TALO - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to the Talos Energy First Quarter 2022 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, Vice President of Finance Investor Relations and Treasurer. ahead. go Please

Sergio Maiworm

Good quarter operator. and to welcome Thank Earnings morning Conference first XXXX, Call. our you, everyone

Joining me Officer. Vice today President to Strategy Fielder, discuss our results Low President, Executive Financial and Carbon Shane Executive Chief Vice and Chief are Officer; Young, and Executive Sustainability President and Officer; Robin Chief Tim Duncan,

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

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

Tim Duncan

call today. Sergio. everyone for Thank our and morning Good earnings you you, thank joining

we had enter XXXX, goals the As specific we for year. several

metric in be lowest public the our we XXXX. First, would wanted since lower to approximately which debt one-times, to going

grow our into projects impact organically to reserve and wanted we Second, high portfolio drilling reintroduce base. our

what strong creative carbon pursue in quarter to and result growth to with still building the as one to energy well-positioned footprint. build of Talos, industrial Third, to business we goals continue and deals. XXXX. meet upstream company well we're into look with our our four business, in exciting all we achieve and we capture the the responsible think future months of a At I'm After our continue a carbon needs, we're confident reduce milestones year finally, as to the to increasing of wanted mandate to out like, balances tangible our front first world's wanted to us, continue should the growing that actively M&A to

to cost, delivering We first will provides target basically more the capacity our increased by to of of quarter inclusive those $X.XX expected than sooner. allowing company details investment and in borrowing talking of are borrowing and and over Talos. lower on to continue the about the $XXX end revenue spring successful operating in or with the and Talos one-times quarter, of share. a in discuss With year including quarter EBITDA, generated we in future the adjusted debt in $XXX excited flow stay free generated imperatives, trend our first quarter, $XX leverage million earnings program track hedged alone, on the truly the and losses first goal to per generated determination capital coupled a getting reaching time Shane quarter I'm liquidity. adjusted both In Talos million its first reduction that cash of million the in spend lighter first

additional least day operational spud We X.X of approximately program results forward Seville the March. exploitation that from barrels at and platform rig look the recently average at rig from thousand year. On and one our Pompano, in later side, to well well, progressing the production is in well platform well added per the equivalent

wells take extend an slots, the consecutive half of three will additional program rig which significant drilling additional XXXX, we initiate were overall well we opportunity to into XXXX XXXX to These synergies we prepare with in operational with As our to program. to cost. our consecutively, in now and second already plan be them expect in capital realize executing seized water the expected six lower contract And straight contract open the wells.

extended operated importantly, the following have a the in we rate assures months, contract projects. balanced portfolio subsidy XX can that More of

projects a day one XX tiebacks, production rate could per a prospects others either equivalent candidates or tieback as Rock, XX to Some that these and are X,XXX each million targeting such prospects. are and our barrels more between well. Pompano subsea and Rampow barrels deliver equivalent impactful are Lime of are lower risk [ph] gross Each well these per gross tieback initial million subsea Venice of are [ph] XX,XXX facilities. Wrigleys to while Each our

We timing. Working operations may between projects Delivery in per second of early depending and XX to XXXX, the expected by to each currently this online to using that XXXX for be late interest operator rig third throughout on scheduled quarter XX% on project. currently approximately timing expect them the are of into be accelerate is levels rig. the rig the results though quarter, the it the is ongoing depending and

in with in second between half portfolio, non-op XX%. of Amongst and XX% is subsea interest to tiebacks wells, projects, these working West XXXX. Puma the discovery which all set three of non-operative to the XXXX to ranging participate the expect On our is we deepwater spud appraisal existing infrastructure

Mexico, an to company. the important for remains Zama Moving catalyst on

of with the resolution unlocked project mentioned believe our make a most is portfolio our We've this Zama the continues for company's the the way. in sure Talos Ministry FID will project towards Mexico's how to is continue Zama shareholders. final we that we can of from the in and valuable Energy, value past receipt effort Pemex Following move commercially attractive of constructive in the have we to unitization dialogue and

part Low On of capture business, and quarter exciting the for the sequestration the it Carbon was carbon an Solutions' team. Talos

look new projects. highlight business numerous to for that what we that the can commerciality, had speed, February, bringing Our has rapidly vertical thinking milestones like key CCS and and In team innovative two Talos. growing announced is our separate announced bear the that

a Midstream centrally Rouge partnered Baton properties sequestration exceptional metric rock as and acre COX The footprint of with million New with EnLink project on of company's site Orleans, is the providing can of between mile infrastructure first, XX,XXX region, miles CCS much last connected in Talos industrial transportation access it partner, over located is Louisiana. over store X,XXX that equity an and to in as XXX tons the the sites in area. numerous of the Riverbend it's the

the Following Port Bend Howard Corpus Energy Riverbend, Christi we project announced our with separately Partners. of and Coastal

solid partners will of infrastructure, major Corpus to provider to partners maintain two geology this project well year area due export setting and with pre-fieldwork, in with wells discussions on an the Christi, working the characterization midstream stratigraphic as infrastructure ideal available We ahead footprint, the develop Authority on continuing each along forward application hub market. transportation preferred as place Port submissions, Port highly a concentrated and Riverbend industrial with We port look be site classics land. the CCS-as-a-service the in offering industrial to advancing permit in EPA and local as as and Bend industrial of Coastal Howard its and landowner CCS to both another while

studies, Port has over to in an collaborating forward coming with our this County, Arthur include stratigraphic project in investing permitting, the solution Bend cover with Lastly, the Robin is costs kickstart to test, transaction to related tangible CCS ultimately, Chevron remain capital Talos' of in premier help commitment Talos will carry into years its any the questions FID, a expanded through the Texas. includes past these of this that by approval. year is a and Southeast the Jefferson development a CCS-related our partners that which months will reputation are and well Bend initiative. and on speaks final Chevron's project activities industrial to major projects happy Talos to and bring We take joint hub. operator that it we expansion the look region Chevron and the Bayou announced This the of consideration preliminary important venture Carbonvert. belief current Texas of cash Talos project the CCS developments. in week will will that to agreement speed to make success classics of Bayou an Beaumont achieved This in and

We us saw putting it's carbon a report in a from While decrease and XXXX XXXX, X% on annual emissions well data. intensity achieving XXXX. fourth baseline, a mentioning intensities worth a quarter to XX% emissions stretch published XXXX by I our finalized about as ESG XXXX in goal of way follow-up decrease talk XX% reduction from our our the initiatives, from our our low operations team

foreannounced our XXXX to fully more projects is emissions, X Upstream expect In reducing CCS than our online, upstream The current to business. capture Scope from times alone just our of Talos' we Once in be will significant. amount estimate emissions. XX the we are that portfolio addition emissions capturing we CCS

it a actively shareholders. remain on Finally development are identifying fit Talos' a to our XXXX strategies, of I'll preserve and financial of of updates over or and quarter. position. our address opportunities the evaluate for committed opportunities and credit to strong number our our best good shareholders, progress turn Within some Shane in for to the are key sets seeking being are skill front, accretive goals, to the details patient the transactions We that of on M&A improve we've to to out the those continued business

Shane Young

start for like joining by this third-party Today, morning. our our ins three team solid and operationally experienced. on we like Tim, everybody Thank shut quarter congratulating despite to you, cover and things. I'd to thank another call some unplanned financially you I'd

quarter and successful update including redetermination our and quarter for second year continued results First, of outlook of finally, borrowing give the our strength on And the the the position, some the liquidity on base the thoughts we and yesterday. that financial leverage first full announced then an XXXX.

effort opening mentioned on production can we facilities results in costs. his our continued and reflect of remarks, and capital the performance, Tim control; operational focus to quarter's this things As control

per impact XX% quarter. XX.X equivalent generated production the oil That pipeline we're was equivalent, totaling the figure quarterly from of oil, $XX.XX $XX changes With for natural of XX the $XX free days cash of and quarter, which before These pricing amounted XX% During we $XX.XX NGLs, barrel million $XX unplanned per Realized of working on million the wrong flow margins cost approximately $XXX MCF third-party gas. was equivalent. revenue We or and quarter, generate performance to million. the $XXX quarter, million X.X or $XXX by EBITDA of this, hedge continued for able per great of downtime to impact losses liquids. adjusted bolstered the adjusted control, during was equivalent of This nearly per of expenditures excluding contributed over thousand oil approximately barrel thousand capital approximately on was which the of and capital. barrel $XX.XX of to focus quarter After or includes barrels also XX% barrels barrel $X million of respectively. system, in XX% margins. Island EBITDA generated per generated further of Eugene we in

net income the adjusted million, was Importantly, $X.XX for share. per diluted quarter or $XX

unit we June of mentioned, impacting month the both HP-X expect quarters the and previously in XX XX run As drydock floating and to with production to production start days, during process third the approximately the for second production for deferrals.

expect X,XXX we been in guidance planned During between continue for downtime cost change. guidance we barrels updates year previously all This negatively HP-X plan manage Further, personnel, downtime year experienced accordingly, expenses the and we by seeing equivalent currently of cost X,XXX the impact currently production vessels, in pressures relentlessly expectations are cost structure inclusive accounted the total our planned worked issued. for XXXX materials, for to helicopters, issued day, the the inclusive per to impact rigs. previously the items team full service has The to these similar like downtime that was to throughout quarter. quarter's second inflationary will production downtime first provide materially our our if and quarter, and the

quarter, EBITDA, times the we reduced X.X additional paid year X.X our end. million to down at times During credit debt and $XX our leverage down on an from to net facility debt

existing at million lenders under $XXX redetermination reach commitments. past our XX levels reduced brings debt now including stood This strong Earlier aggressive credit our credit same order million our facility. increased their million by over to at end week, we to debt the increase $XXX $XXX end our one-times million, the not if we million concluded our Over $XXX Liquidity around are XXXX, base year profile increased this successfully in net debt commitments from continuing to barring two pre-pandemic. knew our and net to reduction EBITDA plan our $XXX $X.X goal base by sooner. $XXX have with over available we to opting billion We to back and quarter million, semiannual process. months, borrowing by

the our CCS appreciate continue our RBL both Upstream syndicate partners We plans our and execute to we in supportiveness growth as of businesses.

Upstream we invite Finally, research later as strategic Investor of we both I New analysts other to plan back first this and ever a May all With our and us Tim. on will call for Day and CCS this important month investors among milestones, capital topics. our the day. outlook many and Analyst discuss in and execution We our to York reminder, opportunities, our There, to portfolio recent and allocation many the that, host XX. future our join for informative will hand businesses, City

Tim Duncan

have years to of have XX-year been our part in history, XXXX celebrating business I of that on and extremely the XX advancing the a I'm reflect as anniversary is honored last extraordinary Talos' we built. Talos Shane. you, Thank

portfolio. However, reflects any still our Talos not line sector. of I of Puma discount investment see will open to value and our in Zama Today, amongst such a the discovered business, resources and value best Q&A. capture I opportunity, West the believe our is the for current opportunities up incredible us our our that steep credit of an energy does operator, one as carbon and the the that, today business With value the wedges production of for drilling valuation as give namely

Operator

with from [Operator Company. ahead. now first go session. begin The Subash question-and-answer will Chandra question We the Please Instructions] comes Benchmark

Subash Chandra

first is on going. guess getting question, it program, ,So Yes. I the morning, on guys. good congrats Hey,

than extend So, E&I And subsea on on wait wells? October? from production contract the based which to I think second through for success end? when backs Do we earlier their the that, have and -- with Or do of you -- the have might rig, the -- should the shot sequence a begin did E&I program to getting said? we response rig can tie you Or of have for immediately? see it

Tim Duncan

you. Yes, It's from thanks joining for the call. Subash. hear Thanks to good

is that operation. always receive whatever And that right rig the would middle of I they're it current through think E&I, the operator who current after in now. plan that has we the operation rig was the

the details going so more on put that is was to that wait the on quarter And to when question then now. subsea little so. a a always operation exactly program we time, so in the longer the of is about of year together we environment but fairly response we And goal basis think initiate what quickly. in really of to project was deepwater the And always push in into that engaged would can planned two us so operated that we to we three rig been was these recompletion once impact look, rig logistics, portfolio efficiencies extend it that on start We going the crew. in move to be we XXXX we've you it with well, that have a the waiting at to an you about look, be think a can for an production a presented when us us and it to into which could to we flux. rig, timing now the E&I to projects the high looked it? market was and period at constructive wanted having hey, And XXXX have projects commodity and operator take for be that their do that ends if rig a would after would always received the in looked a and to and our want of What dive doing, going the into receive opportunity we extension do going to -- was of really don't kind did idea be three were third operating where rig rig was rethinking the

going for teed XXXX. plans the to was in have be it this So, project up to

to I think extend an this was just opportunity it.

area infrastructure And question, the million targets and we we're to projects your control can tie barrel these some there mean, that XX around that and backs, got these good answer of maybe going six million are are exactly are would ideas well, own say are though, Canyon other months. middle one that so that online I XX in subsea I come are operate. they that in are, to Mississippi aren't anywhere between down XX months, be these to months, the projects projects fairway, but there are that we've take XX equivalent, and our drilling going

we're And a the into feel these so see XXXX asked XXXX. that positive now, about We it's late invest going XXXX at time. the late income benefit production, aspects revenue that to of and XXXX. is commodity and But constructive in and to and time see fairly great in the and environment this still of the, projects really

Subash Chandra

that. for Thanks Thanks.

how light you So, sort brought it like you? occurred? or the checkbook, to seems guess, could seems, came that no looking brought I transaction they and Chevron they but more that a partners, shed existing you of "expertise", something any brought, And assets. they on Was basically for it they went

in can the your I So, of project? CCS and be interpret those the given CCS value how bankability, sort you projects, of that balance recognized guess or that in the

Tim Duncan

in I'm guys manage space if time. Yes, have the involved our and a right tech, that build have be we the could knew of to be If right the these absolutely that the whole involved majors. her the this, investing they've understood partner to to certainly to that that's going over been we they goal this, a conviction what start of do studying we bear. some long sequestration space, and these monitoring could and that to they're we that going be that because right might markets in right were brought out, give and we that in do going in to the majors for an We benefits locations, the in we was and But as can pick player we good partnership were hand this it views for that us. finding the and opportunity Robin can we right of areas, pore I'm question. to kind this with to the the we to partnership

is excellent job, they seeing And huge they brand, committed in space. do a clearly talk multiple outlets are CEO to global the an so the to their Chevron commitment about

And it. so operatorship of that project, think that in our great it's we're the look, and and will these a for and is West. that But talk broadly, are companies with, partner we specifically able we validation, Robin to think I important views retain her about Puma fact been example,

reputation a think smaller I so Robin, partnerships. team, very smart operations that particular built always company, And I think And on team. as project. being technical of thoughts And a we a we've good good additional want

Robin Fielder

Tim Sure. Subash thanks the question. Thanks and for

we're partners, so the value all customer advantage. partners, to it's that customer and equity we're want strategic making it's facing choice, we speed, first calculated mover or maintain about Be recognizing of thinking be that and we're our aligned As to that facing, across brand. that partner with sure looking chain whether have we want

in is piece, assurance touched sure got chain. the across having some partnership. But And on, Ken value as mix that Tim there making the right operational the experience so we've

going six and and projects our our monitoring and programs that experience, of here. like a expertise, class to with now we've the through we're sets, long-term injection now Carbonvert so with way we to all right lot permits skill these Chevron, to partner, from develop And things need first the all filing got the feel

have we're we're a group so this new very tackling large excited together And to regional hubs. as

Arthur there's Port So, emissions tremendous we amount in know Corridor. of the Beaumont

offshore and site And first partnership excited this States. to being United CCS fantastic project about leave the so to able that in at we're and that premier the only have

Tim Duncan

go of have grade to counterparties. One the about on and those Yes, think that this think and we before to emitter, have thinking questions and you their an thing risk indemnities investment things up about end-to-end. other people look, industrial is are counterparty and and you and companies, I'd other add, And big lot a nature. have about they're wrap to of

think to does when marry us. even I in little you've to the whether mineral all owner, deliver, thinking of we of we they validation that. adds end, revenue, it's a which And they'll On urgency get project a which private whether that's Chevron And want more think you and the other a the got or lot a that. have great right to that. landowner, again, state they're table. for the partnership And bring look, about

about carry we're capital, of how is for -- do. get through it's managing company and well. always size, So that think FID for sensitive then to look, managing are capital our the We're a and as Subash, us I responsible extremely a important we thing to

Subash Chandra

Yes, hey, Robin, Tim.

Okay. I'll just follow-up. A couple of things.

regulatory required cash there's is you there a stated release, So in a, and approval carry. the as

you the or more So looking split done? be? say, you're cash what is, carry there. time, at terms the share could international did of the you of, last domestic, at just Thank Tim, one you throw will I this much. might it you M&A on point, opportunities you is I'll Shane question, this? did Second on And specifically regulatory about and how think, just would if out between talk some getting approval handicap this very

Robin Fielder

those Sure, order. tackle I'll try to in

progressing Beaumont So specifics have that agreements definitive we're that bringing about those once to Port the the we regional this wanted to just Arthur expertise We're the put – at – really but really very would and first, we have develop we extra talk yes, partnership the to here advancing finalized, this the MOU. emphasis hub region. for excited toward this we announce announcement do that rapidly and experience this additional would the of and about intent and transaction the idea time, of concept for

of there. Coast, we've along the rock the quality we're how wanted start our we Gulf looking, as because both CCS got far US portfolio certainly As the to

storage, then but these and and America in we So often looking class are clusters, places when North think all about other we emission beyond, we're the looking in world internationally.

add that First this the we else to with we've be We've a we and as dollar But few each mindset, other to some we've demonstrated announced to might as can ear we but these since looking the more. of at it to today, to projects ground in advance where exposure pieces our spread get around, got but to here, announced. a don't foremost, And we we've got participate. XXX% monetize of able existing these portfolio around and approaching and, we've four we and of can we be see projects have we got of exposure our our dollars we're want our also some markets. could –

Tim Duncan

leverage year. some priority one make And principles, trying oil got asked make have of goal But we're and the were two to to get then got back market, done for year, to think number our that a have house. the one M&A, it to down And on look, side might this this get we we're It's I deal a to on core always frustrating we're Subash in gas to to last it's it. almost times the target sense. Yes. not was committed years absolute

look affect our it that. be the And in shareholders, we've fit fit operating so if base and and we inside can looked can the look a at transaction accreted to has start little said and We our geological we But Gulf. needs you it. the always skill because a understand to that set, Gulf, absolutely because outside bit, we've we of that in synergies to know we'll

look, ready to we're to it's it's So it's And if to focal sense engage than there's year. the for been point engage. market Counterparty, that tell breaking this no good news makes a a something other

Subash Chandra

you. Thank

Operator

next The [ph] question Jared comes Please ahead. with go from Drew Stifel.

Unidentified Analyst

I Hey, about onshore guys. been a hot inflation. was and in just remarks. opening with industry. topic And first talked question But operators, good the the it's just whole really know, it's morning, about

to seeing Talos going trying mitigate just about inflation? is how So

Tim Duncan

hard of opportunity. previous was we call where market like no XXXX. a an that one we flow market don't, of And then the look, them And two operating there's back. just, know and a want mentioned picking we rig to tie the rig is of And be year half question, going markets the they we're what look deepwater tell second so it's Yes. Well, where decision, to engage, rig to And in I increasing. doubt time, these subsea what so, had I in projects would like? a that three the to

prices now the our so this it just But much getting of it rig in some capturing in extending supply be as might on high, labor more. necessarily time, want boats. capital it would a involved, helicopters, a that's names doesn't if We are of XXXX. And there a and add idea as to use you pay that's measure follow? onshore little of XXXX, a away We there's a it fuel use we're it, cost. of is about have, When seeing seeing to you're operating the you have it of an maybe operations, chain you of lot pressures, you've, Obviously, issues, that labor, to lot some kind on than differently manage in a inflation it high. quicker, marketplace, everywhere you that little think you have little but when lot that

try OpEx, we all team's had on OpEx. big, to it I system, manage the speaks And we Shane in comments, a some And team, a that. to might quarter through first you ability think, on our beat just quarter so had beat look, first to yes, have that's the

And side? so, Shane, your on thoughts any

Shane Young

costs the really of Yes, say look, performed would keeping proud were just of he I terms in We of sort did. way first check. He the the quarter. all saw business in

great. And so that's

for we But still – we then in certainly use nothing and to we moment the third the full But cannot to think, well of think the to was production about LOE every pressures to end we quarter. just of But always anticipation low as we is are our a about within for say, capital – bake our outlook some guidance so guidance, try in deferrals. of last talked everybody year, outlook remind way this below say XXX. would for LOE talked right. I inflationary which I came kind that of in we bake really frankly, HPX, outlook think, the we're And And happens into the I XXX year. our remember costs. I the just second that about year,

we've so and think probably extra XX guided, an million also I there's expense. or

next million HPX of quarter as wouldn't So in couple, the there well. expenditure a we some quarter over each that I see expect to XX when incorporate

Tim Duncan

And specifically, right. we're talking about drydock

Shane Young

Yes.

expense. On the drydock

Unidentified Analyst

Perfect. for was last that. on by look lease, Thanks. the Do lease After like projected what federal Thank you color the federal believe environment any federal one then And question. have you could this and sale year? you court. blocked November the

Tim Duncan

look, ultimately, plan five it's it and Act sale another to then we've previous that in gets And offshore a think come I And this in sales about continental that plan we plan five June, talked that then the a there do that was suspect It's that be the is is anticipate proved the administration, was to be requires year year, expiring past, year I and plan. Lands going Yes, law. to the re-initiated. think in would is -- I difficult back. need

that's leasing there's onshore. bit that trade now. that part to of the there's should try on think than year getting five is different engage I be in be expectation offshore again, is way on five sales. actively, – another to you're year managed of with of year planning absolute For that place a plan how slightly could and an groups We be ongoing the seeing engage new that actively, right federally There, period, a there there's interior, managed that that's that plan going little that, process plan, five

So you've a onshore, of seen different come that plan some back offshore. it's five for year

taking So, just But that is obviously, in forever you with and people think administration I -- little the it's on this up nature delay don't I think about way than this prioritizing bit I of by longer a the would want. we Washington. can't this, moving

position. on a expect So trade got we it. have We've focused would we acreage it, huge groups

the and in million our position, leases X.X term. primary that taught huge a about we've past acres both think on on producing I

good about see sales. our I a we there's think it. And not is, so you're ultimately, it that feel Again, fans temporary we're inventory. It's to going of And pause. that good we feel frustrating; lease

I operators Mexico, expectation about Gulf they that of but think of that Gulf all have in sales we're it other the the back. law the have is lease vocal to with we should fairly come Mexico, in

Unidentified Analyst

Perfect. you. me. That for does Thank it

Operator

comes question Research. with Jeff next Please go from Watertown The ahead. Roberston

Jeff Roberston

items that bringing sense on any subject to Tim, try order deep morning, cycle tie discoveries the lead Good back there on program. on? you. Thank shorten make time the water time to to Are long the

Tim Duncan

that things you Yes. and rig reason good There umbilical’s be have planning. another again, be the when why, the the into ahead underappreciated program know manage we extended how chain XXXX and but issues. into have time, we is go Jeff. tubular's. rig, use an again, take an trees, be extended XXXX, rig Gulf a dedicated it at really had kind and of to use had beyond, think to to part And it's XXXX can can just in we're their we go that start And think planning Mexico. And that it's supply a all And question. going about to a I you we of of can didn't opportunity And the where can

can supply get kind we you delivery waiting opposed now, in plan months if can time just of so another global then all in to as in in And being challenged and chain that think XXXX, agree current issues. now, hoping you from six as can the I

sometimes, where these the of some right So the of to inventory, projects, to ones these later you later. order, placing want going those absolutely and exactly inventory go and on side that you're projects are that you particularly to once buying you're the cycle, out operate projects figure you're now then really rig

are to So, first always a on manage a little projects, absolutely, than which be to of that oil way the chain us platform. supply it's just a from do the where for longer we kind going but things is, you subsea to need accelerate

just always items, there. to But some those is to by just on assume lead have a everything taking it's smart have be – and order a we time. us nothing And think we absolutely success bit time long of but to I shorten we lag you risk how can and thing going of having long responsible the do if upfront can't to little all it's and for great it. So remember leads, that the be we do

and So that. we're do important we it's doing got that. But pretty have to we that it we be measured on a Yes, team sophisticated it. but a about do thinks risk basis it's we've on that how

Jeff Roberston

some those terms But in present to add that value, Tim of value can their correct? prospects

Tim Duncan

it if on in can do it project could make success, time you take I right way you and that's some have and it months. XX XX might you mean, months Well, the that a

you what a be allows absolutely a of would it kind to wait be see. and to So

If looks of every then months want six everything these six to you the add to a before if on subsea you going tie see and you're you're little order back do, projects, portfolio whole you months a that to -- less to wait you to lot going interesting. add then project

projects So I is, chance to we on for assume have success the just But that's sun right. success don't and And to on have of the balance three, then everything. want responsible. wait ordering again, two think that not success, I'm can't under great a four going I'm three inventory and I so

benefits just have and So you do how knowing you to the balanced in it are. be where

make reason infrastructure, have little it's because another even bit, it sometimes, you in your can own lean you And when happen to a faster.

into no goes it. about that long it doubt But time. in lot leads, we all engage we a it. think certainly there's it's So, about And the

Jeff Roberston

is involved Bend, project, -- current anchor for being as Chevron Bayou sorry, well -- that in shipper potential I'm the a anchor participation. on as with their Question customer

Robin Fielder

Yes, we about just with definitive Bayou associated we now this bringing as we're talking Right partner to to project. there. agreements got didn't a any announce in get Bend, obviously, emissions them

that so and to they've done the this point, at projects we're CCS globe some the some of just and excited of around that experience have And

Tim Duncan

what guys look, doing of I the big hope these a obviously mean, into organization, around have they're all in our lot with made missions. downstream space. is a JVs the you've appropriate And that, got pledges

Jeff, probably It's downstream a studying. studied level of worth interesting, in it's space. really the you JVs If

so -- think just committed critical to part got you project, there's think the the the and someone hope this in influence there. you've that But So was I helps to space again, I that execution.

Jeff Roberston

cost. Last question, XXXX. Shane, at those is notes, there know it's at until are up, I -- look any not But refinance do XX% a you on rates XXXX. all since options they're as to going lower due the

Shane Young

I We have make-whole did as the mean, you, like market was the math to the in think lot. we'd a XX, of callable pandemic. something tell is about the you opening at back that it's that that would until provisions, do. January was the after right up, the pretty We notes are execution are It there time. the in low XXXX, XXXX, points snappy. to remind gets you, I not but some there it extend potential December

we lower capital there's get interesting, So the I business. figure out if to think, the can there will little -- monitor of try continue we we'll and cost as to soon as of something that and a we closer window, it overall to do

Jeff Roberston

Thank you.

Operator

with Steven go [Operator Instructions] Please comes KeyBanc. The ahead. Dechert from question next

Steven Dechert

see to current are I guys. Thanks. hedging this thinking just environment? about Hey, how price in you commodity guys want

Tim Duncan

the I that you you Look they would over think, XXXX, talk entirety it's if is probably of Thanks favor, commodity since when frustrating the is say, it's XXXX, entirety the interesting, first between will, in quarter when that the it's on mean, I waves, about about I'll think the of breakeven. hedge are. thanks, -- of Steven. interesting, time aren't Yes. because I Shane that kind the which your the we for when think call. the let tell of hedge great course, hedges the over of book, about I how working you book prescriptiveness I would joining hedge, but

And we are, quarter, helped were balance other painful of losses on that proud so we we're turbulent proud us couldn't where this swung we're survive. that it as companies way. a sheet see might quarters what the times Clearly, lot those is, survive, where the as of hedge of where

that. think gets it And to you policy so around have I have to a

be is. And that hope couple you're maybe away just You environment Shane, constructive we run going have in a to how and hedges. think it’s about a frustrating, comments on just can't it of forever,

Shane Young

say the up minimums clearly, that. our those policies Yes. going related with Look, some I’ll line adhere are internal to minimum agreements requirements we and to views we're about And got hedge. credit that of that think sort in quite also continue around it. sort place we've minimum of have. to to well I'd

on past notes, you're that as rebuilt also to hedge volume look continue time Q see of lower are put as you that remainder book to again, this and XXs you that the after of those this metrics hedge a for well off would you'll hedge hedges book. in think book the see place, context. you the kind obviously in start I to to in low I on. the schedule, in of of as terms going mid $XX us quarter, but build what's So the volumes get Once goes got year, in the year, in pretty still terms drop see press the steep at plus being see you in can just matter we that release and say of really just

bit. time So you'll fair look the chain a see hedge the of book over changes

Tim Duncan

is Yes. go Look, $XX, it rent and unhedged an comment to you you was, the and unhedged think, business well. the average kind other price year's at last look my back of basis, financials I final on year if last around unbelievably

be next I going as kind environment plus I hedges, suspect But commodity and year, be if think you $XX what constructive. we're I'm of so it'll roll have to don't over lose about some I off, know things going in not to it. And sleep

and portion to our I the the revenue just get again, think that a view, there. purpose book And absolutely for of market market has where think, its served longer have when I period of over of so in look benefit -- the hedge time, we want you the do But to the us. exposed it's is

Steven Dechert

for Okay, me. great. That's all

Tim Duncan

Thanks, Okay. Steven.

Operator

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

Tim Duncan

Yes. call. for everyone for thanks Again, the joining

we I call laid out in the for out year the the goals first after fourth we we quarter. think were that what laid our had

drill back revisit talk pivotal great tried are what a it's and think invest to to today, you to on to on then for and to the of we what to its and works then right on direction projects in to out we CCS calls. and we're hard we're we're side of is as the which do for in we and about and bit appreciate proud shareholders gas oil participation everyone's goals, continue going diversity projects side. a also bigger continue think us, continue side. the year trying the kind these of those and do team try build And I come The very we where and the

Shane Young

Analyst the for point Day. last One

Tim Duncan

thank Oh, you, yes. Shane. No,

May You lay we in said have out XX that can Day, out that will for loud. yes, attend more institutions an Analyst those and New But York absolutely plans.

So that. we Thanks, appreciate everyone.

Operator

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

You may now disconnect.

Talos Energy (TALO) 5 May 222022 Q1 Earnings call transcript