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Texas Oil Co. Reveals New Exploitation Well to Spud in 2H24
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Texas energy company Talos Energy Inc. (TALO:NYSE) reported plans to drill a new exploitation well, according to a Roth MKM research note.

Talos Energy Inc. (TALO:NYSE) recently revealed plans to drill a new lower-risk exploitation prospect in the second half of 2024 (2H24) in a new slide deck released on June 4, 2024.

Roth MKM analyst Leo Mariani, in a research note published the same day, maintained a Buy rating on Talos Energy and a 12-month price target of US$17.00, citing the company's improving balance sheet, high oil cut, low production declines, below-average valuation, and material potential upside from its carbon capture business.

"TALO put out a new slide deck this morning, and the company revealed that it plans to drill a new lower-risk exploitation prospect in 2H24," Mariani stated. "The Ewing Bank 953 prospect is estimated to hold 18 MMBoe of gross reserves (TALO 33% WI), and it has the potential to produce 8,000-11,000 Boepd if it is successful, and it would be a subsea tieback."

The analyst believes that the announcement of the new exploitation well will likely result in a slight positive reaction for Talos Energy's stock compared to its peers. The Ewing Bank 953 prospect, with its estimated gross reserves and potential production rates, could contribute significantly to the company's future growth and cash flow generation.

Mariani's US$17 price target on Talos Energy shares is based on a 3.3x multiple of Roth MKM's 2025 debt-adjusted cash flow (DACF) estimate, which assumes US$80 WTI oil and US$3.00 Henry Hub (HH) gas prices. "Impediments to our price target include lower-than-expected commodity prices and failure to hit production targets," the analyst noted.

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  1.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Roth MKM, Talos Energy Inc., June 4, 2024

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures: The price target and rating history for Talos Energy, Inc. prior to February 1, 2023 reflect MKM’s published opinion prior to the acquisition of MKM Partners, LLC by Roth Capital Partners, LLC. Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Talos Energy, Inc.. Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has managed or co-managed a public offering for Talos Energy, Inc..

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC

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