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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

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Equity Bottom-Up

<ul><li>Talos’ current ~$2.5 billion enterprise value (EV) reflects a 23% discount to the ~$3.2 billion PV-10 of company’s year-end 2024 proved developed reserves using flat prices of $65/bbl for oil and $3/MMBtu for natural gas.</li><li>Total proved reserves at year-end were 194 MMBoe (74% oil/81% liquids). Estimated probable reserves at year-end 2024 were 125.3 MMBoe, having a PV-10 on the same flat pricing of ~$2.7 billion.</li><li>On a proved plus probable basis, the discount widens to 58%. Under SEC pricing ($76.32/bbl and $2.13/MMBtu), the discount was 41% for total proved and 66% for proved plus probable.</li></ul>

Talos’ current ~$2.5 billion enterprise value (EV) reflects a 23% discount to the ~$3.2 billion PV-10 of company’s year-end 2024 proved developed reserves using flat prices of $65/bbl for oil and $3/MMBtu for natural gas.Total proved reserves at year-end were 194 MMBoe (74% oil/81% liquids). Estimated probable reserves at year-end 2024 were 125.3 MMBoe, having a PV-10 on the same flat pricing of ~$2.7 billion.On a proved plus probable basis, the discount widens to 58%. Under SEC pricing ($76.32/bbl and $2.13/MMBtu), the discount was 41% for total proved and 66% for proved plus probable.

Talos Energy Inc: Valuation Discount/Estimate Update