TALO - Earnings call transcript Q2 2021

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Operator

Good day, and welcome to the Talos Energy Second Quarter of 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] please note this even it being recorded. I would now like to turn the conference over to Sergio Maiworm, Vice President of Finance, Investor Relations and Treasurer. Please go ahead.

Sergio Maiworm

operator. you, Thank and earnings everyone, our quarter second Good call. welcome XXXX conference of morning, to

Joining discuss Executive today Executive Chief Chief me to Officer; Vice Executive President Tim Financial of Officer; and President Duncan, and Shane Operations. Bob Young, and Vice Head and our President Abendschein, results are

statements. on Form our may like as by we and no forward-looking Before in remarks Forward-Looking include events. today would filed that this new of with that differ from to contemplated to obligation Factors results those quarter SEC undertake these statements materially we future or forward-looking these to XX-Q of and forth get based differ started, remind cause opportunity ending result statements these June will are Statements. this take materially XX, release as I in assumptions results you for our the information could on Actual a we that press today, Any yesterday. yesterday’s make update to the are call set

this with is our both at press non-GAAP call which reconciliation talosenergy.com. filed now Tim. measures. A like yesterday’s and SEC non-GAAP GAAP GAAP on included release, present call, to we financial of earnings measures to would I to was and also was During available which over the may in the And website turn

Timothy Duncan

Sergio. you, Thank

job. entire is worth date broadly organization. our excited done the specifically to discuss and the really results more results and quarter, recent tremendous reflecting has I team about shown it the the Before have I’m a of year activities on The because had we across execution second

an Puma that initiative another evolving extended lending had encouraged as in believe company. and launched the this what and Coast results program quarters credit are six-months, possible We to a exploitation the storage of is a deepwater It discovery recently looking the syndicate. we have a repeat first by that quarter and facility We key energy record bank the sub-salt in rig expect asset. we the and margins. moves maturity seen a of year-to-date, drilling this Gulf been I capture our I’m West successful back-to-back significant to continue lending to as well of is added space as reshapes year. busy We improving production very at Mexico Gulf a the and new great to and second a into carbon for half We

the specifics Moving the of into quarter.

the straight for million before over margins an reaching approximately proud margins oil coupled oil execution, we to We equivalent. of and reflected where barrel oil-weighted very impact are second quarter, realized production over $XX production downtime. of oil the the quarter, hedges was XX% our of per per including production oil approximately hedges is values recorded adjusted XX,XXX the with EBITDA hedges. second $XXX equivalent financial of equivalent $XXX This The EBITDA on after margin the per adjusted barrels after of day solid in to before EBITDA of solid adjusted for in led or liquid That of barrel million by report record execution $XX and XX% hedges. minimizing total XX% aided quarter,

year. expenditures is for capital be quarter the quarter to the Second of high XXX million expected

drilled half program and in plan during his but At what offshore our do our quarter Shane the expect is typically in capital well taper schedule. second ahead below materially Tornado, here Attic generation from back best cash his will our remarks, guidance second and year. talk budget we of the we window the projects of third most our with generally weather around completed years capital in case quarters. to second about free early flow and is As in significant we the the when

well rates drilled the day have over of barrels XX,XXX injector from the water per We to in water XXXX. we that increased injection

assets. see over rig in bolstered quarter. production multiyear earnings this reprocessing where rates Pompano X,XXX As our a project, not which drilling the first we show weeks, platform barrels extend production help a improve a the had its result, the and The of coming creative above are per key from XX,XXX Tornado, second exploitation gross. reservoir platform producing Pompano to the begin field believe the the call, the oil our injected of field. where and we same our we immediately water deepwater success we of which enjoy are from project there they expected kind B-X life sand, first equivalent by the field drilling is to will day we our production that quarter, our of team’s seeing Green and in environment, revitalize an well quarter seismic seen here, discussed field, of for output the opportunities Canyon proud significantly fourth initial maintain first XX-years. of lead the to proprietary project the one This success we In in the to this Attic producing production approach then in expectation project impact. moved from in recovery That program sources expect allowed to energy subsea very field, in study deeper is to wells. from utilizing some a original complicated In field the a is to It campaign numerous injection wellbore, innovative to rig to well into and is will our immediate creating

Praline also host of to initiating third-party third with utilizing Exploration’s the Pompano quarter. capacity LLOG discovery facility production oil the spare We in first our are

fees As projects a structure around our help reminder, across already project our this lower competitive production other owned asset and many handling our from infrastructure from cost base.

May, quarter, well, also which and key made from XX% expect our we emissions baseline our late front. In emissions third on ESG is development the announcements we our market non-operating in by the Anchor XXXX the the success side, our In our the on to X which to of GHG by Scope the Additionally, assets also targets, long-term announced presented we online we second reduction Crown XXXX. lower quarter. from

We advance making solid progress. towards and goal are that continuing to

In adjustments ESG We to quarter. executive advocating member, And long as Glover. along initiated space we the the help an U.S. to the second bolster with a most communities. at impact to has concluded in gas we annual organization added of energy successful economy specific published second history governance be program. also ESG, expect space. skill better efficiency new sets and reviewing we involved led storage. carbon the announced From the issues and We low-carbon Paula approach Gulf capture key evolving grassroots was ESG core perspective, leverage quarter, Coast. social capture same communities, that only could meeting, align most and our a made Board bonus Paula a year a going for compensation local of recent to annual but ways impacts an ESG our our solutions sustainability and portion we in have initiatives by of inform more could community also reporting that policy our Talos’ objectives forward. reminder, a with where get to ago, a we and our storage the natural how will we company venture Over exclusive and not carbon responsibility into She oil employee set made a where sustainability end third and skill energy apply report looking in in energy the will our and a us

chain solid pleased and the Acorn the company to in project, ExxonMobil. and recognizable Storegga real-time which We for was Gulf we the in Storegga record United U.K. to Sea delivery will one across their firms in Shell Geotechnologies, be the with partner be is project most and a being in exclusive expand Coast. including are space today responsible looking operating brings where the partnering partners U.S. with track and States, North value the the of developed now CCS

with be forward. to excited going are them We working

in Talos, For important The energy region directly solutions to conventional core scale add of of Many successfully. functions operating extension add daily us diversity Louisiana and and potential appropriate reservoir leverage existing the excellent storage well applicable A sequestration, like largest a permitting state long competencies geology offshore we understanding and way of of on and set, a for regulatory and business. well, business United natural yet offshore in contains and eventually, our project concentration data significant operations the of Coast to an the wells, things is as located carbon safely Alabama. our our interpretation of CCS inland Gulf in management drilling the handle country management, history the and hydrocarbon industrial leasing. we activity, is petrochemical have to the waters Texas, almost offshore States skill region and and the provinces are to of immediately basis federal a one seismic capture, the our as as procedures, in and adjacent for

to and as this a see element skills our the new and business. corporate we we have knowledge So way add in-house a to take

full providers with announcement. along Abendschein, numerous Our been by infrastructure fast led is value we a and storage the and Executive in Bob off have CCS We chain offering we landowners, Vice to XX-days, culture. discussions believe start and speed built We our a since among emitters, that and President, to team partners a our addition site dedicated the and permeates advancing potential midstream our have just last technical others. commercial advantage, in including commerciality

could over going into CCS and real expect be our forward part of driver grow a We an integral time. business

shareholders, disposal. the that at of near in Ministry Pemex. Talos’ clear, commercial to received Gulf or Energy disappointing to of awarded operatorship offshore the advancing from the Mexico’s of which Zama we discovery optimizing value we Zama will progress term. our preserving for SENER Across rapidly options as committed evaluating area they all news unit in We are are this the of and and be we our and show Mexico, discovery hopeful legal includes To

given our but absolutely topic the the is comments want that at this I to point, We investors from our Talos status circumstances given possible maximize sensitivity doing the and asset. everything limit to value situation, of to this on will evolving this reemphasize

clear is positioning that on our reflect to in investment solid As and is it Talos I very quarter the be today, attractive. and case continues the

and strong, as We production quarter’s margins. are in independent are largest assets this by and our pure-play the basin, evidenced our

executing any Puma infrastructure flood short-cycle like are exploration projects well development program. Green board intra majors BP the and the water bid and and Tornado We and rig Chevron of Canyon to our like platform Pompano’s West, XX like around the across drill and with opportunities partnerships innovative and

utilizing are energy we We strong have and balance in player and a core to a a skill solution. low-carbon sheet set our credit, solid be

exploration significant for in and the our hand Finally, believe through with bullish there the I we interim, always we accretive will history other will the is only in over core financial opportunities. we are area, also the evaluate continue see closing actively I upside. rich which opportunities more focus will particularly part our basins where we GOM, And Shane Mexico, of the more business development details it but a on have not but to Gulf of remains M&A. growth strategy, value-creating provide inorganic some to producing outside and to quarter. M&A be in those comments, and

Shane Young

This second Tim. from appreciate quarter. quarter morning, everybody. topics: our the I join Good will Company’s second morning, the you address record-setting the time today. results We you, Thank conference four call taking First, to

Second, the full-year our guidance. XXXX reaffirmation of

Third, we approach provide will will XXXX. how of I a preview

on financial well half success very second extension Talos at Talos for time Finally, many our and fronts. recent beyond. RBL operating I leaves say, of of the and the for positioned things Sufficed is positive happening a how to will so the XXXX address this and exciting that both

$XX $XX start me recurring We per cost the and the been quarter. production cash than resulted G&A BOE BOE, record margins of costs and the quarter a quarter. cash unhedged Strong over approximately and with BOE strong barrel approximately Let million. company for on with less million record in EBITDA Adjusted LOE $XX.XX for disciplined performed for have of prices Mcf, second per XX%. $XXX.X of hedge million with prices, the of front realized the losses, $X.XX results $XXX.X and well roughly per or would commodity $X.XX respectively. per in $XXX were resulting per Realized EBITDA revenue in

optimal advantage second As weather typically earlier window quarter by of discussed activity the the call, quarter for is the high what in level we year. highest took was to expected the as XXXX, capital for of be operational the driven the

guidance taper the well expect execute expenditures our guidance reiterating and and full-year inside to full-year XXXX our the stay commodity financial we all March. pace significant price therefore, expense on we the We the business current free of are should And We categories. continues XXXX. over for fronts. guidance in The in capital originally all on operational flow to for are production that balance environment, full-year. cash with issued That, for generate the should believe and back coupled year

find specifics can the our release. included night’s You in guidance of XXXX press last

Looking forward, very outlook capital program. XXXX we of our in are stages early the developing and

EBITDA free operational delivers likely While do production and that having developing it expect to in financial flow. and that is reinvestment range we XX% plan. healthy a detailed to That our significant is the of too cash principles of program and capital early to guidance, new to provide capital rate, diversified a XX% stick in

capital XXXX, towards near buckets exploitation exploration three to weighted expect the categories. allocate We and in DMC albeit lower risk risk across field, opportunities, all

front, services cost the should economics. on capital this slight margins the be our seeing program our pressures services, are On but and impact in of we on manageable believe

and of free flow. the on terms to our next are our where we rig for operations that on in provide delivery year, an process cash due course. in update stand deepwater will evaluating continue with and the generate we We in I currently pleased front ability to of be opportunities

of We strong, have rapidly liquidity improving ratios. plenty credit and

these I flow capital to times continue improved increase metric cash all and quarter of the X.X half X.X quarter. leverage second tapers times the free first the should the Our trends program second as expect in through of from the to year in strongly. generation

the structure. to capital Turning

year, happy leading facility, XX our to maturity community X.X During to the the lending quarter, the is commercial challenging XXXX. taking therefore, the pressures we allows to to the of to facility maturity on counterparty And credit on extension our a the have appreciate to approximately we notes year refinancing extension, completed the we banks a business, shareholders. strategic This as preferred positioning extension. very that was the successful of XXXX November significant Talos maturity our maturity with value and under. extending participated business high-yield and focus continue that our years, are the coupled earlier in in of to a maximizing our growing XXXX us our

to scheduled redeterminations, forma relationship strong on We adding RBL. have regularly add years relationship liquidity over our commitment to a the with $XXX another XXth we lender pro million institutions. were have over with between at a partnerships week, been end. This commitment This of a to to valuable yet quarter $XX excited fortunate the to had million consistently facility brings our new RBL our basis

manageable and quarter to our also summary, very balance our RBL We repaid is at quarter, is and declining. $XX outstanding during approximately balance drawn of the bringing $XXX million end. million In Total solid debt liquidity increasing.

year-end. significantly should improve through has maturity and Our to profile our materially ratios credit been extended, continue

should back that, pre-pandemic hand sheet of With I us Tim. will over this back of balance the have we previously strength take call enjoyed. All levels to towards

Timothy Duncan

the me next Shane. company team across I have Thank It what for We the independent think gas second confidence of process rethinking over to oil to five the and impact in you, is highest the the become on reiterate XX-years. initiatives important and quarter strategic can an expectations of to the started our deliver that board.

sources and other company and makes we what improves as next do decades. stronger country we First, over the as oil energy important. and Delivering think gas several into we energy an transition lives efficient low-cost our very is

the as important move assets they story improves, emissions oil and Additionally, hands. into portfolio, on safety and declines, as it their larger not is new that those gas companies monetize

a of and to this independents have history a trusted stay a We area. leader counterparty, among want we being in important

to also leadership are we and emissions technical we that live in the nimble, and in into our an of work pride we amount Lastly, with are and own Tornado at lowering had our Mexico ourselves to capture, of innovation tremendous the our resolve, communities focus proud on success approach. a our early as on we being initiative. emissions where have box huge our on carbon success we production, through we a CCS commercial lowering focused with of in team outside From

the forward, all conclude have counting on continue front. that this accomplished operational look very to we To the team deliver performance its well strategic our culture prepared our on I’m this with our As core. morning, as as I’m to with at and financial remarks quarter we pleased in

the We on are drive creation solid that business in delivering will to the long-term future. for to are built the executing excited find we ways to the well Q&A. in we solid, the and line accelerate while we open results that, that we With year. and operator, can about everything add catalysts and of is will deliver value half control platform we The continuing second

Operator

Thank you.

first and begin question We session. now with the Securities. Instructions] will [Operator question come from Chandra answer Northland Subash will The

Subhasish Chandra

guess, a sort and this your Tim, most will a really maybe question you choice, question look a I is I But XXXX, for false about as but is this lay at anyway. out it priorities, and Hey EMPs. of

well. the been XX% talked the would communicated to How - have rate. I that, XX% cap, reinvestment be as talked of which industry prioritize Shane previously the has liquidity following? priority might rate, production the I The don’t you would think think revolver, a I growth concerns a about through, given or about XX% paying that reinvestment some off You

and to If rank you? between three choose you those would have them, how

Timothy Duncan

of first. rank growing wouldn’t production We kind

direction of. That in we to something certainly talked we very tick I which continue priority, is proud it mean, it I are have the to think that is think going. leverage is down. want about I Shane, a

about think in I little a than to reinvestment reinvest one we is going and talked rate, thing our bit to that when friends, it different applies we you that call, what compared of previous the I exploration. think about terms today we do maybe think In are onshore in

component is little that dial we Puma part reintroduce way. that what we portfolio there of that as what to that back we of maintenance talked well, right But have of So we where that we reinvestment we to is and in have year more it component we that think that, And added do. exploration. a want just the add XX% rate And some We that by is have to want back don’t West. results the to do, next if have bit Shane exploration then a a is there kind got good back. in environment. XX%, if obviously, we environment. we an and if do, distribution And of can that price we But I part was to price about. again, of that And than of more XX%

you have have that. and kind is that If drill portion you those success you of in really the your where And in value has Greenfields. through long-term how that would be exploration, there to of think budget that And anticipate a is is are lucky we to involved now about do, think develop about we to bid. creation you

not So it production. about growing is

where of the respect have debt. of where between about it you to a revolver dollars down long-term of abundance that as right to want is and in a think an pick really the paying position can right level riches, discipline you value projects. and But I of down the you about high-impact be to you creator, flow, think is have free reintroducing that with some maintaining level maintaining more cash paying

Subhasish Chandra

And We you want On the seen of a banks would kind level preference the a you? others there to comfort for shape that be that just revolver, is have? entirely. have

Timothy Duncan

over thing Shane. hand revolver, this thought going But of Look, of about the to one current are banking the I’m and some Yes. to if in you we kind of community. kind aspect about the of where

and new value that keep we think to million, where additional banks some us any that I had that. had And of news And commitments to just capacity, we love we buying XX think attract speaks room know to capacity. sets content like don’t $XXX is comments we alone to banks, add credit bank. gave kind senior talk can a those million about great, We of have would were to that a able affirmation that and and So the at on base. $XXX if have we borrowings. that that the secured Shane our I kind you the of assets. affirm

Shane Young

Yes.

get I So look, bank think the again, to market. we away trying see people from

partners We that they hedge banks other extension added relationships challenges highlighted of are to banks. it maintain certainly pretty are a the through bank to is when went it whether bit it certainly get week. us, want things, process. is involved. lived But which M&A, whether the our great little consistent rate whether are we little just the we have market level relationship that down that keep may bank whether is Tim a we and through have we book, We great to our cognizant at, a it we that capital it the new bit, with strong a but always We this is markets, had. And of we want utilization

do We are glad to it.

dialogues and to we have we out. as we that XX and us. the fall think is to today, that for like Talos position. are head have going will banks But it continue see to And committed I things got look, shake into outstanding be we where

Timothy Duncan

in an centric from areas. that being XX-years is jurisdiction could I as solidifies how received. the well because the in want think to think, bank, It of now. it add And is think to bank I about kind where we international I message to firm from Mexico, going, think a is five we different a the certainly in other that be speaks it how Gulf of And to nice bringing of direction is look

Subhasish Chandra

underway risking is if you sort already? And are could us about remind the you season to then in half the how isn’t as it of weather begin, back

Timothy Duncan

calls, average days this averaging, model. That we six only can five-year is always years, five those a of in production fine. corporate as we we starting where point of build but this Yes. our shut previous for downtime year, had about a in. material And in of level last a We we rolling as and before probably A about of thought seven talked kind - sometimes year, I have or your XX% would we days. shut were storm some three think, rolling

too for Another not be It XX% your it happens move three shuts production assets four of days. may storm to just or your even powerful. in across and

You just that never quite know. But we had to five-year a that nice rolling disrupted five-year stay average. kind to Last average. of year, have I would tried say, principle. we But true

we similar that I a kind And last into So down. days We think we why that thought what but let an guided was to year in didn’t year. put we blend year of those did this be. last is about think could anomaly, how we year

of obviously, had that be Now could and nice where are forward the point month in so going far, months so busy. in are year next we month. August we But certainly good, the last and three we a

of you high guidance. of year end easy And But could will If have we slow, are production we year. has have half to just the way guidance. you think on closer we But just it at is so robust might a that in that then we certainly If should get we have about they to where I our really the where time team busy why of the just to that and phenomenal we have done season, some job when a second is are hitting is the downtime we a have storms. to - running, look you to the recognize are think think see.

Subhasish Chandra

it in COVID Gulf? back the had in change especially to something you quarter, the is I imagine of light was budget, do this wondering was of news there the than a expense Yes. I the seen other And story then we overall And if P&A been, some announcements have larger to didn’t a P&A for it. with has your but quarter,

Timothy Duncan

say It weather operational sense makes from those who an the story to And months, this platform that. to I’m nothing is saying, to just special a or about going crew It May. to windows. why second to if road, that you weather take activities." I windows, our as work good really, Yes. continue of says, that Those and is And facility," can. May. guy with No, kind and that are nice another the we want best best is to lumpy think my those good reemphasize all and a think high follow where always we done offshore, crew comes we even to the this to it what that my weather. June get July job I is on and late Can great, going it is probably there "Hey, windows are and do And "Hey, yes April, really we we weather is are is because are weather move try much is guys and me as to within when this look, confines quarter. of typically, capital quarter of you are annual working have budget will weather May, great.

any than So it kind complicated of is more nothing that.

Subhasish Chandra

Got it.

The might is outcome broad stuff, I one a me, what CCS sounds Okay. And like brush final cetera. even Could paint mean, picking sort final with - look for for project? it like of Tim. you up the et it momentum, a

Timothy Duncan

it Yes. can a as well. he I must weigh more, Bob and in little start on will

complex The about look, and clients I here your for industrial And question trying reading it along this where it, COX thinking to some this related well. about chemical sequester mean thought when it. been emitters, have current are But of Subash, I there investors waters is as key tax the it and place enormous scheme then, plants, leader it a do the about, you think move it, get is to water, then is do an extract great in and what the you you your are think plants, emissions a is structure. ammonia interesting credit thinking to the all is need to year. are And do the you is, tax Gulf Coast, right kind where and conversation methane right place and place here. current inland to the not time. that I million doesn’t is metric I probably tax that certain different we kind credit part that the now. for right higher The emitters of is structure they emitters. probably a different I million and think a plants, state work a think, are works think when a There lot of XXX And tons coming, about that. of wells, around XXX

have You rock the right the to have right right at in depths, salinities those the aquifers. properties got

contemplate we this, EOR purposes. As for it not is

We talking just away are COX. putting about really

as focus it global do we what that is have And think apply kind need down is segment get fairway monitoring. business we right if is emissions. drilling, how do it are of the frankly, is that segment. labor it, is is of these of and logistics is just, looked it are what it the very, well. at we we is realized I permitting, it and is it business very And And we side just we overall one into These a that, yes, are and growing going geoscience to to on skills lowering it. we different a it

to We guy They States. known is Storegga, Nick, is the time. a store. So their way we it the about the talked have the starts at with there, have move think our you And think kind of he friends CEO a it. I wanted project I to business long is working to a on started to

are that going tenant, and find emitter. If is a right going then COX, to can you more find business. that an get the away you find you store, build your tenants, more throughput and and right the be you as going then through to to are to And you you where is put to are going store

that that. reforms. thought But transportation then in first team an I on certainly on chain ones into into going it people the And of contract And that were go It here against on And one I to that little - signed effect. store. are going in lean in Tornado big area that a store some think like when the the in so of working volume flood we midstream its it of water discovery. execution and say came is team it What I and deepwater trying kind to our to you and add out bit really a about the really almost of here. think you would of what to we the a create. really energy is didn’t you clicks has all don’t the Bob clustering they wouldn’t that doing the working we made more progress. is limit and do. to you first going is that be a it. that in of making hard something the But we was just of issues have That team what value believe asset. I together something people certainly are emitter, And got bet and are probably what They are kind. a it, Talos regardless can just Mexico partner that. elements of first his think can predictability is keep putting on We our and

Subhasish Chandra

I it last Tim, the And promise, one. is

sort pipelines pipelines bracket guess Would you to handle midstream deal? of be ability or companies for there. element. have COX is dense they Just big on to follow-up the just element pipes a several to that? those years a in that, the COX. last characterize that able you it system is of the within I do back pushed the mean of to of as or to retrofit older need that it which the final some be be How not midstream would is a think you way built pretty any I

Timothy Duncan

an there there But a so There is is again, actually are pipe it and pressures. a mean pull that more around COX for of look it repurposed a at almost yes, And can’t. working corrosive a various it. that. map doesn’t But Well, things that some certain reasons. is on is in-depth sizes there little a infrastructure material. that. of of conversation you have be out of and is can’t - lot to And just couple obviously,

one separate you pipelines redundancies might lot these a have But be lines, use systems thing and redundant able lines. to the have. pipeline Some of and do

urgency have is question. that about when And deliveries, you and about they And project right-of-ways. and a actually think project key about important timing of original They have the together, putting so much in an was this space. is about your which

to locations. different of room is and different stores one these partners, is different of plenty have Subash, it geographical are So for emitters here. different bespoke, different. There a lot is of all every going They

ones. key not the up are the midstream somebody’s they’ve and their have, the potentially to infrastructure and guys your of to access existing they’ve But got speed the within only use you got shouldn’t project. We right-of-ways ones timing we emitters that that elements be can only

Subhasish Chandra

Thanks.

Timothy Duncan

appreciate I it. Thanks.

Operator

And will Energy come question Heikkinen Heikkinen with ahead. next David the Please from go Advisors.

David Heikkinen

due continue you and a all that thinking Texas morning submission capture guys Are the you really Did on submit Coast? more the in in Good carbon wanted proposal Land was to side. Louisiana Office mid May?

Timothy Duncan

public, David. don’t think are those submissions I

So don’t Yes. if and through of we of it. here’s is not Right. JV we I I with answering. into contemplates Mississippi That That great. Florida. But even we the Storegga kind why Corpus I’m you, tell did, Christi the talk about look, and would State Alabama what is heading really have think can

commitments three that of North think space That So clustering million with be up to Sea then in project these folks, metric U.K. in think in by started projects. leaders guys a XX. are two of could and the these how to about they the million terms is they I tons more

the your offshore well, waters in you that in David, Texas? that that duplicate Absolutely. Absolutely. well, know duplicate background? in we you of can inland so so Can And Louisiana

the we isn’t not area Gulf there on. so And focused an along are Coast,

David Heikkinen

at looking XXXX to opening about Acorn, a or like then and from they to time Northern like and you having, considering for injection thinking injection cycle we in description. then awarded Norway scaling. said, talking and the award better like XXXX, Is close years getting of type planning up the and Lights couple are in that of Okay the like were are store probably is leases

get Sea idea trying the projects? to of Just North an

Timothy Duncan

- think, and again, your that project, it know project if Yes. Acorn is I project. Well, the I it quick, don’t like or was I don’t not first, if on our

and we looking get don’t I my So Nick year think injecting calling (Ph) don’t and to it, need right. they saying, me darn I want are at project XXXX. and But misquote kind in of [FIDing] this

Shane Young

Late XXXX.

Timothy Duncan

Okay. would obviously. call Nick me

David Heikkinen

So - store the is they - are opening with the of component. I was that using opening

Timothy Duncan

Yes.

David Heikkinen

five and in, way think years are the So tenants the then is it. about you FID coming start to in with

Timothy Duncan

the as Can well you in the sense that But right space, of to are place get now distance right What anchor be emitters it in very that compare But it there? able also right-of-ways. space, and can like be right that you David. I the right projects, not just infrastructure, carbon over you here hard many the view, think the the bespoke. a right, store. this part kind so area, do are so amount little by but off tenant, to the the the that think I I getting the stack on the is in getting we Gulf I other. we things proximity working. It is And again, But quicker. But you geographical the than open the there yes, I so, store these that five There of maybe (Ph). and [plum] we clustered first much capture the a years is understand speed of might move way, store move one can to first store think injections they geology, our that well, pore that, up is the with and store the so so emissions right and brings from store. in to are for think able the one starts to getting you is sooner inject, again to in store, - Coast. think can again, kind the

to other I have If you quickly, get moving you have going got got mean, you to are partners. partner. a a to transportation project have

have to on emitter an anchored tenant You the got side.

that is You want ultimately, as possible. But to to the of go it all as close somewhere. got same together time come to

David Heikkinen

Kudos space I are and Oil to all, like thinking? you are Natural vision that vision Gas reminds the is years, for. in me it Danish looking became some we the before but way they a the It something takes [indiscernible]. had of upstream you

Timothy Duncan

have oil we oil and bigger conventional and I -- that. I want ambition to company. that not appreciate of I deemphasizing David, gas what needs an Frankly, mean it side. like. think a much Well, want is to what We on we the do we look gas to be

know I relevant to foreseeable the oil companies are the to needs own someone And for But monetizing thinking We think assets about going the an for those future. and gas space be forward. in bigger assets. independent

we the think pull the going and we You would more are really get energy is to gas it kind keep have about, this away oil And just we what of I able really it problems be is and I that team to are what what using call in this local. from solve talent, is trying solutions. do. And to And to off.

work. a got hard have of lot We

see We partners, we it, but have make see got And see finding it if to determined it. are keep because you we to it work. I’m we glad

David Heikkinen

Gulf choice you you probably liabilities the all fits. costs other to seller. saw you this back at right and flow I and the come the buying good a of to back back and is partner have some and some people, those do acquirer way think things Mexico for don’t private all another had flow company We year of the properties in Hess are abandonment

good a is that thing as well. So

Timothy Duncan

Yes, Thanks it always is. David.

Operator

KeyBanc. question will with Steven next Dechert [Operator from come Instructions] The

Steven Dechert

Or looking to you more happened see think Zama, on opportunities. is you guys regions? of Do be in want to Gulf focus you it what Mexico? will other the are With plan where at at more just

Timothy Duncan

XXX% Zama. have we given say wouldn’t I on look, Well, up Yes.

think I monetize a right the process is to just value. there try to there

would go giving won’t we let’s so up. ourselves great consider And I but detail, just into not say,

day we that about hard other work it. to I West. BP’s But We are as other hit value going mentioned it Puma areas, there earnings try and the think actually noticed excited the we to release, are the they for at discovery shareholders. yes, about create look,

but So There we salt. lot is around appraisal timing there there underneath peel to the kind is that more type project. the is It are is right and a a that process of we lot of want of back, planning. onion

Mexico. of of is Gulf the a And could of so It some acreage. good more lot It to think the plays it are in but speaks have is where of time. majors do. facilities. side trying And around learn the But some eastern in there a drilling, we you are There will the up are we of emerging is that to I is we neighborhood. a not plays thing that that other on about wells very lot drilling open

outside things And production happening in are Greenfield eastern Gulf deepwater we the we there can buy so And where Gulf the some excited are we Mexico. both areas looking about side the or of in is opportunities. then of areas absolutely, where

project. exploitation And not and but that so is only M&A, that base again, we want a to company be Greenfield through the business growing has

is Hess have folks they of to created your in some engineer you the in see portfolio. it doing want Guyana. But guys is what young for proud a You - I’m benefit for that as it are like has and that those of as

for And potentially certainly keep looking that, areas own and looking we and have that that risk-taking assets But in own other on did through Zama, absolutely up Greenfield are for replace do, and both found or are we giving so really our investment through still to partners. not on we our portfolio are that. we to been going

Steven Dechert

your that the end of full-year? high Okay year, half do with think of the great, range thanks. production you then in you just second guidance And towards for the higher your production for of expectation puts kind the

Shane Young

of Shane of Hello, barrels is would X,XXX day say averaged the year, Steven, first half Look, we a here. I equivalent. oil yes, it

of XX% XX%, half range than and expect year. be is Our second to to higher the XX.X% the guidance in we

time tricky a year. is of it again, So

not would or are I coming safe a statements, outlook. that that, with we it would think our So but say re-guide be out be any to

Steven Dechert

Thanks. Okay.

Timothy Duncan

you. Thank Alright.

Operator

over question no questions At closing This to to session. today’s conference any back further there would CEO, turn queue. are question-and-answer And I this remarks. conclude like the in Tim for the time, will Duncan

Timothy Duncan

conversation. and both the of And year. the Right. call. was again, execution first half operator. Thank quarter in thanks, the the everybody, for fantastic, Good in the Again, you, second and joining team’s questions

side, you the we on to some off. quarter second mentioned, see taper capital lumpiness to related window, are As obviously, weather of the the going that

next said what a year. You repeated think are of the is and as think I into our we of are I diversify work. look prepared see gas five it how in and that to energy to kind our flow what you vision the do, free lot my But - XX-years. going are Not a the also second we lot cash over going ourselves trying tipping are about we see what to trying to the you gets hard how we we of proud the of the side half generated quarter we prepared forward. I are to and in of And oil an in of second only are that remarks, toe grow become company trying proud going and starting of saw and is to

are we a and got dedicated is doing excited. have team We it, that to

giving be quarters. in updates to excited those going the you are We about coming

we your soon. to thanks look talking again and So participation, for forward to everybody

Operator

conference disconnect. The And now presentation. you for may now has you attending Thank concluded. today’s

Sergio Maiworm	Vice President of Finance and Investor Relations
Timothy Duncan	President and Chief Executive Officer
Shane Young	Executive Vice President and Chief Financial Officer
Robert Abendschein	Executive Vice President and Head of Operations
Subhasish Chandra	Northland Capital Markets
David Heikkinen	Heikkinen Energy Advisors
Steven Dechert	KeyBanc Capital Markets

Talos Energy (TALO) 4 Aug 212021 Q2 Earnings call transcript