Talos Energy, Inc. · NYSE:TALO
Talos Energy — Q1 2025 Earnings Presentation
29 slides from Talos Energy's earnings presentation, May 6, 2025
Slide 1: 1Q 2025 Earnings Conference Call & Webcast
1Q 2025 Earnings Conference Call & Webcast May 6, 2025 www.talosenergy.com NYSE: TALO 1
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statements In addition, we use the terms "estimated resource potential," "estimated resource," "total recoverable resource potential" and "estimated The information in this presentation includes “forward-looking statements” within the meaning of Section 27A of the Se
Slide 3: Talos Overview
Talos Overview LA TX FL • High margin oil weighted production Offshore Gulf of America • High quality and stable asset base • Infrastructure focused Gulf of America • Short cycle offshore drilling inventory • Capital discipline MEXICO • Free cash flow generator Zama • Committed to low leverage Mexic
Slide 4: 1Q 2025 and Recent Financial and Operational Highlights
1Q 2025 and Recent Financial and Operational Highlights RECENT HIGHLIGHTS 1Q 2025 Beat 1Q 2025 consensus on production, Adj. EBITDA and Adj. FCF for fifth consecutive quarter 100.9 MBOE/D 68% / 78% Announced return of up to 50% of annual FCF via Average Daily Production Oil / Liquids opportunistic s
Slide 5: Five Consecutive Quarters Delivering Operationally and Financially
Five Consecutive Quarters Delivering Operationally and Financially 1Q 2025 $363.0 100.9 $194.5 +15% +77% +1% 100.0 $315.0 Beat consensus on Talos Production, $110.0 Adj. EBITDA, and Adj. FCF for the last five consecutive quarters Production Adj. EBITDA Adj. Free Cash Flow (MBOE/D) ($MM) ($MM) Consen
Slide 6: Consistently Achieve Top Quartile Ranking for EBITDA Margin
Consistently Achieve Top Quartile Ranking for EBITDA Margin One of the highest EBITDA/BOE margins in the E&P sector(1) – 1Q 2025: ~$40 per BOE 1Q 2025E EBITDA Margin 2025E EBITDA Margin Consensus $/BOE Consensus $/BOE $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $5
Slide 7: 2025 Proposed Drill Calendar
2025 Proposed Drill Calendar 2024 2025 Prospect Category Host Facility 4Q 1Q 2Q 3Q 4Q Brutus Platform Development Brutus Rig Prep Katmai West #2 Development Tarantula Drilling Comp Daenerys Exploration TBD Drilling Sunspear Development Prince Comp Cardona Development Pompano D&C ` Optional Well (GOA
Slide 8: Delivering Operationally
Delivering Operationally Finished well completion SUNSPEAR • First production expected late 2Q 2025 Initiated Completion Operations KATMAI WEST on Katmai West #2 well • First production expected late 2Q 2025 Drilling operations to commence DAENERYS late 2Q 2025 after Katmai #2 Project on track MONUM
Slide 9: Prioritizing Safety and Environment in Everything We Do
Prioritizing Safety and Environment in Everything We Do Employee Safety TRIR and SIFR Performance 1.0 0.13 TRIR 0.8 In 1.55 MM work hours GOA Average TRIR 0.6 Significantly below GOA average of 0.51 Talos TRIR 0.4 Talos SIFR 0.2 0.0 2021 2022 2023 2024 1Q 2025 BBLS Spilled per 1 MM BBL Produced Liqu
Slide 10: Flexible 2025 Capital Budget
Flexible 2025 Capital Budget Highlights • Flexibility in 2H 2025 to reduce budget • Robust 2H 2025 development projects economic at an P&A average price of ~$35 per barrel 18% Investment in • Upstream CAPEX on track: $500 - $540 MM Mexico 2% • P&A, Decommissioning on track: $100 - $120 MM Cap G&A /
Slide 11: Reaffirming 2025 Operational and Financial Guidance
Reaffirming 2025 Operational and Financial Guidance • 2025 focus on operational execution, financial discipline, and free cash flow generation • 2Q 2025 production guidance 92 - 96 MBOE/D • Expect Free Cash Flow in 2025 2025E Guidance Oil (MMBBL) 22.7 – 24.0 Natural Gas (BCF) 41.9 – 44.3 Production
Slide 12: 2025 Production Guidance Considerations
2025 Production Guidance Considerations 2025E Average Daily Production (MBOE/D) • Talos’s 2025 guidance accounts for expected production impacts, 100.0 – 105.0 including maintenance, third- party projects, and timing- related considerations ~(6.0) • Key 2025 major planned downtime events include Kat
Slide 13: Talos is Well Hedged
Talos is Well Hedged Daily Hedged Oil Volumes MBO/D • Robust hedge positions helps protect cash flow in a volatile commodity price $72.22 $73.45 HEDGE environment HEDGE ~40 ~38 • Allows Talos to generate free cash flow for the full year as low as $40 per barrel • ~42% of the balance of 2025 oil $71.
Slide 14: Strong Balance Sheet and No Near-Term Maturities
Strong Balance Sheet and No Near-Term Maturities Cash Balance and Debt Maturities $Millions • Paid down $550 MM of debt in $800(2) Availability 2024 since closing QuarterNorth acquisition, accreting over $3.00 per share to shareholders $625 $625 • $0 drawn credit facility • Ended the quarter with $2
Slide 15: Maintaining Flexibility to Execute Most Accretive Options
Maintaining Flexibility to Execute Most Accretive Options INVEST in projects that generate robust returns throughout the commodity cycles RETURN STRENGTHEN up to 50% of annual the balance sheet to be FCF via opportunistic prepared to capitalize on share repurchases opportunities that may arise from
Slide 16: 1Q 2025 Scorecard
1Q 2025 Scorecard Delivered strong 1Q 2025 performance • Beat quarterly consensus on Production, Adj. EBITDA, and Adj. FCF Committed to Balance Sheet Strength Driving value • $0 drawn credit facility, 0.8x leverage ratio, $960 MM in liquidity, and $203 MM in cash Delivered Operationally for Talos •
Slide 17: Appendix
Appendix 17
Slide 18: Katmai West #2 Adds Material Proved Reserves
Katmai West #2 Adds Material Proved Reserves Tarantula Strategic Elements Lower Miocene Structure Map Talos: 100% WI Katmai West #2 SA • Initiated completion operations LT EL W • Katmai West #2 well was drilled D Katmai West #1 significantly under budget and a month Katmai West #2 Producing faster t
Slide 19: Sunspear Discovery
Sunspear Discovery Strategic Elements Structure Map Prince • Finished well completion operations Sunspear • Successful development well discovered ~350 Pay Sand Acres 149 ft of net oil pay in main target A’ • High reservoir pressure and excellent Sunspear (GC 78 SS2) fluid properties will produce st
Slide 20: High-Impact Subsalt Miocene Exploration Opportunity
Daenerys High-Impact Subsalt Miocene Exploration Opportunity Strategic Elements Lower Miocene Structure Map TBD • Focus on drilling late 2Q 2025 • Farm-in transaction covering 23,000 gross acres • Large Middle and Lower Miocene 4-way turtle structure Proposed Location • Evaluating several host facil
Slide 21: Acquisition of Major Discovery with Material Resource Life
Monument – High-Impact Subsalt Wilcox Discovery Acquisition of Major Discovery with Material Resource Life Strategic Elements Wilcox Structure Map 2P Reserves Shenandoah • Wilcox discovery with two well penetrations (FID Feb 2024) Discovery Well • Good seismic image, faulted 4-way WR 271 #1 Future P
Slide 22: Ewing Bank – First Success in 2024 Multi-Well Drilling Program
Ewing Bank 953 – First Success in 2024 Multi-Well Drilling Program Strategic Elements Structure Map Megalodon • Discovered 127 ft of net hydrocarbon pay • Excellent rock properties and collected pressure and fluid samples • Expect production in mid-2026 • Current plan is for a short tieback to EW 95
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ Thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Reconciliation of Net Income (Loss) to Adjusted EBITDA: Net Income (loss) $(9,868) $(64,508) $88,173 $12,381 Interest expense $40,927 $41,536 $46,275 $48,982 Income tax expense
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ Thousands) March 31, 2025 Reconciliation of Adjusted EBITDA to Adjusted Free Cash Flow (before changes in working capital): Adjusted EBITDA $363,003 Capital expenditures $(117,574) Plugging & abandonment $(9,752) Decommissioning obligations settled $(27
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ Thousands) March 31, 2025 Reconciliation of General & Administrative Expenses to Adjusted General & Administrative Expenses: Total General and administrative expense $34,615 Transaction and other expenses(1) $(164) Non-cash equity-based compensation exp
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended, March 31, 2025 ($ Thousands, except per share amounts) Basic per Share Diluted per Share Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss): Net Income (loss) $(9,868) $(0.05) $(0.05) Transaction and other (income) expenses(1) $(4,579) $(0.
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ Thousands) March 31, 2025 Reconciliation of Net Debt: 9.000% Second-Priority Senior Secured Notes – due February 2029 $625,000 9.375% Second-Priority Senior Secured Notes – due February 2031 $625,000 Bank Credit Facility – matures March 2027 — Total Debt $1,250,000 Less:
Slide 28: Talos Hedge Book as of April 30, 2025
Talos Hedge Book as of April 30, 2025 Instrument Type Avg. Daily Volume W.A. Swap W.A. Floor W.A. Ceiling Crude – WTI (BBLs) (Per BBL) (Per BBL) (Per BBL) April – June 2025 Fixed Swaps 38,000 $73.45 — — July – September 2025 Fixed Swaps 20,685 $71.81 — — October – December 2025 Fixed Swaps 19,652 $7
Slide 29: www.talosenergy.com NYSE: TALO
www.talosenergy.com NYSE: TALO 29