Talos Energy, Inc. · NYSE:TALO
Talos Energy — J.P. Morgan High Yield & Leveraged Finance Conference 2020
21 slides from Talos Energy's conference presentation, Feb 25, 2020
Slide 1: J.P. Morgan High Yield & Leveraged Finance Conference
J.P. Morgan High Yield & Leveraged Finance Conference February 2020
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: Overview of Talos Energy – Standalone Key Statistics
Overview of Talos Energy – Standalone Key Statistics Talos is a technically driven independent energy company with a track record of shareholder value creation 53 149 197 TALOS CORE AREAS PRODUCTION MBoe/d MMBoe MMBoe AND RESERVES (PRE-ACQUISITION) 3Q 2019 Production Proved Reserves1 2P Reserves1 Sh
Slide 4: Recent Acquisition – Transaction Details
Recent Acquisition – Transaction Details Quality portfolio of oil-weighted assets with significant production, increased diversity and material upside $640MM ~19 MBoe/d, ~68 MMBoe (2P) Transaction July 1, 2019 effective date Overview ILX, Castex closing expected 2/28/20 Diverse assets with
Slide 5: Recent Acquisition – Strategic Rationale
Recent Acquisition – 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 MBo
Slide 6: U.S. Gulf of Mexico Asset Base
U.S. Gulf of Mexico Asset Base Broad portfolio of producing assets and prospects spanning key geological trends and operating environments Gulf of Mexico Shelf Talos 19 MBoe/d net(1) Acquired Assets 53% Oil Talos Seismic Ram Powell Pompano Amberjack Delta House ~1.6MM gross / 0.8MM net leased acre
Slide 7: Gulf of Mexico Investment Thesis
Gulf of Mexico Investment Thesis Gulf of Mexico production benefits from ample infrastructure and proximity to refining capacity, driving premium pricing relative to WTI The basin also benefits from a low royalty burden and no ad valorem or severance taxes Despite certain higher operating cost
Slide 8: Core Competencies
Core Competencies 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 operational performance I
Slide 9: Differentiated Strategic Approach
Differentiated Strategic Approach Success driven by ability to invest across the asset lifecycle and consistently improve opportunity set Advanced Seismic Reprocessing Active business development allows for consistent expansion and high-grading of the Company’s opportunity set Asset Management In-
Slide 10: Core Areas
Core Areas GREEN MISSISSIPPI GOM SHELF / OFFSHORE CANYON CANYON OTHER MEXICO 3Q19 Production 20 mboe/d net, 33 mboe/d net, 19 mboe/d net, - (Pro Forma) ~81% oil ~77% oil ~53% oil Key Assets Phoenix Pompano Ewing Bank 305/306 Zama Tornado Ram Powell Main Pass 72 Block 31 Boris Amberjack Castex Assets
Slide 11: 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
Slide 12: Mexico Core Area
Mexico Core Area Core Area Background Regional Map Talos was one of the first international companies to enter basin following energy reforms World-class Zama discovery in 2017 one of the largest shallow-water discoveries globally in last 20 years; awarded Global Discovery of the Year Highly s
Slide 13: Mexico Core Area – Block Zama Appraisal
Mexico Core Area – Block 7 Zama Appraisal 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
Slide 14: Financial Discipline
Financial Principles Conservative balance sheet, combined with low-risk developments and active hedging program Financial Discipline [xx] Low Leverage High Liquidity Minimize refinancing risk Low risk approach across Avoid excessive burdens Preserve flexibility Long maturity profile business Consi
Slide 15: 2020 Guidance – Summary Highlights
2020 Guidance – Summary Highlights 2020 Guidance Highlights Total Capital Expenditures by Type (%) Plugging & Expect significant positive free cash flow at $50 / $2 price deck Abandonment 13% Includes impact from recent acquisition from March 1st forward Continued focus on cost control resulti
Slide 16: Appendix
Appendix
Slide 17: Social and Corporate Responsibility
Social and Corporate Responsibility Talos strives to operate safely, responsibly and in a manner that protects the public and the environment Health Safety and Environment Community Involvement Leadership is committed to creating a strong HSE culture Employee-led Community Outreach team organize
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of net income (loss) to Adj. EBITDA and of Adj. Three Months Ended EBITDA to Adj. EBITDA excluding hedges ($ 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
Slide 19: 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
Slide 20: 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
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