Talos Energy (TALO) Update - August 27

[dan_s]

I do expect Talos to shut in some production for 2-3 days due to Hurricane Ida. The good news is that the storm is expected to move quickly thru the Central GOM. The Talos Team has decades of offshore experience and they know how to deal with tropical storms. The bad news for Louisiana and Mississippi is that Ida is expect to be a Cat 3 with winds over 100 mph as is approaches the coast.

This is great news: Talos Energy Inc. TALO and partner Carbonvert Inc. have been awarded the lease on a carbon capture and storage (“CCS”) project on the Gulf Coast region of Texas.

The companies were selected as the sole winning bidders among 12 submissions by the Texas School Land Board for the Texas General Land Office’s (GLO) CCS project.

The project site, which covers an area of more than 40,000 gross acres, is situated offshore Texas state waters in the U.S. Gulf of Mexico. The site is fully covered by Talos Energy’s existing seismic database and lies in the vicinity of a large concentration of industrial emitters across the Texas and Louisiana Gulf Coast.

On the basis of Talos Energy's preliminary insights into the rock and fluid properties of the project’s saline reservoirs, the company expects to sequester 225-275 million tons of carbon dioxide from industrial activities in the area. Notably, Talos Energy will be the operator of the project.

In the next stage, Talos Energy and Carbonvert will negotiate a lease agreement with the GLO staff on the terms of the Talos Energy bid and the initial request for proposal from the GLO. Final terms are subject to the approval of the Texas School Land Board.

Oil and gas companies are getting actively involved in CCS-related projects as it offers a transition pathway for the rapid and effective reduction of CO2 emissions beyond what can be achieved by alternative methods like electrification and renewable fuels. Hence, U.S. government officials provided support for such projects as they are crucial to meeting climate targets.

With the latest award, the companies are well-positioned to be among the first independent U.S. energy companies with an identified site involved in carbon sequestration. In June, Talos Energy announced another partnership with clean energy player Storegga Geotechnologies to develop CCS project opportunities along the US Gulf Coast.