Core Viewpoint - Talos Energy is focusing on strategic acquisitions and debt reduction to enhance its financial stability and growth potential in the offshore oil and gas industry, particularly in the Gulf of Mexico [2][17]. Financial Performance - The latest acquisition was valued at over $1 billion, which may introduce one-time assimilation costs affecting the income statement for up to a year [2]. - The company's debt ratio has decreased to 1.0, which is a significant priority for the stock market, leading to reduced interest rates on recent financing efforts [2]. - Talos Energy has repaid $225 million of debt since closing the QuarterNorth deal, with a goal to achieve a zero balance on the bank line by the end of the fiscal year if commodity prices remain stable [4][9]. Operational Strategy - Talos Energy has engaged in offshore growth through acquisitions and aims to continue this strategy as a lower-risk method to achieve growth [7][8]. - The company is focusing on a conservative mix of development and exploration spending, expecting steady growth post-acquisition assimilation [15]. - The offshore projects typically have large upfront fixed costs, which can provide a protective cash flow due to significant depreciation components [2]. Risk Management - The management has successfully avoided excessive debt, which is crucial for survival in the offshore industry [17]. - The company is reducing risk by swapping acreage with neighboring companies, allowing for shared exploratory well risks [12]. - Talos Energy's management appears to have effectively gauged risk, maintaining significant upside potential while minimizing the risk of failure [19]. Strategic Partnerships - Talos has sold a minority interest to a Mexican businessman, which is expected to make operations in Mexico more cost-effective [21]. - The Grupo Carso transaction allows Talos to reintroduce an efficient development plan for over 750 million barrels of oil equivalent (MMBOE) gross [22]. Production Outlook - The company anticipates production guidance may be affected by weather-related losses, particularly during a potentially busy hurricane season [25].

HOUSTON, May 29, 2024 /PRNewswire/ -- Talos Energy Inc. (NYSE: TALO) ("Talos" or the "Company") today announced that representatives of Talos will participate at the following investor conferences and fireside chats. RBC Capital Markets Global Energy, Power and Infrastructure Conference in New York, New York, June 4, 2024. Bank of America Energy Credit Conference in New York, New York, June 5, 2024. Stifel Cross Sector Insight Conference in Boston, Massachusetts, June 4-5, 2024. Tim Duncan, President and Ch ...

Core Viewpoint - Talos Energy (TALO) is experiencing significant selling pressure, with a 12.8% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by positive earnings expectations from Wall Street analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating oversold conditions [2]. - TALO's current RSI reading is 29.57, suggesting that the heavy selling may be exhausting itself, indicating a potential bounce back towards equilibrium in supply and demand [5]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts that TALO's earnings estimates for the current year have increased by 30% over the last 30 days, which often correlates with price appreciation in the near term [6]. - TALO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further indicating a potential turnaround [7].

Financial Data and Key Metrics Changes - The company reported record production in Q1 2024, averaging 79,600 barrels of oil equivalent per day, at the high end of guidance [9][127] - Upstream EBITDA was $268 million for the quarter, with a netback margin of $42 per BOE [10] - Upstream CapEx was $112 million, and adjusted free cash flow was $78 million [10] - Debt repayments totaled $225 million, achieving a debt balance of $1.575 billion by the end of Q1 2024 [11][50] - The company increased its debt reduction target from $400 million to $550 million for the year [31][37] Business Line Data and Key Metrics Changes - The sale of the TLCS business allowed for accelerated debt reduction and improved financial flexibility [11][35] - The company expects production in Q2 2024 to be between 93,000 to 96,000 barrels of oil equivalent per day, with approximately 70% being oil [31] - The company anticipates achieving $20 million in run-rate synergies in Q1, with a target of $30 million by year-end and $55 million by 2025 [13][67] Market Data and Key Metrics Changes - The company is the fourth largest acreage holder and the fifth largest operator in the Gulf of Mexico [8] - The recent lease sale resulted in the acquisition of 17 blocks, adding 95,000 acres and potentially 12 to 15 new drilling locations [16][18] Company Strategy and Development Direction - The company focuses on oil-weighted assets and deepwater infrastructure to enhance operational efficiency and prospect inventory [3][8] - M&A remains a key pillar of the company's strategy, with ongoing efforts to seek further accretive opportunities [59][91] - The company is committed to low leverage and maximizing free cash flow while maintaining a focus on safety and sustainability [76][78] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational execution in Q1 and the potential for increased production throughout the year [56][66] - The company is focused on managing corporate decline and maximizing production from existing assets while exploring new opportunities [114][115] - Management highlighted the importance of the Katmai project as a significant catalyst for future growth [122][125] Other Important Information - The company has a strong focus on operational synergies, particularly in logistics and supply chain management, which are expected to improve over time [88][89] - The company is actively working on integrating the QuarterNorth assets and realizing synergies from this acquisition [51][52] Q&A Session Summary Question: Can you provide an update on the M&A landscape? - Management noted that while there are fewer obvious candidates for acquisition currently, they remain focused on tactical opportunities within the Gulf [91][80] Question: What are the expectations for the Katmai West number two well? - Management expressed optimism about the well's potential to add reserves and accelerate production, emphasizing the importance of geological data [86][97] Question: How will the company utilize incremental free cash flow after achieving debt reduction targets? - Management indicated that the immediate focus is on paying off the revolver, with potential for stock repurchases and new investment opportunities to be considered thereafter [82][85]

Talos Energy (TALO) came out with a quarterly loss of $0.13 per share versus the Zacks Consensus Estimate of a loss of $0.29. This compares to loss of $0.01 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 55.17%. A quarter ago, it was expected that this independent oil and gas company would post earnings of $0.37 per share when it actually produced a loss of $0.01, delivering a surprise of -102.70%.Over the last four quarters, ...

Acquisitions and Sales - Talos completed the sale of its wholly owned subsidiary, Talos Low Carbon Solutions LLC, to TotalEnergies E&P USA, Inc. for a total of approximately $142.0 million[134] - The acquisition of QuarterNorth Energy Inc. was finalized on March 4, 2024, for a total consideration of $1,570.0 million, including $1,247.4 million in cash and $322.6 million in common stock[135] Commodity Prices and Forecasts - During the period from January 1, 2024, to March 31, 2024, daily spot prices for NYMEX WTI crude oil ranged from $70.62 to $84.39 per barrel, while NYMEX Henry Hub natural gas prices ranged from $1.25 to $13.20 per MMBtu[141] - The EIA forecasts that the NYMEX WTI spot price will average $85.30 per barrel in Q2 2024 and $83.78 per barrel for the entire year[142] Financial Performance - Total revenues for the three months ended March 31, 2024, increased by $107.35 million, or 33.3%, to $429.93 million compared to $322.58 million in the same period of 2023[155] - Oil revenues rose by $100.53 million, or 34.3%, driven by an increase in production volumes and higher average sale prices[155] - Production volumes increased by 16.0 MBoepd to 79.6 MBoepd, primarily due to contributions from the QuarterNorth and EnVen acquisitions[156] - For the three months ended March 31, 2024, the company reported a net loss of $112.4 million compared to a net income of $89.9 million in the same period of 2023[169] - Adjusted EBITDA for the three months ended March 31, 2024, was $257.7 million, an increase from $203.1 million in the same period of 2023[169] Expenses and Liabilities - Lease operating expenses increased by approximately $53.8 million, or 66%, to $135.18 million, largely due to major well workover expenses and costs associated with recent acquisitions[157] - Depreciation, depletion, and amortization expenses rose by $68.3 million, or 46%, to $215.66 million, reflecting increased production volumes[158] - General and administrative expenses increased by approximately $6.7 million, or 11%, to $69.84 million, primarily due to transaction and severance costs related to acquisitions[159] - Interest expense for the three months ended March 31, 2024, was $50.84 million, an increase of $13.26 million, or 35.3%, compared to the same period in 2023[162] - The company recorded a $60.3 million loss on extinguishment of debt due to the redemption of senior secured notes[165] Cash Flow and Capital Expenditures - Capital expenditures for the three months ended March 31, 2024, totaled $161.4 million, with $112.4 million allocated to upstream activities[172] - The company used $937.6 million in investing activities during the three months ended March 31, 2024, primarily due to the QuarterNorth Acquisition costing $916.0 million[177] - Cash flow from financing activities increased by $712.5 million, driven by the issuance of New Senior Notes generating $1,224.5 million[178] - The company redeemed $638.5 million of 12.00% Second-Priority Senior Secured Notes and $227.5 million of 11.75% Notes using proceeds from the New Senior Notes[182][183] Liquidity and Financial Position - As of March 31, 2024, the company's available liquidity was $650.2 million, consisting of cash and available capacity under the Bank Credit Facility[169] - The company has a capital spending program for 2024 estimated between $570.0 million and $600.0 million, along with decommissioning obligations of $90.0 million to $100.0 million[173] - As of March 31, 2024, there is $52.5 million remaining under the authorized stock repurchase program of $100.0 million[174] Risk Management and Derivatives - The company plans to mitigate risks related to cash flow generation and borrowing capacity through oil and natural gas derivative contracts[173] - The company has a net derivative liability position of $53.7 million related to commodity price risk management for 16,569 MBbls of crude oil and 29,677 MMBtu of natural gas as of March 31, 2024[192] - A hypothetical 10% increase in oil and natural gas prices could result in a fair value change of $122,360,000, while a 10% decrease could lead to a fair value change of $68,688,000[192] Contractual Obligations - Total contractual obligations amount to $2,694,170,000, with significant debt interest payments of $787,189,000 over the next several years[185] - Vessel commitments for deepwater operations represent gross contractual obligations totaling $49,958,000[185] - Operating lease obligations total $28,680,000, with annual payments ranging from $4,220,000 to $5,531,000 over the next five years[185] - Finance lease commitments amount to $54,656,000, with significant payments due in 2024 and 2025[185] Accounting and Estimates - The company has no recently adopted or issued accounting standards that are material to its operations[189][190] - Critical accounting estimates remain unchanged from those disclosed in the 2023 Annual Report, focusing on oil and natural gas properties and revenue recognition[188] - There have been no material changes in market risk exposures since the 2023 Annual Report[191]

Production and Revenue - Talos achieved production of 79.6 MBoe/d in Q1 2024, with 71% being oil and 80% liquids, at the high end of its guidance range[6] - Revenue for Q1 2024 was $429.9 million, driven by realized prices of $76.01 per barrel for oil and $2.74 per thousand cubic feet for natural gas[6] - Total revenues for Q1 2024 reached $429.9 million, a 33.2% increase from $322.6 million in Q1 2023[46] - Operating income for Q1 2024 was $67.8 million, significantly up from $7.9 million in Q1 2023[46] - Cash flows from operating activities generated $96.4 million in Q1 2024, compared to $62.9 million in Q1 2023[48] Financial Performance - The company reported a net loss of $112.4 million, or $0.71 per diluted share, with an adjusted net loss of $20.9 million, or $0.13 per diluted share, excluding CCS investments[6] - Net loss for Q1 2024 was $112.4 million, compared to a net income of $89.9 million in Q1 2023, resulting in a basic and diluted loss per share of $0.71[46] - Adjusted Net Income excluding CCS for the quarter was $(20,942) thousand, translating to an Adjusted Earnings per Share of $(0.13)[72] - Adjusted EBITDA for the three months ended March 31, 2024, is $257,676, showing a positive trend in earnings[78] - Adjusted EBITDA excluding hedges reached $261,170 thousand, up from $248,098 thousand in the previous quarter[56] Debt and Capital Expenditures - Talos increased its total debt reduction target for 2024 from $400 million to approximately $550 million[5] - Talos's leverage ratio improved to 1.0x by repaying over $225 million in borrowings, ahead of schedule[6] - Long-term debt rose to $1.5 billion as of March 31, 2024, compared to $992.6 million at the end of 2023[44] - Upstream capital expenditures for Q1 2024 totaled $112.4 million, with significant investments in drilling and completions[22] - Upstream capital expenditures are forecasted to be between $570 million and $600 million, excluding acquisitions[31] Acquisitions and Strategic Initiatives - Talos closed the acquisition of QuarterNorth, enhancing its portfolio and is on track to realize expected synergies by year-end 2024[7] - The company is integrating the QuarterNorth acquisition, which is expected to enhance its operational capabilities and market position[37] - The sale of Talos Low Carbon Solutions to TotalEnergies for approximately $148 million resulted in a 2.0x multiple on invested capital[8] - The company incurred transaction expenses of $28.1 million related to the QuarterNorth acquisition, including $14.2 million in severance expenses[67] Production Estimates and Future Outlook - The company expects average daily production for Q2 2024 to be between 93.0 - 96.0 MBoe/d, including the impact of planned downtime[29] - Total production for FY 2024 is estimated to be between 32.6 MMBoe and 34.8 MMBoe, with average daily production ranging from 89.0 MBoe/d to 95.0 MBoe/d[31] - Future production estimates are based on assumptions regarding capital expenditure levels and market demand for oil and gas[38] Risk Factors - The company acknowledges risks related to commodity price volatility, geopolitical events, and operational disruptions that may impact future production and financial performance[37] Asset Management - The company reported a significant increase in proved properties, totaling $9.3 billion as of March 31, 2024, compared to $7.9 billion at the end of 2023[44] - Total current assets increased to $540.9 million as of March 31, 2024, up from $422.2 million at the end of 2023[44] - Cash, cash equivalents, and restricted cash decreased to $124.4 million at the end of Q1 2024, down from $135.9 million at the beginning of the period[48] Cash Flow and Operating Metrics - Adjusted Free Cash Flow excluding CCS (before changes in working capital) was $77,730 thousand for the three months ended March 31, 2024[65] - The net cash provided by operating activities was $96,426 thousand, with an increase in operating assets and liabilities of $76,085 thousand[65] - The production volume for the quarter was 7,248 Boe, with an Adjusted EBITDA excluding CCS per Boe of $36.91[59] Financial Ratios and Metrics - Total Debt amounts to $1,575,000, with Net Debt calculated at $1,553,999 after accounting for cash and cash equivalents of $21,001[78] - The ratio of Net Debt to LTM Adjusted EBITDA stands at 1.0x, indicating a stable leverage position[78] - LTM Adjusted EBITDA is reported at $1,005,331, reflecting the company's earnings performance over the last twelve months[78] - Pro Forma LTM Adjusted EBITDA is reported at $1,491,018, providing a comprehensive view of the company's earnings potential[78]

Talos Energy (TALO) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 6. On t ...

HOUSTON, March 18, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos") (NYSE: TALO) today announced that it has entered into an agreement for the sale of its wholly owned subsidiary, Talos Low Carbon Solutions LLC ("TLCS"), to TotalEnergies E&P USA, Inc. ("TotalEnergies") for a purchase price of $125 million plus customary reimbursements, adjustments and retention of cash, combined totaling approximately $148 million. The transaction was based on an effective date of January 1, 2024 and will close later today. ...

Talos Energy Inc.(TALO) has updated its operational and financial guidance for 2024, taking into account QuarterNorth Energy Inc.’s acquisition, which was closed earlier than expected. Based on the prior guidance, it was expected that the acquisition would close by the end of the first quarter of 2024.For full-year 2024, Talos projects the average daily production to be in the range of 89-95 thousand barrels of oil equivalent per day (Mboe/d), indicating an increase from the previous guidance of 87-93 MBoe/ ...