Talos Energy, Inc. · NYSE:TALO
Talos Energy — UBS Global Oil & Gas Conference 2021
31 slides from Talos Energy's conference presentation, May 25, 2021
Slide 1: UBS Global Oil & Gas Conference
May 2021 UBS Global Oil & Gas Conference
Slide 2: Cautionary Statement Regarding Forward-Looking 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: Talos Energy Overview
TALOS ENERGY OVERVIEW TAL@S
Slide 4: Talos Energy at a Glance
Talos Energy at a Glance RAM POWELL POMPANO AMBERJACK GC-18 HP-1 DELTA HOUSE Solid Foundation Attractive Operating Profile Strong Credit Catalysts for Value Creation Premier pure-play offshore E&P >75% Liquids ~$550 MM of liquidity FID for world-class Zama project Strong management track r
Slide 5: Talos Investment Case Highlights
Talos Investment Case Highlights MANAGEMENT TRACK RECORD OF SUCCESS STRONG, OIL-LINKED MARGINS AND CONSISTENT FREE CASH FLOW GENERATION HEALTHY CREDIT PROFILE SOLID, DIVERSE INVENTORY OF ATTRACTIVE INVESTMENT OPPORTUNITIES CATALYSTS TO DRIVE TANGIBLE LONG-TERM VALUE CREATION LOGICAL OFFSHORE CONSOLI
Slide 6: Solid Fundamental Trends
Solid Fundamental Trends Since public listing, Talos has steadily improved fundamentals despite broader market challenges Proved Reserves (MMBoe) Avg. Daily Production (MBoe/d) Capital Expenditures ($MM) 200 185 70 63 - 67 $600 $546 163 60 152 55 $500 52 150 142 50 46 $391 $406 $400 $340 - $370 40 1
Slide 7: Long-Term Value & Strong Credit Profile
Long-Term Value & Strong Credit Profile Talos has an attractive profile with equity upside and solid asset coverage $3,500 Key Highlights $509 $3,332 Numerous re-completions $3,000 in PDNP and low-risk PUD drilling opportunities $430 $2,500 Probables are primarily performance-based (no $2,393 EN
Slide 8: Acreage Footprint
Acreage Footprint Gross Acreage by Core Area Gross Acreage by Term 8% 36% Miss. Canyon 1,469 1,469 Held By Production Green Canyon 45% Does Not Expire 36% Acres Shelf & Gulf Coast Acres (‘000) 55% (‘000) Primary Term Mexico Exploration Acreage 20% Overview >1.4 MM gross acres under lease as of Dec
Slide 9: Regulatory Environment
Regulatory Environment Talos does not expect any material impact to its business from recent regulatory actions Recent Action Key Talos Facts Additional Notes Jan 20th Secretarial Order: Multiple permits granted since order Numerous industry permits granted since order Limited approval authori
Slide 10: U.S. Gulf of Mexico – The Responsible Source of Supply
U.S. Gulf of Mexico – The Responsible Source of Supply A logical global supply source by numerous ESG metrics Emissions Leadership: Lowest emissions intensity among global oil supply options (shale, heavy oil, etc.) Safety Leadership: Highly regulated with outstanding performance relative to oth
Slide 11: ESG Leadership & Safety Focus
ESG Leadership & Safety Focus >50% reduction in TRIR from 2018 ‒ One recordable incident by Talos offshore and shore based employees in 2020 ‒ Ten total recordable incidents across >3,600,000 offshore hours SAFETY ‒ Highly competitive incident rate across all economic sectors; below GOM averages F
Slide 12: Strategy & Catalysts
STRATEGY & CATALYSTS 12
Slide 13: Talos Core Competencies
Talos Core Competencies Technical Expertise Offshore Operations Experience Geology & Engineering-led firm that Experienced, proven operator in numerous consistently generates results offshore environments Decades of experience specific to conventional Track record of efficient and successful ope
Slide 14: Technical & Commercial Differentiators
Technical & Commercial Differentiators The Gulf of Mexico has remained a prolific basin for decades, yet continues to offer new frontiers Continued Large Basin Favorable Geology: High porosity conventional reservoirs with with World low decline rates and long lives Prospect Generation Class Rock P
Slide 15: Investing Across the Asset Lifecycle
Investing Across the Asset Lifecycle Success driven by ability to invest across the asset lifecycle and consistently improve opportunity set Advanced Seismic Reprocessing M&A Entry Asset Management In-Field Drilling Exploitation Exploration Low entry-cost Invest in recompletions Execute low-ri
Slide 16: Active M&A and Business Development
Active M&A and Business Development Robust business development pipeline provides avenues for exploration and portfolio management Key Takeaways Low entry-cost M&A and subsequent business development provide a pathway to leverage core competencies on organic E&P activities as the primary value cre
Slide 17: Key Operated Facilities
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 Depth: ~2,2
Slide 18: Full-Cycle Regional Case Study – Mississippi Canyon
Full-Cycle Regional Case Study – Mississippi Canyon Technical expertise unlocks resource opportunity; leveraging infrastructure provides strong full-cycle value creation 1 1 3 3 2 1 2 3 3 1 Substantial Regional Infrastructure 2 PHA Partners 3 Access for Future Exploration Mississippi Canyon assets
Slide 19: Full-Cycle Regional Case Study – Green Canyon
Full-Cycle Regional Case Study – Green Canyon Technical expertise unlocks resource opportunity; leveraging infrastructure provides strong full-cycle value creation 1 2 3 3 1 Green Canyon 18 2 Phoenix Complex 3 High Impact Exploration Acquired GC-18 for <$15mm in 2018 Since acquiring asset in 201
Slide 20: High-Impact Exploration – Puma West
High-Impact Exploration – Puma West Project Overview High-impact test of sub-salt Miocene exploration targets Located on Talos-controlled acreage; farmed-in bp and Chevron in 2019 Amplitude-supported objectives in close proximity to bp’s Mad Dog field (<15 miles east) Key Details & Statistics
Slide 21: Catalysts – High-Impact Exploration
Catalysts – High-Impact Exploration Talos possesses the capability, acreage and prospect leads to generate significant value through exploration Gulf of Mexico Geologic Ages Well-Positioned to Execute Norphlet Talos holds a strategic position in every major exploration trend in the basin: Cretaceous
Slide 22: Catalysts – Zama
Catalysts – Zama Sanctioning of the generational Zama project represents a huge milestone for Talos Program Overview NSAI estimates gross contingent resource(1) volumes of 735 MMBoe Largest shallow water oil discovery Participating Current in past ~20 years; named 2017 Interest Block 7 WoodMac Glo
Slide 23: Catalysts – Global M&A Opportunity
Catalysts – Global M&A Opportunity Opportunity Set North Unprecedented consolidation opportunity driven by: Sea ― Record near-term divestment targets ― Long-dated private investments ― Push for scale and cost-efficiency ― Limited universe of capable, well-positioned consolidators Gulf of Talos i
Slide 24: Talos Financial Principles
Talos Financial Principles Conservative balance sheet combined with calculated risk-taking, active hedging program Leverage Liquidity Maturity Profile Risk Management Balance debt load to cash flow Maintain ample liquidity Access market windows for Grow high-quality, diverse and total capita
Slide 25: 2021 Operational & Financial Guidance
2021 Operational & Financial Guidance Production 2020A 2021E Modest growth from normalized 2020 results (~2%) Includes 1H impacts of Praline tie-in and platform rig construction at Oil (MMBbl) 13.7 15.7 – 16.6 Pompano as well as increased weather-related risking Cash Expenses Natural Gas (Bcf) 2
Slide 26: Solid Capital Structure
Solid Capital Structure Talos maintains high liquidity, low leverage and refinanced a key maturity out to 2026 Overview of Recent Actions Key Credit Statistics Resolved April 2022 maturity with recent capital markets activities ― ~$350 MM maturity overhang risk eliminated ~$550 MM Increased liqu
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Slide 28: Sensitivity of PV-10 At Various Oil Prices
Sensitivity of PV-10 At Various Oil Prices $/Bbl WTI SEC $50.00 $55.00 $60.00 $65.00 PDP $1,556 $2,124 $2,393 $2,656 $2,922 PDNP $198 $356 $430 $504 $579 Total Proved Developed $1,754 $2,480 $2,823 $3,160 $3,501 Proved Undeveloped $244 $421 $509 $600 $688 Total Proved (1P) $1,998 $2,901 $3,332 $3,76
Slide 29: Hedge Position As of May 4, 2021
Hedge Position As of May 4, 2021 Instrument Avg. Daily Volume Weighted Avg. Price ($) WTI Oil Hedges (Bbls/d) April - December 2021 Swaps 25,098 $45.33 April - December 2021 Collars 1,000 $30.00 x $40.00 January - December 2022 Swaps 18,849 $48.41 January - June 2023 Swaps 3,000 $54.07 LLS Oil Hedge
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three months ended Three months ended Three months ended Three months ended Reconciliation of net income (loss) to Adjusted EBITDA: ($MM) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Net income (loss) ($121) ($431) ($52) ($141) Interest expense $34 $23 $
Slide 31: Reconciliation of Net Debt
Non-GAAP Reconciliations Reconciliation of Net Debt ($MM): As of March 31, 2021 Bank Credit Facility - matures May 2022 $465 12.00% Second-Priority Senior Secured Notes - due January 2026 $650 7.50% Senior Notes - due May 2022 $6 Finance lease $57 Total Debt $1,178 Less: Cash and cash equivalent ($6