Talos Energy, Inc. · NYSE:TALO

Talos Energy — Pareto Securities E&P Independents Conference January 2020

23 slides from Talos Energy's conference presentation, Jan 22, 2020

  1. Slide 1: Pareto Securities E&P Independents Conference

    Pareto Securities E&P Independents Conference January 2020

  2. 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

  3. Slide 3: Overview of Talos Energy

    Overview of Talos Energy Talos is a technically driven independent energy company with a track record of shareholder value creation 53 152 TALOS CORE AREAS PRODUCTION MBoe/d MMBoe AND RESERVES (PRE-ACQUISITION) 3Q 2019 Production Proved Reserves1 Shelf and $2,255 $3,925 Other Green Mississippi MM MM

  4. Slide 4: Key Achievements Since Public Listing

    Key Achievements Since Public Listing Since becoming a public company in 2018, Talos has continued to hit key milestones  Delivered strong results and advanced on 2018  May: Closes Stone Energy merger numerous strategic fronts since going  September: Acquires Whistler Energy II public  November:

  5. Slide 5: Talos Energy – Core Areas

    Talos Energy – Core Areas GREEN MISSISSIPPI GOM SHELF / OFFSHORE CANYON CANYON OTHER MEXICO Proved Reserves1 (Pre-Acquisition) 70 mmboe 54 mmboe 27 mmboe - 3Q 2019 Production 19.7 mboe/d net, 19.0 mboe/d net, 13.9 mboe/d net, - (Pre-Acquisition) ~81% oil ~77% oil ~61% oil Key Assets Phoenix Pompano

  6. Slide 6: Talos Strategy – Green Canyon Core Area Example

    Talos Strategy – Green Canyon Core Area Example Technical expertise unlocks resource opportunities; leveraging infrastructure provides strong full-cycle value creation 1 2 3 3 3 1 Green Canyon 18 2 Phoenix Complex 3 Geophysics & Business Development  Acquired GC-18 for <$15mm in 2018  Since acquir

  7. Slide 7: Recent Business Development Activity

    Recent Business Development Activity Single Asset Acquisition Roll-Up of Private Company Single Asset Acquisition Stranded Discoveries & Expl., Dev. JVs RAM POWELL GREEN CANYON 18 GUNFLINT ANTRIM  Seller: ExxonMobil  Seller: Shell, ExxonMobil, Anadarko  Seller: Whistler Energy  Seller: Samson Of

  8. Slide 8: Recent Transaction Announcement Overview

    Recent Transaction Announcement Overview 19 MBoe/d 47 MMBoe (Proved) ~65% Oil, ~72% Liquids (3Q 2019) 75% Proved Developed (of Proved) Material, Oil-Weighted Production Deep Reserves Base ~$150 MM 40+ Prospects on Free Cash Flow (2019E) >700,000 Gross Acres Substantial Cash Flow Profile Multi-Year I

  9. Slide 9: Overview of Recent Transformative Acquisitions

    Overview of Recent Transformative Acquisitions High-quality portfolio of oil-weighted assets with significant production, increased diversity and material upside  $640 million Ram Powell Overview of  ILX/Castex effective date July 1, 2019 Shelf and Other Deepwater 4.9 MBoe/d net Transactions  ILX

  10. Slide 10: Strategic Rationale

    Strategic Rationale Increases production and cash flow while diversifying across asset lifecycle and adding growth optionality Scale  >30% increase in daily production volumes and Proved Increased Size and Developed reserves  Top tier pro forma margins and netbacks 53  72 MBoe/D Greater Efficienc

  11. Slide 11: Deep Inventory for Future Growth

    Deep Inventory for Future Growth Bolsters organic growth funnel with sizable inventory in well understood geology  40+ exploration prospects providing several years of drillable inventory  Discovery at Coronado Ram Powell  ~480,000 gross primary term acres Pompano including prospects nearby exist

  12. Slide 12: Financing & PF Capitalization

    Financing & PF Capitalization  $250 million of TALO shares (11.0 million shares based Consideration on 30-day VWAP through December 5, 2019) Details  Cash from existing sources of liquidity  Existing RBL increased to $950 million on current Talos assets as part of regular fall redetermination pro

  13. Slide 13: Valuation & Transaction Metrics

    Valuation & Transaction Metrics  Immediately accretive on key metrics  Significant discount to NAV of Acquired Assets, based Valuation on Talos estimates  Compelling valuation compared to precedents  EV / 2019E Operating Cash Flow: 3.0x Key Metrics  EV / Daily Production: $33,684 Recent Deepwat

  14. Slide 14: Mexico Block

    Mexico Block 7 Block 7 contains the globally recognized Zama discovery and numerous other high quality prospects  Participating Interest: 35%  Operator: Talos Energy  Acreage: 57,427 gross acres  Block 7 Water Depth: 500-650 ft  Zama Water Depth: 550 ft  Appraisal operations completed under bu

  15. Slide 15: Mexico Block – Zama Appraisal Completed

    Mexico Block 7 – Zama Appraisal Completed Independent third-party evaluation finalized with positive findings Zama #2 Zama #2 ST1 Zama #3  1,676 ft gross TVD sand  873 ft gross TVD pay  1,000 ft gross TVD sand  581 ft gross TVD pay  68-73% net to gross  748 ft gross TVD pay  68-73% net to gro

  16. Slide 16: Key Activities in 2019

    Key Activities in 2019 Talos was extremely active in 2019 across its portfolio, with a high degree of success on key projects Geography Type / Block Asset Status Timing Results Tornado 3 On Production 1Q  Boris 3 On Production 1Q  Orlov Drilled 2Q  Deepwater Bulleit Drilled 2Q  HP-1 Dry-Dock Fin

  17. Slide 17: Health Safety and Environment

    Social Corporate Responsibility Talos strives to operate safely, responsibly and in a manner that protects the public and the environment Health Safety and Environment Community Involvement  Leadership is committed to creating a strong HSE  Employee-led Community Outreach team organizes culture su

  18. Slide 18: Key Investment Highlights

    Key Investment Highlights  Oil-focused and large scale conventional asset base generating high margins, high returns on capital employed and robust free cash flow  Portfolio balanced between low risk producing assets, infield development and exploitation, quick turnaround infrastructure-led explor

  19. Slide 19: Appendix

    Appendix

  20. Slide 20: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Reconciliation of net income (loss) to Adj. EBITDA and of Adj. Three Months Ended EBITDA to Adj. EBITDA excluding hedges ($ in millions) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 Net Income (loss) $306 $(110) $95 $73 Interest Expense 24 25 25 23 Incom

  21. Slide 21: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Reconciliation of Net Debt Reconciliation of 3Q 2019 Adjusted EBITDA Margin $ in millions As of September 30, 2019 $ in millions Margin Margin (ex. hedges) Debt Principal $712 3Q19 Adj. EBITDA / ex. hedges $158 $152 Capital Leases 83 Revenue - Operations / $228 / $228 Gross

  22. Slide 22: Non-GAAP Reconciliations

    Non-GAAP Reconciliations TALOS ENERGY Three Months Ended ACQUIRED ASSETS Three Months Ended Reconciliation of Net Income (loss) to Adj. EBITDA and Adj. EBITDA to Free Cash Flow September 30, 2019 Reconciliation of Operating Cash Flow and Free Cash Flow September 30, 2019 Net Income (loss) $73 Revenu

  23. Slide 23: 23

    23

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