HOUSTON - Talos Energy Inc. (NYSE: NYSE:TALO), an independent energy company, has announced a significant oil and natural gas discovery at its Ewing Bank 953 well in the U.S. Gulf of Mexico. The well has encountered approximately 127 feet of net pay, with preliminary estimates indicating a gross recoverable resource potential between 15 and 25 million barrels of oil equivalent (MMBoe).
The discovery well, drilled to a true vertical depth of around 19,000 feet, is projected to yield an initial production rate of 8 to 10 thousand barrels of oil equivalent per day (MBoe/d). Talos holds a 33.3% working interest in the well, with Walter Oil & Gas Corporation as the operator at 56.7% and Gordy Oil Company holding the remaining 10%. Plans are in place to tie the well back to the South Timbalier 311 Megalodon host platform, partially owned by Talos, with first production anticipated by mid-2026.
In a separate development, Talos has entered into an agreement to participate in the Sebastian prospect, which started drilling in late August 2024. The prospect targets the Upper Miocene K-1 reservoir and is estimated to contain a gross resource potential of 9 to 16 MMBoe. The potential initial production rate is forecasted to be between 6 and 10 MBoe/d. Results from the Sebastian prospect, which will be operated by Murphy Oil Corporation (NYSE:MUR), are expected by the end of the fourth quarter of 2024.
Joe Mills, Talos Interim President and CEO, expressed optimism about the Ewing Bank discovery, noting the well's better-than-expected rock properties and the potential for a robust initial flow rate. Mills highlighted that the discovery continues a series of successful exploitation wells tied back to Talos-owned infrastructure and that the inclusion of the Sebastian prospect in the company's drilling portfolio will not necessitate updates to the capital expenditures guidance for the year.
Talos Energy, headquartered in Houston, focuses on exploration and production in the Gulf of Mexico and offshore Mexico, emphasizing safe operations, environmental responsibility, and community impact.
This news is based on a press release statement and contains forward-looking statements regarding the company's strategy, operations, and potential production rates, which are subject to risks and uncertainties. The actual results may differ materially from those expressed in any forward-looking statements.
In other recent news, Talos Energy has made significant strides in its operations. The company reported record-breaking results for the second quarter of 2024, with oil output reaching 955,000 barrels per day and an adjusted EBITDA of $344 million. Additionally, Talos Energy displayed its commitment to shareholder value by repaying $100 million in debt and repurchasing 3.8 million shares.
In a recent development, the company appointed Joseph A. Mills as the interim President and CEO, following Tim Duncan's resignation. Talos Energy is currently seeking a permanent CEO with the assistance of an executive search firm.
In terms of future prospects, Goldman Sachs has maintained a Buy rating for Talos Energy, noting the company's strong financial performance and successful acquisitions of QuarterNorth and Monument. The firm also highlighted Talos' plans for growth, including the delivery of the West Vela rig for drilling the Katmai West well, and a new project set to commence in 2025.
On the earnings front, Talos Energy revised its revenue forecast from $30 million to $35 million and increased its synergy forecast from $55 million to $65 million. The company's third-quarter production guidance is anticipated to be between 92,000 to 97,000 barrels of oil equivalent per day. These recent developments underscore Talos Energy's focus on generating free cash flow and adding value through strategic projects.
InvestingPro Insights
As Talos Energy Inc. (NYSE: TALO) announces its latest oil and natural gas discovery, investors are closely monitoring the company's financial health and market performance. According to recent data from InvestingPro, Talos Energy has a market capitalization of $1.95 billion, highlighting its significant presence in the energy sector. Despite a challenging week with its stock price taking a hit, Talos stands out with a robust revenue growth, reporting a 24.09% increase in the last twelve months as of Q2 2024.
InvestingPro Tips suggest that analysts are taking note of Talos Energy's potential, with four analysts having revised their earnings estimates upwards for the upcoming period. This optimism is likely influenced by the company's strategic exploration successes, such as the Ewing Bank 953 well and the Sebastian prospect. However, it's worth noting that Talos Energy is currently trading at a high EBIT valuation multiple and is facing expectations of a net income drop this year. Despite these challenges, analysts predict the company will be profitable this year, a prospect that could provide some reassurance to investors.
Within the InvestingPro platform, there are additional tips available for Talos Energy, offering deeper insights into the company's financial status and market predictions. These tips can be a valuable resource for investors looking to understand the potential risks and rewards associated with Talos Energy's stock. For more detailed analysis and tips on Talos Energy, interested readers can visit https://www.investing.com/pro/TALO.
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