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Sep 30, 2022
Talos Energy Q3 2022 Earnings Report
Announced third quarter 2022 operational and financial results.
Key Takeaways
Talos Energy reported a net income of $250.5 million and revenue of $377.1 million for the third quarter of 2022. The company repaid $140.0 million in credit facility borrowings and achieved record liquidity of $806.8 million.
Production of 53.0 MBoe/d (67% oil, 75% liquids), inclusive of planned maintenance downtime.
Revenue of $377.1 million, driven by realized prices of $90.73 per barrel for oil.
Net Income of $250.5 million, or $2.99 Net Income per diluted share.
Repaid $140.0 million in credit facility borrowings and achieved record liquidity of $806.8 million and leverage of 0.8x.
Talos Energy
Talos Energy
Forward Guidance
Talos has provided production guidance for the fourth quarter of 2022 as well as an update on guidance related to full year 2022 production, cash operating expenses, general and administrative expenses and capital expenditures (inclusive of plugging and abandonment).
Positive Outlook
- Production for the fourth quarter of 2022 is expected to be 56.0 - 57.0 MBoe/d.
- Capital Expenditures for the fourth quarter of 2022 is expected to be $170-$180 million, inclusive of plugging and abandonment.
- The company expects to close our acquisition of EnVen around year end.
- The transaction adds material scale to our business, both in terms of production and operated infrastructure, while also diversifying our production across a broader asset base.
- The acquisition lowers Talos’s Scope 1 GHG Emissions Intensity and will be a catalyst to de-classify Talos’s Board of Directors and enhance its independence to better align with shareholder interests.
Challenges Ahead
- Production for the fourth quarter of 2022 is expected to be inclusive of the impact of 3.5 - 4.0 MBoe/d of downtime associated with ongoing loop currents, Odyssey pipeline maintenance, unplanned maintenance at the third-party operated Delta House facility, timing of the Bulleit recompletion and lower royalty relief on natural gas production as a result of higher realized prices throughout 2022.
- Utilizing fourth quarter 2022 production guidance, full year 2022 production is expected to be modestly below the low end of Talos’s original guidance range.
- Cash operating expenses and General & Administrative expenses for the full year 2022 are expected towards the upper half of the originally guided ranges of $300 - $320 million and $68 - $73 million, respectively.
- Capital Expenditures for the full year 2022 is expected towards the high end of the originally guided range of $450 - $480 million.
- Production from one of the Company’s Tornado wells generated increased water volumes during the third quarter primarily as a result of the ongoing sub-surface water flood project in the Phoenix Field.