US independent Talos Energy posted net income of $89.9 million for the first quarter of 2023, turning around a $66.4 million net loss in the same period last year.

However, the company’s adjusted figures show a net loss of $1.26 million for the three months ended 31 March.

“Although we have encountered several operational challenges in recent weeks, we remain focused on the totality of our 2023 plan, which positions the business for long-term growth and value creation,” Talos chief executive Tim Duncan said.

“We are seeing our capital and operating expenses trending below our plan and we will look to continue this trend while also progressing our Venice and Lime Rock discoveries to first production.

“We expect that production will exceed 80,000 barrels of oil equivalent per day early in 2024, and we continue to expect to achieve our 2024-2026 production and cash flow goals.”

Talos reported production of 63,600 boepd in the first quarter, that included a partial quarter from its recent EnVen acquisition.

The operational challenges included underperformance in existing wells, selected drilling results and unplanned additional downtime.

Duncan said during the Q1 earnings call that these operational challenges are expected to last for several months, and Talos would respond by revising its production guidance for 2023 to a more conservative approach.

For 2023, Talos will now expect annual production between 66,000 and 71,000 boepd, down from its original guidance of 72,0000 to 76,000 boepd. But the company plans to reach 80,000 boepd next year as new developments come on stream.

Total revenues for the first quarter showed a drop of about 22% to $322.6 million year-on-year.

The company in March announced it would participate in a $100 million share buy-back programme and repurchased 1.9 million shares totalling around $27 million during the first quarter.

Talos is also making progress in its carbon capture businesses. Upstream capital expenditure for Q1 2023 reached $190 million, while carbon capture and sequestration (CCS) capital expenditure was about $21.2 million.

The Bayou Bend CCS project, which Talos will operate with Chevron owning a 50% stake, recently expanded its acreage to a storage capacity of more 1 billion tonnes of carbon dioxide over its lifetime.

Duncan said Talos is preparing this year to drill its first stratigraphic well offshore for the project, and also plans to file multiple Class VI well permit applications by the end of 2023.

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