Table of Contents Introduction to Talos Energy 4 10 Strategy and Track Record 11 18 Why Invest in the Gulf of Mexico 19 24 Reserves and Key Assets 25 41 Financial Guidance and Capital Program 42 48 Business Development…
Introduction to Talos Energy 4
Welcome to Talos Energy Talos Energy Inc., formed through the combination of Talos Energy LLC and Stone Energy Corporation, is a Houstonbased technically driven, independent oil and gas exploration and production company with…
Long Term Value Creation Talos Energy represents an opportunity to invest in a positive free cash flow generating business in an underinvested basin, with a basinleading management team with a bestinclass track record of delivering…
Snapshot of Talos Energy Talos Key Assets Corporate Snapshot Pro Forma (PF) Proved Reserves (1) 151 MMBoe 2P Reserves (1) 205 MMBoe Ewing Bank 305 Field Proved PV10 (1)(2) 2,421 MM Amberjack 2P PV10 (1)(2) 3,435 MM Strip Proved…
Talos Liquidity and Financial Overview Conservative Financial Management Objectives Low Debt & Strong Liquidity Maintain leverage ratio < 2.0x Net Debt / EBITDA ( in millions) Reserve Based Lending Facility (1) 294 Second Lien…
Leadership Team Highly experienced Management Team, with a significant track record of creating superior returns for investors Name Position Prior Companies Years of Experience Key executives have Chief Executive worked together…
Recent Events and NearTerm Catalysts Dec 2017: Tornado 2 May 10th, 2018: Talos completed Nov 2016: Talos announced first begins production in production from Tornado combination with Stone and began trading the Phoenix complex on…
Strategy and Track Record 11
Strategic Growth Plans Capital Allocation Continue to grow production and reserves organically while generating free cash flow 01 through efficient capital allocation Mergers & Acquisitions Discovered Resource…
A Proven Track Record Proven Oil Finders Growth Through the Innovative First Houstons Top Proven exploration and Commodity Downturn Movers Workplace acquisition trackrecord Managed the commodity Secured a large acreage A culture…
Talos Energy Committed to HSE Training Training Competency & Suitability Personnel Competency (Employee / Contractor) Dynamics & Suitability Safe Work Practices / SEMS Facility Maintenance Auditing, HSE Safe Work…
Talos Operational Performance as a Private Company Production Total LOE cost reductions (1) (/boe) Talos Management team delivered capital efficient annual production Successful integration of asset acquisitions and optimization of…
F&D Finding and Development Costs What is F&D and why should you care about F&D How to calculate F&D Allsources F&D is the measure of the total costs incurred expressed per BOE to add 1 BOE of (Acquisition Capex + P&A Capex)…
Benchmarking 5Year AllSources F&D Talos Energy 5Year allsources F&D is in the topquartile across a large universe of liquids weighted companies, regardless of company size and geographical focus 50 43.74 45 38.63…
Well Positioned Relative to both Offshore and Onshore Peers 2017 EBITDA(1) Margins (/Boe) Mean =22.58 31.20 28.16 24.95 24.93 24.18 21.22 20.58 13.62 TALO 1Q 18 Inlt Offshore Bakken Permian TALO 2017 Large Cap MidCap Other…
Why Invest in the Gulf of Mexico 19
Gulf of Mexico Investment Thesis 1 One of the most important and prolific oil basins in the US, second only to the Permian basin in total current oil production 2 Long history of production, with yearoveryear production growth since…
Premium Crude Sales Market and Realized Prices Talos Energy Sales Pricing Talos Energy Sales Pricing Other 1% LLS Compared to the Permian basin and other onshore 7% premium basins, the Gulf of Mexico tends to afford a much more…
TopTier Economics in the Deepwater GoM GoM Project Economics Comparable to US Shale Oil 100 80 Breakeven (WTI US/bbl) 60 40 20 Majority of Talos acreage in the highly economical Miocene play in the GoM Average…
Existing Infrastructure Creates Compelling Project Economics RAM POWELL POMPANO Pompano Cardona Template Malcolm AMBERJACK Audubon Praline Rampart Deep InField and Short TieBack Examples (Pompano Platform) Pompano Key…
Deepwater Project Economics ENSCO 8503 on InField Phoenix Well Risked Deepwater Project IRRs at 50 70/bbl 100% 90% 80% Unrisked Success Case 70% Price Sensitivity 50 70 60% IRR, % 50% 40% 30% 20% 10% 0% 5 10 15…
Reserves and Key Assets 25
December 31, 2017 ProForma Reserves (1) Total by Reserves PV10 PV10 Category (mmboe) (2) (MM) (2) (MM) (3) SEC pricing SEC pricing Strip pricing PDP 62.8 1,207 1,717 PDNP 37.2 386 558 PUD 51.2 828 1,123 Total Proved (1P)…
Net Asset Value(1)(2) Talos Energy trades significantly below its peer group on a NAV basis (3) Mexico LongTerm Portfolio 12 Locations and 1 Discovery NearTerm 250 550 MMBOE(4) Catalysts 38 Locations 200 500 MMBOE(4)…
Talos Trades at a Discount to Peers on Net Asset Value 1.60 Mean = 0.92 1.40 1.37 1.20 Enterprise Value / NAV (x) 1.00 1.00 0.90 0.91 0.85 0.81 0.80 0.61 0.60 0.40 0.20 0.00 Talos Permian Intl Offshore…
US Gulf of Mexico Assets Poised for Growth Through our extensive seismic footprint and the latest advancements in reprocessing, Talos will continue to develop our exploration portfolio around our infrastructure and the established…
Phoenix Field Helix Producer 1 Key Notes HP1 on Location in the Phoenix Field In 1Q 2019, the Phoenix field will be shutin for 45 60 days while the Helix Producer 1 (HP1) undergoes a mandatory drydock Regulators (USCG and Class…
Mississippi Canyon Complex (Pompano, Cardona, Amberjack) Pompano MC 28 004 Pompano Mt. Providence Platform A-15 ST Mt Silverthrone MC28 Prop 5 A-25 ST Mt. Hunter Mt. Bona Ram Powell MC28 4 Pompano Mt. Providence Amberjack…
Ram Powell Field Ram Powell Type Log Ram Powell Unit Area Productive Reservoirs Ram Powell TLP D F G Ram Powell Pompano Amberjack Cardona J L Key Notes Prolific field: 250 MMBOE cumulative production Multiple…
Gulf of Mexico Shelf Low cost and short cycle Asset Management projects creates capital efficient way to maintain existing production, while increasing margins and significantly deferring P&A costs Shelf Recompletions & Major…
Offshore Mexico Strategic Context Macro View Mature offshore basin with significant production Talos was the first foreign operator to enter offshore Single operator was historically tasked with discovering Mexico in Round 1.1 after…
Mexico GOM Assets With a significant seismic footprint in offshore Mexico and access to proprietary reprocessing, Talos can leverage deal flow in the offset acreage and study the regional geology as we mature our exploration portfolio…
Mexico Bid and Lease Progression After Round 1.1 July 2015 After Round 3.1 March 2018 Key Operators Key Operators Pemex Exxon Repsol Talos Shell Murphy Chevron Pan American BP DEA Total Cairn As a firstmover in offshore ENI…
Mexico Portfolio Development Additional Prospects Block 2 48,180 acres 45% working interest Block 7 115,255 acres 35% working interest Block 2 Key Notes Block 7 Key Notes Average water depth is 35m (100ft) allowing for drilling…
Zama Expected Development Timeline Appraisal & FEED Fabrication Dev Drilling Activity 2019 2020 2021 2022 2023 Appraisal Drill 3 wells w/studies FEED Design Facilities Fabrication/Install Platform A Platform B C Development…
Zama Comparison to Appomattox Appomattox Development (US Deepwater GoM) Zama Development (Offshore Mexico) https://www.shell.com/aboutus/majorprojects/appomattox.html Discovery Overview1,2 Discovery Overview Discovered 530 ft…
Financial Guidance and Capital Program 42
2018 Pro Forma Full Year Guidance(1) and 2019 Outlook 2018 Pro Forma Full Year(1) 2018 Capital Breakdown Oil (mmbbl) 12.5 13.5 Mexico Exploration Natural Gas (bcf) 27 30 1% Mexico Appraisal Production NGL (mmbbl) 0.9 1.0 US…
Asset Management low cost, high capital efficiency Key Notes EW 305 Field Type Log Section Asset management spending is our first line of defense against base production decline Projects have attractive economics: Over 47 major…
Mt. Providence Development Well Success MC 28 4 Key Notes M83A Structure Map Drilled the Mt. Providence MC 28 004 well safely and on budget Logged full to base oil pay with a total net thickness similar to Lowest predrill…
Deepwater Development Project Tornado 3 Arbitrary Seismic Line Along Tornado 3 Drill Path GC 281 002 ST01 (Tornado 2 ST PDP) Tornado 3 (PROPOSED PUD) GC 281 002 (Downthrown Discovery) o o o Downthrown o o Discovery…
Shelf Development Project GI 19 Talos P15 Structure Map PROPOSED GI 19 005 (P15 Attic PUD) Proposed GI 19 5 GI 19 4ST 500 structurally updip GI 19 4ST (P15) Daily Production Plot 10,000 o o Well beginning to o…
Abandonment Legacy abandonment requirements from acquired assets must be satisfied over the next 12 24 months, but are not representative of goforward business We expect our normalized capital allocation towards abandonment to…
Business Development Opportunities 49
Business Development Opportunities Current Talos Lease Position Rising prices and biannual lease sales Lease Sales have reenergized lease sales in the US Gulf of Mexico Developments deemed immaterial for Stranded Discoveries…
Gulf of Mexico Competitive Landscape GoM exposed players with 10,000 boe/d net production 350 326 314 Other Global 300 Producer Public GoM 19% Company 3% 250 2018E GoM Net Production (mboe/d) 212 Private GoM Big…
Appendix 52
2018 Full Year Guidance Financial Reporting Basis(1) 2018 Full Year Financial Reporting Basis(1) 2018 Capital Breakdown Oil (mmbbl) 10.5 12.0 Mexico Exploration Natural Gas (bcf) 25 27 1% Mexico Appraisal Production NGL…
Hedging Strategy Effective Date 1/1/2018 Talos Hedge Summary Full Year Put Strike Wtd. Total Swap Contracts Collar Contracts Put Contracts Swap Wtd. Avg Avg /Bbl Call Strike Wtd. Blended Avg. Total Oil Hedged (MBbl) (MBbl)…
AllSources F&D Talos Energy Inception to Date SEC Reconciliation (mmboe) Net Capital Spending (MM) 9/1/12 Proved Net Reserves 31.3 Exploration 341 Production (44.3) Development 562 Additions 67.3 G&G 75 Acquisitions 47.0 Land and…
Full Year 2017 and 2018 Q1 Pro Forma Net Income to Adjusted EBITDA Reconciliation YearEnded December 31, 2017 Quarter Ended March 31, 2018 Stone Stone ProForma Stone Talos ProForma Successor Predecessor Talos Energy Energy LLC…
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