Financial Performance & Debt Reduction - Talos achieved record production in multiple quarters[14] - The company reduced net debt by approximately $350 million, decreasing leverage from 2.7x to 1.0x[14] - Talos achieved a company record of over $700 million in liquidity[14] - In Q2 2022, Talos reported adjusted EBITDA exceeding $250 million and free cash flow exceeding $130 million[18, 20] - Talos repaid approximately $150 million in debt, including about 40% of its RBL (Revolving Borrowing Base)[24] Carbon Capture & Sequestration (CCS) Initiatives - Talos successfully launched a Carbon Capture & Sequestration business[14] - The company expanded the Bayou Bend CCS JV with Chevron[24] - Talos' CCS project portfolio targets 800 million metric tons of CO2 storage[45] - At full scale, Talos CCS aims to permanently sequester over 50 times the annual emissions of its upstream operations[53] Operational Footprint & Reserves - Talos has an acreage footprint of approximately 1.3 million acres[12] - The company's proved reserves at year-end 2021 were 162 MMBoe (million barrels of oil equivalent)[13]

Company Overview - Talos Energy Inc. is an independent oil and gas company primarily operating in the Gulf of Mexico [1] - The company presents an attractive investment opportunity characterized by stable cash flow, low debt levels, and significant production growth [1] Financial Performance - Talos Energy is noted for its strong financial metrics, which include a combination of stable cash flow and low debt [1] - The company is positioned for high production growth, indicating potential for increased revenue generation [1] Investment Strategy - The investment approach emphasizes a blend of fundamental analysis, technical chart reading, and market sentiment evaluation to identify undervalued or overlooked stocks [1]

Production and Operations - Talos achieved record production of approximately 101 MBoe/d in Q1 2025, with 68% being oil and 78% liquids[3][11] - Talos expects average daily production for Q2 2025 to be between 92.0 to 96.0 MBoe/d, with full-year guidance of 90.0 to 95.0 MBoe/d[21][23] - Talos completed well operations on the Sunspear discovery, with first production expected in late Q2 2025, projecting 8-10 MBoe/d gross[5][7] - The Katmai West 2 well is currently in completion operations, with first production also expected in late Q2 2025, and an estimated ultimate recovery of approximately 50 MMBoe gross[5][8] - Talos increased its interest in the Monument discovery to 29.76%, expecting first production of 20-30 MBoe/d gross by late 2026[9] Financial Performance - Adjusted EBITDA for Q1 2025 was $363.0 million, with a net loss of $9.9 million or $0.05 per diluted share[5][10] - The company reported total revenues of $513.1 million for Q1 2025, with average realized prices of $71.73 per barrel for oil and $4.32 per Mcf for natural gas[10][12] - Total revenues for Q1 2025 reached $513.1 million, a 19.4% increase from $429.9 million in Q1 2024[39] - Oil revenues increased to $440.7 million, up 12.1% from $393.2 million in the same period last year[39] - Net loss for Q1 2025 was $9.9 million, compared to a net loss of $112.4 million in Q1 2024, representing a significant improvement[39] - Operating income for Q1 2025 was $43.5 million, down from $67.8 million in Q1 2024, indicating a decrease of 35.8%[39] - Cash flows from operating activities for Q1 2025 were $268.2 million, compared to $96.4 million in Q1 2024, showing a substantial increase[41] - Adjusted Free Cash Flow before changes in working capital was $194,472 thousand for the three months ended March 31, 2025[56] Liquidity and Capital Expenditures - The company maintained a strong cash balance of $203.0 million and an undrawn credit facility, resulting in total liquidity of approximately $960.2 million[4][19] - Capital expenditures for Q1 2025 totaled $117.6 million, with plans to allocate up to 50% of annual free cash flow to share repurchases[5][15][6] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 totaled $310.0 million, up from $124.4 million at the end of Q1 2024[41] - Total current assets increased to $708.8 million as of March 31, 2025, up from $659.4 million at the end of 2024[37] - Total liabilities decreased to $3.4 billion as of March 31, 2025, down from $3.4 billion at the end of 2024[37] - Total Debt as of March 31, 2025, was $1,250,000 thousand, with Net Debt calculated at $1,047,050 thousand[68] - LTM Adjusted EBITDA reached $1,393,160 thousand, resulting in a Net Debt to LTM Adjusted EBITDA ratio of 0.8x[68] Risk Factors and Strategic Focus - The company is subject to various risks including commodity price volatility and geopolitical events that may impact its operations[30] - Talos Energy focuses on maximizing long-term value through its Exploration & Production business in the U.S. Gulf of America and offshore Mexico[28] - The company emphasizes safe and efficient operations, environmental responsibility, and community impact in its business strategy[28] - Future production estimates are based on assumptions of capital expenditure levels and market demand for oil and gas[31] - Reserve estimates are subject to significant uncertainty and may differ from actual recoverable quantities[32] Conference and Investor Relations - The company plans to host a conference call on May 6, 2025, at 10:00 AM Eastern Time to discuss earnings and future outlook[27] - Talos Energy's investor relations contact is Clay Jeansonne, available via email for inquiries[29] Non-GAAP Measures and Adjustments - Talos Energy utilizes non-GAAP financial measures such as EBITDA and Adjusted EBITDA to provide additional insights into its financial performance[34] - The adjustments for derivative fair value loss amounted to $15,853 thousand, impacting the overall financial performance[61] - Non-cash equity-based compensation expense for the period was $4,141 thousand, contributing to the Adjusted Net Income of $10,466 thousand[61] - The company reported a transaction expense of $(4,579) thousand related to severance costs and acquisition expenses[61] - Adjusted General & Administrative Expenses for Q1 2025 were $30.3 million, down from $34.6 million in Q1 2024[44] - Adjusted EBITDA for the same period was $363,003 thousand, compared to $361,814 thousand in the previous quarter, reflecting a stable operational performance[49] - Production for the three months ended March 31, 2025, was 9,080 Boe, with an Adjusted EBITDA per Boe of $39.98[49] - The company did not pay any cash income taxes during the period, which had no impact on the reported Adjusted Free Cash Flow[55]

Core Viewpoint - Talos Energy Inc. has appointed Gregory M. Babcock as Interim Chief Financial Officer effective June 28, 2025, following the departure of Sergio L. Maiworm Jr. who is pursuing a new opportunity [1][3] Leadership Change - Gregory M. Babcock has over 17 years of industry experience and has been with Talos since 2014, serving as Chief Accounting Officer since 2019 [2][5] - Sergio L. Maiworm Jr. will remain with Talos until June 27, 2025, for a transitional period [1][3] - The leadership change is not related to any financial reporting or internal control issues [3] Company Guidance - Talos reaffirms its production guidance for Q2 2025 and its operational and financial guidance for the full year 2025 [3] Search for Permanent CFO - The company has initiated a comprehensive search for a permanent Chief Financial Officer [4] 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 Mexico and offshore Mexico [6] - The company emphasizes safe and efficient operations, environmental responsibility, and community impact [6]

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 ...