TALO - Earnings call transcript Q4 2021

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Operator

Good day and welcome to the Talos Fourth Quarter 2021 earnings call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Sergio Maiworm, please go ahead.

Sergio Maiworm

Operator. you, Thank everyone. Good morning, to our Earnings welcome Quarter Fourth Call. Conference And XXXX,

and results to Shane Duncan, President strategy, And and today low me Officer. Vice are Fielder, Young, Financial Executive Robin discuss Vice Chief Officer. Joining carbon Executive our Tim President, Officer. Chief President Executive Sustainability Chief and

based by And remarks Factors filed assumptions And today. like differ undertake forward-looking for with XX-K statements include information statements. could results as may Before the no I'd XXXX, yesterday. we this results materially to will to update we to get these events. future obligation SEC statements. remind new December in are are Any of forward-looking today opportunity XXst, from these those cause these on in statements set on contemplated materially take our that yesterday's the started, or you forward-looking make that our because differ that of release. year press Form we Actual to ending call this forth

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

Tim Duncan

to and quarterly performance for per XX.X results record of Thank of barrels financial delivered XXXX, achieving our strong I'll the oil fourth thousand quarter you, operational discuss equivalent milestone, first Sergio. XXXX. We starting day. production a of another conclude with

at total almost weighted for oil XX% current XX% and oil is environment commodity liquids. production favorably Our the

which $XX, oil Talos for adjusted strong. We EBITDA infrastructure. in strategy high-margin, of fixed oil barrel owned, the demonstrates hedge losses when the weighted adjusting the margins benefit quarter, production, our $XX, new largely of equivalent over of cost, per Our adding very or of cash generated were over through

free of quarter. strong $XX generated we cash million the flow Lastly, very in

For day XXXX, Shane to cost beyond annual also leverage incidents safety approximately shortly. and free XXXX. flow record goes This we million. continuing in recordables This significantly million our over of increased Hurricane reduce performance quarter offshore production $XXX of equivalent thousand an our to those increase and had strong throughout delivered will the recording per of production despite for with full-year on third in to details And XX.X amongst EBITDA oil allowed year. over control liquidity cash XXXX adjusted An time XX% associated already efforts lose strong the the year, peers. team provide year Ida. approximately ratio drive and outstanding our of down zero alone Operationally that their barrels $XXX of us led levels downtime from

XX% hydrocarbon recorded our third intensity, the zero target of GHG consecutive our on For offshore reduced we than schedule more meet baseline to and releases a putting ahead reduction our achieve track goal our reduction. of one to further XXXX XXXX stretch from by of XX% barrel year, and us

decarbonization. set attractive our how on as early Talos can to into entry business, into an utilize Turning we conducted transition reminder Capture best review and XXXX late this the business Carbon our our XXXX of contribute in a in-depth skill to energy opportunity, to

the this midstream Baton and including customer a to a significant strategically to XXX holds early export at team Since confident And our established COX connected the build front-end CCS where to made across customers. the States, feed weeks out advancing facility thrilled leader. solution We over and outstanding offshore to significant engaging and are commercial key solution last from is with first be expertise look along fourth of The we've make the market CCS with a technical Freeport the along engineering progress River the source we business, emissions point infield alliance regional point and -carbonizing sustainability that source of accelerated we a along most to and strong publicly Texas sequestration project. EnLink's and of We're tons. technical sequestration addressable and Riverbend capabilities, X,XXX-foot partnerships TechnipFMC, in of of And the Coast we've in with our emissions capacity The the begun Fielder added is will model named highest important date strides a pet corridor United global engineering diverse a with It's the the drive on-site time continuing project our Due first an over largest acreage we energy. projects chain. industrial going huge project Gulf coupled the project the further it the combined. variety of and Coast, with a a solution along Technip our the new lead offer Midstream, we projects already Coast X,XXX in Gulf most we've across brings efforts will a with capture project a And with success, Jefferson natural announced The made key in projects Our emitters. We which one sequestration, develop formed from will we an world, achieved conventional XXXX, Mississippi portfolio with CEO hub alliance transport accelerate money. then, column, quarter, team were Rouge surface of company. sequester to Riverbend In milestone, To Gulf to largest and expertise sequestration a as a carbon and project midstream well of to fully offshore combined phase visible we first efforts that our large de potential call, Orleans, operator rapidly the state Gulf or potential geology, alliance business, coming executive Coast. the processes, one project New capture companies. forward, progress design, the the current of first value save of business metric CCS of carbon LNG, located million recently large very quickly next the site, development advancing of also the during the the And project base and are of and aquifer our integrated forward opportunities fit. become customers. the as announcing Robin regions site, provides the our and This capture us CCS it's to CCS announced miles collaboration geology saline first industrial EnLink market. recently footprint. it's moving portfolio as The our a well portfolio. carbon while GLO projects, facilities being our to or projects. and in pipe background LNG between in pursue roles a Texas continue custom as to of dedicated broad as transport, We've proactively quickly the with sequestration project, just our operational that across across one ranging two and process with the source for development to would then, and both integrated significant of physical our subsequently and commercial months. County. a traded milestones

going is available leader. is for and building prepared as on our do of Q&A she think to business and us call this the tremendous job positioning at Robin the is our remarks. CCS I So, the a us morning sustainability conclusion joining

reflective equivalent $X.XX our with $X.X per to back we fully PNA XX% million with and barrel approximately and of upstream $X.X the base of per of Proved MMbtu. XX% of of year-end $XX PV-XX billion. billion $XXX PV-XX utilizing those held carry figures environment, include This the in commodity year report. a all approximately reserves sensitivity and today's is concluded at Turning over year-end proved SEC proved with a developed which reserves, our reserve prices associated a reserve value price oil. reserves are $XX.XX barrels a These properties a barrel, At more audited per business

$XX barrels probable an million the at reserves SEC of additional we -XX $X.X hold of with PV Importantly, billion. prices

remarks. is that, I financial very solid, the we it we base over turn reserve some to value to will Our the address details XXXX aim With the fundamental on Shane the significant unlock unrecognized of to operational details and update that of an future. more and and on in some see program as closing then XXXX year, and well conclude capital as full our financial our guidance. I'll quarter with

Shane Young

joining and full-year I And This Tim. quarter Thank call this XXXX, will you, for everyone, results. morning. the thank fourth discuss you our morning,

addition, the is and production guidance fourth year as high in in In day the will thousand was range $XX the and quarter. highly operational the approximately equivalent. provided Lease expenses of $XX financial for for averaged I cover XXXX, equivalent weighted at as the liquids XX%. our goals quarter barrels for per Production year. our XX.X at well This from quarter or totaled barrel this efficient uptime million benefited operating than the end extremely for per and operations less our earlier update high

less than $X $XX.X barrel totaled G&A cash recurring or per While million equivalent.

realized the prices income $XX million. positive high share. hedge million over adjusting of million and Net strong losses, $XXX per over of barrel per to over a MCF. adjusted business $XX to cash $XXX.X barrel for million equating $XX a approximately net These the a $X share. EBITDA per income costs of results $X.XX As per $XX.X equate of equivalent generated per strong result Adjusted generated net $X.XX we of EBITDA adjusted or quarter. And Further production operating respectively. backs $XX and realized was core competitive was for

$XX a quarter. just All million, hedge losses Capital of before $XX.X realized after working million these of quarter. resulting the in approximately free million capital $XXX the during totaled flow cash over in expenditures of

XXXX of generated pandemic. is of production approximately XX% the full which year, liquid flow the full weighted levels. working facility. legacy equivalent million, $XXX was XXXX under were entered and $XXX.X credit below Talos again, generated losses a full significant cash to $XXX.X equated the capital. portion over free cash used for realized million reinvestment our COVID-XX production company's of we our XXXX, million the rate. low the of approximately year financial during from to Ultimately, expenditures Talos and end day, year full Turning free guidance EBITDA borrowings XXXX, of XX,XXX before million year barrels early average repay for $XXX Adjusted of for hedges Capital highly a In the XX% impact the per to flow of inclusive

Talos one has at quarters, three rapidly reduced last of X.X almost approximately Over and ratio reached leverage turn a the leverage by full times year-end.

expect During target debt XXXX, to the strong expect continue range further debt-to-EBITDA and to that deliver we within should company net next XXXX cash to times reduction. be and one-and-a-half achieve quarter one or To one to free approximately year-end will by end, continue the two. times we flow our over will prioritize leverage

Finally, the liquidity and capital $XXX free two built million with to of working banks rapidly over cash course of credit XXXX new approximately addition facility. of the our flow before

consistent the with downtime XXXX handles guidance XX,XXX As which the HP-X downtime levels. The XX,XXX year. expect now for address release. disclosed planned equivalent to oil primarily a our and production between daily dry our planned per and The X,XXX the both downtime, to roughly equivalent year-end Starting press XXXX to for per we I'll in barrels third-party fields. relates $XXX previously impact including process, guidance equivalent day stood X,XXX details yesterday's that Factors, will the unit by Phoenix floating barrels volumes year, our Tornado of is disclosed production to liquidity XXXX some million. unplanned X,XXX impacted production have production at recent from and result, X,XXX average a negatively with of of production; day. HP-X dock approximately the barrels vessel

to XX maintenance For the undergoes years vessel XX days. regulatory several every of requirements,

This and window in life otherwise will third regular completed be dry-dock maintenance which the during times. extend process to which This field is production will contribute items, high key and During up fields quarter in quarter. extremely addresses the the second deferred. turn begin

the of from midstream the includes year. forecast System impact the full-year third-party our in Eugene of recent Pipeline Second, downtime Island first quarter the

in barrels result expect X,XXX and to We over to impact a first will return eminently, EIPS day it service the barrels the per day to equivalent and year, per X,XXX that full approximately quarter, XXXX. equivalent X,XXX

million. for be the It and expenses expected infrastructure total G&A XXXX of begin costs $XXX be XXXX our drilling years. adds the expect and $XX G&A million. of expect come $XXX production XXXX. are future Operating risk Due of of and management, invested in base and over million our around in and during to progresses additions exciting our completion the will in capital XX% CCS, our online be year operating as and production completion program our for business. is approximately production resource Roughly and growth. approximately of invested year's year $XXX million includes the investing slightly are exploitation allow For Carbon Talos. asset as disciplined for half Gulf approximately This will our HP-X lead dry-dock growing million $XX have business, cash for appraisal a adds expenditures program of open additional times, as timing leadership full-year development XX% XXXX, expected land, exposes for $XXX and expenditures to are million the second and support well expenses capital to of will program million the the impact generating to high Capital to to expenses million we cash $XX water Coast program $XX spending own lower portion of Capture material to drill our Carbon future and expectations between measured, production, build-out beyond, to CCS for to of well Capture and be incremental through and we as and items. of also rapidly the TNA, sequestration. related active. expect investment cost The projects. other bit supporting weighted G&G, capitalized of Capital to drilling costs inflation. operations infield invest It we position On inclusive drilling when will and our the XXXX balance for includes

to for rate alone, XX% be reinvestment carbon investments and to upstream XXXX, when in sequestration. approximately factoring X% is X% looking additional expected Our at in when investments capture with

mentioned, continuing cash market to significant as we current deliver paydown. plan this expect previously our year. during And be objective conditions, the flow Given debt primary free will

was and -pandemic. expect result We liquidity this XXXX, the than approximately greater by ending to one lower times year-end reaching leverage in with Talos leverage year pre

and stock X daily significantly trading now the On we to has -pandemic. X liquidity equity the side, pre and volume times Talos XXXX enjoyed increased throughout is

long-term a in should been As going overhang in significant hand its believe stockholders the of investment, exited technical shareholder and position largely to back to that, forward. we has benefit previous trading call I'll Tim. has the stock the over after resolved our a the With accrue

Tim Duncan

Shane. you, Thank

series provide will on in production. of impactful in Mississippi discussed, three projects we year's our XXXX have Shane subsea will projects XXXX, would this that Talos but back area asset on development also drilling for focus and management and Ram our Corridor the Powell that normal program, Canyon and facilities will around operated drilling of balance and operated rig we into including platform work our a As tie-back investing still half will facilities. be projects Pompano reserves Pompano two our focus the projects of growing more the to facility, the and Miocene second specifically In tie

between be and XX% these will Our interest levels on working projects XX%.

of as we to properties generally Puma represent the was also feet have as fields We tie discovery rates in and goal and of our -- perspective The can drilled our gross fields rock in suspended by well to appraisal XX% XX,XXX-barrels look Miocene these second discovery three in evaluating a our additional the multi-well initiating a our the per between non-operated single-well BP utilizing interest. if West opportunities the that found that sub-sea equivalent we sub-sea back partners XX,XXX of initial delineate be nearby will depth our and as These working infrastructure These hope accelerate surrounded projects, capacity nearby will adjacent similar X,XXX- additional In in a projects forward production half as provide fluid with The production, keeper, West. with to also with these participate development operator. sub-salt as one discovered Puma facilities. discovery, would per Chevron also is sands. expectation initial and appraisal program, day we're unused the in in Because well prolific the XXXX accelerate well, we attended successful to local BP be original the facilities. we tie back and well well. appraisal resource will to tiebacks these of and will of to

growing required Our project X capital year. feed business advance process to sites drill EPA our guidance wells stratigraphic to announced work, to advance, CCS class with test during previously and on respect allows multiple us the permitting the

we believe in opportunities aside industrial shareholder our emissions spectrum, industry, soon. not market quickly to opportunities broadly, set great an that EMP will our of also will a the material in cash plan transfer is value. business the long-term continue delivers become in lowering build the we moving that's To build and sets found I'm resources And companies. we future proud all make material production, program to have unique which and U.S. Talos Carbon conviction, and conventional additional front saw differentiated new We optimizing our house. team's capital flow high leader. We across stable sequestration wrap believe that Capture Access and and the the to only portfolio resource to risk while vertical hope we for targeted truly on costs announce at have a effort, that amongst reward XXXX in our progress margins, evolving up, a and expertise offshore lease important grow a free with of to Talos skill critically but of business

Shane liquidity a throughout the also anchored as experienced that and subsea believe generate pressure billion and our net into Now the our challenging alleviated both business through our selling mentioned, cash we've flow drilling a years, by budget free expect trading a as in equity headwind we technical for inventory, coming projects past impact base in can from we year. increased, stock in over has positive With the that XXXX existing XXXX. holders higher

So fundamentals future. several of the business. Plus, diversification will base positioned Q&A. the open removed highly in line driving strong growth Talos rapid We technical business and think XXXX. look Capture our a With that Operator very exciting forward to represents investment opportunity. for We the years challenges attractively incredibly in Carbon an is for compelling

Operator

you. Thank

We [Operator session. the will question-and-answer now begin Instructions].

Our comes Please with Subash Company. Benchmark from first go ahead. Chandra question

Subash Chandra

Tim. like a Thanks, number. a dollars as of Billion

pathway wanted classics on first I about is What Just get get the the fit permits to first FID? where the And that, to in talked the working projects in to the on status, and to to just are before CCS. then process? does definitive pathway

Tim Duncan

process, credits here so look, Robin projects, of of Robin to it talked some going answer an a of it -- control the with value doing of three work you're FID. monitoring these parts a that then then me bring I the these a they Freeport hub And and little why to hand projects an But storage more going together give we the that. And lot can will that of over about The or And ones together an piece what to opine where we before, source of you to all as EPA the we when have process, are part transportation a maybe motivation we're announced talk about to now we the piping have now right you one and hope they're them, there's you could And going on we permit the than who then working when have opportunity questions emitter, project, with quicker piece. and that emitters, always as talk that you parts the things There's got view of come some is with can their to of is they've doing those point a the pull that River try must well. those have kind do FID. well. let I'm before also Look, on with that bit Yeah. they incentive carbon. we decide all some ultimately get store LNG monitoring a be the piece in capture while as first, starts I accelerate retain can That's on alliance my And storage transportation Robin and that. have high-level and and must starts then which hey, the Subash. midstream, -- together, Bend a have a that of to an about potentially processes. may emitters. it which a the some who to go and comments because you ultimately, to chain. you're to we little entering with

Robin Fielder

Tim. to from good [Indiscernible] Thanks, And you. hear

as CCS three you the the part want out newly is classic our in announced work to file and for is and anchor pre Freeport, acreage, necessary collected to for continue Riverbend to Jefferson We projects, project advance and emitter Louisiana. of these data of all obviously mentioned our County key but GLO to a piece, So, that go the -feed permits.

a manner. wells, we data about that's timely collecting test us the drilling part got included better additional make some these when talked in can sufficient what apply for permits, So to data we help these reservoir we've that stratigraphic push process that through characterize to sure we that application in of subsurface

working far will not on body filed for State And be and timeline those would the of behind the injection be work pre regulatory our too piece again, That'll overseeing the waters. into filing that has and today, of is and think, And you that. and the -feed as advancing Louisiana projects, something, as primacy with wellhead of three both hear GLO, state some which on still to timelines of then, state stores the on primacy, advanced a here. our as expect alliance of these onshore classic feed we COX year that, in for subsurface meanwhile, Texas our on the know on we technical this that, EPA. well. we later is all key As far the as shallow permits, moving hopefully,

Tim Duncan

we've I think couple of wrap goal emitter regions I that, So, have addressable of look, that. -- market. from, a ago, we partner big to players? we calls where industrial advanced know a think, setting You're a Can up with we established store midstream there's seeing

You're seeing hard the on. so the advancement teams work

stratigraphic Now standpoint. the out on, have to throughout we Coast a so have what else development ambition test, can you Gulf but need the build things we on execute from seen we still we business have

if year to last was busy, expect now busier. we team and year leadership not extraordinary for it's equally So busy be the great Robin, got and this some with

Subash Chandra

see you Yeah. to Hey, as good again well. Robin,

what's definitive, I Tim, to So, I the to other? MOU get versus one terminology guess guess there from the on etc. the parts moving the

Tim Duncan

agreement. an agreement, we some someone about they're funny. hear people if and definitive easy because want question buying to Look, selling when you things you'll announced side, to business have say, none are definitive a gas you'll hey, on often an definitive asset, so that and a get where good we're asset, at it's when it's what like the oil to a mature There we and it's look, have

business. to an We that this that want people we to sense very counterparty. in put here to why together. Here, know alone the sometimes Where that's working. and want another We we're makes quickly. and it add maybe we're that in MOU establish We're not market we're moving

look, assets lease the that addressable got asset the think Why both if they've market, entered hey, got to emitter can interesting. in reaches and bill-to-business of are we lease infrastructure -- example, this For We network. project compelling us. very agreements don't a to relative [Indiscernible] for they that again, great we've say a into and by the up see we their and pipeline pull together this ultimately, collaborate we that

becomes an into work together, of get until that, Robin, memorandum on collaborate you for itself more anchor in agreement. what you a then to enter and evolving definitive business, you emitter need to that's that again, have And works got a to. that you Robin pull that just really agreement. you So a hope different we understanding when we that you together, it as we into as It's business. that a alluded that. -- additional would anything more work, definitive have to than mature got a process to But

Robin Fielder

All is, great alluding that Rouge, market Tim now Mississippi, was Norland's we're area. that only the Baton thing as River, The add, know I'll comments. a letting we in solution have bundled Corridor

Tim Duncan

collaborate, store obvious for looking but going doing that into side you're what that the you're going same partner, be in areas industrial you're again, duplicated for is And can an for the market model you collaboration and you reasons. be that to other creating. in really accessible to is the Again, want to able the pull look Meta to

Subash Chandra

-- sounds going I stock? the four buy like. how is suppose so Okay, single cap, How that, we close it about of billion post amount good into that got of it. And think think this do you to every are my XX cash follow-up, years but you the etc., opportunities, market should that to free a back future goes flow

Tim Duncan

question. No, good

we still at Obviously, in lower but losses. hedge to free are taken there a But look million think you like I -- you have wind oil we year, just $XXX on questions. going cash by my look they're hedges all questions, starting to down prices. was had behind, of XXXX gaps we some So, flow. put if good the Those but created way, pandemic had this Subash as the has

years, the as hopefully and do by we which our our X; commentary imagine to and X, ambition I'm going prices a think creep we kind to but is with start that hard don't one XXXX to we into generate because that we before X, Shane, collapsed. You It priority. why back our want multiplying around through working then billion X losses I'm good get where pulling well, a primary those down back let a kind to have area addressing talk of keep X to just at bulk allowed it a that it's it more our about slowly to maybe takes to goal. when to the And not capital dollars of see constructive have through That's as can profile to environment couple deliver could system us it X, closer this down some should question. there back X, hedge shareholders. to this X; have business that add time pandemic, our obviously debt And to was going obviously foundation. look, the Shane now you thing we year and of I we're that time. where one a From the only priority be look of year. accelerating over

Shane Young

to happy that. Yeah, do

last We X.X. this X.X, we it's we in year So, I look, exactly right. year went ended through, at think were

time. course So we the year. million to deleveraging. Paid over until debt of intend off down rapid $XXX stay the And the a just to we one get under of course

relates think that M&A be sort to do essentially then Balance then and But to of the about. think the as range and things in to between we think inside the for I We there. opens activities M&A think other to possibility is window, because that we us X.X below lot a marker. into getting over one-and-a-half M&A the to from window talks tend down it range exclusive up around there intend the of we'll of out obviously, Look I period that the mentioned that our put more that you to table there, times our I keeps know and good want as that next ways capital quarter return we in to we Tim a that leverage or we that hit it shape. keep longer get one driving with Sheet of two type forward Once taking things don't times. I mutually

Subash Chandra

[Indiscernible]. thanks Excellent,

Shane Young

[Indiscernible]. you Thanks,

Operator

[Indiscernible] Michael ahead. from comes go question please next Our

Michael Scialla

everyone. congratulations position. Good Hi. your Robin, Yeah. morning, And new on

been you seems forward like has It CCS more you than Looking quickly with working along business the anticipated. moving to again.

it You to $XX million allocated about year. this

forward, to -- -- sense a level anticipate more quickly pre six stage, look as think of do as permit trying -class you see years? do you ramping this the that testing that? for business for does it and the Or you're you get you of in couple than the Just next

Tim Duncan

to ask Well, we about space all We we of And room We've once came I couple built day really thinking trying savings regulated previous private into for can at go about think transition. team, mean a said that things. and started we play we're and to lucky we be used before. so space this I looked Potentially We calls, sequestration. how announcement. were Gulf companies, why once bidder. hopefully we hard we around eve sequestration, professionals that look, aren't operators about industry. ourselves supposed conventional know. it. a We're geology we talked one rye understand. conferences And here, some space. into X, had We're back it's there's with from Coast that. know working the we we GLO, and really for bidding then we that enough we we we for skill that across that play to know hard State set? look, previous that for point ownership CCS be evolving Can on operators, what federally regulated space, We really offshore were the source utilize that so purposeful Michael. decided put to and once successful

River in previous And still decks said expect I do say would that. we the to I previous an even and announcement. think We've seen more. calls, Bend You've

going say it, leading probably was and And been she Robin ambitions, plenty. look, look, it got of the really put who when I but we've also should urgency. at her the additional we to agility own led a of skill over we Shane, so that -- to can I think need we've are we would said, so, so hey, business that look to And the that, the there leadership think has probably executive ambition and We much but part We this, I'm above development the express my hand there's and only to got big Robin. set. and time,

add to want you to anything we where So, on that team see going? the

Robin Fielder

how continue the increased hold local what looks will stacking look plan like, Coast - and talked of emissions, FEED pre to getting identifying across lease and a many Gulf about we in projects. [Indiscernible] just as you've injection contiguous that opportunities moving success we space into and U.S. continue development wells. I'll that developing from got with to where and advance we surface say the these FEED the And at

yes, to years put the source expect these online come a in again, to success, to online needed would position dollars time. to be just the these and advance get over time, to years’ not Freeport forth few but able just next with hubs point we our projects in we'll So, continue few

Tim Duncan

we're FID, capital it's look, not appropriate, sure shortly. hopefully, needed it's I look, make some in to go announcement think, think projects we is I program, spend it's then, these to but much, addressing And bring have to and think, too enough that the that more get also to needed what we

Michael Scialla

assume good. to at your going wells those this those. if plan about year. bit Well, a sales I talk one lease to on Look through. more can that Want going little comes know you the the I you Do don't that I sales those? do exploration those interior us forward you those, partners point, see Anything change already and you about your depend says, had November Miocene of, anticipated part if lease tell have some plans aren't but think, forward? there? of you could back more

Tim Duncan

And put of -- all questions. those are good these a those are we'll so buckets. couple Yeah, into

government leases year, we is, if about a talked precedent drilling permits in and thing a good that uncertainty one permitting agreements. what and said ask First, we what previous when to like in the related Whether or all a record. going up had we've past question that's have recompletion And fair to scenarios. political on executed of that the we're haven't And it's we've a have any lease this there's about things plugging execute we delays calls haven't things lot draw very permit, was lease. working people when that an to feel that's whether to with agreements permits were was that's primarily to these to that drill on activities. parties, on new Those to And we're sale into that to course, agreement that going because close Operator vacated, case lease just in those asset due entering certainly the vacated. lease going are all On abandonment how this lease happening us year. we're we the our and things between management related in the

So, we good we why lease disappointing don't this we it's need I on us but another to where on there's energy not things shame for because we other policy agreements. developed it we a it's will that have need have that offshore. Because whole make it have a we and and commentary call, have do around robust don't it, and discuss it's

as do we just developed And we last the heavy So why in led of how at report. we that's the of years this successful. our to that because think Green heavy lead we With because to field on led Canyon the transactions our from kind more Green We're bit, little thrilled Canyon including did a about redevelopments, discovery end that the West last some in respect get of timing defensive. reserves and it ultimately to it was there. proved ago great. reprocessing of highest year's you Michael, little Puma the area, seismic. That It West some also And Mississippi led transactions. reprocessing on did It into development -- Puma we report a to that of recovering middle was Canyon science, that how of several more pandemic were bit know, also was which of area. seismic a the data. was interpretation And level with to year depends in what year's was or the to

things XX Think we targets million as sub-sea As are They're these barrels gross $XX targets one exploitation, exploration. equivalent Canyon, move is facilities tiebacks. working there's type into more our well in of within that facilities. non-op some these miles that And so oil in similar a difference Mississippi we are to And case, of $XX then The Pompano or the this Powell. Ram interest. on and have operate profile.

we'll out. more you of have Look, give about partners second don't being these rig is up. some lined fine. we're working so year, half out excited to really very some the We We roll well. That's as we decks, details until get it. the as And a timing-wise close everything on corporate

the area with a year you in to want of spend reinvest the Mississippi it Puma Green the we're appraisal a As area. prolific money moving great And of year. an east bit It's was this just a program, of year, we West and know to then quite the Last is some Canyon in where half well. second again business. as

Michael Scialla

color, I thanks. Tim, appreciate the

Operator

go Our next Dechert Please from question with KeyBanc. comes ahead. Steven

Steven Dechert

the you wanted any there have is on Thanks. happens timing It just year? those sounds you of in Class do the could guys that EPA, depend six but mind kind going permits. a I at file lot on like you more what of to up guys. point Louisiana, with Hey, specific this like think some to that's and follow I'd say potentially

Tim Duncan

let then doesn't what I political test the can tell government move going federal think by address one can think a federal government. being of and the on I just me lands -- to federal the you government we're and there. I'm bit spend will, then little stuff our on and has doing would Yeah. may it And we that look, with specifics federal careers nature little the assets when government you know the address But If will, on take the think have -- dealing longer. government quickly. our start I federal federal of address the whole the you I

a does you're We here lot of all. federal government the -- think want I easy start that it's permits at filed. a will. be say are and in process are permit we not much doing though a there's to to think we I of have this think filing we the is political that caution an there's to think and do area interest going of where lot to have we

out do think follow You on test no government drill really that we see succeed. perfect these this we'll And have we long definitive a need to that process, you how takes. stratigraphic see a and and have a where but to wants leases. get assets there I answer really There's then

Robin Fielder

Yes.

the to be Characterization, completing these, all set using to able geo start well subsurface and existing Reservoir year. want later filing testing both to we're these this of applications and some seismic the modeling. continuing our data of as We from work So, some

intent. the that's So

Tim Duncan

Yes.

Robin Fielder

about it's be the will over the then timeline award of just on And those which depending body ones to time. those approvals regulatory

Tim Duncan

that's definitive are starts test start and to going it's have absolutely where this we But it test to what we in budget get with for. leases start we've drill the starting allocated

Steven Dechert

it. Got

Okay. just Great. up. then And a follow

great. kind Just the provide see with were with be of would you emitters, discussions guys want you Thanks. there any color can to what

Tim Duncan

then expand working that look, And huge obviously Well, everybody side interesting it's in and that have Yeah. and we're on there's Freeport, we're one. in market so We're addressable market. work then why to of also portfolio That's talking I that Freeport, do. we to trying to addressable and point talking obviously projects source progress. of where with our is why EnLink's a Bend, it's our poor they've relationships they're River kind pipe to be their got be got partner a and infrastructure; great customer in to those that with offering space of They've and that with in already really those going base, because guys. and that we're you EnLink's great partner think have infrastructure, thrilled

bullish I together. So, River how come on quickly very Bend think we're can

Robin Fielder

add just per regional tons more site. that Corridor, that and there. Texas emissions out that fits than We're XXX million the annum Corridor, what's Arthur And adjacent that. Riverbend Yes. Between emissions you our total lease to Mississippi adding River talking GLO when to Beaumont-Port to of in the

code of those And emissions And sources bait you've XXq, capture the new when doesn't things so potential exceed are gas today. able enhancements But are our current are some work emissions, be waiting pay. make we those actively natural processing, for that that direct methanol, will pointed we'll bit projects. XX -- and of to there that little we of these to we've with these Freeport. easier to that those like dollar the they help out, can emissions kinds got customers. still already pool of ton lift some queue for to And increase Tim the per quite a for we we as subscribe think IRS are and relief a dialogues subscribed the technology some having tax And our can to few that

Tim Duncan

the market, all current Let XX think of this There's of on in I the because that little a but me the expand is not for bit framework addressable for important. Obviously, queue works market some them. in space that need The about more about. talked talked of have enhanced we in others to and the pull that addressable incentives are the frankly. really playing does best emissions

are make we're know it those permits dose ready, for ready, we going business, And the drilling ready, bitter leader we that that the ready to to who because one partners -- and policy? those this in investment they in were industrial with making we forward a that for us with go is, we're investment preparing move talked available all be to the emitters investments. wait we're those look strat this to we've starts and perfect us question for a, We those issue conversation as want a test, said, if week to for your time well. and be going the classics, and those being and emitters on last Now make -- can where customers must if thing folks to ahead and

little thing lag that and be we of a egg, but can to in the a the the is be upfront. We want and that. it's a last chicken be So leader in bit

Steven Dechert

the Okay, great. I appreciate time.

Tim Duncan

Thank you.

Operator

comes question next Our Robertson with ahead. Please go Jeff Watertown from Research.

Jeff Robertson

or Is lease believe it [Indiscernible] blocks to, Thank that individually need Bend, and on I for separate to one to At then all others? do you'll morning. different six their work you. River all move class right a you the one Good in the owned three presentation. time had them to map on them try at and work each secure permits area you do you based

Robin Fielder

evaluation the at injection to in but look -- sites will those mode, We're see be. where still we'll

injection a that got for class -- an to we've permit all see any the well, the be place evaluation X, We'll For on continue obviously, may that well. where it additional option need X you'll also and some acreage. most optimal

large port Our some is current the holders foot areas. the exceeds here agreement XX,XXX for in acres, space with land good news thickness the X,XXX

of do area in But to one Industrial continue per tons XX we and just those have about River the you storage So the what annum around address Mississippi when largest option we've million locations. the emission talk looking is regional the got space tremendous the Corridor. sources, to X

Tim Duncan

didn't area in do question, put do I typically to so consistent mean, this I there that and get geology level interesting of an the wasn't I to extraction, nature CoX what's have really reason about it's of now too Look, that this the geological that think geology. we're area hydrocarbon without getting detail these a technical we need to is in daily aquifers. that in away Jeff.

geology is pretty across consistent the lease that but so And acreage.

rock can show describe is we for with ready there a the describe So good geology and that sequestration. want as to we strat as properties and test why to prepared do and much

Robin Fielder

Bend, that the River additional on first a you right XX,XXX are clarify acres Could refusal. of

Shane Young

capacity. short that even River GLO in million to how still this that out that's we've XXX we build announced of stuff right up a we and again, that around to Bend Robin option when in Well refusal to. pore some then space, LNG, tons amount that going -- you with available really me of that Freeport before time. the just smaller pore of take have, some metric in acreage hard acreage in first Again, around back we're And work to And the a but the have clear space, up additional even meaningful teams that. on, of now, the sequestration the let additional the to the alluded

Jeff Robertson

economic, two on of and projects different all return with you sorry, A those return I'm CCS, broader you all and two Can sets question about compare? how might then the projects. Thanks. the at profile point source hub preference or talk

Tim Duncan

a think Look, capital the point it. level I of with source certain removes

XX, it pipe potentially they that's to miles five, have don't and You higher XX slightly economics. meaningful so have and an to have that opportunity

midstream going returns. But all we and those great to lands. get Obviously, And it's well question, volumes and about anchor think that then an there's you're a and hub, anchor that's of you then that's it committed when trying think of I would a midstream there. where be I And It time. that you more monitoring again, model a expect infrastructure. to exactly lot have the model it of We requires pieces think pools of and is map that to you you alluded the moving in really for where will the maps some part into tolling just And show we a that injection we that where s, pour space as is. then more out of build the part market know yields and well. pipe saw. addressable that -- know a just that to

see emitter to is this. start not going have a that once We million we talked anchors, hub. is who have to a companies metric of lot we the You them to want the of really as all with ton anchor to look store again, a I to then emitters interesting. that's time in anchor going very And other

that to really that where And into and does into the that you've of The got you need, the so going can structure going space. And little rest you're the the how be? is how it emitter? better have on figure capital better is fit And come involved. complex? tolling then have to feel a out Who to the then feel partners for you anchor industrial a

Jeff Robertson

Thanks.

real Just quick. Mexico Gulf moving the in of

One I think West. discovery? adjacent Does near-term the your of that to that plans on from Puma the plans any November development appraisal have impact vacated is that sale, for leases was or

Tim Duncan

do is to just that talked -- then, Puma frustration we leasing case we that cover also going don't to would accelerating case, accelerate to original discovery I we're great as to leasing a obviously, West this, to a have offshore. from it, to it well, hook additional having go to resources nice it's of But if important appraise to go kept fringe now. need we But wanted how and figure -- -- right then, to could all. it always material. we if some everything. and about, would the being lease, look to back as we our And resource. go decide wells we're around successful, original some it. we we're but And No, if We on as which is it's It's lineate. out delineate base to acreage, what -- Not acreage, which else in found how call a up at an want be again, can. would we question. And going here, up I to you goals upside want develop to go can, as the want going well Miocene really not need can interesting. to a keeper. development example our we're we nobody it's good fringe we've vacated for protection that those quickly of we're very Look, to that try what get sands. go X And we and much the And and as back the that

on process Even to kind years of of we work our in plenty have large things come. acreage can that this of vacated for position with this We go sale.

Jeff Robertson

Great. very you much. Thank

Tim Duncan

Jeff. Alright. Thanks,

Operator

our to the over concludes Duncan to any closing like Tim would question-and-answer remarks. I turn conference back This session. for

Tim Duncan

last employees listening look, them we take a to year; this And the hard call a They I our Okay, moment all great a great about had great their is fun want team sometimes in. a quarter. thank fourth to had are quarter. thing the know had thank you, operator. Well just year work. I for

go them Our extremely I'm hard business that, know new of we to do where throughout we're And we working and the record them giving you from production forward about and excited about here, we're can guys’ look and what to year. I building year. very team is excited proud a and want really we updates this with and

Operator

you concluded. Thank presentation. today's The now attending conference for is

You may now disconnect.

Talos Energy (TALO) 25 Feb 222021 Q4 Earnings call transcript