Busy storm season sinks Talos revenues

Houston-based Talos Energy has said that production shut-ins and project delays caused by to the busiest storm season in the last 15 years in the Gulf of Mexico resulted in it recording a decrease in quarterly revenues and booking a net loss compared to a profit in the same period last year.

According to its report on Wednesday, Talos Energy’s production for 3Q 2020 was 48.6 thousand barrels of oil equivalent per day (MBoe/d), of which 67 per cent was oil and 74 per cent were liquids.

The company noted that production for the quarter was significantly impacted by deferrals associated with weather-related shut-ins, third party downtime, and other miscellaneous items.

Talos President and Chief Executive Officer, Timothy S. Duncan, said that the third quarter was particularly challenging, dominated by the busiest storm season in the last 15 years in the Gulf of Mexico.

Duncan added: “These storms did not cause significant damage to our infrastructure, but shut-in production and project delays resulted in a decrease in revenue as well as an increase in capital spending and delays in first production on active development projects”.

As a result, Talos’ 3Q 2020 revenues dropped to $135 million compared to $228.9 million in the corresponding period of 2019.

The company booked a net loss of $52 million in the third quarter of this year versus a profit of $73.3 million in the same period last year.

Looking at projects, after starting up production from the Bulleit well in mid-October, Talos was later that month forced to shut-in the well due to the Hurricane Zeta.

The project has been developed via a 10-mile subsea tieback to the Talos-operated GC 18 Whistler platform where production is being processed and then delivered into regional oil and gas sales pipelines.

“After initiating flow back, the ramping up of production was halted for personnel evacuations resulting from Hurricane Zeta”, the company said on Wednesday.

Talos expects to re-initiate production following the re-staffing of the Green Canyon 18 platform in November 2020.

Talos holds a 50 per cent working interest and is the operator, with EnVen and Otto Energy holding 33.3 per cent and 16.7 per cent working interests, respectively.

On the other hand, Talos expects to start producing from its Kaleidoscope well later this month. Talos holds a 100 per cent working interest in this well.

After successful drilling operations, the Kaleidoscope well completion operations were conducted in October. The well was drilled from the Green Canyon 18 platform.

Talos expects the first production from the well in late November 2020.