Talos Energy Inc. (TALO) 10-K Annual Report Thu Mar 12 2020

Houston, Texas, March 11, 2020 – Talos Energy Inc. (“Talos,” or the “Company”) (NYSE: TALO) today announced its financial and operational results for the fourth quarter of 2019 and provided an operations update. Additionally, in response to recent commodity price trends, the Company will reduce its previously announced 2020 spending guidance by more than $125 million. Inclusive these reductions, Talos expects to remain free cash flow positive for 2020 with average WTI prices of $30 per barrel or higher. Specific details of the revised 2020 guidance will be disclosed in the coming weeks.

Key fourth quarter of 2019 highlights:

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Net Income of $0.3 million ($0.01 earnings per share – diluted) for the fourth quarter and Adjusted Net Income⁽¹⁾ of $71.6 million ($1.31 adjusted earnings per share – diluted) in the fourth quarter of 2019.

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Production of 54.0 thousand barrels of oil equivalent per day (“MBoe/d”) in the fourth quarter, of which 73% was oil and 79% was liquids.

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Average realized prices of $57.65/Bbl of oil in the fourth quarter, net of transport and quality deductions, or $0.83/Bbl above the average WTI benchmark price of $56.82/Bbl during the same period.

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Adjusted EBITDA⁽¹⁾ of $155.8 million in the fourth quarter and Adjusted EBITDA excluding hedges⁽¹⁾ of $157.4 million. Adjusted EBITDA Margin⁽¹⁾ per Boeof $31.37, or 67%, and Adjusted EBITDA Margin excluding hedges⁽¹⁾ per Boe of $31.70, or 67%.

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Capital expenditures, inclusive of plugging and abandonment costs, were $86.8 million in the fourth quarter.

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Free Cash Flow⁽¹⁾ of $44.4 million in the fourth quarter.

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Year-end 2019 proved reserves of 141.7 million barrels of oil equivalent (“MMBoe”), of which 69% is proved developed with a PV-10 of $3.0 billion and Standardized Measure of $2.5 billion. Pro forma year-end 2019 proved reserves for the recently closed transaction, inclusive of plugging and abandonment obligations:

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At SEC prices, 181.3 MMBoe, of which 73% is proved developed, and PV-10 of $3.6 billion.

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As a supplemental sensitivity, at $45.00 WTI / $2.00 Henry Hub, 166.7 MMBoe, of which 73% is proved developed, and PV-10 of $2.5 billion.

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As of December 31, 2019, liquidity position of $673.4 million. Net Debt to Last Twelve Months (“LTM”) Adjusted EBITDA⁽¹⁾ was 1.2x. Liquidity as of February 28, 2020 was approximately $600.0 million.

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Borrowing base increased to $1,150.0 million from $950.0 million as of February 28, 2020.

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Approximately 10.6 million barrels of oil hedged for 2020 with a weighted average price of $54.05 per barrel of WTI.

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Adjusted Net Income, Adjusted Earnings per Share, Adjusted EBITDA, Adjusted EBITDA excluding hedges, Adjusted EBITDA Margin and Adjusted EBITDA Margin excluding hedges, Cash Flow per Share, Free Cash Flow and Net Debt to LTM Adjusted EBITDA are non-GAAP financial measures. See “Supplemental Non-GAAP Information” below for additional detail and reconciliations of GAAP to non-GAAP measures.

President and Chief Executive Officer Timothy S. Duncan commented: “We exited 2019 with another consecutive quarter generating significant free cash flow and adjusted earnings per share. Talos also exited the year with one of the lowest leverage ratios in our sector, with a 1.2x Net Debt to LTM Adjusted EBITDA, and high levels of liquidity. Because of the oil-weighted and highly proved developed nature of our reserve base, significant value is sustained at various commodity prices, with additional upside from our probable reserves and our drilling portfolio. The results from the Claiborne #3 well, which just reached total depth, came in above pre-drill expectations and the well will be tied to existing infrastructure in order to be brought online by mid-year, demonstrating the upside potential of the assets we acquired.”

Duncan continued, “With the closing of our recent acquisition, we are a larger, more diverse, and more resilient business with an improved combination of free cash flowing assets and a strong balance sheet. As we look into 2020 with the context of recent commodity price trends, we are re-examining costs throughout the organization in order to maintain our healthy leverage and liquidity metrics while



TALOS ENERGY INC.				333 Clay St., Suite 3300, Houston, TX 77002

The following information was filed by Talos Energy Inc. (TALO) on Thursday, March 12, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Talos Energy Inc. provided additional information to their SEC Filing as exhibits

Exhibit 4.12: Instruments Defining The Rights Of Security Holders, Including Indentures

Exhibit 21.1: Subsidaries Of The Registrant

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 23.2: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 99.1: Additional Exhibits

Ticker: TALO
CIK: 1724965
Form Type: 10-K Annual Report
Accession Number: 0001564590-20-010495
Submitted to the SEC: Thu Mar 12 2020 4:33:28 PM EST
Accepted by the SEC: Thu Mar 12 2020
Period: Tuesday, December 31, 2019
Industry: Crude Petroleum And Natural Gas