related to plugging and abandonment of wells in the U.S. Gulf of America[170]. Shareholder Activities - The company repurchased approximately 2.3 million shares for $22.0 million during the three months ended March 31, 2025, with a total repurchase capacity of approximately $292.5 million[159]. Regulatory and Accounting Updates - The company anticipates that the new revised financial assurance rule will require significantly less bonding than the current final rule[129]. - No accounting standards were issued during the quarterly period ended March 31, 2025 that were material to the company[172]. - There have been no material changes in market risk exposures compared to the disclosures in the 2024 Annual Report[172].

Talos Energy (TALO) came out with quarterly earnings of $0.06 per share, beating the Zacks Consensus Estimate of a loss of $0.10 per share. This compares to loss of $0.13 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 160%. A quarter ago, it was expected that this independent oil and gas company would post a loss of $0.02 per share when it actually produced earnings of $0.08, delivering a surprise of 500%.Over the last four q ...

Cautionary Statements Cautionary Statements 1Q 2025 Earnings Conference Call & Webcast May 6, 2025 1 www.talosenergy.com NYSE: TALO The information in this presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact included in this presentation, regarding our strategy, futu ...

Core Insights - Talos Energy Inc. reported record production for the fifth consecutive quarter, achieving approximately 101 MBoe/d in Q1 2025, alongside strong Adjusted EBITDA and Free Cash Flow [3][8][12] - The company maintains a significant cash balance and an undrawn credit facility, positioning it well to manage commodity price fluctuations [4][21] - Talos expects to remain free cash flow positive for the full year 2025, even with oil prices around $40 per barrel [4][22] Production and Operational Highlights - Talos completed well operations on the Sunspear discovery and expects first production in late Q2 2025, projecting production of approximately 8-10 MBoe/d gross [7][8] - Completion operations for Katmai West 2 have commenced, with first production also expected in late Q2 2025 [7][8] - The company anticipates drilling operations on the Daenerys prospect to begin in late Q2 2025, with significant resource potential estimated between 100-300 MMBoe [9] Financial Performance - Total revenues for Q1 2025 were $513.1 million, with a net loss of $9.9 million, translating to a net loss per diluted share of $0.05 [12][37] - Adjusted EBITDA for the quarter was $363.0 million, with capital expenditures totaling $117.6 million [12][18] - The company reported a strong balance sheet with $203.0 million in cash and a Net Debt to Last Twelve Months Adjusted EBITDA ratio of 0.8x [21][36] Share Repurchase Program - In March 2025, Talos repurchased approximately 2.3 million shares for $22.0 million, with an average price of $9.61 per share [6][8] - The Board of Directors authorized an increase of approximately $42.5 million to the share repurchase program, bringing the total remaining authorization to approximately $178.0 million [6] Guidance and Future Outlook - For Q2 2025, Talos expects average daily production to range from 92.0 to 96.0 MBoe/d, with a full-year production guidance of 90.0 to 95.0 MBoe/d [22][23] - The company plans to allocate up to 50% of its annual free cash flow to share repurchases, reflecting a commitment to returning value to shareholders [8][22]

Company Overview - Talos Energy (TALO) is expected to report a quarterly loss of $0.10 per share, reflecting a year-over-year change of +23.1% [3] - Revenues are anticipated to be $499.97 million, which is a 16.3% increase from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for May 5, 2025, and could influence the stock price depending on whether the results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised 55% lower over the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP for Talos Energy is 0%, suggesting no recent analyst revisions that differ from the consensus estimate [10][11] - The company holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11] Historical Performance - In the last reported quarter, Talos Energy was expected to post a loss of $0.02 per share but instead reported earnings of $0.08, resulting in a surprise of +500% [12] - Over the past four quarters, the company has beaten consensus EPS estimates three times [13] Industry Context - Another company in the same industry, SM Energy (SM), is expected to report earnings of $1.57 per share, reflecting a year-over-year change of +11.4% [17] - SM Energy's revenues are projected to be $822.88 million, up 47% from the previous year [17] - Despite a recent 17.9% downward revision in EPS estimates, SM Energy has an Earnings ESP of 9.01% but holds a Zacks Rank of 5 (Strong Sell), complicating predictions for an earnings beat [18]

Core Points - Talos Energy Inc. plans to release its first quarter 2025 results on May 5, 2025, after the U.S. financial market closes [1] - A conference call will be held on May 6, 2025, at 10:00 AM Eastern Time to discuss the results [1] - The conference call will be accessible via a webcast link on the company's website and through a toll-free number for North American listeners [2] Company Overview - Talos Energy is an independent energy company focused on maximizing long-term value through its Exploration & Production business in the U.S. Gulf of America and offshore Mexico [3] - The company emphasizes technical expertise, safe operations, environmental responsibility, and community impact in its operations [3]

Group 1 - Talos Energy is a relatively small player in the offshore upstream oil and gas business [2] - The company has recently completed an acquisition that enhances its position in the market [2] - The oil and gas industry is characterized as a boom-bust, cyclical industry requiring patience and experience [2] Group 2 - The analysis provided in the article focuses on the balance sheet, competitive position, and development prospects of oil and gas companies [1] - Members of the Oil & Gas Value Research service receive early access to analysis and insights not available on the free site [1]