Talos Energy, Inc. · NYSE:TALO
Talos Energy — Jefferies Energy Conference 2018
27 slides from Talos Energy's conference presentation, Nov 27, 2018
Slide 1: Jefferies Energy Conference
Jefferies Energy Conference November 27, 2018
Slide 2: Legal Disclosure
Legal Disclosure 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 opera
Slide 3: Talos Energy Overview
Talos Energy Overview Company Overview Corporate Snapshot (Pro Forma) Talos is a technically driven, offshore focused oil and gas upstream company Proved Reserves (1) 151 MMBoe Exploration, acquisition and development of largely deepwater, oil‐weighted, operated US Gulf of Mexico (“GoM”) assets
Slide 4: Long Term Value Creation
Long Term Value Creation Talos Energy represents an opportunity to invest in a positive free cash flow generating business in an underinvested basin, with an experienced management team with outstanding track record of delivering value to investors. Value Creation Over Time (with continued drill‐bit
Slide 5: Gulf of Mexico Investment Thesis
Gulf of Mexico Investment Thesis 1 One of the most important and prolific oil basins in the US, second only to the Permian basin in total current oil production 2 Long history of production, with year‐over‐year production growth since 2013, and forecasted to continue to grow over the next 10 years 3
Slide 6: Talos Core Competencies & Focus Area
Talos Core Competencies & Focus Area Geology & Geophysics MS AL Targeting prolific Pliocene ‐‐> Miocene window LA FL TX Excellent rock properties and advances in seismic lead Norphlet to direct hydrocarbon indicators (DHI’s) Miocene Reduce risk and increase exploration success Pliocene Offshor
Slide 7: Applying Best Practices to Improve Seismic Imaging
Applying Best Practices to Improve Seismic Imaging Regional Map 2010 Original Spec. Cequi Beam Data Cox #1 Zama‐1 Talos Seismic Talos Blocks Zama‐1 Cox #1 1 Hint of a flat spot 3 Closest well that found the same Miocene section Incorporated regional well data ~40 miles away and reprocessed the seism
Slide 8: Existing Infrastructure Creates Compelling Project Economics
Existing Infrastructure Creates Compelling Project Economics Near-term Catalysts Long-Term Portfolio 3rd Party Discovery (Potential PHA income) In‐Field and Short Tie‐Back Examples (Pompano Platform) Key Highlights Deepwater tie‐back opportunities can be categorized into three Pompano groups that
Slide 9: Illustrative Deepwater Project Economics
Illustrative Deepwater Project Economics In‐Field Phoenix Tie‐Back Illustrative Deepwater Project IRR’s at $50 $70/bbl 100% 90% Price Sensitivity 80% $50 $70 70% 60% IRR, % 50% 40% 30% 20% 10% 0% 5 10 15 20 EUR, MMBO (with a GOR of 1000 scf/bbl) Key Highlights Deepwater project economics are s
Slide 10: Top-Tier Economics in the Deepwater GoM
Top‐Tier Economics in the Deepwater GoM GoM Project Economics Comparable to US Shale Oil $100 $80 Breakeven (WTI US$/bbl) $60 $40 $20 Majority of Talos acreage in the highly economical Miocene play in the GoM Average breakeven $0 Wolf‐ Eagle Niobrara GoM Bone Bakken Three Scoop Utica camp Ford Sprin
Slide 11: Track Record of Adding Value to Acquired Assets
Track Record of Adding Value to Acquired Assets Ewing Bank 306 Shelf Field Phoenix Complex EW306 Production: Asset Management and Drilling Adds Phoenix Field: Rate Growth Since Acquiring 4.0 40 Gross Production Rate, MBOE/D Gross Production Rate, MBOE/D 3.5 Acquisition Eff Date 35 3.0 30 Acquisition
Slide 12: Benchmarking 5-Year All-Sources F&D
Benchmarking 5‐Year All‐Sources F&D Talos Energy 5‐Year all‐sources F&D is in the top‐quartile across a large universe of liquids weighted companies, regardless of company size and geographical focus. Talos Five Year Reserve Growth (mmboe) $50 $43.74 Organic Acquisitions (five) F&D of $45 Acquisit
Slide 13: Recycle Ratio of US E&P Universe
Recycle Ratio(1) of US E&P Universe Talos maintains a peer‐leading Recycle Ratio on a five‐year, all‐in look‐back basis. 2.8x2 2.7x 2.6x 2.4x 2.3x 2.2x 1.9x 1.9x 1.9x 1.9x 1.7x 1.7x 1.7x 1.7x 1.6x 1.6x 1.6x 1.6x 1.6x 1.6x 1.5x 1.5x 1.5x 1.4x 1.4x 1.4x 1.3x 1.2x 1.2x 1.2x 1.1x 1.1x 1.0x 1.0x 0.9x 0.9
Slide 14: Talos Energy – Core Areas
Talos Energy – Core Areas Key Highlights AL Talos’ current position is broken into the following FL four main core areas Mississippi 1 Green Canyon (“GC”) Area Offshore Canyon Shelf 2 Mississippi Canyon (“MC”) Area Green Canyon 3 U.S. Gulf of Mexico Shelf 4 Offshore Mexico Significant acreag
Slide 15: US Gulf of Mexico Assets – Poised for Growth
US Gulf of Mexico Assets – Poised for Growth Through our extensive seismic footprint and the latest advancements in reprocessing, Talos will continue to develop our exploration portfolio around our infrastructure and the established Miocene trend in deepwater. Ram Powell 2018 Q3 Production 8.4 MBoe/
Slide 16: Green Canyon Core Area
Green Canyon Core Area Key Highlights ‐ Green Canyon Core Area Recent strategic acquisition of the GC 18 platform Additional infrastructure will allow us to bring in nearby exploration wells looking for a host Talos has achieved significant drilling success in the Phoenix mini‐ basin since acq
Slide 17: Green Canyon Phoenix Complex
Green Canyon Phoenix Complex Phoenix Field Lay‐Out A Proven Track Record of Success N Head & Neck W HP‐1 Boris Riser Typhoon Riser Tornado Riser Material rate and reserve growth since acquiring S E Successfully drilled and completed 4 subsea wells Subsea Manifold Producer Proposed Location with
Slide 18: GC – Phoenix Complex - Tornado Development Well
GC – Phoenix Complex ‐ Tornado 3 Development Well Illustrative Line A ‐ A’ GC 281 #002 ST01 (Tornado 2 ST – PDP) Tornado 3 A A’ (PROPOSED PUD) GC 281 #002 (Downthrown Discovery) o o Tornado #1 ST (Producing) o o Downthrown Tornado 3 o Discovery o (Proposed) SALT Gross Rate: 8‐10 MBOE/D B6 Structure
Slide 19: Offshore Mexico
Offshore Mexico Strategic Context Macro View Mature offshore basin with significant production Talos was the first foreign operator to enter offshore Mexico in Single operator (Pemex) was historically tasked with Round 1.1 after winning the only two competitive blocks in discovering and develo
Slide 20: Offshore Mexico – Timeline and Milestones
Offshore Mexico – Timeline and Milestones Ultra deepwater Talos acreage now surrounded by NOC’s & Major’s Major Milestones >900 meters PSC signed on Block 2 and Block 7 just 2 years following the Mexican Energy Reform Largest Shallow Water Discovery by a Private Energy Deepwater Company in Past
Slide 21: Mexico Block 7 Core Area
Mexico Block 7 Core Area Overview Participating Interest: 35% Operator: Talos Energy Acreage: 114,854 gross acres Water Depth: 500‐650 ft Zama Discovery Water Depth: 550 ft Zama Appraisal program has been approved and Talos continues to update the Block 7 Exploration Plan as leads mature
Slide 22: Mexico Block 7 – Zama Discovery Implications
Mexico Block 7 – Zama Discovery Implications Seismic Line Amplitude/Structure Map Zama‐1: Gross Pay Section & MDT Gradient 0 3500 00 -3400 W E -2900 -3300 -4100 -3200 -2800 -3100 -4000 00 -39 -30 00 -38 00 700 00 -37 0 36 60 00 -3 0 50 -3 0 0 40 -290 00 -3 -33 00 00 -3 00 1,100 ft TVD -32 60 E -31 0
Slide 23: Mexico Block 7 – Zama Preliminary Project Planning
Mexico Block 7 – Zama Preliminary Project Planning Preliminary Unitization Agreement (PUA) signed 3Q 2018 The Appraisal program is approved by CNH Drilling is expected to commence November 2018 Continuous drilling of a three‐well campaign Drill schedule includes the testing of the addition
Slide 24: Zama – One of the Lowest Breakevens in the World
Zama – One of the Lowest Breakevens in the World The Zama discovery stacks up well against WoodMac’s new global sources of oil supply and is considered one of the most economic projects in the world Conventional pre‐FID and future drilling in US Lower 48 production in 2027 Each point represents a pr
Slide 25: Mexico Block 2/31 Shallow Water Area
Mexico Block 2/31 Shallow Water Area Block 2/31 Overview Participating Interest: 25%(1) Operator: Hokchi Energy(1), a subsidiary of Pan American Energy (PAE) Acreage: 112,979 gross acres Water Depth: 100‐150 ft Yaluk Cabrakan A Block 2 Exploration Plan is awaiting approval and Talos is wor
Slide 26: Talos Trades Below Proved and Proved PV-10
Talos Trades Below Proved and Proved PV‐10 Long‐Term Portfolio Drilled in 3+ Near‐Term Years Catalysts Drilled in 2 – 3 Years Discovered Resources 2P PV‐10(1,2) 6,000 Zama (Mexico) 5,000 US$ Millions 4,000 3,000 Current TEV implies: 2,000 TEV at ~$25/share ~$47/bbl of oil flat, if only 1P reserves
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