Talos Energy Inc 8-K, filed May 24, 2022
Talos Energy Inc. (TALO)
About this 8-K
Talos Energy Inc filed this 8-K on May 24, 2022.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 2.02. | Results of Operations and Financial Condition. |
On May 24, 2022, Talos Energy Inc. (the “Company”) disclosed certain information relating to its recoverable resources in an investor presentation discussed in greater detail in Item 7.01 of this Current Report on Form 8-K. Such information is set forth below:
Prospect Net Unrisked Resources by Project Type (1)
| Project Type |
Resources (MMBoe) |
|||
| Exploration |
931 | |||
| Exploitation |
126 | |||
| Development |
73 | |||
| Total |
1,130 | |||
| (1) | In this Current Report on Form 8-K (and the related press release and investor presentation), we use certain broader terms such as “prospect net unrisked resource” that the U.S. Securities and Exchange Commission’s (the “SEC”) guidelines strictly prohibit from inclusion in filings with the SEC. These types of estimates do not represent, and are not intended to represent, any category of reserves based on SEC definitions, are by their nature more speculative than estimates of proved, probable and possible reserves and do not constitute “reserves” within the meaning of the SEC’s rules. These estimates are subject to greater uncertainties, and accordingly, are subject to a substantially greater risk of actually being realized. Investors are urged to consider closely the disclosures and risk factors in the reports we file with the SEC. |
| Item 7.01. | Regulation FD Disclosure. |
On May 24, 2022, the Company posted a new investor presentation entitled “Analyst & Investor Day” to its website www.talosenergy.com. A copy of the presentation can be reviewed at the Company’s website by first selecting “Investors,” then selecting the “Events & Presentations” tab. Information on the Company’s website does not constitute a part of this Current Report on Form 8-K.
On May 24, 2022, the Company issued a press release announcing the availability of its Analyst & Investor Day materials on its website www.talosenergy.com. A copy of the Company’s press release relating to such materials is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.
On May 24, 2022, the Company issued a press release announcing the execution of definitive documentation and closing of the expanded joint venture to develop the Bayou Bend offshore carbon capture and sequestration hub with Carbonvert, Inc. and Chevron U.S.A. Inc. A copy of the Company’s press release relating to such is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K under Item 7.01 and set forth in the attached Exhibits 99.1 and 99.2 are deemed to be “furnished” solely pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description of Exhibit | |
| 99.1 | Press Release, dated May 24, 2022. | |
| 99.2 | Press Release, dated May 24, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 24, 2022
| TALOS ENERGY INC. | ||
| By: | /s/ William S. Moss III | |
| Name: | William S. Moss III | |
| Title: | Executive Vice President, General Counsel and Secretary | |
2
Exhibit 99.1
TALOS ENERGY TO HOST ANALYST & INVESTOR DAY TODAY
Houston, Texas, May 24, 2022 – Talos Energy Inc. (“Talos” or the “Company”) (NYSE: TALO) will host its first-ever analyst and investor day today at 2:00 PM Eastern Time (1:00 PM Central Time). A live webcast of the event will be available on the Company’s recently updated and relaunched corporate website at https://www.talosenergy.com/investor-relations/events-calendar/. Please allow extra time to visit the website and register for the live webcast, which will also be made available for replay following the event. Presentation materials for the event are currently available on the website.
Key Highlights of the Program will Include:
| • | The Company’s differentiated conventional offshore strategy and technical and operational capabilities |
| • | 2022 capital program details and robust project inventory, which includes approximately 100 prospects and more than 1.1 billion barrels of oil equivalent resource potential |
| • | Focus on ESG and Sustainability including Talos Low Carbon Solutions portfolio |
| • | Financial terms of the Company’s Bayou Bend CCS joint venture transaction, which implies a gross valuation for the pre-emitter contract, pre-FID project of $100 million |
| • | Strong expected 2022 free cash flow profile and the Company’s expectation to reach 1.0x leverage by year-end 2022 or sooner |
| • | Increased long-term (2021-2025) cumulative free cash flow(1) guidance by approximately 50% to over $1.5 billion, roughly equivalent to the Company’s current market capitalization |
| • | Guest presentations on seismic imaging technology and CCS value chain partnerships from CGG S.A. and EnLink Midstream, LLC, respectively |
| (1) | Free Cash Flow is a non-GAAP financial measure. See “Non-GAAP Financial Information” below for additional information. Free Cash Flow estimates for the years 2022 through 2025 represent management estimates as of the date of this release and are based on several assumptions and uncertainties. Specifically, these estimates are based on management forecast and current commodity market conditions utilizing Strip pricing and market capitalization as of May 13, 2022; however, commodity prices are highly volatile and any material changes in these assumed prices could materially alter management’s estimates of Free Cash Flow over the applicable periods. These and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2021, could cause us to not achieve the estimates set forth above. Figures are presented pre-tax. |
ABOUT TALOS ENERGY
Talos Energy (NYSE: TALO) is a technically driven independent exploration and production company focused on safely and efficiently maximizing long-term value through its operations, currently in the United States and offshore Mexico, both upstream through oil and gas exploration and production and downstream through the development of carbon capture and sequestration opportunities. As one of the Gulf of Mexico’s largest public independent producers, we leverage decades of technical and offshore operational expertise towards the acquisition, exploration and development of assets in key geological trends that are present in many offshore basins around the world. With a focus on environmental stewardship, we are also utilizing our expertise to explore opportunities to reduce industrial emissions through our carbon capture and sequestration initiatives along the U.S. Gulf Coast and Gulf of Mexico. For more information, visit www.talosenergy.com.
INVESTOR RELATIONS CONTACT
Sergio Maiworm
+1.713.328.3008
investor@talosenergy.com
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This communication may contain “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. 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. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
| TALOS ENERGY INC. | 333 Clay St., Suite 3300, Houston, TX 77002 |
We caution you that 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 due to the continued impact of the coronavirus disease 2019 (“COVID-19”), including any new strains or variants, and governmental measures related thereto on global demand for oil and natural gas and on the operations of our business; the ability or willingness of OPEC and other state-controlled oil companies (“OPEC Plus”), such as Saudi Arabia and Russia, to set and maintain oil production levels; the impact of any such actions; the lack of a resolution to the war in Ukraine and its impact on certain commodity markets; lack of transportation and storage capacity as a result of oversupply, government and regulations; lack of availability of drilling and production equipment and services; adverse weather events, including tropical storms, hurricanes and winter storms; cybersecurity threats; inflation; environmental risks; failure to find, acquire or gain access to other discoveries and prospects or to successfully develop and produce from our current discoveries and prospects; the success of the Bayou Bend CCS joint venture project and similar projects; geologic risk; drilling and other operating risks; well control risk; regulatory changes; the uncertainty inherent in estimating reserves and in projecting future rates of production; cash flow and access to capital; the timing of development expenditures; potential adverse reactions or competitive responses to our acquisitions and other transactions; the possibility that the anticipated benefits of our acquisitions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of acquired assets and operations, and the other risks discussed in Part I, Item 1A. “Risk Factors” of Talos Energy Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022 and Talos Energy Inc’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed with the SEC on May 5, 2022. Should one or more of these risks occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, to reflect events or circumstances after the date of this communication.
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, hurricanes 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.
In this release, we use certain broader terms such as “gross resource potential” that the SEC’s guidelines strictly prohibit from inclusion in filings with the SEC. These types of estimates do not represent, and are not intended to represent, any category of reserves based on SEC definitions, are by their nature more speculative than estimates of proved, probable and possible reserves and do not constitute “reserves” within the meaning of the SEC’s rules. These estimates are subject to greater uncertainties, and accordingly, are subject to a substantially greater risk of actually being realized. Investors are urged to consider closely the disclosures and risk factors in the reports we file with the SEC.
NON-GAAP FINANCIAL MEASURES
Projected free cash flow is a non-GAAP financial measure defined by the Company as Adjusted EBITDA less Capital Expenditures, Plugging and Abandonment Expenses and Interest Expense, and is presented before changes in working capital and pre-tax. No reconciliation between projected free cash flow and net cash provided by operating activities is included in this release, however, because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts, and we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors. In particular, reconciliation of projected free cash flow to net cash provided by operating activities is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures such as the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price and other non-recurring or unusual items such as impairment charges, transaction-related costs and gains or losses on sales of assets. We expect the variability of these items to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
| TALOS ENERGY INC. | 333 Clay St., Suite 3300, Houston, TX 77002 |
Exhibit 99.2
TALOS, CARBONVERT AND CHEVRON ANNOUNCE CLOSING OF PREVIOUSLY ANNOUNCED JOINT VENTURE EXPANSION OF THE BAYOU BEND CCS PROJECT OFFSHORE JEFFERSON COUNTY, TEXAS
Houston, Texas, May 24, 2022 – Talos Energy Inc. (NYSE: TALO) (“Talos”), through its Talos Low Carbon Solutions division, Carbonvert, Inc. (“Carbonvert”) and Chevron U.S.A. Inc. (“Chevron”), through its Chevron New Energies division, announced today the execution of definitive documentation and closing of the expanded joint venture to develop the Bayou Bend CCS offshore carbon capture and sequestration (“CCS”) hub, effective May 1, 2022.
Under the terms of the transaction, Chevron has acquired a 50 percent stake in the expanded Bayou Bend CCS joint venture for gross consideration of $50 million to Talos and Carbonvert, consisting of $30 million of gross upfront cash and up to $20 million of gross capital cost reimbursement, expected to cover Talos and Carbonvert capital expenditures through the project’s final investment decision (“FID”). Equity interests in the joint venture are now 25 percent Talos, 25 percent Carbonvert, and 50 percent Chevron, and Talos is the operator. The three companies have also established an Area of Mutual Interest (“AMI”) over the full ~231,000-acre Jefferson County offshore region contemplated in the State of Texas’s original request for proposal, aligning the parties for future expansion opportunities.
ABOUT TALOS ENERGY
Talos Energy (NYSE: TALO) is a technically driven independent exploration and production company focused on safely and efficiently maximizing long-term value through its operations, currently in the United States and offshore Mexico, both upstream through oil and gas exploration and production and downstream through the development of future carbon capture and storage opportunities. As one of the Gulf of Mexico’s largest public independent producers, we leverage decades of technical and offshore operational expertise towards the acquisition, exploration and development of assets in key geological trends that are present in many offshore basins around the world. With a focus on environmental stewardship, we are also utilizing our expertise to explore opportunities to reduce industrial emissions through our carbon capture and storage initiatives along the U.S. Gulf Coast and Gulf of Mexico. For more information, visit www.talosenergy.com.
INVESTOR RELATIONS CONTACT
Sergio Maiworm
investor@talosenergy.com
713.328.3008
ABOUT CARBONVERT
Carbonvert Inc. is a carbon capture and storage project development and finance company that simplifies decarbonization for industrial clients. Carbonvert was established in late 2020 by Alex Tiller and Jan Sherman, veterans of the renewable and conventional energy sectors to manage the financial and technical complexities of CCS project development. Our executives have decades of experience developing projects, financing tax advantaged projects, trading carbon offsets, and structuring over $4 billion in infrastructure investments, including equity, tax equity, and debt for large assets. Carbonvert’s senior team has extensive experience with large-scale CO2 projects and have designed, secured environmental and CO2 storage permits, and completed and operated large-scale carbon capture, transportation, and storage projects notably Petra Nova CCS in Thompsons, Texas, Quest CCS in Alberta, Canada, and In Salah in Algeria. For more information, visit www.carbonvert.com.
INVESTOR RELATIONS CONTACT
Amanda Biggs
amanda@carbonvert.com
832.937.5021
ABOUT CHEVRON
Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever-cleaner energy is essential to achieving a more prosperous and sustainable world. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We are focused on lowering the carbon intensity in our operations and seeking to grow lower carbon businesses along with our traditional business lines. More information about Chevron is available at www.chevron.com.
| TALOS ENERGY INC. | 333 Clay St., Suite 3300, Houston, TX 77002 |
INVESTOR RELATIONS CONTACT
Creighton Welch
CreightonWelch@chevron.com
281.703.2728
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This communication may contain “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. 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 “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. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
We caution you that 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, the success of our expanded joint venture with Carbonvert and Chevron; the success of the Bayou Bend CCS project and similar projects; commodity price volatility due to the continued impact of the coronavirus disease 2019 (“COVID-19), including any new strains or variants, and governmental measures related thereto on global demand for oil and natural gas and on the operations of our business; the lack of a resolution to the war in Ukraine and its impact on certain commodity markets; the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and non-OPEC countries, such as Saudi Arabia and Russia, to set and maintain oil production levels and the impact of any such actions, lack of transportation and storage capacity as a result of oversupply, government regulations and actions or other factors, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, the possibility that the anticipated benefits of recent acquisitions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of such acquisitions, and other factors that may affect our future results and business, generally, including those discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 25, 2022 and in our Quarterly Report on Form 10-Q for the period ended March 31, 2022 filed on May 5, 2022.
Should one or more of these risks occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, to reflect events or circumstances after the date of this communication.
| TALOS ENERGY INC. | 333 Clay St., Suite 3300, Houston, TX 77002 |