Independent energy company Talos Energy Inc., Houston, announced a new strategy targeting growth as a pure-play offshore exploration and production company in the U.S. Gulf.
The plan, outlined during an investor call led by the company's president and chief executive officer, Paul Goodfellow, on June 17, includes a sharpened focus on offshore operations, particularly in the Gulf of Mexico, renamed by the U.S. government as the Gulf of America, and other mature basins.
Goodfellow, who joined New York-listed Talos in March, said the new plan follows a comprehensive internal review of the company’s operations, future opportunities, and broader market trends.
"We anticipate a shift in the global exploration and production market, with offshore basins expected to play an increasing role in global oil production," said Goodfellow. "We view this anticipated shift as a unique opportunity to increase our scale through disciplined execution and selective accretive growth opportunities that will enhance returns for our shareholders."
The strategic overhaul will see Talos endeavor to boost cash flow by $100 million annually by 2026. The company said it plans to achieve this through greater capital efficiency, improved margins, new commercial opportunities, and streamlined organizational processes.
Talos will also pursue new offshore projects and targeted acquisitions to increase production and profitability, the company said. These “bolt-on” acquisitions will focus on deepwater assets that complement Talos’s existing operations and expertise.
In addition, the company will aim to assemble a larger offshore portfolio, especially in established basins such as the U.S. Gulf, to deliver consistent long-term free cash flow and provide Talos with a robust, sustainable production base, the company said.
"At its core, the goal of our strategy is to leverage our entrepreneurial culture, history, and strengths in order to become a leading pure-play offshore exploration and production company," said Goodfellow. "While I believe we have an incredibly strong and efficient operational organization at Talos, our goal is to take a very good company and make it great through continuous improvement."
Talos said it aims to return up to 50% of its annual free cash flow to shareholders, maintain a strong balance sheet with a long-term leverage target of 1.0x or lower, and invest only in projects with resilient returns across commodity cycles.
