US independent Talos Energy reported production of 56,500 barrels of oil equivalent per day for the third quarter, taking a production blow as the company continues to recover from Hurricane Ida.
The total production, down from 66,300 barrels per day the quarter before, was 10 to 11,000 barrels lower than initially projected. Talos Energy said the company is still expecting selected outages of 4000 bpd from Hurricane Ida that should return by the end of the year.
The company is expecting another 1500 to 2000 bpd to be added by the end of the year from its Pompano platform rig program, which should remain at the facility through 2022.
Talos Energy ended the quarter with a net loss of $16.7 million, up from its $52 million loss in the third quarter 2020 and its $125.8 million loss in the second quarter of this year.
Chief executive officer Tim Duncan said the company is on track to remain inside its 2021 capital guidance, despite the hurricane.
“It’s always tough when you have a hurricane blow through. [The team] rebounded quickly,” Duncan said.
“I think the fact that we’re trying to keep everything inside the guidance we had for the year, it’s a testament to what we did in the first half of the year and I think it’s a preview of how good we feel about the fourth quarter.”
Progress in carbon capture
Talos Energy is a leader in carbon capture and storage (CCS) opportunities in the US Gulf of Mexico after it was awarded a CCS project with the Texas General Land Office off the coast of Beaumont and Port Arthur.
With a possible enhancement to the 45Q tax credit working its way through government that would bring the tax credit for carbon sequestration from $50 per tonne to $85 per tonne, Duncan said Talos Energy's approach to CCS remains unchanged. However, stakeholders may be more receptive to carbon capture at a credit of $85 per tonne, Duncan said.
“I do think this is an area where there’s some bipartisan support in a world where there’s not a lot,” Duncan said. “You really need to push the incentive structure to get more people excited about the idea around CCS.
“So it doesn’t change our approach, but it may help with the execution.”