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Dec 31, 2022
Talos Energy Q4 2022 Earnings Report
Announced operational and financial results for Q4 and full year 2022 and provided 2023 guidance.
Key Takeaways
Talos Energy announced its Q4 and full year 2022 results, highlighting a production of 56.6 MBoe/d, net income of $2.8 million, and adjusted EBITDA of $185.2 million. The company paid off its credit facility balance, achieving a leverage of 0.7x and liquidity of $846.5 million at year-end. Additionally, Talos expanded its CCS acreage in Southeast Texas.
Production of 56.6 thousand barrels of oil equivalent per day (“MBoe/d”).
Net Income of $2.8 million, or $0.03 Net Income per diluted share, and Adjusted Net Income of $16.6 million, or $0.20 Adjusted Net Income per diluted share.
Adjusted EBITDA of $185.2 million; Adjusted EBITDA excluding hedges of $242.3 million.
Paid off the balance of the Company’s credit facility, bringing leverage to 0.7x and liquidity of $846.5 million at year-end.
Talos Energy
Talos Energy
Forward Guidance
Talos Energy provided its 2023 operational and financial guidance, focusing on cash flow generation and key long-term projects. Production is expected to be between 72.0 and 76.0 MBoe/d, with oil and gas capital investments of $650 to $675 million and CCS investments between $70 and $90 million.
Positive Outlook
- Production between 72.0 and 76.0 MBoe/d, including 10.5 months of production from the recent EnVen acquisition.
- Oil and gas capital investments of $650 to $675 million focused on developing recent drilling successes.
- CCS investments between $70 and $90 million, which may grow as additional key milestones and further portfolio expansions are achieved.
- Expected production growth of approximately 20-25% between 2023 and 2026, or a compound annual growth rate (“CAGR”) of 6-8% per year over the same period.
- Capital allocation framework focused on continued debt reduction, investment in key Upstream and CCS catalysts, and providing a path towards returning capital to shareholders.
Challenges Ahead
- Talos elected to remove the gas-weighted Lisbon prospect from its 2023 drilling calendar despite its near-term potential production rate of approximately 8-10 MBoe/d.
- The closing date of the EnVen acquisition was February 13, 2023, therefore the transaction is contributing approximately 10.5 months of financial performance compared to an expected full year at the announcement of the acquisition in 2022.
- Operations on the Bulleit DTR-10 Sand recompletion recommenced in February 2023 following a successful fracture stimulation, including the running of an additional casing liner due to loop currents experienced in late 2022.
- Rigolets prospect in the second quarter of 2023; If successful, Rigolets would flow via subsea tieback to the Company’s Pompano platform with production achievable in the second half of 2024.
- Zama Field Development Plan (“FDP”). The partnership is targeting the submission of the FDP to the regulator by the March 23, 2023 deadline.