The following is a summary of the Talos Energy Inc. (TALO) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Talos Energy reported a record quarterly production of 96,500 barrels of oil equivalent per day in Q3 2024.

• EBITDA for Q3 was $324 million with an EBITDA netback margin of approximately $37 per Boe.

• The company generated $122 million in free cash flow and paid down $100 million of debt, reducing the leverage ratio to 0.9 and achieving their target leverage ahead of schedule.

• Capital expenditures for the quarter were $119 million, excluding plugging and abandonment costs.

Business Progress:

• Talos has commenced its robust 2024 and 2025 drilling program, including the drilling of the Katmai West #2 delineation well and the Daenerys exploration well.

• Continued integration of QuarterNorth assets is expected to achieve estimated synergies of $65 million in 2025.

• Expansion of the Tarantula facility completed to increase throughput from 27,000 to 35,000 barrels of oil equivalent per day.

• The company remains committed to strategic mergers and acquisitions, recently acquiring a 21.4% interest in the monument discovery operated by Beacon Offshore Energy.

Opportunities:

• Talos's long-term organic growth potential is supported by significant drilling projects like Katmai West #2 and Daenerys, expected to produce substantial reserves.

• Strategic acquisitions, such as the monument discovery, represent opportunities for substantial reserve growth.

• Talos's focus on high margin, oil-weighted assets in deepwater operations offers a strong growth trajectory in existing and potentially international arenas.

Risks:

• The company faces operational disruptions and cost implications from hurricane seasons, affecting production and financial results.

• Regulatory challenges and changes in government policies, particularly in areas like financial assurance requirements in the Gulf of Mexico.

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