Talos Energy, Inc. · NYSE:TALO
Talos Energy — Q4 2024 Earnings Presentation
34 slides from Talos Energy's earnings presentation, Feb 27, 2025
Slide 1: 4Q 2024 Earnings Conference Call & Webcast
4Q 2024 Earnings Conference Call & Webcast February 27, 2025 www.talosenergy.com NYSE: TALO 1
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statements In addition, we use the terms "estimated resource potential," "estimated resource," "total recoverable resource potential" and "estimated The information in this presentation includes “forward-looking statements” within the meaning of Section 27A of the Se
Slide 3: Talos Has a Differentiated Offshore Strategy
Talos Has a Differentiated Offshore Strategy LA TX FL • High margin oil weighted production Offshore Gulf of America • High quality and stable asset base • Infrastructure focused Gulf of America • Short cycle offshore drilling inventory • Capital discipline MEXICO • Free cash flow generator Zama Mex
Slide 4: 4Q and Recent Financial and Operational Highlights
4Q and Recent Financial and Operational Highlights 4Q 2024 RECENT HIGHLIGHTS 98.7 MBOE/D 70% / 79% Beat 2024 quarterly consensus on production, Adj. Average Daily Production Oil / Liquids EBITDA and Adj. FCF for fourth consecutive quarter Paid off RBL and lowered leverage to 0.8x(1) Ended the year w
Slide 5: Beating Expectations Every Quarter in 2024
Beating Expectations Every Quarter in 2024 1Q 2024 2Q 2024 3Q 2024 4Q 2024 $267.5 $77.7 $344.0 $148.0 $324.4 $121.5 98.7 $361.8 $164.0 79.6 95.5 96.5 +7% +10% +24% +38% +1% +11% +41% +4% +11% +3% +1% +1% $251.1 $312.7 $312.9 93.3 $70.1 94.6 $327.0 78.7 $119.6 97.8 $87.9 $116.0 Production Adj. EBITDA
Slide 6: Talos Ranks in the Top Quartile of Public E&P Companies for EBITDA Margin
Talos Ranks in the Top Quartile of Public E&P Companies for EBITDA Margin(1) One of the highest EBITDA/BOE margins in the E&P sector – 4Q 2024: ~$40 per BOE 4Q 2024E EBITDA Margin 2024E EBITDA Margin (Consensus) ($/BOE) (Consensus) ($/BOE) $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $0 $5 $10 $15 $20
Slide 7: Capital Discipline and Scale Provides Free Cash Flow
Capital Discipline and Scale Provides Free Cash Flow 2024 Adj. Free Cash Flow ($ Millions) • Obtained scale from previous $600 transactions $164.0 $511.2 $500 • Stable asset base does not require high re-investment rate $400 • Free cash flow generation $121.5 underpinned by a high-quality asset $300
Slide 8: Committed to Financial Discipline, Low Leverage, and Building a Solid Foundation for Growth
Committed to Financial Discipline, Low Leverage, and Building a Solid Foundation for Growth Achieved Total Debt Paydown Objective Debt Balance ($ Millions) $2,000 $1,800 $1,800 • Reduced $125 MM of debt in 4Q 2024 $1,600 $1,400 $1,375 • Repaid RBL balance $1,200 ($425) ($125) $1,250 $1,142 • Ended Y
Slide 9: 2025 Upstream Investments
2025 Upstream Investments Highlights • Upstream CAPEX: $500 - $540 MM • Production Guidance 90 - 95 MBOE/D P&A 18% • P&A, Decommissioning: $100 - $120 MM Investment in Mexico • Balanced mix of development, exploitation and 2% exploration projects • Ordering long-lead equipment for Monument and Cap G
Slide 10: 2025 Operational and Financial Guidance
2025 Operational and Financial Guidance • 2025 focus on operational execution, financial discipline, and free cash flow generation • 1Q 2025 production guidance 99 - 101 MBOE/D • Expect Free Cash Flow in 2025 2025E Guidance Oil (MMBBL) 22.7 – 24.0 Natural Gas (BCF) 41.9 – 44.3 Production NGL (MMBBL)
Slide 11: 2025 Production Guidance Considerations
2025 Production Guidance Considerations 2025E Average Daily Production (MBOE/D) • Talos’s 2025 guidance accounts for expected production impacts, 100.0 – 105.0 including maintenance, third- party projects, and timing- related considerations ~(6.0) • Key 2025 major planned downtime events include Kat
Slide 12: 2025 Proposed Drill Calendar
2025 Proposed Drill Calendar 2024 2025 Prospect Category Host Facility 4Q 1Q 2Q 3Q 4Q Brutus Platform Development Brutus Rig Prep Katmai West #2 Exploitation Tarantula Drilling Comp Daenerys Exploration TBD Drilling Sunspear Exploitation Prince Comp ` Unnamed Well – GOA(1) Exploitation TBD Drilling
Slide 13: Strategic Drilling Campaign
Strategic Drilling Campaign Ewing Bank 953 1 Est. Gross Resource Potential: 15 - 25 MMBOE(1) Host Facility: Megalodon Gulf of America Katmai Area Shelf 2 Talos Operated Est. Gross Resource Potential: up to 200 MMBOE(1) Host Facility: Tarantula 1 Daenerys 2 3 Talos Operated Host Facility: TBD Monumen
Slide 14: Katmai West #2 Adds Material Proved Reserves
Katmai West #2 Adds Material Proved Reserves Tarantula Strategic Elements Lower Miocene Structure Map Talos: 100% WI Katmai West #2 • Katmai West #2 well was drilled significantly under budget and a month Katmai West #1 faster than expected to a true vertical Katmai West #2 Producing depth of ~27,00
Slide 15: Sunspear Discovery
Sunspear Discovery Strategic Elements Structure Map Prince • Successful exploitation well discovered Sunspear 149 ft of net oil pay in main target ~350 Pay Sand • High reservoir pressure and excellent A’ Acres fluid properties will produce strong initial Sunspear flow rates (GC 78 SS2) GC 78 SS2 • W
Slide 16: High-Impact Subsalt Miocene Exploration Opportunity
Daenerys High-Impact Subsalt Miocene Exploration Opportunity Strategic Elements Lower Miocene Structure Map TBD • Farm-in transaction covering 23,000 gross acres • Large Middle and Lower Miocene 4-way turtle structure • Evaluating several host facility options Proposed Location • Expected to drill i
Slide 17: Acquisition of Major Discovery with Material Resource Life
Monument – High-Impact Subsalt Wilcox Discovery Acquisition of Major Discovery with Material Resource Life Strategic Elements Wilcox Structure Map 2P Reserves Shenandoah • Wilcox discovery with two well penetrations (FID Feb 2024) • Good seismic image, faulted 4-way Discovery Well WR 271 #1 Future P
Slide 18: 2024 Score Card
2024 Score Card Beat 2024 quarterly consensus every quarter on record production, Adj. EBITDA and Adj. FCF Closed QuarterNorth acquisition and completed QuarterNorth integration Driving value for Talos Employed capital discipline, leading to Adj. FCF(1) of $511 MM year-to-date Accreting value to sha
Slide 19: Appendix
Appendix 19
Slide 20: YE 2024 SEC Proved Reserves
YE 2024 SEC Proved Reserves Talos SEC Reserves PF SEC PV-10(1) (MMBOE) ($BN) PDP 109 $2.8 PDNP 41 $0.7 PUD 44 $0.6 Total Proved (Net of P&A) 194 $4.2 Total Probable (Net of P&A) 125 $3.0 Product Mix Category Mix Proved PV-10 19% 15% 23% 7% 194 194 17% $4.2 MMBOE MMBOE BN 68% 74% 77% Oil NGL Gas Prov
Slide 21: Significant Shareholder Value From Proved Reserves and Probable Resources
Significant Shareholder Value From Proved Reserves (1P) and Probable Resources (2P) YE 2024 Reserves at SEC Pricing $76.32 Oil / $2.13 Gas 2P Product Mix MATERIAL UPSIDE $6,000 Net PV-10 inclusive of from Proved Reserves (1P) PV-10 ARO then deducted 20% $5,226 NAV Value to current valuation $5,000 $
Slide 22: Sub-Salt Amplitude Exploitation Opportunity
Helm’s Deep Sub-Salt Amplitude Exploitation Opportunity Strategic Elements Structure Map TBD • Exploitation prospect targeting Subsalt Upper Miocene sands • Strong amplitude support with SALT positive Class III AVO and downdip conformance • Analogous to GC 390/478 Khaleesi/Mormont and GC 943 SALT Wi
Slide 23: Wilcox Trend – A Prolific and Well-Established Growing Play
Wilcox Trend – A Prolific and Well-Established Growing Play Anchor (CVX) Green Canyon LOUISIANA Garden 20K Installation TEXAS Total Recoverable Up to 440 MMBO Resource Potential(1) Banks Productive Capacity 75 MBO/D Gulf of America Shelf Dunharrow Sparta Shenandoah Yucatan Coronado Cascade Monument
Slide 24: Conventional Offshore Well Profiles
Conventional Offshore Well Profiles Outstanding Conventional Rock Properties Allow for Lower Decline Rates and Extraordinary Production Rates • Differences from Unconventional (Shale) Onshore Benefits in the Gulf of America • Every offshore reservoir is unique in geologic • ~80% of economics returne
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ Thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Reconciliation of Net Income (Loss) to Adjusted EBITDA: Net Income (loss) $(64,508) $88,173 $12,381 $(112,439) Interest expense $41,536 $46,275 $48,982 $50,845 Income tax expen
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended ($ Thousands, except for BOE amounts) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Reconciliation of Adjusted EBITDA to Adjusted EBITDA excluding CCS: Adjusted EBITDA $361,814 $324,359 $343,984 $257,676 CCS Costs: Equity method investm
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Twelve Months Ended ($ Thousands) December 31, 2024 December 31, 2024 Reconciliation of General & Administrative Expenses to Adjusted General & Administrative Expenses excluding CCS: Total General and administrative expense $41,563 $201,517 CCS Segment $(5
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Twelve Months Ended ($ Thousands) December 31, 2024 December 31, 2024 Reconciliation of Adjusted EBITDA to Adjusted Free Cash Flow excluding CCS (before changes in working capital): Adjusted EBITDA $361,814 $1,287,833 Upstream Capital expenditures $(129,88
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Twelve Months Ended ($ Thousands) December 31, 2024 December 31, 2024 Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow excluding CCS (before changes in working capital): Net cash provided by operating activities(1) $34
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended, December 31, 2024 Twelve Months Ended, December 31, 2024 ($ Thousands, except per share amounts) Basic per Share Diluted per Share Basic per Share Diluted per Share Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss): Net Income (loss) $(64,
Slide 31: Reconciliation of PV-10 to Standardized Measure
Reconciliation of PV-10 to Standardized Measure Reconciliation of PV-10 to Standardized Measure Reconciliation of PV-10 to Standardized Measure PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ Thousands) December 31, 2024 Reconciliation of Net Debt: 9.000% Second-Priority Senior Secured Notes – due February 2029 $625,000 9.375% Second-Priority Senior Secured Notes – due February 2031 $625,000 Bank Credit Facility – matures March 2027 — Total Debt $1,250,000 Les
Slide 33: Talos Hedge Book as of February 20, 2025
Talos Hedge Book as of February 20, 2025 Instrument Type Avg. Daily Volume W.A. Swap W.A. Floor W.A. Ceiling Crude – WTI (BBLs) (Per BBL) (Per BBL) (Per BBL) January - March 2025 Fixed Swaps 36,917 $72.81 — — Collar 3,000 — $65.00 $84.35 April - June 2025 Fixed Swaps 38,000 $73.45 — — July - Septemb
Slide 34: www.talosenergy.com NYSE: TALO
www.talosenergy.com NYSE: TALO 34