Talos Energy, Inc. · NYSE:TALO
Talos Energy — Investor Day (May 2022)
109 slides from Talos Energy's investor day presentation, May 24, 2022
Slide 1: Analyst & Investor Day
Analyst & May 2022 Investor Day
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statement Regarding Forward-Looking Statements This presentation contains “forward-looking statements” for purposes of the federal securities laws. All statements, other than statements of historical fact included in this presentation, regarding our strategy, future
Slide 3: Analyst & Investor Day Agenda
Analyst & Investor Day Agenda Topic Speaker Business Overview Tim Duncan The Gulf of Mexico Tim Duncan Conventional Offshore Strategy Tim Duncan ESG Focus Robin Fielder Guest Presenter: Seismic Imaging with CGG Sophie Zurquiyah, CEO of CGG and John Parker Break Upstream John Parker Talos Low Carbon
Slide 4: Business Overview
TALOS ENERGY ANALYST & INVESTOR DAY BUSINESS OVERVIEW 4
Slide 5: Talented & Experienced Management Team
Talented & Experienced Management Team Talos leaders are proven explorers, successful entrepreneurs and accomplished stewards of capital Tim Duncan John Parker Robin Fielder Shane Young Bob Abendschein Chief Executive Officer (Founder) EVP of Exploration (Founder) EVP Low Carbon Strategy EVP & Chief
Slide 6: Who We Are
Who We Are Talos Energy is an innovative, industry- We are committed to leveraging our leading energy company focused on technical, operational and commercial Exploration & Production and Carbon expertise to help supply society’s growing Capture & Sequestration. need for secure, affordable energy an
Slide 7: Building the Energy Company of the Future
Building the Energy Company of the Future GROWTH ADVANCEMENT A COMPLETE IN UPSTREAM OF CCS ENERGY SOLUTION Providing responsible Executing large-scale A responsible energy conventional energy decarbonization solutions company positioned resources for today and to reduce industrial to improve lives t
Slide 8: Unique and Attractive Energy Investment Case
Unique and Attractive Energy Investment Case Conventional offshore strategy Carbon capture leadership Strong free cash flow profile Solid balance sheet Exploration catalysts Natural consolidator 8
Slide 9: Celebrating Years of Consistent Performance
Celebrating 10 Years of Consistent Performance Since formation in 2012, Talos has continued to grow and hit key milestones Major discovery at Puma West Established CCS Business Added to S&P Won first of its kind offshore Acquired Gulf Coast Energy SmallCap 600 Index CCS site auction by Tex
Slide 10: Building a Leading Independent Energy Company
Building a Leading Independent Energy Company 2022 Drilling River Bend Focus Area Emerging CCS CCS Site Bayou Bend Opportunities CCS Site Pompano Ram Powell Freeport LNG Amberjack CCS Site GC18 Talos Acreage High Phoenix HP1 Talos Seismic Productivity Fairway Emerging CCS Coastal Bend Project Opport
Slide 11: The Gulf of Mexico
TALOS ENERGY ANALYST & INVESTOR DAY THE GULF OF MEXICO 11
Slide 12: The Gulf of Mexico
The Gulf of Mexico The Gulf of Mexico offers immense resources and unique opportunities for those qualified to manage its technical and operational requirements. Our basin benefits from: Diverse and prolific geology Ample in-place infrastructure Advancing technologies in subsea production Se
Slide 13: Relative Scale of the Gulf of Mexico
Relative Scale of the Gulf of Mexico Basin Footprint Comparison (To Scale) Permian Marcellus Basin Shale Gulf of Eagle Mexico Ford Bakken Shale The GOM has DJ Basin unparalleled size, scale and diversity compared to other U.S. basins Note: Basin mapping data per EIA, shown to scale. 13
Slide 14: Diversity of Geology
Diversity of Geology Diverse geology and outstanding rock properties are spread over a huge geographic area Gulf of Mexico Talos is active across numerous plays Geologic Ages in a diverse range of operating Norphlet conditions, water depths and subsurface complexity Deep experience in Pliocene,
Slide 15: The Gulf of Mexico – A Significant National Resource
The Gulf of Mexico – A Significant National Resource One of the largest, most diverse and most prolific basins on Earth Top U.S. Basins by Daily Oil Production Large-Scale Operations from Majors, Independents and Privates 4,500 500 4,000 450 2021 Gross Operated Production (MBoe/d) Current Oil Produc
Slide 16: Conventional Offshore Well Profiles
Conventional Offshore Well Profiles Outstanding conventional rock properties allow for lower decline rates and extraordinary production rates Illustrative Decline Profile Illustrative Relative Cumulative Cash Flow Profiles 100% Exploration 90% % of Initial Production Rate 80% 70% 60% 50% 40% 30% Exp
Slide 17: A Leading Environmental & Emissions Story
A Leading Environmental & Emissions Story GOM Deepwater is the clear leader for cleaner, environmentally responsible energy supply GHG Intensity by Global Resource Type Key Environmental Data Points (MT CO2 Equivalent/MBoe) 15% of U.S. oil production in 2019, but less than 3% of 80 nationwide vent
Slide 18: GOM Provides Social Impact on a Nationwide Scale
GOM Provides Social Impact on a Nationwide Scale A highly compelling resource for social impact, job creation and public budgetary considerations Job Creation & Community Impact Public Impact ~350,000 ~$30 BILLION JOBS ACROSS ALL 50 STATES ANNUAL U.S. GDP IMPACT TEXAS 147,000 MISSISSIPPI 20,000 >$5
Slide 19: Conventional Offshore Strategy
TALOS ENERGY ANALYST & INVESTOR DAY CONVENTIONAL OFFSHORE STRATEGY 19
Slide 20: Talos Core Competencies
Talos Core Competencies Technical Subsurface Expertise Offshore Operations Experience Geoscience & Engineering-led firm Proven operator in diverse that consistently generates results offshore environments Decades of conventional geology experience Track record of safe, efficient operations Ent
Slide 21: Proven Explorers
Technical Subsurface Expertise Proven Explorers Established track record of finding new resources Leadership has numerous discoveries at predecessor companies (predecessor figures excluded from below) >1.0 >60 >70% BILLION BOE WELLS DRILLED SUCCESS DISCOVERED SINCE 2013 RATE Growth in PDP Reserv
Slide 22: Offshore Operations Experience
Offshore Operations Experience Experience operating safely and responsibly across a wide spectrum of water depths and facility types Shelf Platform EW305 GC18 Amberjack Pompano HP-1 Ram Powell WD ~50ft WD 271ft WD 750ft WD 1,100ft WD 1,300ft WD 2,200ft WD 3,215ft Talos Supply Chain & Logistics Fixed
Slide 23: Talos Strategic Approach
Talos Strategic Approach High- Regional Impact Seismic Exploration Database Step-Out Value- Exploitation Full Lifecycle Focused M&A Talos utilizes seismic technology Investment and M&A to build value through Approach drilling opportunities across the full asset lifecycle In-Field Asset Management De
Slide 24: Talos's Substantial Acreage Position
Talos’s Substantial Acreage Position Large, diverse acreage position provides low-risk, short-cycle projects and material exploration opportunities Regional Mix 6% Miss. Canyon 39% 32% 1,238 Green Canyon Acres Diverse Shelf & Gulf (‘000) Shelf & Gulf Coast Coast Footprint Mexico 24% Primary Term Exp
Slide 25: Gulf of Mexico Lease Sale Impacts
Gulf of Mexico Lease Sale Impacts Updates & Talos Mitigations Potential Impacts of a 5-Year Leasing Program Delay ~$1.5 Billion Interior Department cancelled offshore O&G Recent leases on May 11, 2022 Actions Current 5-year GOM leasing program scheduled to end on June 30, 2022 ANNUAL GOV’T. REVE
Slide 26: Seismic Reprocessing Expertise
Seismic Reprocessing Expertise Talos reprocessing capabilities drive better results and provide a competitive advantage in exploration Key Takeaways Proprietary reprocessing provides a strategic advantage in discovering new resources Seismic imaging is a critical risk mitigation tool helping to
Slide 27: Talos's Key Operated Facilities
Talos’s Key Operated Facilities Key assets have available capacity for future drilling and hosting third party production HP-1 Green Canyon 18 Pompano Ram Powell Amberjack Block: Green Canyon 236 Block: Green Canyon 18 Block: Viosca Knoll 989 Block: Viosca Knoll 912 Block: Mississippi Canyon 109 Dep
Slide 28: Full Lifecycle Case Study – Green Canyon
Full Lifecycle Case Study – Green Canyon 18 Highly successful campaign currently being replicated in 2022 Pompano program Project Background & Results Production Growth Since Acquisition Comprehensive field study identified overlooked 12.0 opportunities to increase production Avg. Daily Production
Slide 29: Full Lifecycle Case Study – Phoenix / Tornado
Full Lifecycle Case Study – Phoenix / Tornado Advanced seismic reprocessing and increasingly impactful drilling optimized a prolific asset Project Background & Results Resource Growth Since Acquisition 200 Seismic reprocessing provided basis Cumulative Production 179 for Tornado exploration well i
Slide 30: Reserve Summary – Year-End 2021
Reserve Summary – Year-End 2021 SEC Regional $80.00/$3.50 $66.55/$3.60 Mix 26% 33% Green Canyon YE 21 SEC Reserves PV-10 PV-10 162 Mississippi Canyon Total by Category (MMBoe) ($MM) ($MM) MMBoe Shelf & Gulf Coast 42% PDP 96 $3,073 $3,798 Product PDNP 41 599 794 Mix 9% 24% Oil 162 MMBoe PUD 25 254 35
Slide 31: M&A Track Record and Opportunity Set
M&A Track Record and Opportunity Set Talos has a solid history of successful acquisitions and is well-positioned to execute on future opportunities Talos Track Record Current M&A Landscape 12 acquisitions since inception >$100 billion in divestments targeted by Super Proven ability to add valu
Slide 32: Catalysts Driving Future Value Creation
Catalysts Driving Future Value Creation Development & Exploration Pipeline Access to major catalysts is a unique differentiator Unprecedented for Talos and provides M&A Opportunity the basis for exceptional long-term value creation Low Carbon Initiatives 32
Slide 33: ESG Focus
TALOS ENERGY ANALYST & INVESTOR DAY ESG FOCUS 33
Slide 34: ESG Journey
ESG Journey Action & Reporting Alignment U.N. Sustainable Development Goals (Nine Most Impactful for Talos) 2021 ESG report references GRI Standards; mapped to SASB Oil & Gas – E&P Sustainability Accounting Standard 2021 ESG report discloses components of the Task Force on Climate-Related Financ
Slide 35: Talos's Environmental Stewardship
Talos’s Environmental Stewardship Talos is committed to lowering its emissions intensity and maintaining strong environmental standards Driving Down Talos Scope 1 GHG Intensity Benchmarking Pace of GHG Intensity Reductions (Gross Operated Production, MT CO2 Equivalent/MBoe) (Annual reduction rate re
Slide 36: Recent Environmental Initiatives
Recent Environmental Initiatives Recent Emissions Reduction Initiatives Operational Improvement Highlight Installed solar, wind-powered compressor skids on un-manned platform offshore 85% Scope 1 GHG reduction by eliminating Pompano Replaced fuel gas power source cold venting Completed in le
Slide 37: Beyond Net Zero
Beyond Net Zero PERMANENTLY Executing Decarbonization for Industrial Partners SEQUESTERED CO2 At full scale, Talos CCS will permanently sequester >50x the annual emissions of its 20.0+ Upstream operations Talos CCS will contribute to broad industrial decarbonization well beyond its own Upstream
Slide 38: Exceptional Safety Performance
Exceptional Safety Performance Talos consistently outperforms industry safety averages and continues to improve performance Lost Time Incident Rate (LTIR) Safety Highlights (Average Combined Rates – Employees & Contractors) Safety & Environmental Management System (SEMS) guides day-to- 0.25 day sa
Slide 39: Social Engagement
Social Engagement Talos actively engages with community leaders and stakeholders, and factors that feedback into its planning processes Talos is also proud to support our local communities along the U.S. Gulf Coast for charitable activities, community involvement and disaster relief $1.2 Million
Slide 40: Our People
Our People Aiming to be a positive influence in the lives of our workforce We actively promote and measure employee engagement, diversity and inclusion in the workplace, including through partnering with contractors Effective and enforceable Human Rights, Code of Conduct and Ethics policies
Slide 41: Governance
Governance Talos maintains an independent Board with strong shareholder alignment Strong Governance Enhanced Ownership 6 Independent Directors plus Founder/CEO Legacy private equity ownership transition has significantly increased public float 4 distinct committees, each with separate charters
Slide 42: Guest Presenter: Seismic Imaging with CGG
TALOS ENERGY ANALYST & INVESTOR DAY GUEST PRESENTER: SEISMIC IMAGING WITH CGG 42
Slide 43: CGG – Our Businesses
CGG – Our Businesses Combining human ingenuity, data and new technology to understand and solve the world’s most complex challenges for a more sustainable future Focused on 6 key markets ― Oil & Gas ― Energy Transition ― Infrastructure Monitoring ― Digital Sciences ― Earth Data ― Environmental S
Slide 44: CGG – Our Capabilities
CGG – Our Capabilities CGG Strengths Three Core Competencies Remarkable Data & Technology Geoscience / Data science Established leader in subsurface imaging, geology and Unique Earth Data library, imaging, geoscience services / Specialized HPC Solutions geoscience & digital technologies Outstandin
Slide 45: Leading Experience in Gulf of Mexico and Deepwater
Leading Experience in Gulf of Mexico and Deepwater Continuous presence in the Gulf of Mexico since 1965 Subsurface Imaging Earth Data ~1,500 employees, with major >1.25m km2, including: hubs in: ― GoM: 406,000 km2 ― Houston ― Brazil: 370,000 km2 ― London ― N. Sea: 292,000 km2 ― Singapore Seism
Slide 46: An Industry Unique Solution
Subsurface Imaging An Industry Unique Solution Specialized high-performance computing Leading geoscience & data science technologies Highly optimized software Exceptional people Service excellence A highly specialized, optimized and integrated solution 46
Slide 47: Specialized, High-Performance Computing
Specialized, High-Performance Computing Highly specialized scientific compute resource ― Constantly optimized for new technologies ― In the top 15 worldwide, all industries Supports over 700 users running over 6 million jobs on 15 Petabytes of active data per week Significantly more efficient
Slide 48: Subsalt Imaging Milestones in the Gulf of Mexico
Leading Geoscience & Data Science Technologies Subsalt Imaging Milestones in the Gulf of Mexico Constant innovation driven by the challenges in the Gulf of Mexico Leading and differentiated technologies Only commercially available Elastic Full Waveform Inversion 48
Slide 49: External Benchmark – Kimberlite Seismic Imaging Survey
External Benchmark – Kimberlite Seismic Imaging Survey Supplier seen as leader in selected technologies OBN Multiple Multi- Attenuation Component Least De-blending Processing Squares WAZ / FAZ Time Depth Imaging & Imaging & Simultaneous Migration Reverse Sources 4D/Time Lapse Velocity Velocity Broad
Slide 50: CGG Service Excellence
CGG Service Excellence Culture of service excellence Projects uniquely based on result quality, not compute usage or applied technology CGG operations integrated with client teams ― Project based, or as long term dedicated resources 70% post graduate degrees / 26% PhDs R&D integrated into
Slide 51: A Long History of Success in the Gulf of Mexico
A Long History of Success in the Gulf of Mexico Data Coverage in the Gulf of Mexico Earth Data Active in the area since 1965 Using most advanced acquisition and imaging technologies Almost two thirds of all discoveries in the Gulf of Mexico since 2012 have been over CGG data 51
Slide 52: CGG technology delivers step change in salt model and subsurface image
Atlantis OBN – Smoothed Legacy Model and 18Hz RTM CGG technology delivers step change Gulf of Mexico – Atlantis OBN: Smoothed Legacy Model and 18Hz RTM in salt model and subsurface image 52
Slide 53: CGG technology delivers step change in salt model and subsurface image
Atlantis OBN – 18Hz TLFWI model and 18Hz RTM CGG technology delivers step change Gulf of Mexico – Atlantis OBN: 18Hz TLFWI Model and 18Hz RTM in salt model and subsurface image 53
Slide 54: CGG's latest technology brings a paradigm shift to streamer data
Talos Camellia Prospect CGG’s latest technology brings Gulf of Mexico – WR WAZ: Legacy Model & 20Hz RTM Image a paradigm shift to streamer data 54
Slide 55: CGG's latest technology brings a paradigm shift to streamer data
Talos Camellia Prospect CGG’s latest technology brings Gulf of Mexico – WR WAZ: 12Hz TLFWI Model & 25Hz RTM Image a paradigm shift to streamer data 55
Slide 56: CGG Imaging Provides Superior Correlation with Well Data
CGG Imaging Provides Superior Correlation with Well Data The step-change in image accuracy and resolution provided by CGG’s FWI Imaging enables well paths and locations to better target reservoirs and avoid hazards Legacy Data CGG Imaging with 65 Hz. TLFWI 56
Slide 57: Helping Our Clients
CGG Subsurface Imaging Helping Our Clients Make faster, better-informed decisions Improve well placement Reduce the costs and risks of drilling Increase exploration/near step-out success Optimize development & production Reduce GHG emissions intensity of exploration, development and prod
Slide 58: Upstream
TALOS ENERGY ANALYST & INVESTOR DAY UPSTREAM 58
Slide 59: Talos Upstream
Talos Upstream Since our founding 10 years ago, Talos has grown to be one of the largest independent operators in the Gulf of Mexico. We have the necessary skill sets, a proven strategy and a solid asset base, positioning Talos for exceptional value creation through our Upstream business. An unwaver
Slide 60: Inventory Evolution Process
Inventory Evolution Process Review of seismic data Talos is constantly expanding and high-grading Evaluation of known analogs its inventory for flexibility and long-term growth Integrated evaluation with Engineering, Drilling, Operations Rigorous peer-led review process and collaboration Formal revi
Slide 61: Inventory Overview – Portfolio Summary
Inventory Overview – Portfolio Summary Low risk portfolio to sustain and diversify production plus high impact targets for future growth The Company maintains and continues to grow a deep, diverse inventory portfolio providing sustainable growth Talos’s project inventory consists of over 95 proj
Slide 62: Inventory Overview – Generic Project Categorization
Inventory Overview – Generic Project Categorization Talos prioritizes a balance of project risk, impact, cost and cycle time in developing its capital planning for future periods As project risk increases, Talos generally targets a lower working interest, thereby increasing the number of net pro
Slide 63: Current Drilling Inventory Locations
Current Drilling Inventory Locations Ram Powell Pompano Amberjack At 2022 pace of ~10 wells per year, Talos has ~10 years of existing, identified drilling inventory 2022 Pompano Rig Program Coelacanth Delta House 2022 Open GC 18 Water Program Phoenix HP1 2022 Puma West Appraisal Shenandoah (Planned)
Slide 64: Seville – Pompano Platform Rig
Seville – Pompano Platform Rig Miocene exploitation opportunity targeting amplitude correlative to proven hydrocarbons Key Data Points Seismic Overview Spud Date 1Q 2022 POMPANO First Oil 3Q 2022 SALT Est. Resource (Gross MMBOE) 5 – 10 Est. Initial Rate (Gross MBOE/D) 4–6 SEVILLE M74 Target Depth (F
Slide 65: Mount Hunter – Pompano Platform Rig
Mount Hunter – Pompano Platform Rig Development well targeting attic proved reserves in a prolific Miocene sand Key Data Points Seismic Overview Spud Date 3Q 2022 First Oil 1Q 2023 Est. Resource (Gross MMBOE) 5 – 10 Est. Initial Rate (Gross MBOE/D) 3–5 Target Depth (Feet TVDSS) 9,700 Working Interes
Slide 66: Lime Rock – Open Water / Floater Rig
Lime Rock – Open Water / Floater Rig Class III AVO exploitation opportunity nearby Ram Powell facility with strong analogs Key Data Points Seismic Overview Spud Date 3Q 2022 NW SE M66 First Oil 2Q 2024 270’ Gross Thickness Est. Resource (Gross MMBOE) 10 – 20 M66 Est. Initial Rate (Gross MBOE/D) 5 –
Slide 67: Venice – Open Water / Floater Rig
Venice – Open Water / Floater Rig Exploitation opportunity near Ram Powell identified via advanced seismic analysis Key Data Points Seismic Overview Spud Date 3Q 2022 N S First Oil 1Q 2024 Est. Resource (Gross MMBOE) 10 – 20 Est. Initial Rate (Gross MBOE/D) 10 – 15 Target Depth (Feet TVDSS) 13,200 Q
Slide 68: Rigolets – Open Water / Floater Rig
Rigolets – Open Water / Floater Rig Miocene exploitation opportunity targeting multiple amplitude supported horizons Key Data Points Seismic Cross Section Spud Date 4Q 2022 First Oil 1Q 2024 Est. Resource (Gross MMBOE) 20 – 30 M85/87 Oil Est. Initial Rate (Gross MBOE/D) 10 – 15 Target Depth (Feet TV
Slide 69: Puma West – Open Water (Non-Operated)
Puma West – Open Water (Non-Operated) Appraisal to delineate 2021 high-impact exploration discovery Key Data Points Regional Asset Map Spud Date 2H 2022 Talos Blocks First Oil Pending Appraisal Est. Resource (Gross MMBOE) Pending Appraisal Puma West Est. Initial Rate (Gross MBOE/D) Pending Appraisal
Slide 70: Select Projects – In-Field / Development
Select Projects – In-Field / Development In-Field / Development Exploitation Exploration Select Projects Prospect Count by Core Area Current Name Location Working Interest Bulleit Recompletion GC21 50% Miss. Canyon 15 36 Mt. Hunter MC28 100% 18 Prospects Green Canyon Shelf & Gulf Flat Top VK 989 100
Slide 71: Select Projects – Exploitation
Select Projects – Exploitation In-Field / Development Exploitation Exploration Select Projects Prospect Count by Core Area Current Name Location Working Interest 4 Seville MC27 100% Miss. Canyon 31 Venice VK912 60% 7 Prospects Green Canyon 20 Lime Rock VK1000 60% Shelf & Gulf Coast Rigolets MC162 60
Slide 72: Select Projects – Exploration
Select Projects – Exploration In-Field / Development Exploitation Exploration Select Projects Prospect Count by Core Area Current Name Location Working Interest 2 Miss. Canyon Puma West GC821 25% 30 Green Canyon Coronado WR98 40% Prospects 15 13 Camellia GC991 100% Shelf & Gulf Coast Mazama/Tacoma G
Slide 73: Zama Update
Zama Update World-class Exploration discovery with increasing line of sight to FID Mexico Accomplishments Unitization Updates First and only successful entrant in initial 2015 A Zama development plan is the main gating item to bid round FID 4 successful exploration wells and >600 MMBoe gross
Slide 74: Talos Low Carbon Solutions
TALOS ENERGY ANALYST & INVESTOR DAY TALOS LOW CARBON SOLUTIONS 74
Slide 75: Talos Carbon Capture & Sequestration
Talos Carbon Capture & Sequestration Talos is leveraging its decades of experience as an Upstream operator to build a portfolio of CCS projects driving large-scale decarbonization efforts through the direct removal of CO2 from industrial emissions. 75
Slide 76: What is Carbon Capture and Sequestration?
What is Carbon Capture and Sequestration? CCS involves capturing, transporting, injecting and permanently storing CO2 emissions from industrial sources back into the ground in saline aquifers. Carbon Capture and Sequestration Value Chain Capture Transport Sequester CO2 emissions removed CO2 safely p
Slide 77: CCS Growth is Required to Meet Climate Objectives
CCS Growth is Required to Meet Climate Objectives Talos has rapidly taken a leadership role in the developing market for global emissions reductions Additional CCS Capacity is Required to Meet Global Targets REQUIRED @ 2050 ~3,000 3,000 Total CCUS Capacity 2,500 Pipeline of Projects Gap to IEA SDS(1
Slide 78: Energy Industry Consistently Evolves To Meet Challenges
Energy Industry Consistently Evolves To Meet Challenges Decades of evolution by the industry have solved complex, global problems Evolution of Oil and Gas Focus and Advancements PETROLEUM MEGA-PROJECT HORIZONTAL U.S. SHALE CRISIS EVOLUTION DRILLING REVOLUTION Existing energy companies possess the sk
Slide 79: Applying Expertise Towards CCS
Applying Expertise Towards CCS Complementary Skill Sets E&P CCS Conventional Reservoir Expertise, G&G Team Significant Gulf Coast / GOM Presence Vast Seismic Database Established Operator & Project Mgmt. Capabilities Strong HSE Track Record Business Development and Commercially Driven 79
Slide 80: U.S. Gulf Coast – World-Class CCS Market Opportunity
U.S. Gulf Coast – World-Class CCS Market Opportunity Emissions concentrated along the Gulf Coast are adjacent to best-in-class storage capacity & infrastructure America’s Industrial Epicenter Critical power generation, industrial and petrochemical corridor 100+ facilities emitting >1 MM MT of CO
Slide 81: TLCS Vision
Talos Low Carbon Solutions TLCS Vision TLCS targets to be a recognized leader in domestic decarbonization focused on delivering responsible, reliable, and cost-effective solutions to create sustainable value for our stakeholders. CCS business has been organized under Talos Low Carbon Solutions (“T
Slide 82: Maturing Two CCS Project Types
Maturing Two CCS Project Types Regional Hub Point Source Source Clustered Industrial Base Single facility / Plant Operator / Turnkey Operator / Talos Role / Offering Project Mgr. Project Mgr. Third Parties Midstream Provider Talos and / or Partners Land / Site Large, regional lease Already secured;
Slide 83: Advancing Short and Medium-Cycle Project Types
Advancing Short and Medium-Cycle Project Types Illustrative Schedule for CCS Projects Year 1 Year 2 Year 3 Year 4 Year 5 Project Quarter Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Point Source Project FEED Work Stratigraphic Well Test Class VI Permitting Project FID Construction & We
Slide 84: Illustrative CCS Commercial & Economic Considerations
Illustrative CCS Commercial & Economic Considerations Large-scale projects and contracted cash flows with high visibility Incentives Carbon Tax/Credit Value (US$/tonne CO2) Federal tax credits 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 State Programs Canada All Emissions 31 38 50 62 73 85
Slide 85: Illustrative CCS Commercial & Economic Considerations
Illustrative CCS Commercial & Economic Considerations Key Economic Factors Illustrative Annual Cash Flows Critical Model Variables: Long-term, tolling fee- ― Tolling fee per tonne based cash flow stream ― Total Volume ― Capital Expenditures Financing: Modelling projects on an unlevered basis; fi
Slide 86: Talos CCS Project Portfolio: Million MT CO2 Storage
Talos CCS Project Portfolio: 800 Million MT CO2 Storage Supporting 150 MTPA of Regional Emissions on ~80,000 acres 3 1 Gulf of 2 Bayou Bend Mexico (25%) River Bend Freeport LNG (30%) (50%) Coastal Bend (50%) 1. Bayou Bend 2. Freeport LNG 3. River Bend 4. Coastal Bend Industrial Region Beaumont / Por
Slide 87: Bayou Bend CCS
Bayou Bend CCS Regional Hub Project for Beaumont / Port Arthur, Texas region (Jefferson County) Key Data Points 2022 Milestones Region Offshore Beaumont / Port Arthur Lessor State of Texas Lease finalized with State of Texas April 2022 Acreage 40,000+ Storage Capacity 225 – 275 MM MT CO2 Expande
Slide 88: Bayou Bend CCS Transaction with Chevron
Bayou Bend CCS Transaction with Chevron Chevron brings significant expertise to the first and only major offshore CCS project Executed MOU to add Chevron to Bayou Bend CCS joint venture Consideration of cash at closing and capital cost carry through FID Pro forma equity interests of 25% Talos
Slide 89: Freeport LNG CCS
Freeport LNG CCS Point Source Project for Freeport LNG Key Data Points 2022 Milestones Region Onshore Freeport Lessor Freeport LNG Drill stratigraphic well test to confirm geologic conditions in Acreage ~500 2022 Storage Capacity ~25 MM MT CO2 First Injection Late 2024 Prepare for EPA Class VI P
Slide 90: River Bend CCS
River Bend CCS Regional Hub Project along Mississippi River corridor Key Data Points 2022 Milestones Region Onshore Baton Rouge / New Orleans Lessor Private Landowner Finalize subsurface evaluation activities Acreage 26,000 Lease acres + 63,000 ROFR acres Storage Capacity >500 MM MT CO2 Define m
Slide 91: Coastal Bend CCS
Coastal Bend CCS Point Source Project at the Port of Corpus Christi Key Data Points 2022 Milestones Region Onshore Corpus Christi Lessor Port of Corpus Christi Advancing project investigation with formal lease expected 2H Acreage 13,000 2022 Storage Capacity 50 – 100+ MM MT CO2 First Injection Lat
Slide 92: Guest Fireside Chat: CCS Partnerships with EnLink
TALOS ENERGY ANALYST & INVESTOR DAY GUEST FIRESIDE CHAT: CCS PARTNERSHIPS WITH ENLINK 92
Slide 93: Finance & Valuation
TALOS ENERGY ANALYST & INVESTOR DAY FINANCE & VALUATION 93
Slide 94: Financial Principles
Financial Principles We aim to maximize shareholder value through disciplined investments, healthy credit and responsible risk management. Our key financial principles include: Appropriate capital reinvestment with positive Free Cash Flow generation Maintain low leverage and high liquidity Man
Slide 95: Financial Highlights
Financial Highlights Key Takeaways Key Statistics Shareholder value creation through >$1.5 Billion responsible deployment of capital Free Cash Flow 2021-2025(1) Infrastructure-led model generates >$500 Million highly competitive EBITDA netbacks Liquidity >$90 million of free cash flow in 1Q 20
Slide 96: Current Capitalization & Balance Sheet Trends
Current Capitalization & Balance Sheet Trends Prioritizing financial health, stability and successful long-term value creation - ILX and Venari Acquisitions Capitalization Summary ($MM) Liquidity ($MM) Pandemic Tranche 3/31/22 Maturity $750 $673 $612 RBL Facility ($1,100 BB, $806.3 Commitments) $340
Slide 97: 2022 Operational and Financial Guidance
2022 Operational and Financial Guidance Production 2021A 2022E 66% oil, 75% liquids 3.0 – 4.0 MBoe/d of annual downtime Oil (MMBbl) 16.2 14.6 – 15.5 impact: 45 – 60 days of HP-1 dry-dock downtime Natural Gas (Bcf) 32.8 33.1 – 35.3 ~40 realized days of third-party midstream downtime in 1Q and
Slide 98: 2022 Capital Guidance Overview
2022 Capital Guidance Overview Balanced capital program targeted at unique high-impact drilling and CCS opportunities Upstream Investments 55% upstream Floater and Platform Rigs reinvestment rate 3 Development projects ~50% 0 Other 5-6 High Impact projects 10-15% Appraisal of Puma West of D&
Slide 99: Production
Production 2013-2022E Avg. Daily Production (MBoe/d) 63-68 64 60-64 30% 55 60-64 Deepwater 52 MBoe/d Shelf 70% 46 Targeting 3-5% long-term CAGR in normalized 29 commodity environment 26 24 22 18 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E Guidance (Guidance + Dry Dock Impact) Note: 2022E Guid
Slide 100: Resilient Pricing in a Diverse Set of End Markets
Resilient Pricing in a Diverse Set of End Markets Ample pipeline infrastructure and high-quality crude support steady price realizations Crude Markets (% of Total Sales) Basis Differentials Near or Above WTI $5.00 $4.00 $3.00 $2.30 9% 1% $2.00 $1.45 $1.00 Bonito 16% $0.00 43% HLS ($1.00) ($1.00) LLS
Slide 101: Hedging Overview
Hedging Overview Key Principles & Details RBL Hedging Requirements Talos has consistently hedged since its 50% of Oil, Gas PDP for forward quarters 1-4 founding, and will continue to do so ― 45% in July and November ― 25% in August, September, October (hurricane months) Hedging is a tool to mi
Slide 102: Attractive Long-Term Free Cash Flow Profile
Attractive Long-Term Free Cash Flow Profile Talos’s high-quality asset base generates material free cash flow in the current commodity environment Cumulative Upstream Free Cash Flow(1) Expect to generate over $1.5 billion in free cash $1,750 flow from base business through 2025(1) $1,500 Provide
Slide 103: Performance and Valuation Remain Disconnected
Performance and Valuation Remain Disconnected Talos is generating record margins with a solid balance sheet, but valuation continues to lag the peer group Adjusted EBITDA Margins (Unhedged) Leverage $80.00 Talos Record margins 2.5x Talos Solid credit amongst peers, Selected Peer E&Ps demonstrate ass
Slide 104: Closing Remarks
TALOS ENERGY ANALYST & INVESTOR DAY CLOSING REMARKS 104
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Slide 106: Appendix
APPENDIX TAL@OS
Slide 107: Hedge Book as of May 17, 2022
Hedge Book as of May 17, 2022 Crude – WTI Natural Gas – HH NYMEX Boe Avg. Daily Weighted Avg. Avg. Daily Weighted Avg. Swap Avg. Daily Quarter Volume (bbls) Swap Price (per bbl) Volume (mmbtu) Price (per mmbtu) Volume (Boe) Apr. – Jun. 2022 27,341 $52.38 56,352 $3.00 36,733 Jul. – Sept. 2022 18,000
Slide 108: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ thousands, except per Boe) March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 Reconciliation of net income (loss) to Adjusted EBITDA: Net Income (loss) $ (66,441) $ 81,012 $ (16,691) $ (125,782) Interest expense 31,490 33,102 32,390 33,57
Slide 109: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ thousands, except per share amounts) Three Months Ended March 31, 2022 Reconciliation of Adjusted EBITDA to Free Cash Flow (before changes in working capital) Adjusted EBITDA $ 208,213 Less: Capital Expenditures and Plugging & Abandonment (84,706) Less: Interest Expense (