Talos Energy(TALO) - 2024 Q1 - Quarterly Results

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]