Talos Energy, Inc. · NYSE:TALO
Talos Energy — 47th Annual Scotia Howard Weil Energy Conference 2019
25 slides from Talos Energy's conference presentation, Mar 26, 2019
Slide 1: Scotia Howard Weil Energy Conference
Scotia Howard Weil Energy Conference March 2019
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 Talos Key Assets Company Overview Ewing Bank 306 Amberjack Talos is a technically driven, offshore focused oil and gas upstream company Field Exploration, acquisition and development of largely deepwater, oil‐weighted, operated US Gulf of Mexico (“GoM”) assets near existing
Slide 4: 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. Talos Seismic Expertise – US Gulf of Me
Slide 5: 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. Long Term: Near Term: Medium Term: + Large‐scale D
Slide 6: Active in all Business Development Avenues
Active in all Business Development Avenues Stranded Discovery Single Asset Acquisition Discoveries that are Low cost of entry on all metrics not material enough to justify Typically sold by Majors the construction of Sellers main focus is on protection new infrastructure against P&A liabilit
Slide 7: Talos Core Competencies & Focus Areas
Talos Core Competencies & Focus Areas Geology & Geophysics Targeting prolific Pliocene ‐‐> Miocene window Excellent rock properties and advances in seismic lead to direct hydrocarbon indicators (DHI’s) Reduce risk and increase exploration success Offshore Operations Top‐tier offshore operati
Slide 8: Applying Best Practices to Improve Seismic Imaging
Applying Best Practices to Improve Seismic Imaging ~40 miles 2010 Original Spec. Cequi Beam Data Cox #1 Zama‐1 (Closest well that found the same Miocene section ~40 miles away) Based on the reservoir thickness and rock properties encountered in the analog Cox #1 well, we expected to see direct hydro
Slide 9: Talos Energy – Core Areas
Talos Energy – Core Areas Key Highlights Talos’ current position is broken into the following four main core areas 3 2 1 Green Canyon (GC) Area 1 2 Mississippi Canyon (MC) Area 3 U.S. Gulf of Mexico Shelf 4 Offshore Mexico Significant acreage position with significant Gulf of seismic footpri
Slide 10: Green Canyon Core Area
Green Canyon Core Area GC 18 Bulleit Prospect Fixed GC 65 Bullwinkle Antrim Orlov Prospect GREEN CANYON Phoenix GC 237 Phoenix Talos MOPU Complex Talos Tie Backs Green Canyon 18 – Strategy in Motion Recent strategic acquisition of the GC 18 platform with active production and significant available
Slide 11: Green Canyon Phoenix Complex
Green Canyon Phoenix Complex Phoenix Field Lay‐Out Material rate and reserve growth since acquiring Scalable infrastructure Successfully drilled and completed 4 subsea wells with top‐tier operational performance Drilled a major discovery in Tornado at the bottom of the oil price downturn A P
Slide 12: Offshore Mexico – Timelines and Milestones
Offshore Mexico – Timelines and Milestones Ultra deepwater Talos acreage now surrounded by NOC’s & Major’s >900 meters Major Milestones PSC signed on Block 2 and Block 7 just 2 years following the Mexican Energy Reform First Participating Interest Swap between Private Entities (Block 2/31) Fir
Slide 13: Mexico Block 7 Core Area
Mexico Block 7 Core Area Overview Participating Interest: 35% Operator: Talos Energy #2 & 2ST Acreage: 114,854 gross acres #1 Water Depth: 500‐650 ft #3 Zama Discovery Water Depth: 550 ft Zama Appraisal program has been approved and Talos continues to update the Block 7 Exploration Plan
Slide 14: 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 1,100 ft TVD -3 00 -32 60 E -31 0
Slide 15: Block 7 – Zama Drilling Progress
Block 7 – Zama Drilling Progress 1.4 Miles Offshore Mexico Offshore Mexico Zama Appraisal Highlights Block 7 Block 7 Zama‐2 DEL Zama‐1 SON BP1 Initial phase of the appraisal program was completed safely, 28 days ahead of schedule, and 25% below initially projected costs Continuous Zama sandstone
Slide 16: Block 7 – Current Appraisal Plan Results
Block 7 – Current Appraisal Plan Results Zama #1 Results Zama #2 Objectives Zama #3 Objectives Identified the OWC within 72 feet of the Evaluate the northern area extent of Zama technical estimate Evaluate the southern area extent of Zama Whole core (upper section) Successfully collected r
Slide 17: 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 18: Mexico Block 2/31 Shallow Water Area
Mexico Block 2/31 Shallow Water Area Very attractive shallow water acreage set with Olmeca prospect de‐risked by Pemex well 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: 100‐1
Slide 19: Mexico Block 2/31 – Acan Prospect
Mexico Block 2/31 – Acan Prospect Key Highlights Exploration well in 100 ft water depth Calibrated amplitude response indicates oil in main target Amplitude area covers approximately 1,380 acres Unproduced oil discoveries in neighboring block to East: Potential shallow gas targets with a m
Slide 20: Mexico Block 2/31 Olmeca Complex
Mexico Block 2/31 Olmeca Complex Exploration Background Xaxamani‐1 well Drilled by Pemex in 2003 65 ft gas and 130 ft oil pay in two sands Resource area was included in the Block 31 exploration area Just offshore from the 1950’s era Rabon Grande Oil Field (same field pays) A A’ Deeper pote
Slide 21: Talos Trades Below Proved Developed PV-10
Talos Trades Below Proved Developed PV‐10 Talos trades below PV‐10 of PDP reserves of $2.5 billion Long‐Term Portfolio Drilled in 3+ Near‐Term Years Catalysts Drilled in 2 – 3 Discovered Years Resources 2P PV‐101,2 Zama 6,000 (Mexico) 5,000 US$ Millions 4,000 3,000 TEV at ~$26/share ~39% of 2P PV‐10
Slide 22: Appendix
We! if TUN 5 : ae N = “4 a Lt .: A Mi 7 ai ir we — . ee APA = iT sr i hee A TR APPENDIX
Slide 23: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Reconciliation of net income Three Months Ended Twelve Months Ended December 31, 2018 (loss) to Adj. EBITDA and of Adj. December 31, 2018 EBITDA to Adj. EBITDA excluding As Reported As Reported Pro Forma hedges ($ in millions) Net Income (loss) $306 $222 $275 Interest Expense
Slide 24: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Reconciliation of Net Debt Reconciliation of Annualized Adj. EBITDA $ in millions December 31, 2018 $ in millions December 31, 2018 3Q18 Adj. EBITDA $157 Debt Principal $672 4Q18 Adj. EBITDA $159 Capital Leases 94 2H18 Adj. EBITDA $316 x2 Gross Debt $766 Annualized Adj. EBITD
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