Talos Energy has announced its operational and financial results for fiscal quarter ended September 30, 2024.
Recent Key Highlights
- Production of 96.5 thousand barrels of oil equivalent per day ("MBoe/d") (70% oil, 80% liquids), at the high-end of third quarter 2024 guidance range.
- Reduced debt by $100 million, bringing leverage to 0.9x*.
- Commenced drilling at the high-impact Katmai West #2 well in the Gulf of Mexico to further appraise the field, potentially adding additional proved reserves over the initial discovery well in the west fault block, Katmai West #1 well.
- Discovered commercial quantities of oil and natural gas at the Ewing Bank 953 well, with first production expected in mid-2026.
- Purchased a 21.4% non-operated working interest ("W.I.") in the Monument discovery located in the Walker Ridge area in the Gulf of Mexico.
- Re-completed the 100% Talos-owned Brutus A3 well yielding a peak production rate of over 30 million cubic feet per day ("MMcf/d").
- Improved 2024 production guidance with revised estimate of 91.0 – 94.0 Mboe/d and lowered 2024 capital expenditures guidance to $510 - $530 million.
Third Quarter Summary
- Revenue of $509.3 million, driven by realized prices (excluding hedges) of $74.72 per barrel for oil, $19.42 per barrel for natural gas liquids ("NGLs"), and $2.39 per thousand cubic feet ("Mcf") for natural gas.
- Net Income of $88.2 million, or $0.49 Net Income per diluted share, and Adjusted Net Loss* of $25.6 million, or $0.14 Adjusted Net Loss per diluted share*.
- Adjusted EBITDA* of $324.4 million.
- Capital expenditures of $118.9 million, excluding plugging and abandonment and settled decommissioning obligations.
- Net cash provided by operating activities of $227.0 million.
- Adjusted Free Cash Flow* of $121.5 million.
*See 'Supplemental Non-GAAP Information' for details and reconciliations of GAAP to non-GAAP financial measures.
Talos Interim President and Chief Executive Officer Joseph Mills stated, 'For the third quarter 2024, we are proud to report that we achieved another consecutive quarter of record production of 96.5 MBoe/d, along with strong Adjusted EBITDA and Adjusted Free Cash Flow. This is a testament to our team's focus on delivering results. Our solid cash flow generation enabled us to continue making strides in reducing our debt and attain 0.9x leverage, below our target leverage of 1.0x. We remain focused on paying down the balance of our debt under the Bank Credit Facility by year end 2024. Since closing the QuarterNorth acquisition in March 2024, we have repaid $425 million of debt, demonstrating our focus on maintaining a strong balance sheet and financial flexibility.
'Regarding our drilling and recompletion program, we are pleased with the results of the re-completion at the 100% Talos-owned Brutus A3 well in July 2024, which yielded a peak production rate of over 30 MMcf/d during the third quarter. We are also pleased about the previously announced Ewing Bank 953 well results in September 2024 and the acquired non-operated stake in the Monument deepwater discovery in August 2024. We logged better than expected rock properties at our Ewing Bank 953 well, which we anticipate will be producing by mid-2026. Our participation in the non-operated Monument project, a large deepwater oil and gas discovery in the Wilcox trend, presents an attractive post-FID subsea tie-back opportunity, including a potential drilling opportunity beyond the appraised discovery.
'Additionally, we recently began drilling the first of three consecutive high-impact subsalt wells utilizing the West Vela deepwater drillship, starting with the Katmai West #2 appraisal well in October 2024, to be followed by the Daenerys and Helm's Deep prospects in 2025. We are placing a strong emphasis on operational execution and capital discipline as we embark on a very important drilling campaign.
'I'm honored to have stepped in as interim CEO of Talos at the beginning of September 2024, allowing me the opportunity to work more closely with our highly skilled and talented employees to achieve these results. The Board, in partnership with an external search firm, is diligently searching for a new CEO who can build on Talos's strong foundation and lead the Company into its next phase of growth. I have the utmost confidence in our management team, Board, and the future direction and strategy of the Company. Talos's management team and Board are laser-focused on executing our strategic initiatives and maximizing long-term stockholder value. I'm pleased to be here to ensure a seamless transition until a permanent CEO is named.'
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Source: Talos Energy
