Talos Energy, Inc. · NYSE:TALO
Talos Energy — Merger or Acquisition (January 2023)
32 slides from Talos Energy's merger presentation, Jan 6, 2023
Slide 1: January 2023 Investor Presentation
Exhibit 99.1 January 2023 Investor Presentation
Slide 2: Important Information for Investors and Shareholders
Important Information for Investors and Shareholders Important Information for Investors and Shareholders This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed Merger, T
Slide 3: Cautionary Statements Regarding Forward-Looking Statements
Cautionary Statements Cautionary StatementRegarding Forward-LookingStatements 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 op
Slide 4: Who We Are
Who We Are Talos Energy is an innovative, § Conventional offshore focus industry-leading energy company focused on Exploration & Production § Carbon capture leadership and Carbon Capture & Sequestration. We are committed to leveraging § Strong cash flow generation profile our technical, operational
Slide 5: Building the Energy Company of Tomorrow
Building the Energy Company of Tomorrow GROWTH ADVANCEMENT A COMPLETE IN UPSTREAM OF CCS ENERGY COMPANY Providing safe and Executing large-scale Producing the energy responsible conventional decarbonization solutions needed today and energy resources for today to reduce industrial advancing low carb
Slide 6: Expansive Operational and Geological Footprint
Expansive Operational and Geological Footprint 2023 Exploitation River Bend Focus Area Emerging CCS CCS Site Bayou Bend Opportunities CCS Site Pompano Ram Powell Freeport LNG Amberjack CCS Site GC18 Talos Acreage High Talos Seismic Phoenix HP1 Productivity Fairway Emerging CCS Coastal Bend Project O
Slide 7: 3Q 2022 Highlights
3Q 2022 Highlights Advancing key catalysts while achieving the best credit profile in company history § ~$40 million in Adjusted Free Cash Flow (~$266 million YTD) § Record liquidity (>$800 million) and leverage (0.8x) § $140 million in RBL repayments; ~$450 million net debt reduction since “This wa
Slide 8: The Gulf of Mexico – A Significant National Resource
The Gulf of Mexico – A Significant National Resource One of the largest, most diverse and most prolific basins on Earth Top U.S. Basins by Daily Oil Production Large-Scale Operations from Majors, Independents, Privates 4,500 500 4,000 450 3,500 Second largest oil-producing 400 basin in the United St
Slide 9: A Leading Environmental & Emissions Story
A Leading Environmental & Emissions Story GOM Deepwater is an emissions-leading basin; Talos is advancing its long-term GHG goals GHG Intensity by Global Resource Type Talos Scope 1 GHG Intensity Targets (MT CO Equivalent/MBoe) (Gross Operated Production, MT CO Equivalent/MBoe) 2 2 25.0 80 30% Base
Slide 10: 2022 ESG & TCFD Report Highlights
2022 ESG & TCFD Report Highlights ― Increased alignment with UN SDGs, GRI, and SASB ― First ever Climate Risk & Opportunities report aligned with TCFD ― Expanded ESG Reporting: NOX/SOX/VOC emissions, energy use, water use, hazardous waste, near miss frequency and average training hours data ― Scope
Slide 11: Positive Impacts from the Inflation Reduction Act
Positive Impacts from the Inflation Reduction Act Offshore Lease Sale Implications Ram Powell VK 988 § Reinstates winning bids from Lease Sale 257 § Talos was one of most active bidders (high bidder MC 68 Pompano on 10 blocks totaling 57k gross acres) MC 69 § Requires holding previously cancelled Gu
Slide 12: Catalysts Driving Future Value Creation
Catalysts Driving Future Value Creation Development & Exploration Pipeline Access to major catalysts is a unique differentiator for Talos and provides the basis for exceptional Unprecedented long-term value creation M&A Opportunity Low Carbon Initiatives 12
Slide 13: Talos Approach to Organic Drilling Opportunities
Talos Approach to Organic Drilling Opportunities Regional Seismic Database Talos utilizes seismic technology 3 Value- and M&A to build value through High- Focused M&A Impact Exploration drilling opportunities across the full asset lifecycle. Full Lifecycle 2 Asset Investment Management on Acquired S
Slide 14: Current Drilling Inventory Locations
Current Drilling Inventory Locations Ram Powell Pompano Project Inventory Amberjack 30 Development 36 97 Projects Exploitation 2022 Pompano Exploration Rig Program 31 Coelacanth Delta House 2022 Open Talos Facility GC 18 Water Program Other Key Facility Talos Seismic Phoenix HP1 Selected Project Pro
Slide 15: Lime Rock & Venice Discoveries
Lime Rock & Venice Discoveries Key Highlights § Talos acquired Ram Powell in 2018; Ram Powell Lime Rock / field had produced ~250 MMBOE Venice § Executed multiple asset management projects to increase production, reduce costs rd § Began hosting nearby 3 party Venice discovery, generating material PH
Slide 16: Lime Rock Discovery – Exploitation
Lime Rock Discovery – Exploitation Upper Miocene Exploitation Discovery Seismic Overview Key Data Points Lime Rock Spud Date 4Q 2022 Wellbore Expected First Oil 1Q 2024 M66 Sand Est. Resource (Gross MMBOE) 10 – 15 (48% Oil) 78’ net pay Est. Initial Rate (Gross MBOE/D) 8 – 10 Reservoir Depth (Feet TV
Slide 17: Venice Discovery – Exploitation
Venice Discovery – Exploitation Exploitation Discovery Identified via Advanced Seismic Analysis Seismic Overview Key Data Points Venice RAM POWELL Spud Date 4Q 2022 Wellbore FIELD Expected First Oil 4Q 2023 Est. Resource (Gross MMBOE) 10 – 15 (34% Oil) Est. Initial Rate (Gross MBOE/D) 8 – 10 M62 San
Slide 18: M&A Track Record and Opportunity Set
M&A Track Record and Opportunity Set Talos has a solid history of successful acquisitions and is well-positioned to execute on future opportunities Talos Track Record Current M&A Landscape § 12 acquisitions since inception§ >$100 billion in divestments targeted by Super Majors alone by 2025 § Proven
Slide 19: EnVen Transaction Overview
EnVen Transaction Overview Petronius Pompano Amberjack Contiguous operated asset portfolio provides hand-in-glove fit in deepwater Ram Powell Gulf of Mexico core areas Cognac Lobster Transaction closing expected by early February 2023 Prince GC18 Increases Scale and Diversity Talos Acreage/Facility
Slide 20: Applying Expertise Towards CCS
Applying Expertise Towards CCS E&P CCS Complementary Skill Sets Conventional Reservoir Expertise, G&G Team Significant Gulf Coast / GOM Presence Vast Seismic Database Established Operator & Project Mgmt. Capabilities Strong HSE Track Record Business Development and Commercially Driven 20
Slide 21: 2023 CCS Goals
2023 CCS Goals Fortifying, Expanding and Advancing the Business § Enhance existing portfolio and increase storage capacity in existing project areas § Expand partnerships in existing project areas § Progress permitting and front-end engineering design (“FEED”) workstreams § Advance and execute activ
Slide 22: Talos CCS Project Portfolio
Talos CCS Project Portfolio: 800 Million MT CO Storage 2 Supporting 150 MTPA of regional emissions on ~80,000 acres 3 1 River Bend (30%) Gulf of Bayou Bend Mexico 2 (25%) Freeport LNG (50%) Coastal Bend (50%) 1. Bayou Bend 2. Freeport LNG 3. River Bend 4. Coastal Bend Industrial Region Beaumont / Po
Slide 23: Bayou Bend CCS
Bayou Bend CCS Beaumont Key Highlights § Country’s first and only major offshore CCS project, Sabine operated by Talos Lake § High volume of major emissions sources in close proximity to storage site lease Port Arthur ~30 MM MTPA § CCS-As-A-Service model: transportation, sequestration and monitoring
Slide 24: Illustrative CCS Commercial & Economic Considerations
Illustrative CCS Commercial & Economic Considerations Large-scale projects and contracted cash flows with high visibility Incentives Estimated Capture Cost by Industry ($/tonne) § Federal tax credits and direct pay provisions New, Expanded 45Q Credit $100 for Dedicated Storage § State Programs $90 §
Slide 25: Beyond Net Zero
Beyond Net Zero PERMANENTLY Executing Decarbonization for Industrial Partners SEQUESTERED CO (MMTPA) 2 § At full scale, Talos CCS will permanently 20.0+ sequester >50x the annual emissions of its Upstream operations § Talos CCS plans to contribute to broad industrial decarbonization well beyond its
Slide 26: Financial Principles
Financial Principles We aim to maximize shareholder value through disciplined investments, healthy credit and responsible risk management. Our key financial principles include: § Appropriate capital reinvestment with positive Adjusted Free Cash Flow generation § Maintain low leverage and high liquid
Slide 27: Current Capitalization & Balance Sheet Trends
Current Capitalization & Balance Sheet Trends Prioritizing financial health, stability and successful long-term value creation Capitalization Summary ($MM) Liquidity ($MM) $900 Tranche 9/30/22 Maturity $807 $800 $702 RBL Facility ($1,500 BB, $965 Commitments PF EnVen) $60 Mar. 2027 $673 Pandemic $70
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Slide 29: Appendix
APPENDIX 29
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ thousands, except per Boe) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Reconciliation of net income (loss) to Adjusted EBITDA: Net Income (loss) $ 250,465 $ 195,141 $ (66,441) $ 81,012 Interest expense 29,265 30,776 31,490 33,102 I
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ thousands) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Reconciliation of Adjusted EBITDA to Adjusted Free Cash Flow (before changes in working capital) Adjusted EBITDA $ 197,560 $ 250,777 $ 208,213 $ 190,378 Less: Capital Expenditures and Plugging &
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Reconciliation of Net Debt ($ thousands) 12.00% Second-Priority Senior Secured Notes – due January 2026 $ 650,000 $ 650,000 $ 650,000 $ 650,000 7.50% Senior Notes – due May 2022 — — 6,060 6,060 Bank Credit Fac