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Talos (TALO) Updates Guidance After Including QuarterNorth Deal
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Talos Energy Inc.(TALO - Free Report) has updated its operational and financial guidance for 2024, taking into account QuarterNorth Energy Inc.’s acquisition, which was closed earlier than expected. Based on the prior guidance, it was expected that the acquisition would close by the end of the first quarter of 2024.
For full-year 2024, Talos projects the average daily production to be in the range of 89-95 thousand barrels of oil equivalent per day (Mboe/d), indicating an increase from the previous guidance of 87-93 MBoe/d. The updated guidance is inclusive of approximately 10 months of QuarterNorth contributions. It also covers expected planned downtime and risk for unplanned downtime, along with any weather-related disruption.
In its full-year 2024 guidance for cash expenses, Talos incorporated approximately 10 months of expenses for QuarterNorth and a full 12 impact of the EnVen transaction. These expenses compare to only 10 and a half months of expenses incurred in 2023. Talos expects to incur nearly $15 million in expenses in relation to the Helix Producer I (HP-I) drydock and other maintenance associated with it. The updated guidance is inclusive of multiple deepwater workover projects, which may increase or reinstate production.
The company expects average daily production in the range of 78-80 Mboe/d for the first quarter of 2024, indicating an increase from the prior guidance of 70-72 Mboe/d. The first- quarter update incorporates March impacts of approximately one month of QuarterNorth’s contribution and the partial impact of the planned HP-I dry-dock shut-in. The guidance also included planned downtime at the Tarantula facility, which will affect production from the Katmai field. Additionally, TALO anticipates upstream capital expenditures in the range of $570-$600 million.
In conclusion, TALO has a robust production outlook for 2024 after incorporating the effects of the QuarterNorth acquisition. With oil prices nearing the $80 per barrel mark, the company is expected to ride on the favorable business environment. However, Talos expects to incur higher costs and expenses than in 2023, which may adversely impact its profitability.
Zacks Rank and Key Picks
Currently, TALO carries a Zacks Rank #5 (Strong Sell).
Sunoco LP is one of the largest distributors of motor fuel in the United States. The company distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Sunoco’s current dividend yield is greater than the composite stocks belonging to the industry. SUN could be a preferred stock for income-focused investors who seek consistent returns.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of the Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.
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Talos (TALO) Updates Guidance After Including QuarterNorth Deal
Talos Energy Inc.(TALO - Free Report) has updated its operational and financial guidance for 2024, taking into account QuarterNorth Energy Inc.’s acquisition, which was closed earlier than expected. Based on the prior guidance, it was expected that the acquisition would close by the end of the first quarter of 2024.
For full-year 2024, Talos projects the average daily production to be in the range of 89-95 thousand barrels of oil equivalent per day (Mboe/d), indicating an increase from the previous guidance of 87-93 MBoe/d. The updated guidance is inclusive of approximately 10 months of QuarterNorth contributions. It also covers expected planned downtime and risk for unplanned downtime, along with any weather-related disruption.
In its full-year 2024 guidance for cash expenses, Talos incorporated approximately 10 months of expenses for QuarterNorth and a full 12 impact of the EnVen transaction. These expenses compare to only 10 and a half months of expenses incurred in 2023. Talos expects to incur nearly $15 million in expenses in relation to the Helix Producer I (HP-I) drydock and other maintenance associated with it. The updated guidance is inclusive of multiple deepwater workover projects, which may increase or reinstate production.
The company expects average daily production in the range of 78-80 Mboe/d for the first quarter of 2024, indicating an increase from the prior guidance of 70-72 Mboe/d. The first- quarter update incorporates March impacts of approximately one month of QuarterNorth’s contribution and the partial impact of the planned HP-I dry-dock shut-in. The guidance also included planned downtime at the Tarantula facility, which will affect production from the Katmai field. Additionally, TALO anticipates upstream capital expenditures in the range of $570-$600 million.
In conclusion, TALO has a robust production outlook for 2024 after incorporating the effects of the QuarterNorth acquisition. With oil prices nearing the $80 per barrel mark, the company is expected to ride on the favorable business environment. However, Talos expects to incur higher costs and expenses than in 2023, which may adversely impact its profitability.
Zacks Rank and Key Picks
Currently, TALO carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the energy sector are Sunoco LP (SUN - Free Report) ,Archrock Inc. (AROC - Free Report) and Harbour Energy (HBRIY - Free Report) . Both Sunoco and Archrock presently sport a Zacks Rank #1 (Strong Buy), while Harbour Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The company distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Sunoco’s current dividend yield is greater than the composite stocks belonging to the industry. SUN could be a preferred stock for income-focused investors who seek consistent returns.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of the Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.