Energy Prospectus

Note below from John White at Roth Capital on 10/27/2020 with my comments in blue.
TALO closed at $6.90 on Oct 26

Our valuation is based on a net asset value (NAV) analysis which produced $12.95 per share which we adjusted higher to our $13.00 per share price target. < TipRanks shows three other recent price target updates from other analysts of $10, $17 and $18. My current valuation is $15.40.

TALO: Earnings Preview

Our EPS/CFPS/EBITDA estimates for 3Q 2020 are $(0.65)/$0.73/$75.8 million. < Compares to my forecasts of $(0.54) EPS/$0.55 CFPS/$66.9 million EBITDA.

On the call we will be listening carefully for updates/additional information on the following Drilling/Operations Successes. Previously TALO provided the following:

The Kaleidoscope well was successfully drilled and is being completed. Results exceeded pre-drill estimates and included the logging of approximately 325 feet of net pay across four zones. TALO holds a 100% interest in the well. TALO has elected a dual completion to allow for simultaneous production of multiple sands. First production expected in November 2020.

Tornado Water Flood Initiation: TALO has begun the process of water injection of over 20,000 barrels of water per day from the shallower and higher pressure B-4 aquifer into the deeper and lower pressured B-6 oil reservoir. TALO holds a 65% interest and is the operator.

Bulleit First Oil: Completion and hook-up operations are expected to be finalized with first oil to be achieved in October 2020. TALO holds a 50% interest and is the operator.

Ram Powell Production Restart: TALO has received regulatory approvals and is in the process of completing repairs.

Matthew V. Veazey for Rigzone
Sun, October 25, 2020, 10:05 AM CDT
Talos Achieves First Oil in Green Canyon Field

The Talos Energy, Inc. (NYSE: TALO)-operated Bulleit Field in the Green Canyon (GC) area of the Gulf of Mexico produced first oil on Oct. 15, 2020, co-venturer Otto Energy (ASX: OEL) reported Monday.

“The development and startup of the Bulleit Field is a significant milestone for Otto Energy and its shareholders,” remarked Mike Utsler, Otto’s CEO and managing director, in a written statement emailed to Rigzone.

Talos plans to ramp up output in increments of 1,000 barrels of oil per day (bopd) at Bulleit – located in GC 21 – over one to two weeks until the well reaches a steady state production rate, Otto continued. The firm pointed out the project has been developed via a 10-mile (16-kilometer) subsea tieback to the Talos-operated GC 18 Whistler platform, where production is processed and delivered into regional sales pipelines. Otto added that long-term production handling, transportation and sales arrangements secure its product sales from GC 21.

Last year, the GC 21 Bulleit well encountered 250 feet (76.2 meters) of total vertical distance oil pay in two intervals – DTR-10 and MP, the company stated. It also noted that additional proven reserves exist in a shallower DTR-10 sand that can be produced form the existing well bore.

“The field and its production form an important component of our robust base business in both the offshore and onshore Gulf of Mexico, where we now produce oil and gas from three excellent fields,” continued Utsler. “We look forward to updating the market further as the well ramps up production to its expected steady state levels.”

According to an Oct. 7 update on Talos’ website, Hurricane Delta and other weather-related issues delayed Bulleit completion and hook-up operations. Early this year, Talos revealed that it had contracted the Transocean Discoverer Inspiration drillship to complete and tie back the well.

Talos’ website points out that Talos holds a 50-percent working interest in Bulleit, with EnVen Energy Corp. and Otto owning 33.3 percent and 16.7-percent stakes, respectively.