Talos Energy Q2 2022 Earnings Report
Key Takeaways
Talos Energy reported a strong quarter with rapid debt reduction, record-breaking revenue, and cost control efforts, achieving the lowest leverage multiple and highest liquidity in the company's history.
Production of 65.4 MBoe/d (67% oil, 75% liquids).
Revenue of $519.1 million, driven by realized prices of $108.03 per barrel for oil, $37.79 per barrel for NGLs and $8.00 per Mcf for natural gas.
Net Income of $195.1 million, or $2.33 Net Income per diluted share, and Adjusted Net Income of $100.6 million, or $1.20 Adjusted Net Income per diluted share.
Free Cash Flow (before changes in working capital) of $134.1 million.
Talos Energy
Talos Energy
Forward Guidance
Talos expects to spud the Puma West appraisal well early in the fourth quarter and is closely monitoring recent legislative developments regarding the Inflation Reduction Act.
Positive Outlook
- Initiating operated open water rig program testing high-impact drilling opportunities in the second half of the year.
- Expecting to spud Puma West appraisal well early in the fourth quarter.
- Closed the Bayou Bend transaction with Chevron and Carbonvert, welcoming Chevron into the joint venture.
- Expect to spud the first stratigraphic evaluation well this year to expedite the EPA Class VI permitting process.
- Actively working with Pemex and its Block 7 partners to finalize the Zama Field Development Plan, targeting submission to CNH latest by March 2023.
Challenges Ahead
- HP-1 vessel mobilizing to shore for regulatory-required maintenance, resulting in 6.0 – 9.0 MBoe/d of deferred production in Q3.
- Planned third-party midstream downtime and other miscellaneous planned downtime activities to result in 4.0 – 5.0 MBoe/d of deferred production in Q3.
- Majority of hurricane downtime impact is typically incurred in the third quarter.
- Seville exploitation well failed to discover commercial quantities of hydrocarbons in late July.
- Inflation Reduction Act has not been passed in the U.S. Senate and any final legislation may be different from the legislative text that is currently proposed.