Table of Contents Introduction 4 Gulf of Mexico Overview 10 Talos Strategy and Historical Performance 17 Key Assets 30 Guidance and Modeling slides 70 Appendix 80 2
Introduction 4
Talos: Focused Exclusively on Shareholder Value Creation Discipline: Maintain low leverage and Compelling Value Proposition generate future free cash flow Profitability: Repeatable low F&D and oil weighted, robust Adjusted EBITDA…
Talos Energy Overview Company Overview Corporate Snapshot (Pro Forma) Talos is a technically driven, offshore focused oil and gas upstream company Proved Reserves (1) 151 MMBoe Exploration, acquisition and development of largely…
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…
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…
Long Term Value Creation Talos Energy represents an opportunity to invest in a positive free cash flow generating business in an underinvested basin, with an experienced management team with outstanding track record of delivering value…
Gulf of Mexico Overview 10
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 (Q3 2018) Talos Energy Sales Pricing Other 1% Compared to the Permian basin and other onshore LLS premium basins, the Gulf of Mexico tends to afford a 7%…
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…
Base Royalty Rate: US Basin Comparison Talos does not pay ad valorem or severance and maintains a lower base royalty rate than US onshore basins 27.6% 27.4% 22.8% 20.5% 18.8% 16.7% 12.5% 12.5% 12.5% Phoenix…
Gulf of Mexico Realizing Drilling Efficiency Gains The average drilling rate in 2018 is twice as fast as in 2014 Drilling rate by play Drilling rate by operator type 8 8 Drilling rate (days/1,000 feet) Drilling rate…
GoM Competitive Landscape Positioned for Consolidation Limited Buyer Universe Combined with Large Number of Sellers and Many Parties Simply Standing Still Potential Looking to Exit / Category Consolidators / Status Quo Noncore…
Talos Strategy and Historical Performance 17
Talos Core Competencies & Focus Area Geology & Geophysics MS AL Targeting prolific Pliocene Miocene window LA FL TX Excellent rock properties and advances in seismic lead Norphlet to direct hydrocarbon indicators (DHIs)…
Existing Infrastructure Creates Compelling Project Economics Near-term Catalysts Long-Term Portfolio 3rd Party Discovery (Potential PHA income) InField and Short TieBack Examples (Pompano Platform) Key Highlights Deepwater…
Applying Best Practices to Improve Seismic Imaging Regional Map 2010 Original Spec. Cequi Beam Data Cox 1 Zama1 Talos Seismic Talos Blocks Zama1 Cox 1 1 Hint of a flat spot 3 Closest well that found the same Miocene…
Deepwater Appraisal Development is a CostEffective Approach Lowest Known Oil (LKO) Tor. 1 Amplitude limit (Assumed OWC) Subsea tiebacks to an existing manifold reduces cost and Tor. 2 accelerates cycle time to first oil…
Track Record of Adding Value to Acquired Assets Ewing Bank 306 Shelf Field Phoenix Complex EW306 Production: Asset Management and Drilling Adds Phoenix Field: Rate Growth Since Acquiring 4.0 40 Gross Production Rate, MBOE/D Gross…
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. Talos Five Year Reserve Growth…
Recycle Ratio(1) of US E&P Universe Talos maintains a peerleading Recycle Ratio on a fiveyear, allin lookback basis. 2 2.8x 2.7x 2.6x 2.4x 2.3x 2.2x 1.9x 1.9x 1.9x 1.9x 1.7x 1.7x 1.7x 1.7x 1.6x 1.6x 1.6x…
E&P Universe Reserve Life(1) Comparison Talos maintains a competitive reserve life ratio versus a diversified onshore peer group Taloss unique strategy of focusing on drillbit reserve adds and exploration allows Talos to grow…
Talos Maintains Robust Profitability and Low Leverage Q3 Production % Oil Q318 Adjusted EBITDA per BOE(1) 53 98% 39 69% 67% 66% Average 33 34 34 Average 61% 28 28 51% 50% 25 44% 42% 22 TALO KOS WTI Bakken Permian…
Talos Trades at a Significant Discount to its Peers Of the seven public E&Ps with low leverage, large scale, and high oilweighting, Talos is the only E&P to trade under 1.0x Proved PV10 (at 65/3 flat). of Companies Median EV/2019E…
Talos Trades Below Proved and Proved PV10 LongTerm Portfolio Drilled in 3+ NearTerm Years Catalysts Drilled in 2 3 Years Discovered Resources 2P PV10(1,2) 6,000 Zama (Mexico) 5,000 US Millions 4,000 3,000…
Key Assets 30
December 31, 2017 Pro Forma Reserves (1)(2) Total by Reserves PV10 PV10 Category (mmboe)(3) (MM)(3) (MM)(4) (net of ARO) SEC pricing SEC pricing Flat Pricing (65/bbl and 3/mmbtu) PDP 62.8 1,207 1,694 PDNP 37.2 386 526 PUD…
Talos Energy Core Areas Key Highlights AL Talos current position is broken into the following FL four main core areas Mississippi 1 Green Canyon (GC) Area Offshore Canyon Shelf 2 Mississippi Canyon (MC) Area Green Canyon 3…
1 Green Canyon Core Area Key Highlights Green Canyon Core Area Recent strategic acquisition of the GC 18 platform Additional infrastructure will allow us to bring in nearby exploration wells looking for a host Talos has…
1 Green Canyon Phoenix Complex Overview Talos Energy US Gulf of Mexico Production to date: 98 MMBOE Current Production (Q3): 29.2 mboe/d, gross 16.4 mboe/d, net % Oil: 79% Working Interest: Phoenix Complex 100% WI in Boris…
1 Green Canyon Phoenix Complex Phoenix Complex LayOut A Proven Track Record of Success N Head & Neck HP1 W Boris Riser Typhoon Riser Tornado Riser Material rate and reserve growth since acquiring S E Successfully…
1 GC Phoenix Complex Tornado 3 Development Well Illustrative Line A A GC 281 002 ST01 (Tornado 2 ST PDP) Tornado 3 A A (PROPOSED PUD) GC 281 002 (Downthrown Discovery) o o Tornado 1 ST (Producing) o o Downthrown…
1 GC Phoenix Complex Boris 3 Development Well Boris 3 PUD Structure Map B4 Sand (Boris Area) GC 282 001 ST03 (Boris 1 PDP) Boris 2 Targeting 300400 ft (Watered out) updip of Boris 1 10 MMBOE B4 Sand 0 Boris 3 Stats DHC:…
1 GC Phoenix Complex Lindsey Exploitation Prospect Illustrative Line A A (Lindsey Prospect) B6 Sands in Tornado Area A A 23 MMBOE to date T1 & T2 (B4 Sd) 13 MMBOE to date Lindsey Prospect (B6 Sand) Regional B4…
1 GC Phoenix Complex Balvenie Exploitation Well Illustrative Line for Balvenie N S Balvenie Structure Map B4 Sand (T4 Well) Illustrative Line for Typhoon West N S Amplitude/Structure Map N S N N S N T4 GC 237 4 ST3 T4 S…
1 Green Canyon 18 Overview Talos Energy US Gulf of Mexico Production to date: 117 MMBOE Current Production (September): 1.8 mboe/d, gross 1.5 mboe/d, net % Oil: 89% Working Interest: 100% Operator: Talos Energy Green Canyon…
1 Green Canyon 18 Field Key Highlights Schematic Cross Section(1) Strategic infrastructure in our core Green Canyon area with new WAZ seismic Dry tree facility potentially creates economical production rate add opportunities…
1 GC Core Area HighLevel Summary Drilling Portfolio Gross Unrisked DHC Completion & Initial Rate Prospect Name Timing to Drill W.I. NRI Type (MM) HookUp (MM) (MBOE/D) TORNADO 3* ShortTerm 65% 46% 3649 6890 1015 DWDevelopment BORIS…
2 Mississippi Canyon Core Area Key Highlights Mississippi Canyon Core Area Three key operated assets in the northern Mississippi Canyon area Several drilling locations identified near our infrastructure that can be tied into our…
2 Mississippi Canyon Pompano Field Overview Talos Energy US Gulf of Mexico Production to date: 213 MMBOE Current Production (Q3): 16.0 mboe/d, gross 11.7 mboe/d, net % Oil: 80% Pompano Working Interest: 100% WI in Pompano…
2 Mississippi Canyon Pompano / Cardona Cardona Short Tieback and Pompano Infield Tieback to Pompano Pompano Platform Productive Pompano Facility VK 989 Undrilled Mt. Hunter Cardona Field Pompano Template MC 28 004 Mt.…
2 MC Pompano Myrtle Grove Prospect Illustrative Line for Myrtle Grove SW NE SW NE Structure Map (M87) Pompano Template Myrtle Grove 4.4 MMBOE NE M87 M85 M83A Myrtle Grove 160 ac. SW Myrtle Grove Prospect DHC:…
2 MC Pompano Amethyst Sidetrack Structure Map (M57 Sand) MC 26 Amethyst Discovery 0 0 0 0 0 M57U 0 2.9 BCF 0 0 103 MBC BP 1 0 26 MBW 0 (137 days of (Supertramp) 0 0 production) 0 Stone 1 (Amethyst) 0 0 M57L…
2 Mississippi Canyon Amberjack Field Overview Talos Energy US Gulf of Mexico Production to date: 102 MMBOE Current Production (Q3): 3.0 mboe/d, gross 1.9 mboe/d, net % Oil: 93% Amberjack Working Interest: 100% WI in MC 109…
2 Mississippi Canyon Amberjack Field Regional Blob Map Regional Cartoon Cross Section A A A Belafonte Bacchus Bingo Gilligan Amberjack Platform Ginger Rex Key Highlights Productive 100 MMBOE of cumulative…
2 MC Amberjack Gilligan & Ginger Prospects Illustrative Line for Gilligan/Ginger Prospect Gilligan M Sand Structure Map A28ST1 M Sand Gilligan (Proposed) o o o Gilligan Ginger P Sand Structure Map A16ST2 P Sand…
2 Mississippi Canyon Ram Powell Field Overview Talos Energy US Gulf of Mexico Production to date: 252 MMBOE Current Production (Q3): 9.5 mboe/d, gross 8.4 mboe/d, net Ram Powell % Oil: 59% Working Interest: 100% Operator:…
2 Mississippi Canyon Ram Powell Field Ram Powell Type Log Ram Powell TLP Ram Powell Field Productive Reservoirs and Opportunities UNDRILLED D PRODUCTIVE TALOS ACREAGE F Ram Powell Historical Daily Rate (BOE/D) 100,000…
2 MC Ram Powell Venice Prospect N Illustrative Line Along VK 912 A013 ST1 Well Path S Structure Map (Q Sand) VK 912 A13 ST1 COMPLETION M FAILURE M 20002006 24 BCFG P 2.5 MMBO 0.1 MMBW P Q not reached Q Q Target…
2 MC Ram Powell Rialto Norphlet Prospect Shell MC392 1 Illustrative Regional Line from Appomattox to Rialto Appomattox Rialto SALT SALT Key Highlights Syncline separated from Shells world class Appomattox Discovery (650…
2 MC Core Area HighLevel Drilling Portfolio Gross Unrisked Completion & Initial Rate Prospect Name Timing to Drill W.I. NRI DHC (MM) Type HookUp (MM) (MBOE/D) KUSKALANA ShortTerm 33% 27% 4154 119159 1422 DWExploration AMETHYST S/T*…
3 U.S. 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…
3 GoM Shelf (EW 306) Example of Shelf Success Talos Energy US Gulf of Mexico Recent Deeper Pool Discovery (EW 306 A20) EW 306 A20 Illustrative Drill Line 0 0 Shallow Field Pay Ewing Bank 306 Field 0 0 0 0 0 0 0…
3 GoM Shelf (EW 306) Miocene 2 Prospect Structure Map (Rob E1 Miocene Sand) A 0 0 152 acres EW 306 A20 Rob E 1 Miocene 2 Stats 13,625 DHC: 1317 MM LKO 13,751 A 0510 TVT Comp., H/U: 57 MM 0 0 Initial Rate: 13 MBOE/d 0…
4 Offshore Mexico Strategic Context Macro View Mature offshore basin with significant production Talos was the first foreign operator to enter offshore Mexico in Single operator (Pemex) was historically tasked with Round 1.1 after…
4 Offshore Mexico Timeline and Milestones Ultra deepwater Talos acreage now surrounded by NOCs & Majors Major Milestones 900 meters PSC signed on Block 2 and Block 7 just 2 years following the Mexican Energy Reform Largest…
4 Mexico Block 7 Core Area Overview Participating Interest: 35% Operator: Talos Energy Acreage: 114,854 gross acres Water Depth: 500650 ft Zama Discovery Water Depth: 550 ft Zama Appraisal program has been approved and Talos…
4 Mexico Block 7 Zama Appraisal Plan Zama Main Reservoir Structure Map with Amplitude Overlay Arbitrary Seismic Line (AA) -3700 -4300 A A A -3600 -3800 0.90 -3500 Amplitude 0.00 -0.90 -4200 -1.80 -3200…
4 Mexico Block 7 Zama Preliminary Project Planning Preliminary Unitization Agreement (PUA) signed 3Q 2018 The Appraisal program is approved by CNH Drilling is expected to commence November 2018 Continuous drilling of a threewell…
4 Zama One of the Lowest Breakevens in the World The Zama discovery stacks up well against WoodMacs new global sources of oil supply and is considered one of the most economic projects in the world Conventional preFID and future…
4 Mexico Block 7 Additional Similar Prospects Possible Zama Analogs Proprietary reprocessed data continues to reveal prospects with similar geophysical characteristics to Zama (highlighted in yellow), supporting a portfolio of…
4 Mexico Block 2/31 Shallow Water Area Block 2/31 Overview Participating Interest: 25%(1) Operator: Hokchi Energy(1), a subsidiary of Pan American Energy (PAE) Acreage: 112,979 gross acres Water Depth: 100150 ft Yaluk Cabrakan A…
4 Mexico Block 2/31 Acan Prospect Key Highlights Exploration well in 100 ft water depth Calibrated amplitude response indicates oil in main target Amplitude area covers approximately 1,380 acres Unproduced oil discoveries in…
4 Mexico Block 2/31 Olmeca Complex Exploration Background Xaxamani1 well Drilled by Pemex in 2003 65 ft gas and 130 ft oil pay in two sands Resource area was included in the Block 31 exploration area Just offshore from the 1950s era…
Guidance and Modeling Slides 70
2018 GAAP vs Pro Forma Guidance as of May 29, 2018 GAAP Results and Guidance Pro Forma Results and Guidance Oil (mmbbl) 10.5 12.0 Oil (mmbbl) 12.5 13.5 Natural Gas (bcf) 25 27 Natural Gas (bcf) 27 30 Production (1) NGL (mmbbl) 0.8 1.0…
2019 Outlook Production Tornado 3 well scheduled to spud in 4Q 2018 and expected to start production in 2Q 2019 with estimated IP in the 10.0 15.0 MBoe/d range, on a gross basis, and 5.0 7.5 MBoe/d on a net basis, after royalties Mt.…
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 be…
Risked Prospect Economics Apply Apply Gross Unrisked Costs WI % PS % Net Risked Costs Dry Hole Cost (Drill & Evaluate) Dry Hole Cost Dry Hole Cost (Drill & Evaluate) Case and Complete Case and Complete Case and Complete…
Typical GoM Production Profiles Typical GOM Production Profiles Oil Rate vs. Time Typical GoM Production Profiles Oil Rate vs. Time Benefits in the GoM 16,000 16,000 14,000 Favorable rock properties allow for Gross Oil Production,…
Production Sharing Contract (PSC) Basics Mexico Talos PSC consist of three main components: Royalty paid to the government, Cost Recovery available to the contractor and the Royalties amount of Profit Oil the consortium earns…
Talos Capitalization and Debt Maturity Schedule Financial Considerations Low Debt & Strong Liquidity (1) ( in millions) Talos maintains over 400 MM of liquidity with over 300 Reserve Based Lending Facility (2) 265 MM of undrawn RBL…
Hedging Strategy We are currently hedged approximately 70% and 50% of our forecasted 2018 and 2019 production Note: Inclusive of all hedges in place as of October 8th, 2018 Total Weighted Average Price Swaps Collars Puts Hedged…
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…
Appendix 80
NonGAAP Reconciliation Reconciliation of net income (loss) to Adjusted EBITDA and of Adjusted EBITDA to Adjusted EBITDA excluding hedges Three Months Ended Nine Months Ended September 30, 2018 Sept 30, 2018 As Reported As Reported…
NonGAAP Reconciliation Reconciliation of Net Debt Reconciliation of 3Q 2018 Annualized Adjusted EBITDA in millions September 30, 2018 in millions September 30, 2018 Adjusted EBITDA 157 Debt Principal 673 x4 Capital Leases 97…
AllSources F&D Talos Energy Note: Ram Powell reserves included at the 35MM effective date purchase price: Stone Energy Reserves are not included in F&D calculations 83
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