TALO - Earnings call 3 2023 | Talos Energy Inc.

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Operator

Hello, and welcome to the Talos Energy Third Quarter 2023 Earnings Conference Call.

[Operator Instructions]

Please note this event is being recorded.

I would like now to turn the conference over to Sergio Maiworm, Chief Financial Officer and Senior Vice President. ahead. go Please

Sergio Maiworm

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

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

statements. I'd contemplated forward-looking forth by cause statements. that filed results we these will and start, that SEC. these remarks materially release reports and annual press our recent Form could differ yesterday's set to forward-looking in like Before may materially results you XX-Q differ remind Form our most include quarterly Actual those are with on on to from Factors the our report XX-K

update or are of assumptions Forward-looking based these events. and future as as on we a new today, result obligation information statements of statements to undertake no

During release present this financial in reconciliation of and is with to on measures. website. filed yesterday's available the A non-GAAP included call, non-GAAP and our measures may GAAP press GAAP we SEC

I'd like turn to Tim. call over now And the to

Timothy Duncan

it final Sergio, everyone, Q&A. of in. some to to listening We you briefly appreciate to then plan for of I the welcome, you, and turn quarter key Sergio operational of and the commentary our highlights ahead call. Thank over cover

third of the advancements our we our quarter, aspects During were business. several on with pleased

reached VI previously additional We permit second EPA milestone continue new VI our in for filed first permit Zama our announced to PPA Carso. a application X closed advance first our We transaction We Lime with Rock and toward and Venice Class with wells. production. discoveries application Class Mexico our Grupo

of business. excited our since about accomplished was the call, last bit a and quite we're our direction So

of Venice and in XXXX. the drilling Lime wells them early online completing we are Rock the completions program, bringing before On the in and capital process

late XXXX. development production another Lobster help XXXX bring successful is to drilling platform, incremental are to growth our from in which in well production and we Additionally, contribute

interesting over was several operated our in participating rig pay are weekend. partners Marmalard operator past we program, non-operated Beyond the successful projects basin. this also in sand our well Murphy, The with by

production expect quarter first the XXXX. We in to commence of

Kosmos mid-XXXX. Subsea The on by project Odd to service track operated progress remains be to continues in Job and pump by

#X by fourth the of reinstate for production XXXX a in Lastly, early operated is intervention Beacon well, rig scheduled quarter in Claiborne XXXX. the to

XXX the the quarter. The non-operated from per the in even third oil well since was equivalent The downtime of field. quiet the quarter oil and And in hurricane of also additional a have of The shut oil full shut-ins loop barrels HP-X typically equivalent field, back barrels The issues impacted the by X,XXX Tornado loop impact for the the XXXX. for intermittent requiring a in day the during production events. is contributing with during an field equivalent year to currents of season, X,XXX Phoenix the day of quarter, quarter and production and impacted caused and drilling weather-related barrels of is Phoenix quarter of day our operations approximately these of unfortunately quarter, infrastructure abated associated a deferral online. per or in per currents Claiborne

of the downtime, downtime our reinstate in oil-weighted well. the in months, the we to production mentioned, expect Sergio should fourth as operator will this with coming we Even of so As hopes nature as strong several this quarter the discuss, maintain exciting in And competitive to wells with forward to start added to XXXX, we key restored a margins. extremely exit allowed or near XXXX. an and are looking us term, assets the being

deepwater close acres, a Gulf Talos reprocess seismic controlled area joint XXX,XXX prolific a by data over Talos in the of which front, exploration is venture On and to in to XXX,XXX signed acres of Repsol Mexico. agreement prospects significant of an drill over will inventory tied generate We few to development hope time. This back important infrastructure. the to is we could develop next value to that over an be Talos' years hope

publicly In we partnership previously are Mexico listed first sale Mexico. in an closed for to million. Talos' established in baseline an conglomerate $XXX Mexico, which remaining The Mexico Grupo up million closing for deal of excited $XXX significant approximately with million minority subsidiary, $XX interest, a $XX with of while at XX.X% million stake preserving a price valuation production of In holds cash we our additional Carso, aggregate due late September, Talos a a upside announced about equity a is our XX.X% Talos working in for XX.X%. approximately upon

combined expect We advance will and record, first further and global enable Zama FID us toward local presence critical Carso's reputation, to Talos' with strong operational oil. track commercial

We are review to final completion securing approvals. following hard progress or the FID design working and towards engineering final project of FEED, and financing work

create optimistic will We project always our incremental local and about this are have understood this has the Mexico, value importance we project stakeholders shareholders. for the in for

our Talos Solutions Low to Turning business. Carbon

all We review. are Class our in determines step first permit Talos is the status October. first step permitting This Bend project, August required XX% submitted next the in CCS administrative The Harvest our that owns for EPA's VI a technical of completeness pleased where application a the process at EPA permit application interest information. contains received

permit Bayou to second Also Bend Bend CCS in for Coastal CCS Harvest its Bend wells application Bend filed Harvest Class Class and in XXXX VI additional its applications October, file permit additional X VI at TLCS for projects. its CCS, project. CCS TLCS aims

fourth XXXX. to spud Our first the well at offshore Talos stratigraphic is operating of Bend Bayou quarter expected during

As Chevron the to in of half a operator partnership first previously drill expects XXXX. well Bayou stratigraphic also announced, onshore Bend the

the a storage the Bend Texas. Equinor XX% following purchase portfolio interest transaction Carbonvert, carbon partnership Southeast that to of We from a also in quality Bayou its welcomed our underwrites of further

to Texas, are with benefits the up COX partners. matched in is of Bend announcement hub the the that production this Energy to by expected reality. be U.S. Department $X.X will in key Coast position ambition and will Gulf This an the an regional advantaged expected growth the with Bayou bring news from a in require which to investment in pleased outlines sequestration. We sequestration hydrogen they billion and region, the by to blue invest to help unprecedented unique hydrogen permanent

explore are for We to capital TLCS. continuing raise

We to will continue that update as the advances. market process

the we While in that the the operational is create help storage process. execution will ongoing, shareholders believe long-term and marketing for portfolio value carbon enhance

to business on strategic are skill This position. our accretive larger Lastly, or business transactions. and preserve continue actively opportunities strong development shareholders and bolt-on our credit opportunities our that we improve strategies, front, set and M&A evaluate fit the will development, spans tactical to

Solutions it and advancements pleased shareholder in summary, quarter, driving was busy and with a value upstream creation In the Low made Carbon we're we our businesses. both have

focusing proceeds sheet cash the by to a we sale in flow operational addition, operation the excess successfully In partial through loop production managed plus a Mexico and use the challenges associated our free on secured execution, while continuing healthy currents position. of with in balance keep to

in updates plans Sergio to the XXXX will our key for and financial third turn I goals, address quarter. call the details these With our over to

Sergio Maiworm

good and you, Tim, again, Thank everyone. morning

I the highlight covered financials. that and Low in include reminder quick upstream appropriate, will businesses impacts the Solutions further in of these these yesterday. our Where a as in Carbon our businesses results discussion our XX-Q of different filed results consolidated As my

of very of XX% margin XX% production equates the oil equivalent which During in adjusted generated an of and EBITDA million close oil which EBITDA $XX per companies. E&P This $XXX $XXX led high to barrels per XX,XXX Talos' ranks netback revenue business day million was in That believe public our liquids. and BOE, upstream in quarter, to alone. amongst we to

company net per quarter approximately $X also share. net for loss The of a reported or diluted million $X.XX loss the

quarter adjusted income net the during million per was adjusted income $XX share. $X.XX net approximately Our diluted or

Capital in abandonment settled third decommissioning quarter expenditures, our business. including were million and plugging upstream obligations the during and $XXX

$XX We CCS million business, leading our cash flow million also to about positive free about $X generation a the quarter. invested of in in

Grupo in on third in approximately the sale spending in quarter, received few we when September. we Mexico CapEx the cash $XX from closed a items. the partial including late of Carso key Talos Additionally, million

First, Rock. and to had related Venice hookups Lime for and operations we completions, ongoing installation

an Second, category. of project, spending quarter that spending third-party the for the in on $XX the primarily drove quarter included million significant inherited which decommissioning

third do not we out XX-Q, future spending most laid our in and in in quarters. this trend this the completed of quarter spending our in As expect category, book this liabilities

RBL Turning at over roughly balance of remained stood $XXX to end the million and The on our $XXX sheet. on drawn million. was the third balance September debt At high our $X very net liquidity quarter, billion. at XX

The which we revolver. and used significantly of those As just few fourth partial September, Talos requirement in closed I'll we continues as to business to to down expect slow we capital minutes. slowing investment we that quarter before, mentioned capital increased working pace. drive more increased of in XXXX $XX Mexico investment our the in million an on were proceeds cash down in abate a XXXX and sale pay address the into activity in and the received approximately in the

stood X.Xx. the XXXX see of months provide XX, how overview a the As September of we high-level final seeing also at our shaping year leverage we're and of how approximately progressing metrics I to wanted up.

but which XX,XXX within range earnings equivalent for to expect guidance of per of guidance us full towards oil low the to of XX,XXX day. oil barrels year and production for in quarter outlined XX,XXX production our XX,XXX between be As end year fourth the release, our of day, the barrels we per equivalent puts XXXX

year and the are of are respectively. and range our and $XX guidance million allegations current range. of full of lower $XXX and CCS settled $XXX abandonment, plugging the current towards decommissioning including XXXX, million, expenses $XX G&A to investments operating to and the within expected million CapEx For half be cash tracking million

including the range asset low to Specifically, is drilling million the and $XXX end at million. and spending of $XXX our completions, of tracking upstream other management CapEx, guided

of projected spending shifts XXXX. CCS at or end million are Our below timing to be to due the the to low range current of million of $XX into $XX investments

the It abandonment well earnings additional on as between As pressures that decommissioning now is our million the $XXX estimated $XXX in I market in full portfolio spending as mentioned to to by last third-party in spending plugging year higher. primarily call, inflationary coming activity. be driven is and million for

estimates philosophically, also in over We months. next early next how than up. specifics expect to but too those substantially the go to few fine-tune continue I'd or year's It's starting normalize investments XXXX. into like talk to will XXXX lower see we're some seeing this to we about shape category we'll XXXX capital

right a for the we likely the is CapEx path the believe side levels evaluate next breather right that of our gas taken reinvestments our the taking foot year. to into continue off business, We on and and Talos

with approach albeit optionality year, reduced tempered trajectory. return, we this next to well a Despite When we production still debt increase expect solid shareholders. these us for growth creates near-term options, opportunities. and think allows long-term this as investment, organic most shareholder weighing for the value our as growth growth That inorganic reduction

Overall, I'm look very excited business as about the to trajectory we of the XXXX.

and new from remains are as we well excited attractive Lime strong, our and credit and Our very opportunities about Rock both next Venice in early businesses. year investment position production upstream CCS as

of to balance investments, long-term ever-present Talos' and the attractive track on value record, sheet with and combination focus believe We line in an will M&A solid a deliver our shareholders. opportunities future accelerate

line for we'll operator, the open that, With Q&A.

Operator

Instructions] [Operator

The Pendleton from Stifel. from first comes Nate question

Nathaniel Pendleton

this your on Sale and you any of there? how for impacts specifically, delay Can further XXX the provide the industry the last expectations announced any thoughts resolution week,

Timothy Duncan

to on government one to script our of of that's decarbonize, of what regulators the side. and forms Yes. on what earlier our What part we we're and super supportive losers. we're then the the bit we is part is less what CCS a -- we you And of talking supportive out winners little some Look, it's our want have, industry the and of energy. they're of a part not and hope a but have from about of traditional Department think, doing picking broader when speaks frustration Energy interesting. progress it It's of I

offshore again, that. like the that's on they're obviously, the interior frustration, is doing side the of feels that it house, so And

And Now sales, have in these certainly with coinciding supportive wind the sales. again, government sales. Act to we know expect the wind that. we sales having of Inflation And IRA requires this same are wants lease Reduction fully year to us and time lease is we frame have

across that and the idea Western frustrating the see basin. Mexico around they're Mexico, line to to in very this there's the moved out Rice's the issue the of particular of from Eastern pulling arbitrarily falling the But the whales and Gulf migration leasing. of kind of And Gulf typically Whale path found where then

appropriate trade being it's them that's so our do And fought to and so. for by groups,

come to that we will. hope it expect back, and We

around when of X-year reinstated delayed the frustration and kind is traditionally, years sales X-year out. kind leasing administration, plan further traditional plan think than that the of one place always was I previous into rolls with the broad This in been lease then plan. less X the is where it's plan

is look, I policy So think energy important.

think balanced. I needs be it to

all carbon think the sales We the in happening prepared we're kind to just low got side. the it of we and process. the on sale and part feels through punitive things on mandated think see of lease traditional I at I again, some applaud inflation equally But upcoming were to these happens. lease reduction this go when side, frustrated what lease the of

Nathaniel Pendleton

details earliest see? are other And that acreage? with one the on opportunities to your across any that about similar And news there it. Any Repsol, reprocessing from the provide campaign? can could you we if Got partnership

Timothy Duncan

Yes. can what back we're it. is on And dialogues glad up. of Well, where around doing do you what bring with look, long of it you to you not brought Repsol. about do what and policy kind that and it things I'm do government I about energy go federal

partnership what's the working participate to to They have through projects. in that so want their join is to wanting of what's us is interpretation and a to this And trying interest map actually in all They these not particular to expertise acreage. happening. interesting just want in to financially bear participate coming the and bring geological table, about Repsol

combination And we acreage. a facility EnVen in acreage of and a host This is Neptune. Talos have

way a we that value we it's that a out transaction pull didn't value in So we're the to set trying transaction. of when an in allocate bought acreage

So positive. all very of those are

that's and you this kind Look, But prospects the longer-term it's These is see beyond. more of types generation. the more to sure Gulf when the partner type portfolio building of you're in you expertise, that of I range that think in absolutely inventory of make are great. you built-in have And level XXXX work need Mexico. a do got to that's technical of

got JVs. with do? of are more again, types we in part your there closed acreage is, which question, you of How there's I And position, acreage say, to acreage million other how we were then, position. almost acres. have? X partners also an you second when think pull up parties acreage do you an Yes, then The X.X that And to gross the do from want to you have look, find I've

our and some together of try inventory acreage. let's that working pull then as Let's to build those we're out of And pooled well.

And in coming months. will come to hopefully, the those fruition

activities. business acreage to similar large upcoming pull of it acreage has but So and lack everybody you or do when to position, manage and opportunities. do ways a and in development trying of leasing, trying partners X kind you both a you're to built-in leasing challenges you have our How else find do how we're play

Operator

question from Michael next comes Stephens. The Scialla from

Michael Scialla

discern to your down decision to here a bit. slow wanted I

at single-digit about growth production plan. high one X-year for were point a You talking

You you're bit, you a but growth. that said expect tempering still

single-digit So want there. to what you're I Is low see thinking growth? it

indication the any lower activity you're lead year terms maybe of to what might spending? this to And relative what in doing on

Timothy Duncan

Yes.

effort. Lime When Let lot really Look, about thoughts you can Rock, follow any Venice me discovered we of XX spent ago. Michael. up year, something on of that initial less give you thoughts. like this that, his a Sergio with think months than and some we

out a for capital but any XX infrastructure, see it's material of production So revenue generation months. a you that where and amount subsequent all that inside fantastic, it's installing doing year, been of a that also don't

And rig the work part we've on a wrap want when of had we year. a Venice to think to last better will months, be And the this XX for cash contract XXXX Rock. that roll so see generation think and with off start I we up I flow material to Lime

of first a first of on, step operated then some of year, drilling the particularly of opportunities. let's this Have off think half we we perspective, rig And second of now, the kind a that in -- year. of breather foot as about from the kind kind the take our the production is the new thing the as we first And reinstate right half our bring in kind think of gas.

rig basin a grown who's And and been that's basin. in that, have think this -- I always tightening. survivor one also market thrived we and do You about reason think this look we've at in of a as someone we kind

As you those a in and the too the it of took on working look they because didn't hedge, at because it's past, sometimes project. big it's who in sometimes they make interest didn't

they time turnaround. rig contract over and bad a the of just on period took a Sometimes long commodity

to wanted prices. rig haven't we in inflated these at walk a So to long-term contract

to And rig where so have opportunities rig with work we openings. and there's might

off to when capital making a our that's And that off, pay right rolling wanting to after new online, think to getting down taking it's of play hot, what's market can spending generating rig the free use long-dated sure so I just to way the and on substantially year-over-year the really thinking refinancing. cash between production flow, speaks take about time a our breather debt coming which rig potential contract and we're efforts program ahead we

basis, flow really up roll and year, the of ways just months I it. broader production all those how term. kind the cash and think Look, in Board it's kind around absolute as on near the growth wrap about for an guidance but of to sorts So about thoughts generation think next we'll think we out of that impacts, free that coming in with

Michael Scialla

it. Got

non-operated realize impacted I fourth production, your by quarter Okay. And I the guess wells. on is

on something that Is about that's see some that carrying as operator do welcome-back-online Or intervention risk Is to you affect more first could. of color fairly there? get I that, that that could quarter wanted in routine? the some the is that Just talking 'XX? that if

Timothy Duncan

quick. routine. that. or more different that happened It I either deepwater, it's requires easy happen these from that that planning time little these on water, because to that takes can If mean time, to in downhole it might you and repair different if and big onshore, get have you a to wells that resources something move Look, planning. do got in pretty do a just fairly pretty you you happened obviously, in it's time. When around have and sidetrack, completions you shallow big recycle exercise. It's

that to an vessel or got You've figure the out how in fits typically you're intervention rig using.

it's different a dynamic. So just

But that, of to sidetrack we well, a the the a either repair idea and through the got look, everyone's look, happens, I resource course we or a hey, that large portfolio in well year. think, base want

And confident online. think so we're comes that fully I back

ramp part specific seeing get we But have possibility trying on wells which have the that the Mike, We're fourth bringing guide the sneak pushes we can this quarter, we more this of accelerate should on there's those little Venice if We're of and the about was a and online. of into a first related we then bit parts last to been year, downtime could there's little Rock a to downtime quarter, Lime that. power looked at to quarter. when probably -- actually this that in into

and net shifts on the interest related a ramp that bit out we run full if downtime into push X,XXX, There's there's that rate into downtime little want a bit day, can little get XXXX, online. that there's early then quarter. push to a we a to into really well certainly sneak barrels rate, fourth a to that exit So production, some X,XXX our back there, non-op that quarter

Michael Scialla

on to work and FPSO that you Okay. the were know just stand this do at platform, you the between does That's one now? FEED helpful. with at wanted And one one Where point, there I last ask point? And where's debating Zama. I fixed -- how look the

Timothy Duncan

And in think of been unfortunate. time the unit. has of I around an this Yes. struggles the challenge part I initial was and active Look, it's formation the lost discussion. it's the mean,

how frustration that that do that, again, partnership on about integrated well back operatorship we to of giving And build can fairly where an into we obviously, up that. we've views kind documented, talked were and Our project claw we then team. the

underneath plan operator, the with in to start engineering we the when took and that, they government were we was of Keep but that, blend over new there's we a a had when we then reviewed over had mind, different Pemex approved had they some Ultimately, proposing up that that. blended and that that to with. operatorship plan, development come details

unit of to brought And through some of changes financing. in so the and process, we going it capital the that to to kind And full about led total be thought pulling the FEED. through now through has the part and ultimately design the then of in and has as think be

So frustrated Carso that some to though back time that, there, around track, on happy in. was happy have we're lost

place of think with probably I behind we're some the us. asset and with that of at ever been. debates better and a we've that some the Certainly, frustration that partnership is

on And what a key up. focus more so about to do need to wrap now we it's do really

So still get realize shareholders. that is time important we're that of But get over in on stakeholders. glad monetize been to years. year we've a last lot spot. there. a think certainly for that we've got to And work It's our thing place next year a we've asset. This ball asset It's some long to of and right enough. that. been the get of of than time It's that been kind to to couple again, important moving to kind important I We're FID. to value. It's some work is Look, been an do with to better able the the in little

Operator

Company. Benchmark the from Chandra Subhasish from comes question next The

Subhasish Chandra

events, around is Venice. not production, of offloads? to have course, you some that might Lime anticipate sort plus, might wells of number sort What curious, that hurricane XQ you base the level one of subject Rock, of But you be do bounce Just a cetera? downtime, a of et these these as XQ as effects,

Timothy Duncan

question perfect answered to in Gulf of, calling. the last said It's basin the always difficult rate by quick a just XX we kind back shallow in -- where onshore the bring the as see a predominant to past, that find of in that isn't something have look, portfolio around and you bit, for I've of or you in thanks Mexico. that -- operations ago you downtime, with it's back of years always and online kind of kind the there's water. even run the it's of was have little when Subhasish, ability Well, as some the nature our

So it's a little bit the kind of tough to quarter. answer. Obviously, there. second were We quarter XXs was a in cleaner low

And little and weather typically so a cleaner. good

clean So like. I think quarter what we know looks a

I we're think you projects and downtimes. have of to trying we what on know add then these kind

it be that sometimes sometimes So can in XX% can quarter, in the quarter. X% X%, be downtime a

The forecasted which El currents, what into going Nino, weather-related third around tricky. be learning loop generally now And always we're quarter downtime. is that's to is

And 'XX, kind to reason again, is which we And in we're from operators the cash at quarter these of over term, reason in but well flow of things on there that just why than smaller so don't the X another year. although on and the you have Rock. to the or had work into pace little way how The nice was smaller focus We what's some out and have we've the to more actively also we X at anchor of different a we then activities. stack for think the on have go impact, near been and clean some generation working interest, in do stack X the we and feel nonops second compelled and I last development should next a things, there. put Venice those think decline we have Lime quarter. quarters half in going a weekend relatively then first free stacking you on good It's

adding got pull good quarter we But ramp as change I start. call what next think months. the total we the but really CapEx to that down we year, program. year in X X second what about up next, And in it's we then year, think on would was look the really I may we out But a or full are place it as outlook, how to

Subhasish Chandra

Right.

So guess, might an as by of that -- I that is that be you enterprise comment? CCS comment partly substantially offset CapEx, an upstream lower outlook sort a spend? the Or is for

Timothy Duncan

look, look, or enterprise I year generated I of nature. a down think of we $X, close this more in of of think -- I I -- significant think paid more our last debt XXXX, cash share year, mean, as that an comment. we something to free flow, amount $X

of year, program with putting bankruptcies. This focus then kind non-op really as we going related of knew a online. little much to generate bubble as things we're we a capital on bit saw the P&A some with stuff And associated we some in some

capital. managing a pretty good And managing so expenses think when you job good have a year, which I job we've done pretty a and

make make to cash year that. as point. free where But to to you much sure you're back when yourself flow, not have I see want go want that I generating So a you

mutually monetizing that on we're that bringing exclusive or think business questions focus. forward team, and a that, her And there's I and And to around and to and value around process somewhat so that's CCS. the Robin that's as take happy the executing well. some focus

I would call those separate.

was an from year. accelerate free developments. next broadly cash year don't capital levels have enterprise a make think We I this do how business were upstream we perspective, that that knowing the where to right really to some do going flow, sure generating to is we the of

a You've market. rig rising got

moments our that nature. that sure on in manage and we to putting all want were a we that year we're buybacks this place we do and make shareholders where can things in How be some as of opportunistic

Subhasish Chandra

can. one, I if final one Just

out question one number is the So there onshore M&A.

or give to to like what would outlook you the comment offshore we looks an like. A&D as well So opportunity

Timothy Duncan

that know look, capital can thinking mean, we business have, as cash going ultimately I with want people model as diversity. understand that we M&A mean, the goal, the if we how size. material executives to a we about think it. have to to that add starts appropriate model to all I accretive I generation we be scale And add shareholders. want deliver to free We comment. we we we get cash It's back to mean, business that assets want, I understand it. to into free and scale grow as fits of is. We what It types flow. of and to are generate flow amounts

next offshore think sellers X filled not but we not decarbonize. it's They about Our cycle. want skill They life you basin, months, full some back XX step set at their our conventional in did sellers reinvesting years be that is to to is may and rates and the if assets life may may basin cycle, think may ago. they geology, They be not the you It's own want from the operations. the majors across ultimately. our of with

roll our wells. the We've play. again, think Mexico counterparty. so We a other the about way we trusted that's we've have actually looking this we partners in just And talked can't think are because to going outside same thinking there's Gulf I Gulf These companies of test. guys predict the great is be. to And think when about are. with passed we they've a that at And us got

where think you roll look and and to that you I available up. for set diverse unconventional look you opportunities we you in a being play long see would set, of of so our at run the where And transfer I when broad can sustainable what's ceiling in skill over can that at are versus set the one say, skill it's pretty

about bullish our M&A to year-to-year. long on term skill set I'm our and we relative relative So strategy and think from to quarter-to-quarter how

going that's You just can't predict go. how to exactly

Operator

Our Water Tower Research. Robertson next from Jeff question comes from

Jeffrey Robertson

Repsol the Tim, on a venture. question joint follow-up

contributing identify area an you about you'll acreage? Is is the the XX,XXX mechanics of it you Is Repsol acres about Can Talos joint AMI think venture. XXX,XXX-acre I go to and to the in try contributing talk all acreage? prospects that? the get

Timothy Duncan

think Right. AMI should acreage more it. right. how really It's of combination That's exactly a concept. That's about of our an and you more

And then where let's that AMI. generating acreage this around So area, we acreage about say, that key are. put we and amongst around opportunities think about is look, a facilities big our think new set. where finding broader inside go let's halo And our out and

simple But close XXX,XXX double a We -- put contributing halo don't have we that. a around I it's should acres. concept. check they're I it's acreage. really, So believe to

And just got for appropriate imaging then kind area of aren't you of concept. those commensurate from seismic familiar of And that coverage entire do mutual how think of we -- reprocessing data, so about with from kind an or how AMI around inventory that that's interest with perspective. the develop to part you want

that's together, how So comes this Jeff.

Jeffrey Robertson

today think to to the of options? have that with respect place Talos seeing balance are the just things? wants do Gulf that things not of the have you M&A, consolidation you present opportunities with in some to strongest the do seeing necessarily industry, you themselves taking Mexico Or sheet that's And will possible in

Timothy Duncan

I to look, mean, we try I of be, have make of mean, that sure. the we for Yes, wanting leverage needs to to part keep the appropriate where sure liquidity. that it levels

make ideas free in on the And to use And some combinations, what's the it allocation they're even cash of for speaking to of business, directly. available first think the having capital of can we debt. proceeds all sure next pay reinvesting year, of I we down M&A. then these at I think It's other flow. look going think liquidity

And so where plays that out. know don't we

for example, fascinating think, is and Chevron I a Helix combination.

is like area mix the is what they or think Gulf for ultimately, a core Exxon. a for the Chevron. I Chevron alumni, a As like right But certainly, company of asset Mexico company

to when have we think a probably is want going to test. what if answer they're on available but to that don't the pass that, about do do they trust. counterparty that be particularly side, that might asset they to and to they're know you going want and need And You the cash to know M&A,

-- While at more have idea on that ideas other we M&A look M&A sources that might and uses. flexibility

to So where current have you model leads rushing the a a We're understand we the that's platform not why return on out we we're and Look, prepared get but thoughtful to certainly thinking build that's into ultimately more and firm to have about be diversity we be trends. it. and got to sustainable. scale we see shareholder anything, how

Jeffrey Robertson

potential provide And with to customers? maybe, can question Equinor just or can that that commercial CCS are you update Robin, where And more add you anything an a the potential marketable project just, emitters? on discussions on Does business. anchor makes

Timothy Duncan

going Well, let me look, Rob. to -- yes, I'm to over hand

to and that an setting $XXX will put want quick different this and if just up, initial wells. together around with idea Robin we're a on way we Not with share did set strategics, think it the We position When us. her attracted I Equinor, We strategic acreage will. then in was drill the take risk a think provide we from not conversation thoughts. what real can that the I that going million but us acreage. in up go too it that you to subsea involved in it

in. in Chevron came and so now, came Equinor And

the strategics with about when And So Robin talk there. think have can it's emitters we execution. about the they great bring benefits conversations to and

Robin Fielder

have one world. pioneers are in of the mean, projects ongoing that is Both there the CCS Yes. around I the in partners Equinor Northeast.

too, to great that project bringing of expertise experience our and of large blue as some encouraging long-term in ability certainly thing. these commodities partners, invest to the and So really and have well. is other go the Both a

I exciting. that's So think

encouraging The announcement gray retrofit but more just about to COX is hub, will blue front velocity what encouraging integrated the investment additional capture hydrogen, and facilities existing, which customers, into and the region of new being investment basically to not we've able hydrogen grant end. surround Louisiana ecosystem facilities the where where got hydrogen Southwest Energy also designed coming actually in that Department on we green grant is the Texas hydrogen the as high is Southeast providing the counterparties is think very the do here, of that

thinking being COX address out so greenfield and brownfield about investments. we're with as their facilities, both And having some discussions we're able folks emissions of new to categories

ongoing, we've and And conversations are those. so those few got a quite of

And well hopefully which year about first some in release, as our first we're in help will the portion, that to excited we permit still offshore supplement advance drill that XXXX. project. very mentioned expecting later this And in so stratigraphic our project time go to continuing for that

Jeffrey Robertson

once it put need Robin, Thanks. that application? you take Tim you've permit a well in does strat the long how gather drilled or that to to data

Robin Fielder

more data will we're consortium data. We'll core and participating of model collecting initial we're office core We've We'll real be already that it's built, with that that have time got our some as on some the reviewing pads we'd CCS that was But on be of on lab take captured itself so the that. some part be logging of they'll back location. be and in some in a that offshore, back that coverage. in the filing. We of what of site. bid supplementary the lease to seismic core well data Again, Some general that get we'll XXXX.

really hopefully, more we've Railroad that set to down up achieves goes Texas got process a eventually, help confirmatory as data and it as road. great the application into and Commission primacy So is supplement the This state there. EPA the then

Operator

The next from question from Parks Tuohy comes Noel Brothers.

Noel Parks

as wonder and Lime most inflation? burdened standpoint. what I just in were thinking couple motion these of you set as then? inflation One efficiency thing some wonder, the at things. contracted Venice, before Or the even attractive assume also of are they I few about sort the from in next baked of just if be over So a also that by prospects, you so have capital looking of look examples were planning the recent might something you was are you Rock And at years, have just I much tiebacks impact pretty of or a is that

Timothy Duncan

I think rig the of it ancillary -- look, driven largely a is rigs. and services it's by around lot those

them. the rigs to need drill You

installation. on need to ancillary around services related around demand subsea and You obviously nature. complete projects things them the there's rigs And look, that infrastructure to the vessels of global subsea

you're West areas it Africa. in Guana, You're areas seeing seeing in like it like

market. these time certainly the we of are you to frames think do in adapt you're XX-month thinking these when somewhere projects, windows. have them I XX-month between about typically So to think windows,

again, Rock leads. Venice that we had accelerated. Lime and Now -- because and did long we We

are things that inflation And the about secured, thinking so those of nature. once of you're tubulars not and

the and exploitation some then one that's So have got the think I quicker to reasons we broader round, do thoughtful be inventory we and next some around development exploration. want some of hookups, an

say, going." adjust right market XX to had to really is into for let's "Hey, working going. look, got You've rigs to on step we've last And I just that's while months, been where contract the the for where us think XX this and year hard to rig

over is year. be the going I And decision then seen operated I XX of activity. up, we being slowing idea don't in by feeling responsible afraid the a speed our risk is we years. a like much multiple and in we to as how look, where rig pause we rate do right play going There's have activity, play halved years think And size. it but we That's think at about for a to take management the say, the probably and company let's our last and some of haven't market in let's go this then in down first it. the half think take not contract not

-- perspective. 'XX, planning market is a We we going something to about think be to the think do going and do inflation. spud think if what in So where that so about we from do we're 'XX we in

take why a we foot others, you we our by and of look, and Sometimes a does X-year don't see, and wait if the flattening windows. grab maybe some create little, we seeing, want to see. that instead that maybe gas and market. there's waiting to we of off grab grabbing But contracts, windows some got And

Noel Parks

huge the then environment. concern serious with maybe clearly environment looking ahead as one you China -- your the course, we've now even around now and thinking of about shift with we're hadn't this of next I most we, uncertain pretty us year uncertainty hit. the rate service entering of recession in as sort because now the But some seen one spending seems environments Right. unprecedented everything, sort And had run-up. of lot and of said, it of been interest of a cooling like

in thinking. So those -- maybe other that all in even -- industry certainly of think combined the maybe I so some makes players sense the with you're ahead

Timothy Duncan

barrels -- things you are we're it's I what the manage. the We a to equivalent a think more are Again, don't have risks look, what large mean, need cap. day. I just that XXX,XXX Well, not

was we as Mexico, We ultimately. things management know to look Gulf are. founded we like. XX what that's we We're to the And risk where these years are of company we aspire we don't ago. a become where that needs -- that But in build

onshore have a from still we to yourself need started You an a have past run allocation contract had made protect appropriate we layered need prices. when capital hedges. the that. talked protect risk decade in need seen not a that's quarter bankruptcies That's and haven't the a constructive it, yourself this and you from XXX but perspective since on to price haven't in And to we've in phenomena. been we in an that the offshore there's offshore in in And over And some those up you past, We environment perspective. the fourth I perspective, company. We've commodity last think phenomenon.

production And CapEx, don't right ultimately still of down cash meaningful market management but bit growth lot. I that flow. have the So a we risk to be we think think -- changes a trajectory the about That's brings strategy. risk of that generates little if management I the is. And where mindful again, of

But I you doing nature. around think that have commodity. what If and the of bit a uncertainty constructive do generally, little of on Fed we're is things

appropriate management. risk think what's this is I just

Operator

Kyle next Company. & May question The from comes Sidoti from

Kyle May

business of around for or the CCS questions Tim couple Robin. A

are first permits us give for update administrative then completeness. the Class the next for permit Class reached mentioned steps the You time And VI on Bend? expected VI Harvest now? an what Bend Harvest Can overall a you line

Robin Fielder

question. appreciate I the Kyle. sure, Yes,

October. yes, So completeness. administrative Bend We there first Harvest received at our in we application that filed

now so it's review. what's technical entering called And

as last first we to of that were an that of months X second they wells. the comments permit, first could go back so permit. receive details on able some permit, our the that then for feedback incorporate or XX is probably think we into did We that through So additional next some early which

Natural keeping sitting now EPA well. as Louisiana mind, with Department the that have wells in X through co-submitted of we but Resources also So we template

the up, set hopefully, achieved agency. state all very we're for transition a as smooth year next that So over to regulatory primacy sometime

it very is demonstrated that you've state the of of speed made Dakota knows permit well, primacy really that the got past a our just a it, to X Again, X that North states resources. up started increase. plus have a less in CCS than through this seen turnaround in we've has that And week project the geology lots actually months. of after

we're timely can time to it these process through lines. get states take it's X time So to on more we a when very years X encouraged even that EPA, over, fits within but the line, regardless, our or if project overall

Kyle May

to going you're quarter. fourth Got first spud then another do think the planning in Bend, -- to or to estimated how the What's Bayou you for And take? now? well it. And long spud planning well the that's cost a

Robin Fielder

Yes.

going that both application model, the first railroad that in keeping well EPA there into we're and to to our doing where well. a similar acquisition pretty is help test spudding extensive be will calibrate collection data to and approach as supplement This the that we'll core loop. again, be commission we'll go also So really first logging stratigraphic take but agencies eventually a

rig now it that still a what waiting or drill the costly is we're right as cost to little there, it's another jackup I far for mean, depend a offshore, being bit to go more is That's going As to there's one operator. with get on obviously, the that.

from they're wellbore range a onshore, do to the you feet. talking vertical of X,XXX We're As wellbores. X,XXX fairly straightforward these

to if if will well or that acquisition run to well, nothing -- we're a we in can become where we the less that's be do either wells, those it's So reutilize very sections to corrosive resistant the main an for and injector. monitoring keeper difference a wellbore wells just just pipe if we'll these P&A pure decide you costly. for going suspend that, data be Because cost and sophisticated, much

investment as in is far one on projects, smallest the the So overall what wells is. it drilling of at depends the CCS and of where But the the really as that we're pieces.

Operator

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

Timothy Duncan

everybody. Thanks the for call, joining

this value in weather. obviously, to value is, wells get to I saw our have We're a trying quarter as one the as much business, to We're themes trying in some asset. forward related online. TLCS in We with noisy respect can. forward our exit. value We're of trying Mexican is pull pulled we pulling we downtime strong third to potential quarter a to think we're quarter always that, forward

to tackling a of so really blocking to think create going take it's it's And the I been and value. do trying long-term year to that

about next And year. so talked we

Next generation we've would this going on our more a year year, we're I focus materially -- free as flow moving think call attention I than had year. to cash a what

There's happy online, think to the I on the venture we're lot again joint catalysts. on the we're trying with forward to we development lot business think more these forward. think about But get things. do building of value a initiatives lot There's work think do. where a right of to I structuring, So And we things to is. as to pull pull value long-term about inventory of a as

that's the generate on to XXXX things going it of exit think I to robust in do forward and is the going. investor is looking start to and touch a kind value. team how to a that We're strong with needs community being doing the

call. for thanks So the joining

Operator

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

disconnect. may now You

Talos Energy (TALO) 7 Nov 232023 Q3 Earnings call transcript