Talos Energy (TALO) Update - Jan 12

[dan_s]

Stifel sticks with their target price of $14.00, which compares to my valuation of $19.00.

Talos Energy Inc. (TALO, $9.67, Buy; Target $14.00) -
Debt Issuance Upsized Again - Michael S. Scialla, an analyst at Stifel
Proceeds from a $650MM note (upsized for a second time) will be used to retire a significant near-term maturity ($351MM due in April 2022) and partially repay borrowings under the company's credit facility, which had been an overhang on the stock. In addition, retiring the 2022 notes prevents the revolver from becoming due this year. While expensive, we believe the debt maturity extension and upsized debt issuance are positive for the stock.

Talos is going to report a significant increase in production from Q3 and Q4. Plus, I think their 2021 CapEx program will have some significant production projects in it.