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Talos Energy Inc. (TALO) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Talos Energy Inc.

CIK: 1724965 Ticker: TALO

Exhibit 99.1

 

LOGO

TALOS ENERGY ANNOUNCES FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL AND OPERATIONAL RESULTS AND REDUCTION OF 2020 SPENDING GUIDANCE

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:

 

   

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.

 

   

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.

 

   

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.

 

   

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 Boe of $31.37, or 67%, and Adjusted EBITDA Margin excluding hedges(1) per Boe of $31.70, or 67%.

 

   

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

 

   

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

 

   

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:

 

   

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

 

   

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.

 

   

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.

 

   

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

 

   

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

 

(1)

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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Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Stockholders' Equity (Deficit)
Consolidated Statements Of Operations
Acquisitions
Acquisitions (Tables)
Acquisitions - Asset Acquisitions - Additional Information (Details)
Acquisitions - Asset Acquisitions - Summary Of Allocation Of Purchase Price To Assets Acquired And Liabilities Assumed (Details)
Acquisitions - Asset Acquisitions - Summary Of Allocation Of Purchase Price To Assets Acquired And Liabilities Assumed (Parenthetical) (Details)
Acquisitions - Business Combination - Additional Information (Details)
Acquisitions - Business Combination - Summary Of Allocation Of Purchase Price To Assets Acquired And Liabilities Assumed (Details)
Acquisitions - Business Combination - Summary Of Allocation Of Purchase Price To Assets Acquired And Liabilities Assumed (Parenthetical) (Details)
Acquisitions - Business Combination - Summary Of Purchase Price (Details)
Acquisitions - Business Combination - Summary Of Revenue And Net Income Attributable To Assets Acquired (Details)
Acquisitions - Business Combination - Summary Of Supplemental Proforma Information (Details)
Commitments And Contingencies
Commitments And Contingencies (Tables)
Commitments And Contingencies - Additional Information (Details)
Commitments And Contingencies - Summary Of Total Minimum Commitments Associated With Long-Term Non-Cancelable Operating Lease (Details)
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information (Tables)
Condensed Consolidating Financial Information - Additional Information (Details)
Condensed Consolidating Financial Information - Summary Of Consolidating Cash Flows (Details)
Condensed Consolidating Financial Information - Summary Of Consolidating Financial Position (Details)
Condensed Consolidating Financial Information - Summary Of Consolidating Results Of Operations (Details)
Debt
Debt (Tables)
Debt - Additional Information (Details)
Debt - Summary Of Detail Comprising Debt And Related Book Values (Details)
Debt - Summary Of Detail Comprising Debt And Related Book Values (Parenthetical) (Details)
Employee Benefits Plans And Share-Based Compensation
Employee Benefits Plans And Share-Based Compensation (Tables)
Employee Benefits Plans And Share-Based Compensation - Additional Information (Details)
Employee Benefits Plans And Share-Based Compensation - Schedule Of Recognized Share Based Compensation Expense, Net (Details)
Employee Benefits Plans And Share-Based Compensation - Schedule Of Restricted Stock And Performance Share Units Activity (Details)
Employee Benefits Plans And Share-Based Compensation - Summary Of Assumptions Used To Calculate The Grant Date Fair Value (Details)
Financial Instruments
Financial Instruments (Tables)
Financial Instruments - Additional Information (Details)
Financial Instruments - Schedule Of Carrying Amounts And Estimated Fair Values Of Financial Instruments (Details)
Financial Instruments - Schedule Of Carrying Amounts And Estimated Fair Values Of Financial Instruments (Parenthetical) (Details)
Financial Instruments - Schedule Of Contracted Volumes And Weighted Average Prices And Will Receive Under The Terms Of Derivative Contracts (Details)
Financial Instruments - Schedule Of Fair Value Of Derivative Financial Instruments (Details)
Financial Instruments - Schedule Of Impact That Derivatives Not Qualifying As Hedging Instruments In Condensed Consolidated Statements Of Operations (Details)
Financial Instruments - Summary Of Additional Information Related To Financial Instruments Measured At Fair Value On Recurring Basis (Details)
Formation And Basis Of Presentation
Formation And Basis Of Presentation - Additional Information (Details)
Income (Loss) Per Share
Income (Loss) Per Share (Tables)
Income (Loss) Per Share - Summary Of Computation Of Basic And Diluted Income (Loss) Per Share (Details)
Income Taxes
Income Taxes (Tables)
Income Taxes - Additional Information (Details)
Income Taxes - Components Of Income Tax Expense (Benefit) (Details)
Income Taxes - Summary Of Balances In Uncertain Tax Positions (Details)
Income Taxes - Summary Of Net Operating Loss And Tax Credit Carryovers (Details)
Income Taxes - Summary Of Reconciliation Of Income Taxes Computed U.S.Federal Statutory Tax Rate To Income Tax Expense (Details)
Income Taxes - Summary Of Significant Components Of Deferred Tax Assets And Liabilities (Details)
Leases
Leases (Tables)
Leases - Additional Information (Details)
Leases - Components Of Lease Costs (Details)
Leases - Schedule Of Lease Maturity (Details)
Leases - Schedule Of Right-Of-Use Asset And Liability, Adjusted For Initial Direct Costs And Incentives (Details)
Leases - Schedule Of Weighted Average Remaining Lease Term And Discount Rate (Details)
Leases - Supplemental Cash Flow Information Related To Leases (Details)
Property, Plant And Equipment
Property, Plant And Equipment (Tables)
Property, Plant And Equipment - Additional Information (Details)
Property, Plant And Equipment - Schedule Of Asset Retirement Obligations (Details)
Property, Plant And Equipment - Schedule Of Asset Retirement Obligations (Parenthetical) (Details)
Property, Plant And Equipment - Summary Of Oil And Natural Gas Property Costs Not Being Amortized (Details)
Related Party Transactions
Related Party Transactions - Additional Information (Details)
Selected Quarterly Financial Data
Selected Quarterly Financial Data (Tables)
Selected Quarterly Financial Data - Schedule Of Quarterly Financial Data (Details)
Subsequent Events
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Policies)
Summary Of Significant Accounting Policies (Tables)
Summary Of Significant Accounting Policies - Additional Information (Details)
Summary Of Significant Accounting Policies - Schedule Of Percent Of Consolidated Revenue Of Major Customers, Those Whose Total Represented 10% Or More Of Oil, Natural Gas And Ngl Revenues (Details)
Summary Of Significant Accounting Policies - Schedule Of Percent Of Consolidated Revenue Of Major Customers, Those Whose Total Represented 10% Or More Of Oil, Natural Gas And Ngl Revenues (Parenthetical) (Details)
Supplemental Oil And Gas Disclosures (Unaudited)
Supplemental Oil And Gas Disclosures (Unaudited) (Tables)
Supplemental Oil And Gas Disclosures (Unaudited) - Schedule Of Base Prices Used In Determining Standardized Measure (Details)
Supplemental Oil And Gas Disclosures (Unaudited) - Schedule Of Principal Changes In Standardized Measure Of Discounted Future Net Cash Flows (Details)
Supplemental Oil And Gas Disclosures (Unaudited) - Schedule Of Standardized Measure Of Discounted Future Net Cash Flows Related To Interest In Proved Oil, Natural Gas And Ngl Reserves (Details)
Supplemental Oil And Gas Disclosures - Additional Information (Details)
Supplemental Oil And Gas Disclosures - Schedule Of Capitalized Costs Related To Oil, Natural Gas And Ngl Activities And Related Accumulated Depletion And Amortization (Details)
Supplemental Oil And Gas Disclosures - Schedule Of Capitalized Costs Related To Oil, Natural Gas And Ngl Activities And Related Accumulated Depletion And Amortization (Parenthetical) (Details)
Supplemental Oil And Gas Disclosures - Schedule Of Costs Incurred In Oil, Natural Gas And Ngl Property Acquisition, Exploration And Development Activities (Details)
Supplemental Oil And Gas Disclosures - Schedule Of Costs Incurred In Oil, Natural Gas And Ngl Property Acquisition, Exploration And Development Activities (Parenthetical) (Details)
Supplemental Oil And Gas Disclosures - Schedule Of Estimated Proved Reserves At Net Ownership Interest (Details)
Supplemental Oil And Gas Disclosures - Schedule Of Estimated Proved Reserves At Net Ownership Interest (Parenthetical) (Details)
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

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