Page 15 - LatAmOil Week 12 2020

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NEWS IN BRIEF
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UPSTREAM
Talos Energy to maintain
focus on Zama field
offshore Mexico
Talos Energy today announced updated full year 2020 financial guidance, inclusive of $170mn of reductions in capital, operating and G&A expenses. The Company will continue to eval- uate additional opportunities to further reduce 2020 costs. Those reductions would be incre- mental to the $170mn already identified.
Talos continues to expect to generate posi- tive free cash flow in 2020, despite the current commodity environment. We believe that these cost reduction measures, coupled with Talos’ low cash cost structure and robust hedge book, allow the Company to generate free cash flow in 2020, after capital expenditures and interest expense, in the mid-$20s per barrel average WTI prices for the balance of the year.
The Company’s updated guidance for 2020 reflects investments in infrastructure-led, short-cycle projects that were previously com- mitted to and that are focused on lowering the lifting cost structure of Talos’ assets by adding incremental barrels through existing fixed- cost offshore production facilities, resulting in an increased value of the asset base. Given the ability to utilise existing infrastructure, Talos believes these high margin, low breakeven investments are economic even in the current commodity price environment. Also included in the guidance is a limited, but unchanged, por- tion of Talos’s budget dedicated to the front-end engineering and design (FEED) work related to our Zama project offshore Mexico.
Talos continues to maintain its robust hedge book. As of March 23, the Company had approx- imately 11.9mn barrels of oil hedged for 2020, representing 70% of the mid-point of guided oil volumes, at a weighted average WTI price of $51.53 per barrel.
President and Chief Executive Officer Tim- othy S. Duncan commented: “I believe Talos is well positioned to successfully navigate the cur- rent environment. We have taken immediate and decisive steps to defer certain investments, and this updated guidance delivers continued free cash flow generation in a volatile commodity market environment while maintaining abun- dant collateral value and access to substantial liquidity. We expect to continue to invest in our infrastructure-led short-cycled developments while staying focused on moving Zama forward towards a final investment decision. We believe our 2020 updated capital programme will be self-funded in the mid-$20s per barrel of WTI.” Talos Energy, March 23 2020
Bahamas Petroleum
provides update on timing
of Perseverance-1 drilling
Bahamas Petroleum Co., the oil and gas explo- ration company with significant prospective resources in licences in The Commonwealth of The Bahamas, has provided an update in relation to the timing for the drilling of Perseverance-1, its first exploration well in The Bahamas.
As a result of the massive, unprecedented and adverse impact of the spread of the COVID-19 virus, safe and responsible drilling operations in the planned May/June 2020 timeframe can no longer be assured. Drilling operations are thus being rescheduled to October 2020 onwards.
The impact of the response to the spread of the COVID-19 virus, both globally and in The Bahamas, also constitutes a force majeure event under the terms of the Company’s licences. The Company has notified the Government of The Bahamas of such, which is expected to result in a corresponding extension to the current term of the licences.
Key elements of the Company’s finance package have been successfully rescheduled. The Company is in a strong cash position and in the coming months will be seeking to rede- fine operational plans and major contractor arrangements consistent with a revised work programme timetable.
The farm-in process continues. The Com- pany is considering other strategic alternatives arising as a result of the current global crisis.
Simon Potter, Chief Executive Officer of Bahamas Petroleum Co., said: “Our primary objective is safe operations, best delivered by the ability to drill uninterrupted by external events for the period of the drill plan. Given the ever-evolving adverse impact of the response to the spread of the COVID-19 virus - which
is changing daily and is affecting everyone and all enterprises, around the globe - it has become clear to us that if we continue to push forward with drilling in the first half of 2020, safe and responsible operations would be compromised. We have accordingly notified the Government of The Bahamas that a force majeure event has occurred, which is expected to result in an exten- sion to the current term of our licences, and we are rescheduling our drilling plans accordingly, to after October 2020.”
Bahamas Petroleum Co., March 25 2020
Colombia: GeoPark
announces plan for new
environment and revisions
in 2020 work programme
GeoPark, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colom- bia, Peru, Argentina, Brazil, Chile and Ecuador has announced its business approach for the new oil price scenarios and current revisions to its 2020 work programme.
GeoPark begins 2020 from a strong finan- cial position, which includes cash in hand of $168.5mn, $168mn of uncommitted credit lines and a long-term financial debt profile with no principal payments until 2024.
GeoPark builds its work programmes every year with a flexibility that allows it to quickly adjust to any oil price or macroeconomic changes. With the recent oil price decline, GeoPark immediately reverted to a reduced pro- gramme. Due to the severity of the current oil price outlook, additional adjustments have been made both to capital investment plans and oper- ating and administrative costs – with continuous monitoring to adjust further if necessary.
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