Talos Energy Announces Second Quarter 2024 Operational and Financial Results
Talos Energy (NYSE: TALO) announced its Q2 2024 operational and financial results, highlighting significant achievements and providing guidance for Q3 and the full year 2024.
Key highlights include:
- Production of 95.5 MBoe/d, at the high end of the guidance range.
- Repurchased 3.8 million shares for $43 million, and authorized an additional $150 million for repurchase.
- Reduced debt by $100 million, maintaining leverage at 1.0x and liquidity of $738.7 million.
- Purchased a 21.4% interest in the Monument discovery in the Gulf of Mexico.
- Completed the integration of QuarterNorth acquisition, increasing expected synergies to $35 million.
Financial results for Q2 2024:
- Revenue: $549.2 million
- Net Income: $12.4 million ($0.07 per diluted share)
- Adjusted EBITDA: $344.0 million
- Capital Expenditures: $122.8 million
- Net Cash from Operating Activities: $289.4 million
- Adjusted Free Cash Flow: $148.0 million
Talos Energy (NYSE: TALO) ha annunciato i risultati operativi e finanziari del secondo trimestre 2024, evidenziando risultati significativi e fornendo indicazioni per il terzo trimestre e per l'intero anno 2024.
Tra i principali risultati:
- Produzione di 95,5 MBoe/giorno, al limite superiore della fascia di previsione.
- Riacquistati 3,8 milioni di azioni per 43 milioni di dollari e autorizzato un ulteriore riacquisto di 150 milioni di dollari.
- Ridotto il debito di 100 milioni di dollari, mantenendo un rapporto di leva di 1,0x e una liquidità di 738,7 milioni di dollari.
- Acquistato una partecipazione del 21,4% nella scoperta Monument nel Golfo del Messico.
- Completata l'integrazione dell'acquisizione di QuarterNorth, aumentando le sinergie previste a 35 milioni di dollari.
Risultati finanziari per il secondo trimestre 2024:
- Ricavi: 549,2 milioni di dollari
- Utile netto: 12,4 milioni di dollari (0,07 dollari per azione diluita)
- EBITDA rettificato: 344,0 milioni di dollari
- Spese in conto capitale: 122,8 milioni di dollari
- Flusso di cassa netto dalle attività operative: 289,4 milioni di dollari
- Flusso di cassa libero rettificato: 148,0 milioni di dollari
Talos Energy (NYSE: TALO) anunció sus resultados operativos y financieros del segundo trimestre de 2024, destacando logros significativos y proporcionando orientación para el tercer trimestre y para todo el año 2024.
Los puntos destacados incluyen:
- Producción de 95,5 MBoe/día, en el extremo alto del rango de orientación.
- Recompradas 3,8 millones de acciones por 43 millones de dólares y autorizado una recompra adicional de 150 millones de dólares.
- Reducido la deuda en 100 millones de dólares, manteniendo un apalancamiento de 1,0x y una liquidez de 738,7 millones de dólares.
- Comprada una participación del 21,4% en el descubrimiento Monument en el Golfo de México.
- Completada la integración de la adquisición de QuarterNorth, aumentando las sinergias esperadas a 35 millones de dólares.
Resultados financieros del segundo trimestre de 2024:
- Ingresos: 549,2 millones de dólares
- Ingreso neto: 12,4 millones de dólares (0,07 dólares por acción diluida)
- EBITDA ajustado: 344,0 millones de dólares
- Gastos de capital: 122,8 millones de dólares
- Flujo de caja neto de actividades operativas: 289,4 millones de dólares
- Flujo de caja libre ajustado: 148,0 millones de dólares
탈로스 에너지(Talos Energy, NYSE: TALO)는 2024년 2분기 운영 및 재무 결과를 발표하며 중요한 성과를 강조하고 3분기 및 2024년 전체에 대한 지침을 제공했습니다.
주요 하이라이트:
- 생산량: 95.5 MBoe/일로, 가이드라인 범위의 상한.
- 3.8백만 주식 재매입, 총 4,300만 달러, 추가로 1억 5천만 달러 재매입 승인.
- 부채 1억 달러 감소, 레버리지 1.0배 유지, 유동성 7억 3천8백 70만 달러.
- 멕시코만의 Monument 발견에 21.4% 지분 구매.
- QuarterNorth 인수 통합 완료, 기대되는 시너지 3,500만 달러로 증가.
2024년 2분기 재무 결과:
- 매출: 5억 4,920만 달러
- 순이익: 1,240만 달러 (희석 주당 0.07 달러)
- 조정 EBITDA: 3억 4,400만 달러
- 자본 지출: 1억 2,280만 달러
- 영업활동으로 인한 순 현금: 2억 8,940만 달러
- 조정 자유현금흐름: 1억 4,800만 달러
Talos Energy (NYSE: TALO) a annoncé ses résultats opérationnels et financiers du deuxième trimestre 2024, mettant en avant des réalisations significatives et fournissant des prévisions pour le troisième trimestre et l'année 2024 dans son ensemble.
Les points clés comprennent :
- Production de 95,5 MBoe/jour, au sommet de la fourchette de prévisions.
- Rachat de 3,8 millions d'actions pour 43 millions de dollars et autorisation d'un rachat supplémentaire de 150 millions de dollars.
- Réduction de la dette de 100 millions de dollars, maintenant un ratio d'endettement de 1,0x et une liquidité de 738,7 millions de dollars.
- Achat d'un intérêt de 21,4 % dans la découverte Monument dans le Golfe du Mexique.
- Intégration de l'acquisition de QuarterNorth complétée, augmentant les synergies attendues à 35 millions de dollars.
Résultats financiers pour le deuxième trimestre 2024 :
- Chiffre d'affaires : 549,2 millions de dollars
- Revenu net : 12,4 millions de dollars (0,07 dollar par action diluée)
- EBITDA ajusté : 344,0 millions de dollars
- Dépenses d'investissement : 122,8 millions de dollars
- Flux de trésorerie net provenant des activités opérationnelles : 289,4 millions de dollars
- Flux de trésorerie disponible ajusté : 148,0 millions de dollars
Talos Energy (NYSE: TALO) hat seine operationellen und finanziellen Ergebnisse für das zweite Quartal 2024 bekannt gegeben, wichtige Erfolge hervorgehoben und eine Prognose für das dritte Quartal sowie das Gesamtjahr 2024 bereitgestellt.
Wichtige Highlights:
- Produktion von 95,5 MBoe/Tag, am oberen Ende des Prognosebereichs.
- 3,8 Millionen Aktien für 43 Millionen US-Dollar zurückgekauft und eine zusätzliche Rückkaufautorisierung über 150 Millionen US-Dollar erteilt.
- Schulden um 100 Millionen US-Dollar reduziert und eine Verschuldung von 1,0x sowie eine Liquidität von 738,7 Millionen US-Dollar aufrechterhalten.
- Eine Beteiligung von 21,4% an der Monument-Entdeckung im Golf von Mexiko erworben.
- Die Integration der Akquisition von QuarterNorth abgeschlossen, die erwarteten Synergien auf 35 Millionen US-Dollar erhöht.
Finanzielle Ergebnisse für das zweite Quartal 2024:
- Umsatz: 549,2 Millionen US-Dollar
- Nettoeinkommen: 12,4 Millionen US-Dollar (0,07 US-Dollar pro verwässerter Aktie)
- Bereinigtes EBITDA: 344,0 Millionen US-Dollar
- Investitionsausgaben: 122,8 Millionen US-Dollar
- Netto-Cashflow aus operativen Tätigkeiten: 289,4 Millionen US-Dollar
- Bereinigter Free Cashflow: 148,0 Millionen US-Dollar
- Production of 95.5 MBoe/d, at the high end of the guidance range.
- Repurchased 3.8 million shares for $43 million and authorized an additional $150 million for repurchase.
- Reduced debt by $100 million, maintaining leverage at 1.0x and liquidity of $738.7 million.
- Completed QuarterNorth acquisition integration, increasing expected synergies to $35 million.
- Net Income of $12.4 million, or $0.07 per diluted share.
- Adjusted Free Cash Flow of $148.0 million.
- Revenue of $549.2 million.
- Adjusted EBITDA of $344.0 million.
- Capital Expenditures totaled $122.8 million.
- Lease Operating Expenses were $157.3 million, or $18.11 per Boe.
Insights
Talos Energy's Q2 2024 results demonstrate strong operational performance and financial discipline. Key highlights include:
- Production of 95.5 MBoe/d, at the high end of guidance
- Adjusted EBITDA of
$344.0 million - Adjusted Free Cash Flow of
$148.0 million - Debt reduction of
$100 million , maintaining 1.0x leverage
The company's focus on shareholder returns is evident through share repurchases of
Talos Energy's strategic moves in Q2 2024 strengthen its position in the Gulf of Mexico. The Monument discovery acquisition is particularly noteworthy, offering:
- 115 million barrels of oil equivalent in proved plus probable reserves
- Potential production of 20-30 MBoe/d gross by late 2026
$265 million PV-10 value for proved and probable reserves
The company's diverse project pipeline, including Katmai, Sunspear and Lobster Waterflood, demonstrates a balanced approach to growth. The upcoming high-impact drilling program, featuring Daenerys and Helms Deep prospects, could significantly boost Talos's resource base. The completion of the QuarterNorth integration, with increased synergies of
Talos Energy's Q2 2024 results and strategic initiatives position the company favorably in the current market environment. Key points for investors:
- Production mix: 73% oil, 81% liquids - attractive in the current price environment
- Realized prices:
$80.50 /bbl for oil, outperforming some peers - Cost control: Lease Operating Expenses of
$17.09 /Boe (excluding workover) show operational efficiency - Capital allocation: Balanced between growth projects, debt reduction and shareholder returns
The company's guidance reiteration for FY 2024 (89.0 - 95.0 MBoe/d) and expectation of generating Free Cash Flow in H2 2024 sufficient to cover its Credit Facility balance demonstrate confidence in its operational strategy. The target leverage ratio below 1.0x aligns with investor preferences for financial prudence in the sector.
Key Highlights
- Production of 95.5 thousand barrels of oil equivalent per day ("MBoe/d") (
73% oil,81% liquids), which is at the high end of Talos's second quarter 2024 guidance range. - Repurchased 3.8 million shares of common stock for approximately
$43 million $11.26 $150 million - Reduced debt by
$100 million $738.7 million - Purchased a
21.4% working interest ("W.I.") in the Monument discovery located in the Walker Ridge area in the Gulf ofMexico . - Returned the Helix Producer I ("HP-I") to service ahead of schedule.
- Completed integration for QuarterNorth acquisition and increased expected synergies to
$35 million
Second Quarter Summary
- Revenue of
$549.2 million $80.50 $22.33 $2.59 - Net Income of
$12.4 million $0.07 $5.2 million $0.03 - Adjusted EBITDA* of
$344.0 million - Capital expenditures of
$122.8 million - Net cash provided by operating activities of
$289.4 million - Adjusted Free Cash Flow* of
$148.0 million
Talos President and Chief Executive Officer Tim Duncan stated, "The second quarter 2024 marked our first full quarter following the closing of the QuarterNorth transaction, resulting in record levels of production, Adjusted EBITDA, and Adjusted Free Cash Flow. This achievement enabled us to remain on track with our debt repayments while opportunistically buying back 3.8 million shares, representing
"In our capital drilling program, the Lobster waterflood project commenced water injection in the second quarter 2024, and we anticipate a positive impact on production rates by 2025. We are currently drilling at our non-operated Ewing Bank 953, with results expected later in the third quarter 2024. Additionally, we anticipate receiving the West Vela deepwater rig late in the third quarter 2024, which will begin drilling three consecutive high-impact subsalt wells, including the Katmai West #2 appraisal in 2024, followed by the Daenerys and Helms Deep prospects in 2025.
"Subsequent to the second quarter 2024, we executed an important transaction securing a
Footnotes:
*See "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
RECENT DEVELOPMENTS AND OPERATIONS UPDATE
Shareholder Return Program: In June 2024, Talos opportunistically repurchased 3.8 million shares of common stock for approximately
Monument Discovery: Recently, Talos agreed to acquire a
QuarterNorth Integration Complete: Operational and organizational integration is complete for the QuarterNorth acquisition that closed in March 2024, and we increased expected synergies to
Production Updates:
Katmai: Talos expects to take possession of the Seadrill-owned drillship West Vela and commence drilling the Katmai West #2 well in the late third quarter 2024 to further appraise the field, potentially adding significant reserves. Talos projects achieving first production from the Katmai West #2 well in the second quarter 2025. Modifications to the facility, Tarantula, will increase capacity from 27 MBoe/d to 35 MBoe/d. The Katmai wells will be rate-constrained under the upgraded capacity allowing for extended flat-to-low decline production from the facility. Talos will hold
Sunspear Completion: Talos is in the final stages of securing a rig contract to complete the Sunspear discovery. The Sunspear well, successfully drilled in July 2023, is expected to commence first production during the second quarter 2025, with production flowing to the Prince platform. Partners are Talos
Lobster Waterflood: In the second quarter 2024, Talos completed the waterflood (down-hole water injection) well in the Lobster Field, which Talos successfully drilled in the first quarter of 2024. The well began injecting water into the BUL-1 sand at 7,000 barrels of water per day in May 2024. Production is expected to increase by over 2 MBoe/d gross in the next 12-18 months. Talos owns
Exploitation and Exploration Updates:
Ewing Bank 953: Talos is currently drilling the Walter-operated amplitude-supported exploitation well in Ewing Bank 953. The Ewing Bank 953 well targets a Pliocene age reservoir at approximately 19,000 feet with an estimated gross resource potential of 15 – 25 million barrels of oil equivalent, with results expected by the end of the third quarter 2024. Talos holds
Daenerys: Talos expects to utilize the West Vela drillship to drill the Daenerys exploration well subsequent to the Katmai West #2 well. The Daenerys well is a high-impact subsalt project that will evaluate the regionally prolific Middle and Lower Miocene section and carries an estimated gross resource potential between 100 – 300 MMBoe. The prospect is part of a broader farm-in transaction executed in 2023 with a combined approximately 23,000 gross acres in the Walker Ridge area. The well is expected to spud in the first quarter 2025 after drilling Katmai West #2. Talos holds a
Helms Deep: Talos expects to mobilize the West Vela drillship to Helms Deep after completing drilling operations at Daenerys. The West Vela is set to commence drilling at Helms Deep, an amplitude-supported, near-infrastructure subsalt Pliocene exploitation well, in the third quarter 2025. The Helms Deep well has a proposed depth of approximately 18,000 feet and an estimated gross resource potential between 17 - 27 MMBoe. Talos is targeting
HP-I Update:
HP-I Resumed Production: In mid-June 2024, the HP-I vessel resumed production ahead of schedule following the completion of the planned regulatory required dry-dock maintenance. The dry-dock period was 52 days and resulted in an estimated deferred production of approximately 4.8 MBoe/d in the second quarter 2024.
(1) | Proved and probable reserves are estimated by Netherland, Sewell & Associates, Inc. ('NSAI"). PV-10 utilizes SEC pricing of |
SECOND QUARTER 2024 RESULTS
Key Financial Highlights:
($ thousands, except per share and per Boe amounts) | Three Months Ended | ||
Total revenues | $ | 549,165 | |
Net Income (Loss) | $ | 12,381 | |
Net Income (Loss) per diluted share | $ | 0.07 | |
Adjusted Net Income (Loss)* | $ | 5,179 | |
Adjusted Net Income (Loss) per diluted share* | $ | 0.03 | |
Adjusted EBITDA* | $ | 343,984 | |
Adjusted EBITDA excluding hedges* | $ | 361,502 | |
Capital Expenditures | $ | 122,812 | |
Production
Production for the second quarter 2024 was 95.5 MBoe/d and was
Three Months Ended | |||
Oil (MBbl/d) | 69.3 | ||
Natural Gas (MMcf/d) | 110.8 | ||
NGL (MBbl/d) | 7.7 | ||
Total average net daily (MBoe/d) | 95.5 | ||
Three Months Ended | ||||||||||||
Production | % Oil | % Liquids | % Operated | |||||||||
Green | 31.9 | 79 | % | 86 | % | 44 | % | |||||
Mississippi | 50.0 | 75 | % | 83 | % | 77 | % | |||||
Shelf and Gulf Coast | 13.5 | 49 | % | 59 | % | 61 | % | |||||
Total average net daily (MBoe/d) | 95.5 | 73 | % | 81 | % | 64 | % | |||||
Three Months Ended | |||
Average realized prices (excluding hedges) | |||
Oil ($/Bbl) | $ | 80.50 | |
Natural Gas ($/Mcf) | $ | 2.59 | |
NGL ($/Bbl) | $ | 22.33 | |
Average realized price ($/Boe) | $ | 63.22 | |
Average NYMEX prices | |||
WTI ($/Bbl) | $ | 80.66 | |
Henry Hub ($/MMBtu) | $ | 2.06 | |
Lease Operating & General and Administrative Expenses
Total lease operating expenses for the second quarter 2024, inclusive of workover, maintenance and insurance costs, were
General and Administrative expenses for the second quarter, adjusted to exclude one-time transaction-related costs and non-cash equity-based compensation, were
($ thousands, except per Boe amounts) | Three Months Ended | ||
Lease Operating Expenses | $ | 157,310 | |
Lease Operating Expenses per Boe | $ | 18.11 | |
Lease Operating Expenses excluding workover | $ | 148,410 | |
Lease Operating Expenses excluding workover per Boe | $ | 17.09 | |
Adjusted General & Administrative Expenses* | $ | 35,600 | |
Adjusted General & Administrative Expenses per Boe* | $ | 4.10 | |
Capital Expenditures
Capital expenditures for the second quarter 2024, excluding plugging and abandonment and settled decommissioning obligations, totaled
($ thousands) | Three Months Ended | ||
$ | 71,265 | ||
Asset management(1) | 36,726 | ||
Seismic and G&G, land, capitalized G&A and other | 14,821 | ||
Total Capital Expenditures | $ | 122,812 | |
____________________ | |
(1) | Asset management consists of capital expenditures for development-related activities primarily associated with recompletions and improvements to our facilities and infrastructure. |
Plugging & Abandonment Expenses
Capital expenditures for plugging and abandonment and settled decommissioning obligations for the second quarter 2024 totaled
Three Months Ended | |||
Plugging & Abandonment and Decommissioning Obligations Settled(1) | $ | 22,044 | |
____________________ | |
(1) | Settlement of decommissioning obligations as a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. |
Liquidity and Leverage
At June 30, 2024, Talos had approximately
OPERATIONAL & FINANCIAL GUIDANCE UPDATES
For the third quarter 2024, Talos expects average daily production of 92.0 - 97.0 MBoe/d (
Talos's reiterates its full year 2024 operational and financial guidance and continues to expect average daily production of 89.0 - 95.0 MBoe/d (
Talos expects to generate Free Cash Flow in the second half 2024 in excess of its Credit Facility balance, and is targeting a long-term leverage ratio below 1.0x.
The following summarizes Talos's previously disclosed full-year 2024 operational and production guidance.
FY 2024 | |||||||
($ Millions, unless highlighted): | Low | High | |||||
Production | Oil (MMBbl) | 23.4 | 24.7 | ||||
Natural Gas (Mcf) | 40.0 | 44.2 | |||||
NGL (MMBbl) | 2.5 | 2.7 | |||||
Total Production (MMBoe) | 32.6 | 34.8 | |||||
Avg Daily Production (MBoe/d) | 89.0 | 95.0 | |||||
Cash Expenses | Cash Operating Expenses and Workovers(1)(2)(4)* | $ | 555 | $ | 585 | ||
G&A(2)(3)* | $ | 100 | $ | 110 | |||
Capex | Capital Expenditures(5) | $ | 570 | $ | 600 | ||
P&A Expenditures | P&A, Decommissioning | $ | 90 | $ | 100 | ||
Interest | Interest Expense(6) | $ | 175 | $ | 185 | ||
(1) | Includes Lease Operating Expenses and Maintenance. |
(2) | Includes insurance costs. |
(3) | Excludes non-cash equity-based compensation and transaction and other expenses. |
(4) | Includes reimbursements under production handling agreements. |
(5) | Excludes acquisitions. |
(6) | Includes cash interest expense on debt and finance lease, surety charges and amortization of deferred financing costs and original issue discounts. |
*Due to the forward-looking nature a reconciliation of Cash Operating Expenses and G&A to the most directly comparable GAAP measure could not reconciled without unreasonable efforts. | |
HEDGES
The following table reflects contracted volumes and weighted average prices the Company will receive under the terms of its derivative contracts as of August 6, 2024. The table includes derivative instruments assumed as part of the QuarterNorth acquisition:
Instrument Type | Avg. Daily | W.A. Swap | W.A. Sub-Floor | W.A. Floor | W.A. Ceiling | |||||||||||
Crude – WTI | (Bbls) | (Per Bbl) | (Per Bbl) | (Per Bbl) | (Per Bbl) | |||||||||||
July - September 2024 | Fixed Swaps | 39,696 | $ | 76.75 | --- | --- | --- | |||||||||
Collar | 1,000 | --- | --- | $ | 70.00 | $ | 75.00 | |||||||||
Long Puts | 4,000 | --- | --- | $ | 70.00 | --- | ||||||||||
Short Puts | 1,000 | --- | $ | 60.00 | --- | --- | ||||||||||
October - December 2024 | Fixed Swaps | 38,674 | $ | 76.07 | --- | --- | --- | |||||||||
Collar | 1,000 | --- | --- | $ | 70.00 | $ | 75.00 | |||||||||
Long Puts | 4,000 | --- | --- | $ | 70.00 | --- | ||||||||||
Short Puts | 1,000 | --- | $ | 60.00 | --- | --- | ||||||||||
January - March 2025 | Fixed Swaps | 32,000 | $ | 72.52 | --- | --- | --- | |||||||||
Collar | 3,000 | --- | --- | $ | 65.00 | $ | 84.35 | |||||||||
April - June 2025 | Fixed Swaps | 32,000 | $ | 73.80 | --- | --- | --- | |||||||||
July - September 2025 | Fixed Swaps | 14,000 | $ | 74.04 | --- | --- | --- | |||||||||
October - December 2025 | Fixed Swaps | 14,000 | $ | 73.93 | --- | --- | --- | |||||||||
Natural Gas – HH NYMEX | (MMBtu) | (Per MMBtu) | (Per MMBtu) | (Per MMBtu) | (Per MMBtu) | |||||||||||
July - September 2024 | Fixed Swaps | 30,000 | $ | 2.82 | --- | --- | --- | |||||||||
Collar | 10,000 | --- | --- | $ | 4.00 | $ | 6.90 | |||||||||
Long Puts | 13,660 | --- | --- | $ | 2.90 | --- | ||||||||||
October - December 2024 | Fixed Swaps | 35,000 | $ | 2.85 | --- | --- | --- | |||||||||
Collar | 10,000 | --- | --- | $ | 4.00 | $ | 6.90 | |||||||||
Long Puts | 13,660 | --- | --- | $ | 2.90 | --- | ||||||||||
January - March 2025 | Fixed Swaps | 60,000 | $ | 3.68 | --- | --- | --- | |||||||||
April - June 2025 | Fixed Swaps | 55,000 | $ | 3.38 | --- | --- | --- | |||||||||
July - September 2025 | Fixed Swaps | 30,000 | $ | 3.58 | --- | --- | --- | |||||||||
October - December 2025 | Fixed Swaps | 30,000 | $ | 3.58 | --- | --- | --- | |||||||||
CONFERENCE CALL AND WEBCAST INFORMATION
Talos will host a conference call, which will be broadcast live over the internet, on Thursday, August 8, 2024 at 10:00 AM Eastern Time (9:00 AM Central Time). Listeners can access the conference call through a webcast link on the Company's website at: https://www.talosenergy.com/investor-relations/events-calendar/default.aspx. Alternatively, the conference call can be accessed by dialing (800) 836-8184 (North American toll-free) or (646) 357-8785 (international). Please dial in approximately 15 minutes before the teleconference is scheduled to begin and ask to be joined into the Talos Energy call. A replay of the call will be available one hour after the conclusion of the conference until August 15, 2024 and can be accessed by dialing (888) 660-6345 and using access code 62299#. For more information, please refer to the Second Quarter 2024 Earnings Presentation available under Presentations and Filings on the Investor Relations section of Talos's website.
ABOUT TALOS ENERGY
Talos Energy (NYSE: TALO) is a technically driven, innovative, independent energy company focused on maximizing long-term value through its Upstream Exploration & Production business in
INVESTOR RELATIONS CONTACT
Clay Jeansonne
investor@talosenergy.com
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENT
The information in this communication includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact included in this communication regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words "will," "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "forecast," "may," "objective," "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. These forward-looking statements are based on our current beliefs, based on currently available information, as to the outcome and timing of future events. Forward-looking statements may include statements about: business strategy; recoverable resources and reserves; drilling prospects, inventories, projects and programs; our ability to replace the reserves that we produce through drilling and property acquisitions; financial strategy, liquidity and capital required for our development program and other capital expenditures; realized oil and natural gas prices; risks related to future mergers and acquisitions and/or to realize the expected benefits of any such transaction timing and amount of future production of oil, natural gas and NGLs; our hedging strategy and results; future drilling plans; availability of pipeline connections on economic terms; competition, government regulations, including financial assurance requirements, and legislative and political developments; our ability to obtain permits and governmental approvals; pending legal, governmental or environmental matters; our marketing of oil, natural gas and NGLs; our integration of acquisitions, including the QuarterNorth acquisition, and the anticipated performance of the combined company; future leasehold or business acquisitions on desired terms; costs of developing properties; general economic conditions, including the impact of continued inflation and associated changes in monetary policy; political and economic conditions and events in foreign oil, natural gas and NGL producing countries and acts of terrorism or sabotage; credit markets; volatility in the political, legal and regulatory environments ahead of the upcoming domestic and foreign presidential elections; estimates of future income taxes; our estimates and forecasts of the timing, number, profitability and other results of wells we expect to drill and other exploration activities; our ongoing strategy with respect to our Zama asset; uncertainty regarding our future operating results and our future revenues and expenses; impact of new accounting pronouncements on earnings in future periods; and plans, objectives, expectations and intentions contained in this communication that are not historical. These forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility; global demand for oil and natural gas; the ability or willingness of OPEC and other state-controlled oil companies to set and maintain oil production levels and the impact of any such actions; the lack of a resolution to the war in
PRODUCTION ESTIMATES
Estimates for our future production volumes are based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and gas will continue at levels that allow for economic production of these products. The production, transportation, marketing and storage of oil and gas are subject to disruption due to transportation, processing and storage availability, mechanical failure, human error, adverse weather conditions such as hurricanes, global political and macroeconomic events and numerous other factors. Our estimates are based on certain other assumptions, such as well performance, which may vary significantly from those assumed. Therefore, we can give no assurance that our future production volumes will be as estimated.
RESERVE INFORMATION
Reserve engineering is a process of estimating underground accumulations of oil, natural gas and NGLs that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify upward or downward revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil, natural gas and NGLs that are ultimately recovered. In addition, we use the terms "gross unrisked recoverable resource potential," "gross reserves," and "reserve potential" in this release, which are not measures of "reserves" prepared in accordance with SEC guidelines or permitted to be included in SEC filings. These resource estimates are inherently more uncertain than estimates of proved reserves or other reserves prepared in accordance with SEC guidelines.
USE OF NON-GAAP FINANCIAL MEASURES
This release includes the use of certain measures that have not been calculated in accordance with
Talos Energy Inc. | ||||||
Consolidated Balance Sheets | ||||||
(In thousands, except share amounts) | ||||||
June 30, 2024 | December 31, 2023 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 37,797 | $ | 33,637 | ||
Accounts receivable: | ||||||
Trade, net | 243,826 | 178,977 | ||||
Joint interest, net | 156,287 | 79,337 | ||||
Other, net | 13,468 | 19,296 | ||||
Assets from price risk management activities | 16,412 | 36,152 | ||||
Prepaid assets | 79,870 | 64,387 | ||||
Other current assets | 18,123 | 10,389 | ||||
Total current assets | 565,783 | 422,175 | ||||
Property and equipment: | ||||||
Proved properties | 9,435,902 | 7,906,295 | ||||
Unproved properties, not subject to amortization | 653,143 | 268,315 | ||||
Other property and equipment | 34,824 | 34,027 | ||||
Total property and equipment | 10,123,869 | 8,208,637 | ||||
Accumulated depreciation, depletion and amortization | (4,643,062) | (4,168,328) | ||||
Total property and equipment, net | 5,480,807 | 4,040,309 | ||||
Other long-term assets: | ||||||
Restricted cash | 104,368 | 102,362 | ||||
Assets from price risk management activities | 2,784 | 17,551 | ||||
Equity method investments | 109,688 | 146,049 | ||||
Other well equipment | 62,991 | 54,277 | ||||
Notes receivable, net | 17,041 | 16,207 | ||||
Operating lease assets | 12,429 | 11,418 | ||||
Other assets | 5,964 | 5,961 | ||||
Total assets | $ | 6,361,855 | $ | 4,816,309 | ||
LIABILITIES AND STOCKHOLDERSʼ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 91,871 | $ | 84,193 | ||
Accrued liabilities | 315,191 | 227,690 | ||||
Accrued royalties | 84,126 | 55,051 | ||||
Current portion of long-term debt | — | 33,060 | ||||
Current portion of asset retirement obligations | 78,765 | 77,581 | ||||
Liabilities from price risk management activities | 51,607 | 7,305 | ||||
Accrued interest payable | 48,970 | 42,300 | ||||
Current portion of operating lease liabilities | 3,928 | 2,666 | ||||
Other current liabilities | 37,181 | 48,769 | ||||
Total current liabilities | 711,639 | 578,615 | ||||
Long-term liabilities: | ||||||
Long-term debt | 1,435,899 | 992,614 | ||||
Asset retirement obligations | 1,080,082 | 819,645 | ||||
Liabilities from price risk management activities | 1,441 | 795 | ||||
Operating lease liabilities | 17,332 | 18,211 | ||||
Other long-term liabilities | 389,137 | 251,278 | ||||
Total liabilities | 3,635,530 | 2,661,158 | ||||
Commitments and contingencies | ||||||
Stockholdersʼ equity: | ||||||
Preferred stock; | — | — | ||||
Common stock; | 1,873 | 1,275 | ||||
Additional paid-in capital | 3,262,700 | 2,549,097 | ||||
Accumulated deficit | (447,775) | (347,717) | ||||
Treasury stock, at cost; 7,204,380 and 3,400,000 shares as of June 30, 2024 and December 31, 2023, | (90,473) | (47,504) | ||||
Total stockholdersʼ equity | 2,726,325 | 2,155,151 | ||||
Total liabilities and stockholdersʼ equity | $ | 6,361,855 | $ | 4,816,309 | ||
Talos Energy Inc. | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Revenues: | ||||||||||||
Oil | $ | 507,408 | $ | 342,983 | $ | 900,629 | $ | 635,677 | ||||
Natural gas | 26,060 | 16,329 | 49,758 | 36,512 | ||||||||
NGL | 15,697 | 7,898 | 28,710 | 17,603 | ||||||||
Total revenues | 549,165 | 367,210 | 979,097 | 689,792 | ||||||||
Operating expenses: | ||||||||||||
Lease operating expense | 157,310 | 101,165 | 292,488 | 182,527 | ||||||||
Production taxes | 476 | 607 | 1,020 | 1,213 | ||||||||
Depreciation, depletion and amortization | 259,091 | 169,794 | 474,755 | 317,117 | ||||||||
Accretion expense | 30,732 | 22,760 | 57,635 | 42,174 | ||||||||
General and administrative expense | 48,247 | 33,182 | 118,088 | 96,369 | ||||||||
Other operating (income) expense | (1,061) | (723) | (87,104) | 2,115 | ||||||||
Total operating expenses | 494,795 | 326,785 | 856,882 | 641,515 | ||||||||
Operating income (expense) | 54,370 | 40,425 | 122,215 | 48,277 | ||||||||
Interest expense | (48,982) | (45,632) | (99,827) | (83,213) | ||||||||
Price risk management activities income (expense) | 2,302 | 26,197 | (84,760) | 85,134 | ||||||||
Equity method investment income (expense) | (456) | (2,012) | (8,510) | 5,431 | ||||||||
Other income (expense) | 4,164 | 1,591 | (51,732) | 8,257 | ||||||||
Net income (loss) before income taxes | 11,398 | 20,569 | (122,614) | 63,886 | ||||||||
Income tax benefit (expense) | 983 | (6,892) | 22,556 | 39,651 | ||||||||
Net income (loss) | $ | 12,381 | $ | 13,677 | $ | (100,058) | $ | 103,537 | ||||
Net income (loss) per common share: | ||||||||||||
Basic | $ | 0.07 | $ | 0.11 | $ | (0.59) | $ | 0.90 | ||||
Diluted | $ | 0.07 | $ | 0.11 | $ | (0.59) | $ | 0.89 | ||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 183,564 | 125,436 | 171,027 | 115,590 | ||||||||
Diluted | 183,692 | 125,667 | 171,027 | 116,363 | ||||||||
Talos Energy Inc. | ||||||
Consolidated Statements of Cash Flows | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
Six Months Ended June 30, | ||||||
2024 | 2023 | |||||
Cash flows from operating activities: | ||||||
Net income (loss) | $ | (100,058) | $ | 103,537 | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||
Depreciation, depletion, amortization and accretion expense | 532,390 | 359,291 | ||||
Amortization of deferred financing costs and original issue discount | 5,084 | 7,629 | ||||
Equity-based compensation expense | 5,544 | 8,687 | ||||
Price risk management activities (income) expense | 84,760 | (85,134) | ||||
Net cash received (paid) on settled derivative instruments | (21,012) | (4,161) | ||||
Equity method investment (income) expense | 8,510 | (5,431) | ||||
Loss (gain) on extinguishment of debt | 60,256 | — | ||||
Settlement of asset retirement obligations | (50,128) | (47,683) | ||||
Loss (gain) on sale of assets | (2,500) | — | ||||
Loss (gain) on sale of business | (86,940) | — | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 3,076 | 35,127 | ||||
Other current assets | (5,150) | (23,790) | ||||
Accounts payable | (43,608) | (3,890) | ||||
Other current liabilities | 17,748 | (22,975) | ||||
Other non-current assets and liabilities, net | (22,182) | (44,124) | ||||
Net cash provided by (used in) operating activities | 385,790 | 277,083 | ||||
Cash flows from investing activities: | ||||||
Exploration, development and other capital expenditures | (269,170) | (298,658) | ||||
Cash acquired in excess of payments for acquisitions | — | 17,617 | ||||
Payments for acquisitions, net of cash acquired | (916,045) | — | ||||
Proceeds from (cash paid for) sale of property and equipment, net | — | (8,488) | ||||
Contributions to equity method investees | (19,627) | (15,260) | ||||
Investment in intangible assets | — | (7,796) | ||||
Proceeds from sales of businesses | 141,997 | — | ||||
Net cash provided by (used in) investing activities | (1,062,845) | (312,585) | ||||
Cash flows from financing activities: | ||||||
Issuance of common stock | 387,717 | — | ||||
Issuance of senior notes | 1,250,000 | — | ||||
Redemption of senior notes | (897,116) | (15,000) | ||||
Proceeds from Bank Credit Facility | 770,000 | 505,000 | ||||
Repayment of Bank Credit Facility | (745,000) | (305,000) | ||||
Deferred financing costs | (27,386) | (11,775) | ||||
Other deferred payments | (1,234) | (462) | ||||
Payments of finance lease | (8,747) | (8,026) | ||||
Purchase of treasury stock | (39,326) | (47,504) | ||||
Employee stock awards tax withholdings | (5,687) | (7,378) | ||||
Net cash provided by (used in) financing activities | 683,221 | 109,855 | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 6,166 | 74,353 | ||||
Cash, cash equivalents and restricted cash: | ||||||
Balance, beginning of period | 135,999 | 44,145 | ||||
Balance, end of period | $ | 142,165 | $ | 118,498 | ||
Supplemental non-cash transactions: | ||||||
Capital expenditures included in accounts payable and accrued liabilities | $ | 79,832 | $ | 113,319 | ||
Supplemental cash flow information: | ||||||
Interest paid, net of amounts capitalized | $ | 64,452 | $ | 63,492 | ||
SUPPLEMENTAL NON-GAAP INFORMATION
Certain financial information included in our financial results are not measures of financial performance recognized by accounting principles generally accepted in
Reconciliation of General and Administrative Expenses to Adjusted General and Administrative Expenses
We believe the presentation of Adjusted General and Administrative Expenses provides management and investors with (i) important supplemental indicators of the operational performance of our business, (ii) additional criteria for evaluating our performance relative to our peers and (iii) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Adjusted General & Administrative Expenses has limitations as an analytical tool and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP or as alternatives to net income (loss), operating income (loss) or any other measure of financial performance presented in accordance with GAAP. We define these as the following:
General and Administrative Expenses. General and Administrative Expenses generally consist of costs incurred for overhead, including payroll and benefits for our corporate staff, costs of maintaining our headquarters, costs of managing our production operations, bad debt expense, equity-based compensation expense, audit and other fees for professional services and legal compliance. A portion of these expenses are allocated based on the percentage of employees dedicated to each operating segment.
($ thousands) | Three Months Ended | ||
Reconciliation of General & Administrative Expenses to Adjusted General & Administrative Expenses: | |||
Total General and administrative expense | $ | 48,247 | |
Transaction and other expenses(1) | (9,857) | ||
Non-cash equity-based compensation expense | (2,790) | ||
Adjusted General & Administrative Expenses | $ | 35,600 | |
____________________ | |
(1) | Transaction expenses includes |
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
"EBITDA" and "Adjusted EBITDA" provide management and investors with (i) additional information to evaluate, with certain adjustments, items required or permitted in calculating covenant compliance under our debt agreements, (ii) important supplemental indicators of the operational performance of our business, (iii) additional criteria for evaluating our performance relative to our peers and (iv) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP or as alternatives to net income (loss), operating income (loss) or any other measure of financial performance presented in accordance with GAAP. We define these as the following:
EBITDA. Net income (loss) plus interest expense; income tax expense (benefit); depreciation, depletion and amortization; and accretion expense.
Adjusted EBITDA. EBITDA plus non-cash write-down of oil and natural gas properties, transaction and other (income) expenses, decommissioning obligations, derivative fair value (gain) loss, net cash receipts (payments) on settled derivatives, (gain) loss on debt extinguishment, non-cash write-down of other well equipment and non-cash equity-based compensation expense.
Adjusted EBITDA excluding hedges. We have historically provided as a supplement to—rather than in lieu of—Adjusted EBITDA including hedges, provides useful information regarding our results of operations and profitability by illustrating the operating results of our oil and natural gas properties without the benefit or detriment, as applicable, of our financial oil and natural gas hedges. By excluding our oil and natural gas hedges, we are able to convey actual operating results using realized market prices during the period, thereby providing analysts and investors with additional information they can use to evaluate the impacts of our hedging strategies over time.
The following tables present a reconciliation of the GAAP financial measure of Net Income (loss) to EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding hedges for each of the periods indicated (in thousands):
Three Months Ended | ||||||||||||
($ thousands) | June 30, | March 31, | December 31, | September 30, | ||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA: | ||||||||||||
Net Income (loss) | $ | 12,381 | $ | (112,439) | $ | 85,898 | $ | (2,103) | ||||
Interest expense | 48,982 | 50,845 | 44,295 | 45,637 | ||||||||
Income tax expense (benefit) | (983) | (21,573) | (5,081) | (15,865) | ||||||||
Depreciation, depletion and amortization | 259,091 | 215,664 | 183,058 | 163,359 | ||||||||
Accretion expense | 30,732 | 26,903 | 22,722 | 21,256 | ||||||||
EBITDA | 350,203 | 159,400 | 330,892 | 212,284 | ||||||||
Transaction and other (income) expenses(1) | 6,629 | (49,157) | 5,504 | (64,321) | ||||||||
Decommissioning obligations(2) | 4,182 | 855 | 2,425 | 7,972 | ||||||||
Derivative fair value (gain) loss(3) | (2,302) | 87,062 | (94,596) | 98,802 | ||||||||
Net cash received (paid) on settled derivative instruments(3) | (17,518) | (3,494) | 1,017 | (6,313) | ||||||||
Loss on extinguishment of debt | — | 60,256 | — | — | ||||||||
Non-cash equity-based compensation expense | 2,790 | 2,754 | 3,873 | 393 | ||||||||
Adjusted EBITDA | 343,984 | 257,676 | 249,115 | 248,817 | ||||||||
Add: Net cash (received) paid on settled derivative instruments(3) | 17,518 | 3,494 | (1,017) | 6,313 | ||||||||
Adjusted EBITDA excluding hedges | $ | 361,502 | $ | 261,170 | $ | 248,098 | $ | 255,130 | ||||
____________________ | |
(1) | Transaction expenses includes |
(2) | Estimated decommissioning obligations were a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency and are included in "Other operating (income) expense" on our consolidated statements of operations. |
(3) | The adjustments for the derivative fair value (gain) loss and net cash receipts (payments) on settled derivative instruments have the effect of adjusting net income (loss) for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDA on an unrealized basis during the period the derivatives settled. |
(4) | Reporting period includes Carbon Capture & Sequestration ("CCS") business. |
Reconciliation of Adjusted EBITDA to Adjusted Free Cash Flow and Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
"Adjusted Free Cash Flow" before changes in working capital provides management and investors with (i) important supplemental indicators of the operational performance of our business, (ii) additional criteria for evaluating our performance relative to our peers and (iii) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Adjusted Free Cash Flow has limitations as an analytical tool and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP or as alternatives to net income (loss), operating income (loss) or any other measure of financial performance presented in accordance with GAAP. We define these as the following:
Capital Expenditures and Plugging & Abandonment. Actual capital expenditures and plugging & abandonment recognized in the quarter, inclusive of accruals.
Interest Expense. Actual interest expense per the income statement.
Talos did not pay any cash income taxes in the period, therefore cash income taxes have no impact to the reported Adjusted Free Cash Flow before changes in working capital number.
($ thousands) | Three Months Ended | ||
Reconciliation of Adjusted EBITDA to Adjusted Free Cash Flow (before changes in working capital): | |||
Adjusted EBITDA | $ | 343,984 | |
Capital expenditures | (122,812) | ||
Plugging & abandonment | (22,221) | ||
Decommissioning obligations settled | 178 | ||
Investment in | (2,108) | ||
Interest expense | (48,982) | ||
Adjusted Free Cash Flow (before changes in working capital) | 148,039 | ||
($ thousands) | Three Months Ended | ||
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow (before | |||
Net cash provided by operating activities(1) | $ | 289,364 | |
(Increase) decrease in operating assets and liabilities | (25,969) | ||
Capital expenditures(2) | (122,813) | ||
Decommissioning obligations settled | 178 | ||
Investment in | (2,108) | ||
Transaction and other (income) expenses(3) | 9,129 | ||
Decommissioning obligations(4) | 4,182 | ||
Amortization of deferred financing costs and original issue discount | (2,486) | ||
Income tax benefit | (983) | ||
Other adjustments | (455) | ||
Adjusted Free Cash Flow (before changes in working capital) | 148,039 | ||
________________________ | |
(1) | Includes settlement of asset retirement obligations. |
(2) | Includes accruals and excludes acquisitions. |
(3) | Transaction expenses includes |
(4) | Estimated decommissioning obligations were a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. |
Reconciliation of Net Income to Adjusted Net Income (Loss) and Adjusted Earnings per Share
"Adjusted Net Income (Loss)" and "Adjusted Earnings per Share" are to provide management and investors with (i) important supplemental indicators of the operational performance of our business, (ii) additional criteria for evaluating our performance relative to our peers and (iii) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Adjusted Net Income (Loss) and Adjusted Earnings per Share have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP or as an alternative to net income (loss), operating income (loss), earnings per share or any other measure of financial performance presented in accordance with GAAP.
Adjusted Net Income (Loss). Net income (loss) plus accretion expense, transaction related costs, derivative fair value (gain) loss, net cash receipts (payments) on settled derivative instruments and non-cash equity-based compensation expense.
Adjusted Earnings per Share. Adjusted Net Income (Loss) divided by the number of common shares.
Three Months Ended June 30, 2024 | |||||||||
($ thousands, except per share amounts) | Basic per Share | Diluted per Share | |||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss): | |||||||||
Net Income (loss) | $ | 12,381 | $ | 0.07 | $ | 0.07 | |||
Transaction and other (income) expenses(1) | 6,629 | $ | 0.04 | $ | 0.04 | ||||
Decommissioning obligations(2) | 4,182 | $ | 0.02 | $ | 0.02 | ||||
Derivative fair value loss(3) | (2,302) | $ | (0.01) | $ | (0.01) | ||||
Net cash received on paid derivative instruments(3) | (17,518) | $ | (0.10) | $ | (0.10) | ||||
Non-cash income tax benefit | (983) | $ | (0.01) | $ | (0.01) | ||||
Loss on extinguishment of debt | — | $ | — | $ | — | ||||
Non-cash equity-based compensation expense | 2,790 | $ | 0.02 | $ | 0.02 | ||||
Adjusted Net Income (Loss)(4) | $ | 5,179 | $ | 0.03 | $ | 0.03 | |||
Weighted average common shares outstanding at June 30, 2024: | |||||||||
Basic | 183,564 | ||||||||
Diluted | 183,692 | ||||||||
____________________ | |
(1) | Transaction expenses includes |
(2) | Estimated decommissioning obligations were a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. |
(3) | The adjustments for the derivative fair value (gain) loss and net cash receipts (payments) on settled derivative instruments have the effect of adjusting net income (loss) for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted Net Income (Loss) on an unrealized basis during the period the derivatives settled. |
(4) | The per share impacts reflected in this table were calculated independently and may not sum to total adjusted basic and diluted EPS due to rounding. |
Reconciliation of Total Debt to Net Debt and Net Debt to LTM Adjusted EBITDA
We believe the presentation of Net Debt, LTM Adjusted EBITDA, Net Debt to LTM Adjusted EBITDA and Net Debt to Pro Forma LTM Adjusted EBITDA is important to provide management and investors with additional important information to evaluate our business. These measures are widely used by investors and ratings agencies in the valuation, comparison, rating and investment recommendations of companies.
Net Debt. Total Debt principal minus cash and cash equivalents.
Net Debt to LTM Adjusted EBITDA. Net Debt divided by the LTM Adjusted EBITDA.
($ thousands) | June 30, 2024 | ||
Reconciliation of Net Debt: | |||
$ | 625,000 | ||
625,000 | |||
Bank Credit Facility – matures March 2027 | 225,000 | ||
Total Debt | 1,475,000 | ||
Less: Cash and cash equivalents | (37,797) | ||
Net Debt | $ | 1,437,203 | |
Calculation of LTM Adjusted EBITDA: | |||
Adjusted EBITDA for three months period ended September 30, 2023 | $ | 248,817 | |
Adjusted EBITDA for three months period ended December 31, 2023 | 249,115 | ||
Adjusted EBITDA for three months period ended March 31, 2024 | 257,676 | ||
Adjusted EBITDA for three months period ended June 30, 2024 | 343,984 | ||
LTM Adjusted EBITDA | $ | 1,099,592 | |
Acquired Assets Adjusted EBITDA: | |||
Adjusted EBITDA for three months period ended September 30, 2023 | 161,427 | ||
Adjusted EBITDA for three months period ended December 31, 2023 | 129,063 | ||
Adjusted EBITDA for period January 1, 2024 to March 4, 2024 | 99,490 | ||
LTM Adjusted EBITDA from Acquired Assets | $ | 389,980 | |
Pro Forma LTM Adjusted EBITDA | $ | 1,489,572 | |
Reconciliation of Net Debt to Pro Forma LTM Adjusted EBITDA: | |||
Net Debt / Pro Forma LTM Adjusted EBITDA(1) | 1.0x | ||
____________________ | |
(1) | Net Debt / Pro Forma LTM Adjusted EBITDA figure excludes the Finance Lease. Had the Finance Lease been included, Net Debt / Pro Forma LTM Adjusted EBITDA would have been 1.1x. |
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SOURCE Talos Energy
FAQ
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