Talos Energy, Inc. · NYSE:TALO

Talos Energy — Stephens Investment Conference 2021

36 slides from Talos Energy's conference presentation, Dec 1, 2021

1. Slide 1: Stephens Investment Conference

   December 1-3, 2021 Stephens Investment Conference

2. Slide 2: Cautionary 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

3. Slide 3: Talos Energy Mission & Corporate Evolution

   Talos Energy Mission & Corporate Evolution Talos is committed to leveraging its technical, operational and commercial expertise to help supply society’s growing need for secure, affordable energy while being responsible global citizens and building value for all stakeholders. The Company has an esta

4. Slide 4: Building A Leading Independent Energy Company

   Building A Leading Independent Energy Company Louisiana Texas CCS Attractive Operating Profile Opportunities  64 – 66 MBoe/d (4Q 2021E)  >75% Liquids Texas GLO Carbon Capture Site  >70% Deepwater  >65% Operated Freeport LNG Carbon Capture Site  High-quality, diverse producing asset base Talos A

5. Slide 5: A Unique and Attractive Energy Investment Case

   A Unique and Attractive Energy Investment Case Management  Basin experts with >100 years of experience across three start-ups and multiple commodity cycles Strategy  Differentiated offshore, conventional resource company and one of the largest independents in the basin  >240 MM Boe (Proved + Prob

6. Slide 6: Solid Fundamental Trends

   Solid Fundamental Trends Since public listing, Talos has maintained strong fundamentals despite broader market challenges Avg. Daily Production (MBoe/d) Commentary 70 ~63 60 52 55  Since its public listing in May 2018, Talos has 50 46 expanded reserves, increased production and 40 maintained discip

7. Slide 7: Compelling Equity Upside Story

   Compelling Equity Upside Story Talos trades at a significant discount to fundamental value despite solid execution and a strong credit profile NAV excludes any value from:  Probables: Primarily performance- based (no additional capital required); PV-10 of ~$1.5 BN at $65/$3 (net)  Carbon Capture:

8. Slide 8: Increasing Public Ownership and Trading Liquidity

   Increasing Public Ownership and Trading Liquidity Legacy private equity investors are exiting 2012 Talos investment in orderly process  Significant increase in trading liquidity and volume; now regularly trades > 1.0 MM shares per day  Apollo and Riverstone approaching 10 years successfully invest

9. Slide 9: Gulf of Mexico Technical & Commercial Differentiators

   Gulf of Mexico Technical & Commercial Differentiators The Gulf of Mexico has remained a prolific basin for decades, yet continues to offer new frontiers Continued Large Basin  Large Geological Column Prospect with World Generation Class Rock Properties  Huge Resource Potential  Ample Infrastructu

10. Slide 10: Emissions-Focused In An Emissions-Leading Basin

    Emissions-Focused In An Emissions-Leading Basin GOM emissions intensity is among the lowest in oil basins worldwide, and Talos is committed to lowering operated emissions GHG Intensity by Region Talos GHG Intensity (MT CO2 Equivalent/MBoe) (Gross Operated Production, MT CO2 Equivalent/MBoe) 25.0 80.

11. Slide 11: Talos Strategic Approach to Full Lifecycle Management

    Talos Strategic Approach to Full Lifecycle Management 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 transactions Invest in reco

12. Slide 12: Inventory Overview – Generic Project Categorization

    Inventory Overview – Generic Project Categorization  Talos prioritizes a balance of project risk, impact, cost and cycle time in developing its capital planning for future periods  As project risk increases, Talos generally targets a lower working interest, thereby increasing the number of net pro

13. Slide 13: 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 In-Field Drilling: Green Canyon 18 2 Exploitation: Phoenix Complex 3 High Impact Exploration: Puma West  Acquired GC-18 for <

14. Slide 14: Catalysts: Puma West Discovery

    Catalysts: Puma West Discovery Pompano Ram Powell Project Overview Amberjack  High-impact test of sub-salt Miocene exploration targets  Located on Talos-controlled acreage; farmed-in bp and GC 18 Delta House Chevron in 2019  Middle and Lower Miocene objectives in close proximity to HP-1 bp’s Mad

15. Slide 15: Catalysts Driving Future Value Creation

    Catalysts Driving Future Value Creation Development & Exploration Pipeline Access to major catalysts is a unique differentiator for Talos Unprecedented and provides the basis M&A Opportunity for exceptional long-term value creation Low Carbon Initiatives 15

16. Slide 16: Catalysts: High-Impact Exploration

    Catalysts: High-Impact Exploration Talos possesses the capability, acreage and prospects to generate significant value through future drilling Gulf of Mexico Geologic Ages Well-Positioned to Execute Norphlet Talos holds a strategic position in every major Venice geological trend in the basin: Polyph

17. Slide 17: Significant Acreage & Prospect Additions

    November 2021 Lease Sale Additions Significant Acreage & Prospect Additions VK 988 Ram Powell  57,600 gross / 36,720 net acres MC 68 Pompano MC 69  Close proximity to Talos infrastructure and discoveries Amberjack  Added numerous prospects across MC 31 size/risk spectrum for future evaluation GC

18. Slide 18: Catalysts: Global M&A Opportunity

    Catalysts: Global M&A Opportunity Opportunity Set North  Consolidation driven by: Sea ― Record divestment targets ― Long-dated private investments ― Push for scale and cost-efficiency Gulf of Mexico ― Limited universe of well-positioned consolidators The M&A Landscape Atlantic  >$100 billion in di

19. Slide 19: Catalysts: Gulf Coast CCS Market Opportunity

    Catalysts: Gulf Coast CCS Market Opportunity Industrial emitters are concentrated along the Gulf Coast, adjacent to huge storage capacity and infrastructure America’s Industrial Epicenter  Critical power gen., industrial and petrochemical corridor  100+ facilities emitting >1,000,000 tons of CO2 p

20. Slide 20: CCS is a Natural Fit for Talos

    CCS is a Natural Fit for Talos Talos is building a large-scale decarbonization solutions business  Among many energy transition initiatives, CCS stands out as actionable in today’s technological, economic and political environment  Talos’s core skills are well-suited for a fully-integrated carbon

21. Slide 21: Carbon Capture and Storage Value Chain

    Carbon Capture and Storage Value Chain CCS leverages Talos’s transferrable skills to mature project opportunities along the decarbonization value chain Cluster of 3rd Party Midstream Central Onshore Industrial CO2 Sources Transport Collection Hub Storage Hub CCS Value Chain 3 1 Capture & Consolidate

22. Slide 22: CCS Partnerships & Strategic Alliances

    CCS Partnerships & Strategic Alliances Carbonvert Storegga Geotechnologies TechnipFMC  Exclusive partner for Texas GLO  Exclusive joint venture to originate  Long-term alliance to develop and carbon transport and storage and mature CCS opportunities deliver technical and commercial project along

23. Slide 23: CCS Project Types

    CCS Project Types Emerging CCS opportunities are diverse and numerous  Gulf Coast CCS opportunities can broadly be characterized into two key categories  Talos is actively evaluating opportunities in both categories, with opportunities for impactful projects in both Regional Hub Point Source Sourc

24. Slide 24: Regional Hub Project – Texas GLO Carbon Storage Site

    Regional Hub Project – Texas GLO Carbon Storage Site Talos Will Operate the First Major Offshore Carbon Storage Hub in the United States Beaumont Key Highlights Port Arthur  Selected from 12 bids as sole winning bidder partnership with Carbonvert; minimal initial payments Houston  Talos identified

25. Slide 25: Point Source Project - Freeport LNG CCS

    Point Source Project - Freeport LNG CCS A Win-Win point source CCS solution for one of the world’s largest LNG facilities  LOI executed to develop local CCS project adjacent to Freeport’s liquefaction and export facilities ~60 miles south of Houston, TX  Base project to capture, transport, store F

26. Slide 26: Talos Carbon Capture and Storage Vision

    Talos Carbon Capture and Storage Vision Talos aims to build a multi-project, full-scale CCS business along the US Gulf Coast Today Next 12 Months Next 5 Years  Established partnerships with Carbonvert,  3-4 identified storage sites across the  Numerous storage sites spanning Storegga and TechnipF

27. Slide 27: 2021 Operational & Financial Guidance

    2021 Operational & Financial Guidance Production 2020A 2021E As of November 3, 2021  Expect 2021E production at low end of guidance range (~63 MBoe/d), inclusive of 10-12 MBoe/d of Hurricane Ida deferrals in 3Q 2021 Oil (MMBbl) 13.7 15.7 – 16.6  Expect 4Q 2021 production of 64-66 MBoe/d  Includes

28. Slide 28: Talos Capital Allocation Priorities

    Talos Capital Allocation Priorities Prioritizing financial health, stability and successful long- term value creation  Return to ~1.0 – 1.5x leverage target and pre-pandemic financial posture, expected in 2022  Disciplined and risk-balanced capital reinvestment in Upstream business  Measured capi

29. Slide 29: Solid Capital Structure

    Solid Capital Structure Talos maintains high liquidity, low leverage and no major maturities for ~3 years 2021 Actions Key Credit Statistics  Reduced borrowing base utilization to <50% by paying $235MM back to ~$375 MM lenders ― Following the 2L refinancing, paid back $65MM out of operating cash fl

30. Slide 30: Talos Investment Case Highlights

    Talos Investment Case Highlights MANAGEMENT TRACK RECORD OF SUCCESS STRONG, OIL-LINKED MARGINS AND CONSISTENT FREE CASH FLOW GENERATION HEALTHY CREDIT PROFILE SOLID, DIVERSE INVENTORY OF ATTRACTIVE INVESTMENT OPPORTUNITIES SKILL SETS TO DIVERSIFY AS CARBON CAPTURE AND STORAGE LEADER CATALYSTS TO DRI

31. Slide 31: Appendix

    APPENDIX 31

32. Slide 32: Illustrative CCS Project Timelines

    Illustrative CCS Project Timelines Year 1 Year 2 Year 3 Year 4 Year 5 Project Quarter Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Point Source Project FEED Work Stratigraphic Well Test Class VI Permitting Project FID Construction & Wells First Injection Regional Hub Project FEED Work

33. Slide 33: Catalysts: Zama

    Catalysts: Zama Zama carries significant point-forward value that in any case is not reflected in the current valuation Mexico Accomplishments Unitization Updates  First and only successful entrant in initial 2015 bid  Zama unitization agreement and development plan are round main gating items to

34. Slide 34: 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 ‒ Very low incident rate compared to all economic sectors; below GOM averages FOCUS

35. Slide 35: Sensitivity of PV-10 At Various Oil Prices

    Sensitivity of PV-10 At Various Oil Prices $/Bbl WTI SEC $55.00 $60.00 $65.00 $70.00 $75.00 PDP $2,097 $2,445 $2,724 $3,012 $3,293 $3,571 PDNP $495 $616 $704 $791 $881 $969 Total Proved Developed $2,592 $3,061 $3,428 $3,803 $4,174 $4,539 Proved Undeveloped $128 $190 $234 $281 $324 $371 Total Proved

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