Talos Energy (NYSE: TALO) reported Q1 EPS of ($0.34), $0.15 worse than the analyst estimate of ($0.19). Revenue for the quarter came in at $267.91 million versus the consensus estimate of $238.64 million.

Key Highlights:

• Successful high-impact sub-salt Miocene deepwater exploration discovery at Puma West, located approximately 15 miles from the prolific Mad Dog field.
• Successful multi-well drilling program at Green Canyon 18 concluded. Rig mobilizing to Pompano to begin multi-well campaign.
• Completed two high-yield transactions that increased liquidity and materially extended the Company's maturity profile.
• Record production of 66.1 thousand barrels of oil equivalent per day ("MBoe/d") net (68% oil, 76% liquids). This is the Company's highest quarterly production since inception.
• Net Loss of $121.5 million, inclusive of $137.5 million in commodity hedging losses, or $1.49 loss per diluted share, and Adjusted Net Loss(1) of $27.3 million, inclusive of $48.4 million of realized hedging losses, or $0.34 adjusted loss per diluted share.
• Adjusted EBITDA(1) of $136.6 million, or approximately $23 per Boe. Adjusted EBITDA excluding hedges of $185.0 million, or over $31 per Boe.
• Capital expenditures, inclusive of plugging and abandonment costs, of $71.2 million.
• Free Cash Flow(1) of $31.3 million before changes in working capital, reflecting the quarter's strong operational performance.

President and Chief Executive Officer Timothy S. Duncan commented: "The first quarter of 2021 was a busy period for Talos with multiple development and exploration projects underway. We achieved success across the board on those projects, ranging from in-field developments to a high-impact deepwater sub-salt discovery at Puma West. We believe this discovery builds momentum around our sub-salt Miocene portfolio in our Green Canyon and Mississippi Canyon core areas, where we are focused on accelerating significant value creation in the coming years through exploration. On the development and exploitation front, we look forward to drilling an additional well at Tornado to maximize our water flood project, as well as starting the Pompano platform rig program campaign, which should deliver high-value projects in the second half of 2021 and into 2022."

Duncan continued: "It was also a strong quarter financially with over $31 million of free cash flow generation, despite hedge settlements, winter weather events and planned downtime at Pompano. Thematically, the results of the quarter illustrate what's possible with our high-quality asset base, diverse project inventory and competitive cost structure, all of which allowed us to generate over $31 per Boe of Adjusted EBITDA margin before hedge settlements. With our oil-weighted asset base we expect this high margin trend to continue and we believe our balanced capital program will generate solid returns moving forward."

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