1. Talos reports fifth consecutive quarter of record production: 101 MBoe/d. 2. Share repurchase program increased, with $178 million remaining for buybacks. 3. Sunspear and Katmai West projects are on track for late Q2 2025 production. 4. Talos maintains strong cash balance and free cash flow positive outlook. 5. 2025 production guidance reiterated, averaging 90-95 MBoe/d, predominantly oil.
Talos showed strong production growth and financial discipline, boosting investor confidence.
Solid production results and financial stability highlight Talos's growth potential, prompting positive market sentiment.
Upcoming productions from Sunspear and Katmai West in Q2 may drive immediate interest.
("Talos" or the "Company") (NYSE: TALO) today announced its operational and financial results for the three months ended March 31, 2025. Talos also provided second quarter 2025 guidance for production and reiterated its operational and financial guidance for the full year 2025.
Talos President and Chief Executive Officer Paul Goodfellow stated, "I'm excited to be a part of Talos and pleased to report our fifth consecutive quarter of record production, achieving approximately 101 MBoe/d in the first quarter 2025. This milestone was accompanied by strong Adjusted EBITDA and Adjusted Free Cash Flow, highlighting our disciplined focus on execution. Operationally, we achieved strong results, finishing well completion operations on our Sunspear discovery. Furthermore, completion operations are underway at Katmai West #2, following successful drilling results announced in early January 2025. We remain on track for both projects to begin production in late second quarter 2025.
"At the end of the first quarter 2025, we maintained a significant cash balance, even while actively repurchasing shares, and have an undrawn credit facility. This positions Talos to manage the ongoing fluctuations in commodity prices. Our 2025 guidance, robust EBITDA margins, and strong hedge positions allow us to be free cash flow positive for the full year, even at oil prices of approximately $40 per barrel on a go-forward basis. Furthermore, we have the flexibility to adjust our 2025 capital budget, enabling us to adapt to changing market conditions and still maintain positive free cash flow."
Footnotes: *Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
In March 2025, Talos opportunistically repurchased approximately 2.3 million shares for $22.0 million, representing an average price of $9.61 per share. In addition, our Board of Directors authorized an increase of approximately $42.5 million to our previously approved limit, so Talos now has approximately $178.0 million remaining under the authorized program as of March 31, 2025. Under Talos's share repurchase program, management expects to allocate up to 50% of its annual free cash flow to share repurchases. Purchases under the share repurchase program may be made from time to time in privately negotiated transactions or open market transactions under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. These purchases will depend on market conditions, legal requirements, and other relevant factors.
During the first quarter 2025, Talos successfully finished well completion operations on Sunspear with the West Vela deepwater drillship and expects first production late second quarter 2025. Talos projects production to be approximately 8-10 MBoe/d gross. Sunspear will be tied back to the Talos operated Prince platform. Talos holds a 48.0% working interest ("W.I."), an entity managed by Ridgewood Energy Corporation holds a 47.5% W.I., and an undisclosed partner holds a 4.5% W.I.
In April 2025, Talos initiated completion operations on Katmai West #2 using the West Vela after finishing completion work at Sunspear. At the beginning of 2025, Talos announced successful drilling results at Katmai West #2, encountering over 400 feet of gross hydrocarbon pay with excellent rock properties. First production is expected late second quarter 2025. The strong performance from the Katmai West #1 well and its successful appraisal have nearly doubled the anticipated proved estimated ultimate recovery ("EUR") of the Katmai West field to approximately 50 MMBoe gross and affirmed Talos's estimated gross resource potential of approximately 100 MMBoe. The greater Katmai area is estimated to contain up to a total resource potential of 200 MMBoe. Talos, as operator, holds a 50% W.I., with entities managed by Ridgewood Energy Corporation holding the other 50% W.I.
Talos anticipates drilling operations commencing on the Daenerys well late second quarter 2025, utilizing the West Vela. Daenerys 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. Talos holds a 30% W.I., with partners Red Willow holding a 35% W.I, Cathexis holding a 25% W.I., and HEQ Deepwater holding a 10% W.I.
In March 2025, Talos increased its interest in the Monument discovery to a 29.76% W.I., up from 21.4% W.I. Monument is a large Wilcox oil discovery in Walker Ridge blocks 271, 272, 315, and 316. Talos expects to develop it as a subsea tie-back to the Shenandoah production facility in Walker Ridge. First production is expected between 20–30 MBoe/d gross by late 2026 under restricted flow due to facility rate constraints. There is an additional drilling location adjacent to the discovery with an estimated 25–35 MMBoe that could extend the resource. Other partners include Beacon as operator with a 41.67% W.I. and Navitas Petroleum with a 28.57% W.I.
($ thousands, except per share and per Boe amounts)
Three Months Ended March 31, 2025
| Total revenues | $513,059 |
| Net Income (Loss) | $(9,868) |
| Net Income (Loss) per diluted share | $(0.05) |
| Adjusted Net Income (Loss)* | $10,466 |
| Adjusted Net Income (Loss) per diluted share* | $0.06 |
| Adjusted EBITDA* | $363,003 |
| Adjusted EBITDA excluding hedges* | $357,836 |
| Capital Expenditures | $117,574 |
| Production | Production for the first quarter 2025 was 100.9 MBoe/d (68% oil, 78% liquids). |
Three Months Ended March 31, 2025
| Oil (MBbl/d) | 68.3 |
| Natural Gas (MMcf/d) | 135.7 |
| NGL (MBbl/d) | 10.0 |
| Total average net daily (MBoe/d) | 100.9 |
At March 31, 2025, Talos had a borrowing base of $925.0 million under its Bank Credit Facility, subject to a total availability cap of $800.0 million with approximately $42.8 million in outstanding letters of credit. Letters of credit that are outstanding reduce the available revolving credit commitments. Cash was $203.0 million, providing Talos approximately $960.2 million of liquidity. On March 31, 2025, Talos had $1,250.0 million in total debt. Net Debt was $1,047.1 million, with a Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA of 0.8x.
For the second quarter 2025, Talos expects average daily production to be in the range of 92.0 to 96.0 MBoe/d, with 67% oil volumes. Talos reiterates its full year 2025 operational and financial guidance and expects average daily production to range from 90.0 to 95.0 MBoe/d, consisting of 69% oil and 79% liquids.
Talos Energy (NYSE: TALO) is a technically driven, innovative, independent energy company focused on maximizing long-term value through its Exploration & Production business in the United States Gulf of America and offshore Mexico. We leverage decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while maintaining a focus on safe and efficient operations, environmental responsibility, and community impact. For more information, visit www.talosenergy.com.
Clay Jeansonne
[email protected]
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.
SOURCE Talos Energy