Talos Energy (TALO) Misses Q3 EPS by 3c, Revenues Miss

Talos Energy (NYSE: TALO) reported Q3 EPS of ($0.52), $0.03 worse than the analyst estimate of ($0.49). Revenue for the quarter came in at $135.14 million versus the consensus estimate of $160.2 million.

Key Highlights:

• Production of 48.6 thousand barrels of oil equivalent per day ("MBoe/d"), of which 67% was oil and 74% was liquids. Production for the quarter was significantly impacted by deferrals associated with weather-related shut-ins, third party downtime and other miscellaneous items.
• Net Loss of $52.0 million in the quarter, or $0.73 loss per diluted share, and Adjusted Net Loss(1) in the quarter of $37.4 million, or $0.52 adjusted loss per diluted share.
• Adjusted EBITDA(1) of $78.6 million for the third quarter.
• Capital expenditures, inclusive of plugging and abandonment costs, of $132.3 million during the quarter.
• As of September 30, 2020, maintained a leverage position of 1.8x Net Debt to Credit Facility LTM Adjusted EBITDA(1).
• As of September 30, 2020, $353.8 million of liquidity including $32.4 million in cash and $321.4 million of availability under the Company's $985.0 million borrowing base.
• The Company published its inaugural Environmental, Social and Governance report highlighting the Company's initiatives and commitments across health and safety, environmental and social responsibility and corporate governance topics.

President and Chief Executive Officer Timothy S. Duncan commented: "As we discussed in our October 7th operations update, the third quarter was particularly challenging, dominated by the busiest storm season in the last 15 years in the Gulf of Mexico. These storms did not cause significant damage to our infrastructure, but shut-in production and project delays resulted in a decrease in revenue as well as an increase in capital spending and delays in first production on active development projects. Despite those challenges, we made significant progress in our operations to exit 2020 on strong footing with a more resilient set of assets, with more scale and diversity and with a lower cost structure than how we entered the year."

Duncan continued: "There have been several important milestones as we close out the year. We are proud to have published our first ESG report and look forward to providing annual updates going forward. The report highlights our mission to provide life-improving energy with minimal impact to the environment and climate, while also promoting a company culture that's recognized as one of the best in Houston. On the operations front, we continue to deliver on the low end of our operating cost guidance, even with the additional hurricane-related costs, allowing us to have a highly competitive cost structure as we ramp to our full expected run-rate to exit the year. As we conclude our 2020 capital program in November and restore production to our target exit rate of 71-73 MBoe/d, we look forward to generating solid results in the fourth quarter and moving forward into 2021."

For earnings history and earnings-related data on Talos Energy (TALO) click here.

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