Archives

Home   >   Archives   

Talos Energy announces full year 2020 operating and financial guidance

Rig Lynx
  • By Rig Lynx
  • Feb 19, 2020
  • Category : Archives
  • Views : 680

 

Talos Energy Inc. announced full year 2020 operating and financial guidance. The Company also announced that it expects to close the previously announced acquisition of affiliates of ILX Holdings, among other entities (the “Acquired Assets”, the “Acquisition”, or the “Transaction”), on February 28, 2020.

The Company expects to generate significant free cash flow in 2020, despite the recent commodity pullback. Talos expects its 2020 capital program, inclusive of the Acquired Assets, to be similar in size, or smaller, than the 2019 Talos stand-alone capital program, while benefiting from production contributions from the Acquired Assets and new wells commencing production throughout the year. The 2020 capital program will continue to focus on infrastructure-led, short-cycle projects, while allocating a portion of the program to high-impact exploration catalysts.

2020 Guidance Highlights

  • Significant positive 2020 free cash flow at $50.00/bbl WTI and $2.00/MMBtu Henry Hub, as Talos expects to benefit from strong margins and premium pricing to WTI. Talos expects to be free cash flow neutral at an average 2020 WTI price well below $45.00/bbl, assuming $2.00/MMBtu gas prices. Furthermore, the Company expects free cash flow in excess of $100.0 million at $55.00/bbl WTI and $2.50/MMBtu Henry Hub commodity prices.
  • 2020 production sales volumes expected to be 24.4 – 25.7 million barrels of oil equivalent (“MMBoe”), which represents an average daily production of 66.8 – 70.2 thousand barrels of oil equivalent per day (“MBoe/d”), including the impact of planned deferrals. This reflects production from the Acquired Assets beginning on March 1, 2020 – post Transaction close.
  • 2020 capital expenditures expected to be between $520.0 million and $545.0 million, inclusive of plugging and abandonment, which is expected to be fully funded within cash flow from operations.
  • Continued focus on cost control on all aspects of the business, with cash general and administrative (“G&A”) expenses expected to be below $3.00 per Boe.
  • The Company expects to continue to maintain its low leverage metrics.

President and Chief Executive Officer Timothy S. Duncan commented, “We are pleased to present our 2020 guidance, which I believe strikes the right balance between free cash flow generation in a volatile commodity market environment, and the appropriate level of investment to allow for longer term value creation for our shareholders. We expect to achieve this balance by continuing to invest in our core business of infrastructure-led development and exploitation projects while exposing a portion of our capital program to high-impact catalysts. Our 2020 capital program will be self-funded well below the current $50.00/bbl WTI commodity price environment, and assures that we can maintain, and even improve, our peer leading leverage metrics. In offshore Mexico, we continue to stay focused on moving Zama forward towards final investment decision and also integrating the data we gathered during our successful Xaxamani discovery on Block 31.”

Duncan added, “As we approach the closing of our Transaction, expected at the end of February, we believe we are opportunity rich when combining the pro-forma inventory; however, we will continue to maintain the appropriate level of capital discipline, cost control and balance sheet conservatism throughout the year.”

Source: Talos Energy

Check out our other current stories!

Join the largest oil and gas community on iOS and Android!

Download the app here!

Comments (0)

Leave Comment


Check out our other stories

Rig Lynx
Mar 09, 2023

  Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023.   Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.”   Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.”   Updated Guidance   As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023.   First Quarter 2023   Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023   Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here  

Rig Lynx
Mar 09, 2023

  Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico.   The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill   Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here  

Rig Lynx
Mar 09, 2023

  Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin.   The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL).   Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee.   “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling.   Source: Dolphin   Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here