Good morning, ladies and gentlemen, and welcome to the Talos Energy Fourth Quarter 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, February 27, 2025. I would now like to turn the conference over to Clay Jeansonne, Head of Investor Relations. You may begin. Thank you, Operator. Good morning, everyone, and welcome to our Fourth Quarter and Full Year 2024 Earnings Conference Call. Joining me today to discuss our results are Bill Moss, Interim Chief Executive Officer, Co-President, and General Counsel, Sergio Maiworm, Interim Co-President and Chief Financial Officer, and John Spath, Interim Co-President and Head of Operations. For our prepared remarks, please refer to our fourth quarter 2024 earnings presentation that is available on Talos' website under the Investor Relations section for a more detailed look at our results and operations update. Before we start, I'd like to remind you that our remarks will include forward-looking statements subject to various cautionary statements identified in our presentation and earnings release. Actual results may differ materially from those contemplated by the company. Factors that could cause these results to differ materially are set forth in yesterday's press release and our Form 10-K for the period ending December 31st, 2024, filed with the SEC. Forward-looking statements are based on assumptions as of today, and we undertake no obligations to update these statements as a result of new information or future events. During this call, we may present GAAP and non-GAAP financial measures. A reconciliation of certain non-GAAP to GAAP measures is included in yesterday's press release, which was furnished with our Form 8-K filed with the SEC and is available on our website. Now I'd like to turn the call over to Bill. Thanks, Clay. Good morning, everyone, and thank you for joining us on our call today. I would like to start by providing some brief introductory remarks. I will then turn the call over to Sergio and John for highlights on our financial performance, operational activities, and outlook. We will then open the call up for questions after our prepared remarks. First, I want to express, on behalf of management, our appreciation and gratitude to our Talos employees. Your hard work and dedication and your commitment to safety and protection of the environment over the past year have been unwavering. Thank you for all that you do to drive our success and uphold our values. Next, I want to share how excited we are about Paul Goodfellow joining Talos as our new CEO. Paul's first day in the office will be this coming Monday, March 3rd. He brings over three decades of experience in domestic and international operations. His impressive background includes leading Shell's global deepwater business, overseeing Shell's global drilling, completions, and well intervention organization, and serving as a key member of the projects and technology and upstream leadership teams and internal audit function. We are confident that Paul's extensive experience and expertise, especially in deepwater operations, combined with his strategic judgment and proven leadership, will take Talos to the next level. During his first 100 days at Talos, Paul intends to identify the key drivers of Talos' success. He'll be working closely with the leadership team to refine our strategic plan and determine our next steps, and we will announce to you the results of these efforts as soon as they are completed. I will now turn the call over to Sergio to discuss some financial highlights for the fourth quarter and full year, as well as our 2025 operational and financial guidance. Thank you, Bill, and good morning, everyone. Taking a look at our financial performance highlighted in Slide 4, we're very pleased with our results for the fourth quarter, which demonstrates our focus on operational execution and consistent free cash flow generation. If you turn to Slide 5, we have consistently exceeded quarterly expectations on production, EBITDA, and free cash flow every quarter throughout 2024. This strong financial performance enabled us to fully repay our credit facility during 2024, reducing our leverage ratio to 0.8x net debt to EBITDA, while finishing the year with a healthy cash position of $108 million. Operationally, we made real progress in our drilling program with the successful drilling of the Katmai West #2 well, 35% under budget and over a month ahead of schedule. That is a great achievement and a testament to the quality of the team. We have initiated completion operations for the Sunspear Discovery and expect it to be online in the second quarter. Following that, we plan to complete the Katmai West #2 well before drilling the Daenerys Exploratory Well. John will go into more detail on these operational developments in his remarks. For fourth quarter, we achieved record production, totaling 98.7 thousand barrels of oil equivalent per day, which was 70% oil and including the NGL barrels, a total of 79% liquids. We reported record EBITDA of $362 million for fourth quarter, which equates to an EBITDA netback margin of about $40 per barrel of oil equivalent. Throughout the past year, we believe we have consistently ranked in the top quartile amongst public E&P companies in netback margin, as shown in Slide 6. Our CapEx for the quarter was $133 million, and we dedicated an additional $23 million to plugging and abandonment activities during fourth quarter which resulted in $164 million in free cash flow. Now, I want to touch on our year-end reserves, which were prepared by Netherland and Sewell. We ended 2024 with a larger and more oil-weighted reserve base. This is primarily attributable to our acquisition of QuarterNorth in 2024, which marked a pivotal milestone for Talos, adding more scale and related infrastructure to our portfolio. Talos proved reserves are 194 million barrels of oil equivalent, which is approximately 74% oil. The PV-10 of our proved reserves is approximately $4.2 billion, which is calculated at SEC pricing. Talos also has significant value beyond our proved reserves, with an additional $3 billion in probable reserves PV-10, also based on SEC prices, so approximately $7.2 billion in total value. Moving on, for the full year of 2024, Talos produced 92.6 thousand barrels of oil equivalent per day, slightly above the midpoint of our full year guidance range, which was highly liquids weighted at 80%. Our total annual EBITDA for 2024 was approximately $1.3 billion. As shown on Slide 7, our financial performance enabled us to generate record free cash flow of $511 million. With the increased scale from our previous acquisitions, we have strengthened our asset base and the base business production. This positions us to make the right long-term investments in the business while keeping the base production healthy without requiring outsized capital investments. That increases our capability to consistently generate free cash flow now and in the future. We expect a similar pattern of performance in 2025, and we will discuss our guidance momentarily. With that free cash flow in 2024, we stayed true to our commitment to pay down our debt, and we were able to completely pay off our RBL in the fourth quarter and accumulate a healthy cash balance at year-end. As shown on Slide 8, during the year, we reduced our total debt by $550 million, including $125 million paid down during the fourth quarter alone. As I mentioned earlier, we also ended the year with a cash position of $108 million. Our total net debt at year-end stood at approximately $1.1 billion, with no outstanding borrowings on our RBL, and we closed the year with a leverage ratio of 0.8x net debt to EBITDA. I wanted to point out that the $550 million of debt repayment this year equates to over $3 per share of value accretion for our shareholders. These milestones reflect our commitment to financial discipline, low leverage, and building a solid foundation for profitable growth. Before turning the call over to John to discuss our operational activities in more detail, I'd like to touch on our production expectation and capital spending plans for 2025. Moving to Slide 9, in 2025, we expect to invest between $500 million and $540 million. With that investment, we expect full year 2025 production to be between 90 and 95 thousand barrels of oil equivalent per day, of which approximately 69% is expected to be oil and 79% liquids. In addition, we expect to allocate between $100 and $120 million to P&A and decommissioning activities in 2025. Our capital program reflects a strategic balance across low-risk development, exploitation, and exploration projects. We're also making investments in ordering long lead equipment for key projects, including Monument and Ewing Bank 953. Asset management efforts are focused on cost-efficient production adds and enhancements and extending the operational lifespan of fields. Additionally, our ongoing geological and geophysical and land investments aim to refine and continue to bolster our inventory. On Slide 10, we provide a more detailed look at 2025 guidance. For cash operating expenses, we expect between $580-$610 million, including workover expenses for activities that will increase production throughout the year. For G&A, we project between $120-$130 million, including the realization of synergies from the QuarterNorth transaction we completed in 2024. Turning to Slide 11, I want to talk briefly about how we thought about our production guidance for 2025. There are a few items impacting production guidance. As you can see from this waterfall chart, the business currently runs consistently north of 100,000 barrels a day, so the base continues to be very healthy. As is typical for every offshore operator, several large maintenance projects are scheduled later in 2025, which will reduce our production rate for the year, but will also ensure safe operations and high uptime throughout the life of those assets. We then account for weather-related downtime, such as hurricanes and Loop Current shut-ins, as well as an estimate of unplanned downtime associated with third-party facilities and pipelines. So that leads us to 90-95 thousand barrels of oil equivalent per day in 2025. We have also guided our expectations for the first quarter of 2025. Our assets have been performing quite well during the challenging winter months, despite some minor interruptions. We are confident that our production for the quarter will be between 99 and 101 thousand barrels of oil per day. Based on the production and cost profiles laid out in the guidance, we expect to generate significant free cash flow again in 2025. With that, I'll turn the call over to John to address our 2025 drilling plan in more detail. Thank you, Sergio, and good morning, everyone. Moving to Slide 12 and 13, our 2025 drilling program is underway utilizing the West Vela drill ship. We started the year strong with successful results drilling and evaluating the Katmai West #2 well. Following this success, we cased and suspended the well in preparation for completion operations later in the rig campaign. We then mobilized the West Vela to begin completion operations on Sunspear and Green Canyon Block 78. Once we finish the Sunspear completion, the West Vela will return to Katmai West #2 to complete the well. After completing both Sunspear and Katmai West #2, we were mobilized to our high-impact Miocene prospect, Daenerys, located in Walker Ridge blocks 106, 107. Turning to the Katmai West #2 well, which is on Slide 14 of the presentation, drilling commenced in late October 2024, reaching a true vertical depth of 27,000 feet. In early January 2025, we announced successful drilling results, encountering over 400 feet of gross hydrocarbon pay with excellent rock properties. The drilling and subsurface teams delivered an outstanding performance, drilling the well under budget and approximately 40 days ahead of schedule. This drilling efficiency placed Katmai West #2 in the top quartile of similar wells drilled in the Gulf of America. We will begin completion operation on Katmai following Sunspear's completion, with Katmai West #2 being completed as a single zone frac pack with the potential initial production rate of 15-20 thousand BOE per day. First production is anticipated in late second quarter of 2025. Katmai field is a key asset and strategic focus area for us. The strong performance of Katmai West number one well, combined with the successful results of Katmai West #2, has nearly doubled the proved estimated ultimate recovery of the Katmai West field to approximately 50 million gross oil equivalent. This success reaffirms Talos' total resource potential in the Katmai area, which is estimated at approximately 200 million barrels of gross oil equivalent. Talos holds a 50% working interest in and operates the Katmai field. Additionally, we own and operate 100% of the Tarantula host facility. Last fall, we increased the daily throughput capacity at our Tarantula facility from 27,000 BOE per day to 35,000 BOE per day. Our Tarantula facility will be running at maximum capacity once we bring on Katmai West #2 late in the second quarter. Moving to Sunspear Discovery on Slide 15, we recently started completion operations on Sunspear utilizing the West Vela. The well will be completed as a single zone frac pack with projected gross production rate estimated between 8,000-10,000 BOE per day. The well is being tied back to the Talos -operated Prince platform, which is currently undergoing upgrades. We hold a 48% working interest in Sunspear and expect to achieve first production by the latter part of the second quarter of 2025. Moving on to Daenerys prospect on Slide 16, following the completions of Sunspear and Katmai West, the West Vela will be mobilized to Walker Ridge 106, 107 to begin drilling at Daenerys prospect, which will be drilled to a true vertical depth of 31,000 feet to evaluate the large Middle and Lower Miocene four-way structure. Talos holds a 30% working interest and serves as operator of Daenerys. A successful outcome at Daenerys would further enhance Talos' long-term organic production growth. Another exciting area for Talos is the Wilcox Trend in the ultra-deep waters of the Gulf of America. Talos has a significant acreage position in the Lower Wilcox Trend, which we believe represents a growth opportunity for Talos. Turning to the Monument Discovery on Slide 17, we recently agreed to increase our working interest in Monument from 21.4% to 29.76%. The project operated by Beacon Offshore Energy was drilled and appraised with two well penetrations and reached FID in February of 2024. We estimate proved and probable gross reserves of approximately 115 million barrels of oil, with production expected to tie back to the Shenandoah production facility and first production anticipated in late 2026. Additionally, we have identified a promising exploration prospect within the field that could provide an estimated incremental upside of 25-35 million BOE, further enhancing the project's long-term value. Talos is well positioned to be a key player in the growing Wilcox play, and we intend to leverage our broader acreage position to drive future production and reserve growth. On a final note, to reiterate Bill's comments, I want to thank all Talos employees for their dedication and focus in driving our strong 2024 performance, while at the same time maintaining our core operating priorities: health and safety of all personnel, protecting the environment, regulatory compliance, and operational excellence. In 2024, we continue to have an outstanding safety record by working approximately 6.6 million man-hours. Notably, Talos has completed 3 million man-hours since our last recordable incident, reflecting our commitment to a safe and responsible workplace. Additionally, in 2024, Talos continued to outperform the Gulf of America average in regulatory compliance metrics, which reflects the dedication of our field personnel, whose commitment to rigorous safety system testing and proactive facility maintenance ensures we uphold the highest operational standards. This marks the sixth year that Talos has exceeded industry benchmarks and regulatory performance. These achievements underscore the collective progress we have made as a company and reflect the hard work and dedication of the entire Talos team. Our commitment to health and safety, environmental stewardship, regulatory compliance, and operational excellence continues to drive our success. With that, I'll turn the call back over to Sergio to sum up our performance in 2024. Thank you, John. Before concluding, I want to sum up 2024 and reflect on Talos' progress. Slide 18 presents a scorecard that highlights Talos' strong performance and commitment to delivering long-term value for all shareholders. By focusing on capital discipline, operational excellence, and free cash flow generation, we have achieved significant milestones and believe we have laid out a solid foundation for 2025 and beyond. With that, operator, we'll open the line for Q&A. Thank you. We will now begin the question and answer session. To ask a question, you may press a star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your headset before pressing any keys. To withdraw your question, please press a star followed by the number two. With that, your first question comes from the line of Nate Pendleton with Texas Capital. Please go ahead. Good morning. Congrats on a great quarter and update. I wanted to start with a question on. Good morning, Nate. Of course. I wanted to start off with a question on Katmai, building off of John's prepared remarks. Specifically, I wanted to get your perspective on how the field compares to your initial expectations when you acquired the position, and based on what you've learned, do you see any upside to that 200 million-barrel potential shown on Slide 14? Hey, Nate. No, that's a great question. Thank you for asking that. Look, it's a better field than what we thought we were buying, so it's a fantastic field. We knew it was a fantastic field when we made the Quarter North acquisition, but the more we learn about it, the better we feel about Quarter North, so I would say it's in line or better than what we thought, and to answer your question, yes, we do see some upside from that 200 million barrels. Right now, we are counting the 200 million barrels from a combination of the west side of the field, where we already have two wells, and the east side of the field, where we have one well producing. There are other aspects of the field that we are currently investigating and we're not ready to talk about, but we do see some upside from that for sure. Got it. That's really exciting, and referencing Slide 12 for a moment, it looks like you'll have three projects starting up around mid-year, and you have referenced planned downtime during the second half of the year as well. How should we think about the shape of production throughout 2025, and what could an exit rate look like? Yeah. I mean, let me give you some high-level thoughts on how to think about that. So we don't expect a lot of planned downtime in the first quarter. That's how we're thinking about our production being roughly between 99 and 101 thousand barrels per day. As we start going into the second quarter or the kind of spring months, you don't have as much of the winter storms offshore, and you're not yet in hurricane season. So that's where a lot of your maintenance projects happen. So second quarter should be heavily weighted towards some of those planned downtime. As you start getting into the third quarter, you still have some of those planned maintenance, but you also have some of the hurricane risking that we are applying to our production. And as you go into the fourth quarter, you have fewer of those planned downtime or planned maintenance, but you still have a little bit of hurricane risking associated with that. So that's how you should think about the production shape throughout the year. Got it. Thanks for taking my questions. You bet. Your next question comes from the line of Leo Mariani with ROTH. Please go ahead. Hi, guys. I wanted to just touch base briefly on the 2025 CapEx here. I know that there were periods of time during 2024 where Talos had kind of articulated that you might have to kind of spend more money in 2025, that you were modestly undercapitalizing things with the 2024 budget. And now kind of looking at 2025 CapEx, it's not maybe too dramatically different versus 2024 here. So just kind of wanted to get a sense whether or not there's been any kind of philosophical shift in terms of the approach to kind of capital. And do you think that the 2025 budget might lead to some kind of modest declines in production in 2026? I do. Good morning. Thank you for the question. So I think we've communicated throughout 2024, and we were very cautious to caveat that, look, the plans are still ongoing, right? So none of that was written in stone. We were discussing live as some of the plans were still being formed. I would say the 2025 capital program is heavily influenced by the high efficiency that we're seeing in the West Vela rig, right? So we are much more efficient in the drilling and completion operations than we thought we were going to be. So that is allowing us to save quite a bit of money on the capital side of things. So we feel like this is the right level of investment for the company. It generates a tremendous amount of free cash flow. And as I pointed out in my prepared remarks, the base of the business is very healthy. So it's very early for us to start giving us any indication around 2026, but we think that this is the right level of investment for the business to generate the amount of free cash flow that we should be generating. And that's it. So it's mostly drilling efficiencies that's driving the lower capital than the street was expecting. Okay. And then obviously, you guys did a great job on the balance sheet here. I think paying off the debt even maybe a little quicker than expected, ending the year with cash. I'm sure that you guys are somewhat frustrated by the stock price performance here. Just curious as to whether or not, given the health of the balance sheet, that you guys might be able to accelerate that buyback program here in 2025. Yeah, Leo, no, that's a great question. Look, first and foremost, we're very blessed to have a very healthy balance sheet and a very stable business that generates a tremendous amount of free cash flow. So that is a great position to be in. And with Paul coming in and us kind of looking at the strategic planning for the company and refining what our strategy is going to be like, capital allocation priorities is going to be a huge focus as part of that discussion. But I can tell you that capital returns to shareholders are always being considered, and we're going to continue to consider that. So once Paul comes in and we finalize our strategic review, we're going to communicate to the street what our plans are around that. All right. I appreciate that. And then just last thing for me here, guys, on Monument, you picked up an extra working interest in that well. Was there a cash outlay associated with that? I mean, it's an incremental working interest from the interest that we already have. We already own 21.4%. We're increasing at another eight percentage points there in that ownership. So it's incrementally higher. 2025 is still very manageable. It's mostly ordering long lead items. 2026, that's when we're going to actually drill the wells and complete the wells. So it's a marginally higher number, Leo, but it's very, very manageable for us. Okay. So was there an acquisition cost on that, though? So I was getting a sense of. Yeah, it was about $12 million, plus some closing adjustments as part of the period between the effective date and the actual closing. Okay. Thank you. Thanks, Leo. Thanks, Leo. Your next question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Please go ahead. Good morning, folks. And thanks for taking my question. As we think about the 2025 outlook, it seems fairly cautious, a maintenance program, heavy field maintenance, and then sort of a goal on free cash flow. So I was wondering if you could speak kind of from the board's perspective, how much of this is not wanting to get aggressive amid a leadership change? How much is caution on the oil macro? Just kind of curious any insight you can provide on that? Hey, Tim. Good morning. No, that's a great question. Look, there's a bit of all of that as part of the plan, right? So we're trying to be cautious about our guidance around production. We do have a very heavy maintenance year. Obviously, hurricane season last year wasn't as impactful to us as it has been in the past. So we're still being very conservative in our estimates around weather-related downtime. But we think that that is the right approach for our production guidance in 2025. So we're comfortable with that. And as the year progresses, if things continue to do better than what we're estimating, we're going to update the street accordingly. Okay. Okay. That's fair. Some of my other questions have been addressed, but quickly on Daenerys, is the plan to spud that late in the second quarter? I know you're not the operator. And then just what would that mean in terms of potential timing on what you've done? Is Is that something that would be maybe a 4Q or 3Q earnings commentary? Just curious on kind of the timeline of data points there. Yeah. No, for sure, and just to be sure, we are the operators on Daenerys, Tim. Oh, yeah. Okay. Oh, yeah. Okay. Yeah. So we are. So the plan is, we're now doing the completions on Sunspear. After that is done, we're going to do the completion on Katmai West #2, and then we're going to move on to drill Daenerys. So we should start that in the second quarter of 2025. And that is roughly 100-120 days of drilling. So it's a pretty long well. So I expect late in the third quarter, early in the fourth quarter, we're going to have some results. So perhaps around third quarter earnings, we're going to be able to speak to the results of that well. Okay. I appreciate that. I got Daenerys and Monument confused, but I appreciate all the context. Thank you. Okay. Thank you. Your next question comes from the line of Michael Scialla with Stephens. Please go ahead. Hi. Good morning. I wanted to ask on the planned downtime, the 6,000 BOE a day, what's built into that? Is that the HP-1 facility, or can you give us some detail on what all is in there? Sure. Hey, Mike. Good morning. That's a great question. No, we do not have the HP-1 regulatory stop this year. So that happened last year. But we do have a lot of other facilities that require maintenance. And there are some shut-ins related to wells that we're going to actually bring online. For example, in the second quarter, we're going to shut in our Prince facility to connect or to hook up the Sunspear well. We're also going to shut in Tarantula to connect the Katmai West #2. But there are other maintenance projects like on Brutus, on Pompano, and a few others. There's quite a few of those. These four that I mentioned are the largest ones, but there are a few others as well. So it's a little dispersed. There's not one major event. It's a lot of smaller events throughout the year. Got it. And I wanted to ask if there's any update on that. I think you were looking to sell down your interest at Helms Deep. I think you wanted to get that to 50% before you drilled. Any update there? Yeah. We're still working on that. That is still in the works. And as you can see, we actually put it in our presentation, an unnamed well. So Helms Deep is absolutely under consideration to be drilled this year yet. It might slip into 2026, but we are having some other commercial discussions around other wells. So instead of committing to one, we think it's best to leave it as a potential for a different one. So Helms Deep is being considered still, but there are other wells in our inventory that we feel very confident about as well. So it's all about the commercial discussions that we're having. And as soon as those are finalized, we're going to announce it. Great. Thank you. All right. Your next question comes from the line of Jeff Robertson with Water Tower Research. Please go ahead. Thank you. Sergio, on the West Vela, do you have that through potentially the well that you would drill after Daenerys in terms of the contract? Hey, Jeff. Good morning. Right now, the contract with the West Vela goes through Daenerys. We have the option to extend that, and there are other rigs available as well in the market. So we're not concerned about actually having a rig secured for the second half of the year to execute that plan. But right now, the contract with the West Vela ends with Daenerys. The efficiencies that allowed you to drill Katmai West 2 under budget and in a much shorter number of days, is that from the rig operation or the geology that you encountered while you were drilling the well or a combination of the two? It's mostly the operations of the rig. The team did a fantastic job of planning everything to a tee. So we did a really good job on the planning side of things. We had some time before actually taking possession of the rig to execute a few items before started drilling. So we feel like the rig operations itself and how the team is planning these activities is what's making the difference. On capital allocation, can you just remind us how you think about risking contingent capital for maybe follow-on work at Daenerys or for some of the capital that might be necessitated by success as you think about your future mix between exploration development, contingent capital, and the opportunity to repurchase shares? Yeah. No, that's a great question. So obviously, there is a possibility that we might need to spend additional capital at Daenerys. If that is a discovery, we may need to appraise that, and that is all part of the plan. So that is part of the risk, or that's the appetite for risk that we have in this business to drill these types of wells, is to continue to appraise the well and then develop that. So that is something that we would like to continue to deploy capital into. And then the additional free cash flow that we generate and how we deploy that, whether it's buybacks or making additional investments, we're going to tighten that up as we go along. But these types of projects like Daenerys, we would like to have more of those, not less of those. Lastly, just on a regulatory front, I know it's still very early in the current administration. Have you seen anything regulatory-wise or permitting-wise that you think will have an impact on your business yet? Yeah. It's still a little early, Jeff, but we do expect to have more lease sales than we were having over the last four years. That is probably the most impactful change from the previous administration, having kind of regular lease sales. We're expecting to have two lease sales per year going forward. So that is going to be the most impactful item. We didn't have any issues with permitting. We didn't have any of those issues with the previous administration. But lease sales, that is the one that we're looking forward to the most. Thank you. You bet. Your next question comes from the line of Michael Furrow with Pickering Energy Partners. Please go ahead. Hi. Good morning. Thanks for having us on this morning. Good morning. Like others, we're trying to get an understanding of sort of the 2025 CapEx budget, sort of the puts and takes here. Specifically, I'm looking at your Slide 9 with the pie chart, capital allocations. The company's spending a pretty good amount of money this year on the long lead equipment for Monument and Ewing Bank 953. I was just wondering if you could provide some color on where that long lead equipment sits within the pie chart and maybe its associated percentages. Yeah, Mike. That's a good question. So that is still within the U.S. Drilling and Completions section of the pie. So that's part of the D&C budget. Any color on how big that slice is? We haven't disclosed that publicly, but it's not a significant amount of that pie. It's a good chunk, but it's not the big, big part of that. It's still relatively minor compared to the actual drilling of the wells, the running of the West Vela. So it's not a significant part of our D&C budget this year. Monument will be a much more significant part of the budget next year once we're actually drilling and completing the wells. All right. Understood. That's good color. My follow-up question is just sort of on the West Vela. I believe previously the company was considering utilizing the Conqueror to complete Katmai West 2 and then sending the West Vela to the Daenerys prospect. And it looks like the decision was made to continue utilizing the West Vela for completing the Katmai West well, which sort of pushes the timeline back marginally for the Daenerys spud. But I was wondering if you could provide a little more information about what went into this decision and why the company felt like this was the best course of action. No, that's right. That's a great question, Mike. So you're right about that. The Conqueror is also a little delayed. So instead of waiting for the Conqueror to arrive, we decided to rearrange the rig schedule. That actually is another way that we're saving on capital. Instead of running two rigs, we're just running one rig. So that's another big chunk of the capital savings that we have in our budget this year. But that decision was driven by the delay on the Conqueror to arrive. So we had the right to just not take that rig and then just use the West Vela to do all of the operations that we needed. So that's how we came up with that decision. All right. Thank you. That's very helpful. I'll turn it back. All right. Your next question comes from the line of Paul Diamond with Citi. Please go ahead. Good morning, all. Thanks for taking the call. Just a quick question on, given the progress you guys have made on your debt reduction, can you remind us what you all think is kind of the right level of financial gearing, or will that be part of the new strategic review with Paul coming in on Monday? Hey, Paul. Good morning. And thanks for the question. I would say that we're always refining our views on what's the right balance sheet for us. But I would say today, I feel very, very comfortable with our 0.8x leverage metric. I don't feel like we need to deleverage from here. So I feel very comfortable living in this neighborhood. Understood. Just one quick follow-up on Tarantula. With the recent expansion, do you all see any kind of need or potential thoughts around expanding that further, or are you comfortable just kind of letting it run flat out for the foreseeable future or post? Yeah. No, thank you. That's a great question. So with the wells that we have online, we feel very comfortable with the capacity as it is today. That allows us to have production flat, to extend that plateau for several years into the future with no decline. But as we mentioned earlier, there are a few other opportunities in the field, perhaps a few more wells that we could drill. And if those wells are successful, then we will look for opportunities to expand the capacity of Tarantula. Right now, the biggest bottleneck in the facility is the flow lines going from the plant to the facility itself. We would also need to expand the topsides once the flow lines, the new flow lines, are installed if we were to do that. But that's a pretty, I would say, pretty significant investment that we need to make in the facilities to do that. So we need to have real conviction that the additional wells will be successful. So these are things that we're studying right now. It's not a decision that we need to make today. But in the future, if those additional wells are successful, that is something that we will look very carefully into. Understood. Thanks for the clarity. I'll leave it there. All right. Thanks, Paul. Your next question comes from the line of Arun Jayaram with JPMorgan. Please go ahead. Yeah. Good morning. I wanted to see if you could talk about the path to prove up more resource at Katmai. It looks like you're at 50 million barrels gross. What's the path and what activities you need to do to get to 100 or even beyond that? Yeah. Hey, Arun. Good morning, and thank you for the question. No, that's an excellent question, and it goes a little bit about the rules around how you book reserves in a conventional world or in an offshore world, right? So we can only book the reserves to the lowest known. Unlike our shale friends that once they drill a well, they can book all of those reserves in PDP, we cannot do that. We have to book only some of that in PDP. The rest sits in probable. So a lot of it comes, it's an economic decision, right? Do we drill more wells to prove more up? But that doesn't really help us on the economics front, or you just wait for the passage of time, and as you produce some of that, the probables will transfer into PDP. So it's a combination of both. Once we continue to evaluate additional drilling opportunities within the Katmai complex, we will drill more wells, and that will prove up more reserves. But with the passage of time and just producing more, those probables will transfer from that 2P back into PDP, and that will happen naturally. So we may not need to actually spend a lot of capital to do it, but we just won't accelerate that booking of reserves. But the production and the actual recoverability of the field doesn't really change whether we book those proved or not. It's just kind of a different reserves booking rule for offshore conventional companies versus onshore. Great. Thanks a lot. All right. You bet. Once again, if you would like to ask a question, simply press Star 1 on your telephone keypad. Your next question comes from the line of Neil Mehta with Goldman Sachs. Please go ahead. Yeah. Good morning, Sergio and team. And it was really a super year for you guys from a free cash flow generation standpoint. But I think this challenge with the stock has been just around a lot of management transition. And it's going to be really good to get some clarity and steadiness on the ship with Paul coming in. And so, Sergio, I'm curious from your perspective as a leader of the organization, just what are the two or three strategic areas that the new leadership team you guys will be focused on to help to provide a little bit more clarity around the forward path? Good morning, Neil. And thank you for the question. That's a great observation. And look, as Bill mentioned earlier on the call, we are very excited to have Paul joining. Paul is a fantastic professional and individual. His background speaks for itself. So we're looking forward to having him as part of the team and working closely with him to refine that strategy. I don't want to get ahead of my skis here and start saying what are the priorities. Let us kind of get together with Paul once he starts next week, and we're going to have those conversations. And in the coming weeks and months, we're going to tell you and everybody else what we think the priorities are. But for the time being, we're very excited to have Paul. And I agree we need some stability there, and I think we will have it. I think the team is very excited to have Paul, and I think that is going to be a great addition to the team. Yeah. All right. Thank you. It's good to see. The follow-up is just how you guys are thinking about the A&D environment. You've done some really good bolt-on acquisitions here, Sergio. So do you see the opportunity to continue to be a consolidator, recognizing the equity might not be at the optimal cost of capital right now, or do you want to pursue much more of an organic strategy here over the next 12 months? Yeah, Neil, that's a great question. So I would say this. As we continue to refine our strategy, we will make some kind of bigger decisions after that. Some bolt-on acquisitions, some things that are obviously kind of very easy for us to do, yes, we'll continue to do that. If there are opportunities for us to do more of the Monument type of projects, yes, we will do that. If there are some additional bolt-ons in the Gulf of America, we will continue to focus on those. But for the time being, as we continue to refine our strategy, I think the focus is going to be on the organic, the project execution, the operational excellence, and look, our balance sheet is in great shape, right? So depending on the acquisition that we're talking about, we may not need to use any equity to do any of that, or very little equity if we were to do anything a little bigger. But kind of bear with us. Let us refine the strategy here. Let's make sure that we know exactly what we should be doing, and we'll move on from there. But we do think that there will be opportunities for us to continue to bolster the portfolio through some bolt-on acquisitions or some even bigger opportunities down the road. And Sergio, one quick follow-up on that. Can you just remind us, give us an update on Mexico and the asset sale that you executed in December? I guess that will also be an area I would imagine you guys, the new leadership team, will be focused on is what the long-term strategy is in Mexico. But you did provide it. You added an update there in December, so a little color there would be great. Yeah, that's right. So for sure, we'll continue to refine that as well. We're still in Mexico. We still have an ownership in the Zama project. We still think that that is a fantastic project. We would still like to see that moving forward. We have a great partner or great partners in Mexico. We need to continue to kind of straighten our relationship with them. So we'll continue to do that. That is of great importance to us. But we have announced, as you pointed out in December, another sale down of our Talos Mexico subsidiary to the Carso Group in Mexico, which is a fantastic partner. And that is going through the regulatory process to approve that transaction. And we expect that that will close in the coming months. Thank you, sir. All right. Appreciate it, Neil. Thank you. And that concludes today's question and answer session. I would like to turn it back to Bill Moss for closing remarks. Thank you. I want to thank everyone for joining the call today. We're really proud of our results for the fourth quarter. We had a really good 2024, and we're looking forward to continuing that performance into 2025 and to Paul starting next week. So thanks again, everyone, and we'll talk to you soon. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.