Talos Energy, Inc. · NYSE:TALO
Talos Energy — Pareto Securities E&P Independents Conference 2021
27 slides from Talos Energy's conference presentation, Mar 25, 2021
Slide 1: Pareto Securities E&P Independents Conference
Pareto Securities E&P Independents Conference March 25, 2021
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
OVERVIEW OF TALOS ENERGY 3
Slide 4: Talos Energy at a Glance
Talos Energy at a Glance Attractive Operating Profile >71 MBoe/d Year-End 2020 Production Exit Rate Talos Blocks ~70% Operated ~70% Liquids Mississippi Canyon ~70% Deepwater Consistently generate free cash flow with high margins and a leading cost profile Green Canyon Strong Credit Gulf of
Slide 5: Talos 2020 Accomplishments
Talos 2020 Accomplishments Operational Financial Social >$200 MM in operating and capital cost 2022 maturity of 2L Notes eliminated Recordable incident rate (TRIR) sustained savings vs. pro forma 2019 below GOM peer averages >$675 MM of capital markets activity Numerous completed drilling
Slide 6: Solid Fundamental Trends
Solid Fundamental Trends Since public listing, Talos has steadily improved fundamentals despite broader market challenges Proved Reserves (MMBoe) Avg. Daily Production (MBoe/d) Capital Expenditures ($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 ad
Slide 8: Substantial Acreage Position
Substantial Acreage Position Large and diverse acreage position provides broad future exploration opportunity set Key Takeaways Significant acreage position across known Gulf of Mexico geologies, including Pliocene, Miocene, Subsalt Miocene, Wilcox, etc. Although Talos holds over 800k primary te
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: Gulf of Mexico Basin Contributions
Gulf of Mexico Basin Contributions Jobs Impact of the Gulf of Mexico Oil and Gas Industry ~2 MILLION BOE/D PRODUCTION >345K JOBS ACROSS NATIONWIDE SUPPLY CHAIN >$28 BILLION U.S. GDP IMPACT 147,000 94,000 20,000 28,000 #2 CONTRIBUTOR TO THE U.S. TREASURY(1) Jobs Supported Jobs Supported Jobs Supporte
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 & 2021 Guidance
STRATEGY & 2021 GUIDANCE 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: 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 15: Leveraging Seismic to Develop Portfolio of Opportunities
Leveraging Seismic to Develop Portfolio of Opportunities Extensive seismic footprint provides advantage in evaluating prospects to improve results and reduce risk Seismic database covers ~45MM acres (70k square miles) across the Gulf of Mexico Footprint covers 90%+ of Talos operations and explor
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 Phoenix Complex 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
Slide 18: 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 Geophysics & Business Development Acquired GC-18 for <$15mm in 2018 Since acquiring as
Slide 19: 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 3 2 3 1 Substantial Regional Infrastructure 2 PHA Partners 3 Access for Future Exploration Mississippi Canyon assets
Slide 20: Zama – Appraisal Program Overview
Zama – Appraisal Program Overview Zama-2ST Zama-1 Zama-3 Pressure Samples Clearly delineated 185 reservoir and identified oil/water contacts for Zones 3- 47 5 and Zones 6-7 Pre-Appraisal Post-Appraisal Well test produced at ~7,900 boe/d, increasing confidence on field deliverability Logs 28 Ob
Slide 21: Zama – Forward-Looking Timeline
Zama – Forward-Looking Timeline Three-well appraisal program complete Unitization discussion with Pemex ongoing Consortium preparing to FID in before year-end 2021 Expect Zama resources to convert into Proved, Probable reserves upon FID 2019 2020 2021 2022 2023 2024 Appraisal Drilling 2 2ST
Slide 22: Talos Financial Principles
Talos Financial Principles Conservative balance sheet combined with calculated risk-taking and an 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
Slide 23: Solid Capital Structure
Solid Capital Structure Talos enters 2021 with high liquidity, low leverage and a key maturity refinanced 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 ~$550 MM Increas
Slide 24: 2021 Operational & Financial Guidance
2021 Operational & Financial Guidance Production: Guidance Details 2020A 2021E ― Modest growth from normalized 2020 results (~2%) ― Includes 1H impacts of Praline tie-in and platform rig construction at Oil (MMBbl) 13.7 15.7 – 16.6 Pompano as well as increased weather-related risking Natural Gas (
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Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three months ended Three months ended Three months ended Three months ended Reconciliation of net income (loss) to Adjusted EBITDA: ($MM) December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net income (loss) ($431) ($52) ($141) $158 Interest expense $23 $24 $26
Slide 27: Reconciliation of Net Debt
Non-GAAP Reconciliations Reconciliation of Net Debt ($MM): As of December 31, 2020 Bank Credit Facility - matures May 2022 $640 11.00% Second-Priority Senior Secured Notes - due April 2022 $347 7.50% Senior Notes - due May 2022 $6 Finance lease $62 Total Debt $1,055 Less: Cash and cash equivalent ($
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