Good afternoon, ladies and gentlemen, and welcome to the Talos Strategy Update. 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 *0 for the operator. This call is being recorded on Tuesday, June 17, 2025. I would now like to turn the conference over to Clay Jeansonne. Please go ahead. Thank you, Operator. Good afternoon, everyone, and welcome to our Corporate Strategy Conference Call. Joining me today are Paul Goodfellow, President and Chief Executive Officer, and Greg Babcock, Vice President, Chief Accounting Officer, who will become our Interim CFO effective June 28, 2025. Before we roll out Talos' new Corporate Strategy, I'd like to remind everyone that our remarks will include forward-looking statements which are based on our current expectations and assumptions. These statements may relate to our strategy, development plans, future financial performance, including anticipated cash flows, cost savings and operational efficiencies, future operations and operating results, expected production and reserves, market trends and conditions, commodity price assumptions, acquisition and investor opportunities and prospects, liquidity position, capital allocation decisions, shareholder returns, plans and objectives of the board and management, and other forward-looking matters. As with any forward-looking statements, actual results may differ materially due to a number of risks and uncertainties. Such factors are included in the presentation, which is available on our website under the Investor Relations tab. Forward-looking statements are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we may reference GAAP and non-GAAP financial measures. A reconciliation of certain non-GAAP to GAAP measures is included in the presentation furnished with our Form 8-K and available on our website. I would like to turn the call over to Paul. Good afternoon, everyone. Thank you for joining us. Since stepping into the role in March, I've spent a great deal of time connecting with our employees and working diligently to gain an in-depth understanding of our business. When I stepped into this role, my first priority was to continue to ensure quality execution and safe operations. I then thoroughly understand Talos' current position and what drives Talos' success before charting our strategic direction. This effort has been both energizing and rewarding, and I'm excited to be here today to share our view for Talos' future. Before I get into our strategy, I would like to take a moment to recognize the entire Talos team. The bright future ahead of us is a result of the talented individuals we have across the organization and a culture that prioritizes safety, innovation, and continuous improvement. I'm proud of the momentum we've already built together and even more enthusiastic about the opportunities that lie ahead of us. I believe there is potential for the next generation of Talos to drive significant value for our shareholders. I want to start with slide three. Our vision for Talos is simple: become a leading pure-play offshore E&P company. There is an anticipated shift in the E&P landscape as offshore is expected to play an increasing role in meeting the world's energy needs. Talos is in a unique position to capitalize on this opportunity. We have an attractive foundation that we can build on, such as high-margin oil-weighted production, a stable asset base, a strong balance sheet, and proven technical capabilities. I also see a team that can effectively identify and integrate assets and execute on new opportunities. I spent the past 100 days working with the team and thoroughly analyzing the company in detail. We have strengths, but we also have room for improvement. By taking a closer look at Talos' current strengths on slide four, I recognize unique capabilities that can propel us forward in our journey to becoming a leading offshore E&P company. First, we're already an experienced, proven operator with a track record in the Gulf of Mexico. We operate a significant number of high-profile facilities and fields throughout the Gulf today. Second, we have a significant technical capability. I've been impressed with not only the depth of expertise within our organization and the capabilities we have in seismic analysis, operations, and reservoir engineering, but more importantly, the culture of efficiency, flexibility, and accountability. Third, our financial strength positions us well to capitalize on the future ahead of us. We have low leverage, an undrawn revolver, cash on the balance sheet, and no near-term debt maturities, and we've been steadily generating free cash flow. Lastly, we've demonstrated our ability to successfully integrate assets, most recently through the 2024 QuarterNorth acquisition, where we expect to capture approximately $65 million in annual synergies. Compared to recent industry transactions, Talos stands out as a leader in synergy realization. With that said, we always have room for improvement. We plan to capitalize upon a foundation built during Talos' early entrepreneurial years to create a disciplined, scaled offshore company. The organization has come a long way since its formation in 2012, as shown on slide five. Talos was built through acquisitions and organic growth in the Gulf of Mexico. These efforts enabled Talos to go from zero production at its formation to an average of 101,000 barrels per day in the First Quarter of 2025. Talos has grown through bolt-on and transformative acquisitions. A common thread is clear: when strict criteria were applied in a disciplined, thoughtful manner, Talos grew production, integrated the assets efficiently, and ultimately delivered value to its shareholders. It's my job to ensure that everything we do at Talos is designed to deliver meaningful value to our shareholders. Moving to slide six, Talos has a proven track record of efficiently integrating assets, leading to tangible financial results. Talos continues to distinguish itself through its exceptional track record of identifying and capturing synergies. At Talos, offshore is what we do, and we believe there are many assets that we can operate more efficiently and with lower operating expenses than other operators. Importantly, we can do this without sacrificing safety. We can strategically invest in drilling high-return prospects that others often bypass, leveraging our agility and technical expertise. For example, following our acquisition of the Ram-Pow facility, we identified two prospects that were disregarded or overlooked. Both turned out to be successful discoveries, enabling Talos to increase production from approximately 5,000 to over 25,000 barrels of oil equivalent per day. Combined with the increased production and our focus on lowering costs, we successfully reduced lease operating expenses from approximately $12 to $4 per barrel, an impressive 60% decrease. In totality, these actions result in Talos having one of the highest EBITDA per barrel oil equivalent margins in the E&P sector. Our production is predominantly oil-based and commands premium pricing. When combined with our lower cost structure, this enables us to achieve industry-leading margins, which helps us maintain our profitability during commodity price cycles. Turning to slide seven, as I previously mentioned, offshore is what we do, and we do it well, but I believe we can be even better. When we acquire an asset, we seek opportunities to reduce costs and enhance efficiency, leveraging our strategic infrastructure and operational advantages. I believe we can continue to identify and pursue prospects that may have fallen short of previous operators' hurdle rates, thanks to our lower cost structure and faster cycle times. Our entrepreneurial culture, lean nature, and operational expertise allow us to reduce costs to operate those assets. I'm challenging the Talos team to drive costs even lower. I believe we should be more than able to move from a mid-to-top quartile operator to a top decile operator. Lastly, before I go into our strategy, one of our greatest strengths is our balance sheet and cash flow generation capabilities, as shown on slide eight. Our strong cash flow generation has lowered our leverage ratio to 0.8 times, with $960 million of liquidity, a completely un-drawn revolver, and no maturities on public notes until 2029, all of which provides significant financial flexibility to execute our strategy. Moving to slide nine, disciplined capital allocation will underpin our strategy at Talos and be core to our decision-making. We can best deliver value to our shareholders through consistent cash flow generation by exercising a disciplined capital allocation framework while simultaneously implementing improvements in our operations and cost structure. We tend to think of capital allocation in four main buckets. First and foremost, we're focused on investing in our base business and in high-return opportunities that are resilient across the commodity cycles to ensure that we are, first, getting the most out of our business, and second, identifying unique organic expansion opportunities that will help our portfolio's resilience and production and our continued cash flow generation. For example, our drilling projects for the second half of this year remain economically attractive at an average oil price of approximately $35 per barrel. Looking ahead to 2026, we have multiple projects scheduled with attractive break-even prices ranging from $25-$50 a barrel. Secondly, we're focused on returning capital to our shareholders. Let me start off by saying that returning capital is a priority. We're targeting to return up to 50% of our annual free cash flow to shareholders. In the near term, we expect to prioritize share buybacks as our primary means of capital return, and we have done so far this year. Third, our strong balance sheet positions us with substantial flexibility. Maintaining that flexibility is key to our ability to effectively allocate capital. Maintaining low leverage gives us the stability to navigate volatility and the freedom to act decisively when opportunities arise. Finally, we're always evaluating select accretive growth opportunities. While we are always looking, we will take a measured, prudent approach. Every move must make sense for the business and for our shareholders. We'll apply a strict set of criteria when evaluating those opportunities. They must be accretive, support our goal of maintaining a long-term leverage ratio at one times or below, align with our core competencies, and carry a moderate risk profile similar to the one we see in the Gulf of Mexico today. Make no mistake, we need to thoughtfully enhance our production longevity and see clear opportunity to do so with high-return opportunities. Any opportunity evaluated must compete for capital within our existing inventory set. I'm a firm believer that a prudent capital allocation framework is necessary for any publicly traded company in our space. We're stewards of shareholder capital, and we must put shareholders first by exercising capital discipline with a focus on projects that are accretive to our financials and metrics such as cash flow per share and free cash flow per share. Now, with our capital allocation framework underpinning all of our strategic decision-making, let's delve into the three pillars of our strategy as shown on slide 10. First, we're focused on improving our business every day. The Talos team believes there is significant value that can be captured within our existing business, and we're putting forward ambitious targets for the Talos team. Second, we will grow our production and cash flow through continued focus on high-margin projects to further drive our profitability. We will primarily focus on organic growth, but we'll supplement that focus with disciplined evaluation of bolt-on acquisitions. We will maintain a strategic focus in the Gulf of Mexico while evaluating opportunities in other select conventional deep motivations. Thirdly, we will build a portfolio with scale and longevity by developing projects with significant reserves in basins that fit our technical capabilities. We believe that participation in greenfield developments, selectively exploring for large resource potential, and acquiring and developing projects with significant reserves and production will be key to our Third Strategic Pillar. Together, executing against these pillars will enable us to build on our core competencies to grow our cash flow per share and position Talos to create significant value for our shareholders. Let me start with how we are focused on improving our business every day. Turning to slide 12, we've analyzed our assets and their historical performance. I'm impressed with the way our assets perform and our capabilities, but I believe we can get even more out of our current business. This doesn't mean reducing our investments in our business or compromising on our commitments. We believe that we can generate an additional $100 million in cash flow by year-end, calendar 2026, solely by improving our existing operations alone in capital efficiency, margin enhancement, commercial opportunities, and general organizational improvements. I'll be challenging every single team and employee to play their part in helping Talos achieve this goal. Realizing this expansion of cash flow will require us to focus on how we use capital efficiently across the organization, deliver on high-margin projects, realize commercial excellence, and improve as a high-performance culture. Our commitment to continuous improvement is extremely important to me, and the focus on safe and efficient operations will be paramount in everything that we do. As shown on slide 13, our second pillar is to invest in high-margin projects that will enable us to grow production, profitability, and free cash flow generation. A great example of this is the work we performed last year on one of the Brutus wells. In the second quarter of 2024, we successfully executed a recompletion of the Brutus A-3 sidetrack well, targeting the E1 and E2 sands. Production commenced almost immediately, with initial rates exceeding 30 million cubic feet per day. Talos owns 100% of the well, and we expect this well to generate a rate of return in excess of 60% over its life cycle. The rapid execution and strong production performance highlight our ability to efficiently unlock value from our existing assets. Moving to slide 14, Talos has an extensive track record and attractive asset base in the Gulf of Mexico. We see tremendous opportunity in executing what's in front of us, primarily through organic drilling opportunities, farmings, joint ventures, and lease sales. Importantly, we will continue to take an infrastructure-led focus, evaluating opportunities around our existing infrastructure. By doing so, we can use our existing facilities to more quickly bring our discoveries online. This shortened timeframe from discovery to first production can significantly increase the rates of return of our projects. To continue to bolster our drilling inventory, we'll actively participate in lease sales. We expect that BOEM will have a lease sale in December, and we plan to be an active participant. We also expect the new administration to host two lease sales per year in the future. We will continue to thoughtfully evaluate joint ventures as they enable us to both combine acreage and reduce costs. Joint ventures allow us to put more acreage together with our partners to facilitate the sharing of technical data and jointly evaluate potential leads and future prospects more cost-effectively. We'll prioritize organic growth but strategically supplement it with disciplined bolt-on acquisitions. While our primary focus remains on the Gulf of Mexico, we will also evaluate opportunities in other conventional basins to further diversify and strengthen our portfolio. We've already shown a strong track record of executing on organic growth opportunities within our core footprint as shown on slide 15. For example, the Sunspear discovery made in July 2023 is now nearly ready to produce and will soon be brought online via tieback to Talos' own Prince platform. Achieving first production in under two years from discovery highlights our operational efficiency and execution capabilities. Additionally, we reached total depth on the Capella West No. 2 well in January of this year. Completion operations were recently finished, and the well will soon be online, flowing to our Tarantula facility. Bringing this well to a total depth and bringing it online in just under eight months is a remarkable achievement and is expected to generate full cycle return of over 65%. We have progressed the development plans for our Ewing Bank 953 with this discovery to come online in 2026. Finally, we have continued expanding our acreage position within our seismic footprint, successfully winning 13 blocks in the most recent lease sales. On slide 16, we show our Third Strategic Pillar, which is designed to build a long-lived scale portfolio. We see a wealth of opportunities in the Gulf of Mexico and in other basins where we can leverage our capabilities. We will explore the options available to us, apply strict criteria to the opportunities we evaluate, and aim to acquire and develop projects with significant reserves and production. Longevity and scale in our portfolio will enable us to consistently generate free cash flow and return it to our shareholders. We believe that offshore production will play an increasingly larger role in filling the global energy demand and fundamentally think it will be one of the more exciting ways for investors to get exposure to the upstream E&P landscape. There are broader industry trends that we believe support this thesis. The increase in shale drilling was certainly one generational shift. However, even amidst that shift, offshore production has remained relatively consistent. Questions are starting to arise about the continued long-term economic viability of onshore basins, which are becoming less advantageous due to the depletion of tier one and tier two inventory. At the same time, technological advancements have unlocked significant deepwater reserves, while continued innovation in offshore extraction enables us to operate more efficiently. Further, exclusively focusing on offshore provides us with key competitive advantages compared to other diversified majors. Our deepwater expertise is highly transferable to these higher growth areas and well-suited to unlocking value in these regions. We see opportunities to scale in the Gulf of Mexico and other basins. As you can see on slide 17, some basins are projected to grow faster than others, but we are region-agnostic. The Monument project, which we farmed into in 2024, exemplifies the type of opportunity Talos actively seeks: a greenfield development with proven hydrocarbons. We believe opportunities like this align exceptionally well with our core competencies and support our strategy of securing long-lived production assets. We believe Talos offers investors an attractive opportunity to capitalize on this industry trend. Our asset base boasts a high percentage of oil production, short-cycle projects, robust infrastructure, favorable pricing, and strong margins. Leading E&P companies have, in our view, four key qualities as shown on slide 18. We've already talked about three: free cash flow generation, return of capital to shareholders, and the ability to sustain and grow the core business. We've demonstrated our ability to reinvest in the business while simultaneously generating strong free cash flow over the past five quarters and returning meaningful capital to our shareholders. The fourth, longevity in the portfolio, represents an E&P company's ability to maintain the other three qualities over time. We will continue to strengthen the longevity and scale of our portfolio by investing in accretive greenfield opportunities and continuing our exploration efforts. This will drive us towards longer reserves and greater production potential while providing investors with greater inventory visibility and ultimately more consistent long-term returns. Moving to slide 19, now let's talk about how we add scale to Talos. We've been very successful at integrating assets and delivering value for shareholders. As a result, our approach to building a scale portfolio will be highly selective, value-driven, and preserve our strong balance sheet. We remain committed to actively searching for and carefully evaluating the right opportunities. It's our job to evaluate each one independently and be opportunistic about capitalizing on the instances where we can extract value from an asset that others cannot. With that said, we will assess these opportunities through a strict set of criteria. To start, any acquisition will need to be accretive to key metrics like cash flow and free cash flow per share and net asset value. We'll also need to have a clear line of sight to our long-term leverage target within a reasonable timeframe if a transaction is to be financed using debt, ensuring that we maintain the financial flexibility I mentioned earlier. However, the decision to acquire an asset is not purely a financial decision. We will ensure that assets fit within our core competencies, that they have the same subsurface environment where we excel, present low risks, and have significant opportunities for upside. This strict framework will help us achieve a long-lived portfolio, a company with significant production growth potential, and ultimately a company with the potential to generate consistent and significant free cash flow. I'm fortunate that I joined a company that already has fundamental strengths. We have unique capabilities, are a low-cost offshore E&P company, and a balance sheet that affords us flexibility to maintain through cycle while still returning capital to shareholders. With that said, I think there is notable untapped potential in this business, and it's my goal to drive Talos from good to great, and we'll do so with extreme discipline. We'll allocate capital with discipline. Our capital allocation framework prudently balances improving the business, returning capital to shareholders, maintaining financial strength, and growing the business. We'll execute with discipline. We'll operate safely, efficiently, and continue to improve the business every day. Doing things the right way, the way I'm confident we can, will help us take out $100 million in cost and improve efficiency by the end of 2026. We'll grow our portfolio with discipline. We plan to grow our portfolio in a disciplined manner and invest in lengthening our reserves through organic opportunities and where it fits our strategic criteria: acquisition opportunities. I look forward to making progress against our strategy and communicating that progress with you. As always, thank you for your investment in Talos. I believe we have significant potential in front of us, and my goal is to help us reach the potential that I know we're capable of. Operator, I'd now like to open up the call for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number 1 on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you're using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Leo Mariani from Roth. Your line is now open. Yeah, hi. Good afternoon. Want to dive a little bit more into the $100 million of cash flow savings you're hoping you achieve here by the end of 2026. Just wanted to kind of clarify, is that kind of a free cash flow number? Does that include CapEx? Certainly sounds like there'll be OpEx savings and also maybe some pricing enhancements on the hydrocarbons, but just trying to get a sense that also includes kind of CapEx and kind of doing things cheaper here, and obviously seems like a pretty good size number for a company your size here. Thanks, Leo. This is a way that we've been looking at the business in totality and how can we sort of improve the business each and every day. That goes across the totality of everything we do, whether it's from how we operate the assets, how we execute the capital programs that we have, how we strategically source and partner with suppliers, how we can get premium pricing for our products. As we look at that across the totality, we see a number of opportunities that the teams are already working on. I've been extremely proud of how the organization has sort of stepped into this and really sort of generated a significant number of ideas. I think you're right in the way that you characterized it, that it goes across the totality. There'll be opportunities in the CapEx space, opportunities in the OpEx space, opportunities in the sort of efficiency and asset integrity space, and opportunities in terms of how we actually use data to be more efficient in running our business. We really are looking at the totality. The $100 million is our target on an annualized basis starting in 2026, and the best to think about that as a free cash flow number as ultimately it all drops to the bottom line. Okay, that's very helpful. I just wanted to kind of ask about your plans to grow the business. Certainly sounds like you're going to lead the way maybe with organic growth, but you're also not going to shy away from M&A as well for the right opportunities. I certainly saw your comments kind of around scale. Is there any kind of eventual level you think you need to kind of get to to get to scale? I mean, right now you're 100,000 barrels a day. Do you guys have any kind of medium to long-term goal of, say, getting to 200,000 barrels a day? How do you think about what the right scale is for this business down the road? Thanks, Leo. Let me maybe make a few comments then I'll hand it over to Greg maybe to add to that. We are not going to be driven by a numerical production target. That I think is the wrong way to look at this. We're going to be driven by what are the opportunities we can bring forward that can actually add materially to the size of our business, but more importantly, deliver an uplift in how we sort of measure the success of that in terms of margin enhancement, free cash flow per share, those key metrics that really sort of demonstrate the value that we're creating for the shareholder. That really is the way that we will look about that versus setting an arbitrary target from a production point of view. Now, I will say that clearly with scale comes the ability to enhance those margin metrics. If you think about it over the installed asset base we have here in the Gulf of Mexico, continuing to exploit and develop opportunities around those to make sure that we maintain production across the infrastructure as well as access third parties that want to tie back to our facilities. All of that plays into it. Greg, any comments to add? No, look, I think you hit it right. I think everything comes back to the allocation framework and that we have to continue to invest in the business every day. We have to continue to return cash flow, strengthen the balance sheet, and grow the business with accretive opportunities. No certain target size, no certain check size, but something that builds the business the right way, not for the sake of growth. Thank you. Thanks, Leo. Your next question comes from the line of Noel Parks from Tuohy Brothers. Your line is now open. Hello, good afternoon. I was curious, in the slides and in your remarks, you did refer to looking for opportunities in other conventional basins, and I just wondered if you could talk about what you might envision there. Thanks, Noel. I am not going to mention specific basins because we are looking at a wide range of opportunities throughout, let's say, the deepwater universe at this point in time. What I would say is that we're looking for opportunities where we see the ability to drive accretion relative to the output of the business that we have today, where we can clearly see an adjacency to the core skills and competencies that we have in terms of the subsurface environment, the sort of technical complexity of what we do day in, day out, and ones that overall have an understandable risk profile. Now, there are certain ones that we are actively looking at. There are others that, of course, will come across our desk and we cannot control the timing or the location of those. We will look at them through that sort of very strict and disciplined lens in terms of what are the attributes that we would look to that can build on the portfolio. I would also add that I personally have a bias to look for opportunities that deliver free cash flow in the more nearer term, but also recognize that we need a balanced portfolio that actually allows us to build into the longevity that this business requires. I would just remind us that when we talk about near-term in the deepwater, those are very, very different time horizons from how the onshore players think about it. We gave an example of Sunspear where from discovery to first production, we deliver that within 2 years or just at 2 years. That really is a short cycle from a deepwater point of view. Think about it through those lenses and that set of criteria that I just shared, Noel. Great. Thanks for the clarification. In reviewing, again, the slides and your remarks, it was a fairly central part of the strategy that Talos was really originally founded around to really focus on underutilized infrastructure and opportunities that featured that in particular with the chance to sort of typically acquire that infrastructure cheaply. Is that going to be as big a part of the strategy going forward, would you say, or more just kind of one of a longer list of criteria? What I would say, Noel, is that the strategy that we're outlining is really about sort of investing behind what Talos does best. In a sense, please don't see it as a U-turn, but see it as building on what has made us successful to date. The Gulf of Mexico will maintain to be a central part of our portfolio, will be a central part of our sort of capability build, and will be sort of a central part of the value that we generate. I do believe because of the core competencies and skills that we have, we can be and should be the natural owner of many midlife assets within the deepwater environment, and especially within the Gulf of Mexico. Therefore, that component of our history will stay very much sort of front and center going forward. We look then to build on that as we outline through, if you like, the bookends that go either side of that. The first one is clearly investing and improving our business day in, day out, so being the best that we can be with what we've built. The other end of the bookend is going out and proactively looking for additions to the portfolio that deepen the inventory in a way that's accretive to the metrics that sort of drive the value for shareholders. I sort of position it from that perspective, Noel. Great. Just one sort of related question is, are asset sales a key part of the plan at this point, or does it sort of just depend on the opportunities you see? Look, we are always looking at the portfolio and what fits best within the portfolio, and we will continue to do that both in terms of assets we'd like to bring in and those that we may see at the tail. Great. Thanks a lot. Thanks, Noel. Your next question comes from the line of Jeff Robertson from Water Tower Research. Your line is now open. Thank you. Good afternoon. Paul, with respect to returning cash to shareholders, Talos has about $178 million on its repurchase authorizations. In your view of the business and the capital needs of the business over a couple of years and even contingent capital based on drilling success, does shareholder repurchases provide you the greatest flexibility in how you return cash to shareholders and the timing of those returns? Thanks, Jeff, for the question. I think, again, we look at this through the framework that we laid out in terms of investing in the business to sort of maintain the quality of production and the quality of the cash flow, returning up to 50% of our free cash to shareholders, making sure that we're doing that in a way that maintains the strength of the balance sheet whilst looking for accretive opportunities. As we look at our sort of plan over the next two years in a sort of reasonable commodity cycle type of environment, we see the ability to sort of balance those four elements. Now, clearly, we will be looking for opportunities that can enhance the margin delivery from the business, which is why we sort of set our target as up to 50% of free cash being returned to shareholders versus an absolute dollar amount to make sure that we have the flexibility to grow the business from a value point of view and ensure that the metrics such as free cash per share and the ultimate net asset value of the business are actually growing as well. Question on portfolio management. Yesterday, TotalEnergies announced that they were entering with Chevron, I think, on 40 lease blocks in the Gulf of Mexico, excuse me, the deepwater. As you look at the asset portfolio that Talos has today, are you seeing opportunities to add to the prospect inventory, to work with partners in the different plays that you're involved in to leverage your existing portfolio to gain access to incremental opportunities? Yes. I think you've seen a couple of examples of that recently in terms of how we accessed into the monument opportunity, a recent sort of lease swap we've done with BP, Chevron, and Hess, the work we do with many of the partners. Whilst we will be active in terms of using the seismic technology, etc., that we have to sort of build on the lease position that we have in the Gulf, which is sort of the fifth largest, we also work with partners in terms of optimizing that. That, I think, is one of the advantages that the significant infrastructure footprint that we have gives us. We do, in a lot of cases, have a lower cost of access because of the large swath of the Gulf that can actually be reached by the infrastructure that we have and therefore prospects that otherwise may be in an isolated case. Of course, we have the opportunity to work with partners to bring those through our facilities and either as a co-owner of that lease or at least through having a production agreement where we can handle that production across the facility for them. I'll see if I could. Are you seeing increased or do you expect to see increased business activity in the deepwater Gulf over the next several years on the expectation that the administration will make it a little bit easier to do business from a regulatory standpoint and operating standpoint? I think, as we sort of explained in the slides and in my comments, we do see the potential for deepwater conventional volumes to grow in the near midterm because of the technological advancement, the ability for us to develop ever more sort of complex opportunities. I do think there's a higher barrier to entry into the deepwater from a technological sort of point of view, the cycle time that's involved in. Of course, we are very good at what we do in deepwater, and we are a significant player. I would expect there to be more interest in the deepwater and more interest in the Gulf of Mexico, both from, I think, the trend of leaning more towards conventional deepwater production coupled with the regulatory environment that we see from this administration. I would still suggest that the barrier to entry is sort of higher than certainly onshore plays. Thanks, Paul. Thanks, Jeff. Your next question comes from the line of Michael Furrow from Pickering Energy Partners. Your line is now open. Good afternoon, Paul, and the rest of the Talos team there. I'd just like to go back to the $100 million improvement to 2026 cash flows. I mean, that seems to stand out as the most concrete data point from the update. I was just hoping you could maybe dive into the four sub pillars a bit more. Specifically, what's the lowest hanging fruit here within these four buckets, and what were some of the items that may have required a fresh set of eyes to identify? Thanks, Michael. Let me maybe start, and then I can hand it over to Greg to add. You're right. It is the most concrete target, again, because it's the one that is, let's say, the nearest term. We are working equally diligently on the other two. Of course, in a lot of cases, they require either exploration success on our part or the ability to add new opportunities either through partnering or through bolt-on type of acquisitions. I would say think about it across the four buckets as in the totality of sort of capital efficiency, probably 40% of the opportunity sort of sits in there. That goes across everything from how we standardize the designs that we have, how we drive even sort of shorter cycle times, how we think about the management and execution of the significant abandonment activities that we have, to the margin enhancement, which is probably roughly a quarter of the opportunity set where that really is about how we do production optimization. I will say that the Talos assets are run extremely well with some of the highest availability and uptime within the business. The great thing about this is these opportunities are identified by the employees themselves, and therefore, it's our task to help them to deliver it. We're just trying to do it in maybe a more structured way than we have done in the past. Probably another sort of quarter is related to the sort of commercial opportunities in totality. I'm a strong believer in how we actually think about our suppliers as key partners in how we sort of develop opportunities and then sort of deliver against those. I would say the last part, which is probably the least sort of developed in terms of it'll take more sort of system thinking, is how we really think about digital enablement of the business at the appropriate level for the sort of wide range of technically diverse assets that we have from a maturity point of view. That's the sort of broad landscape. Maybe let me pass it over to Greg to give you just a couple of more detailed examples. Yeah. Look, thanks, Paul. I think you laid it out well. I think we've done a number of acquisitions over the last couple of years. I think we've showed that we can be top quartile in driving synergies in those acquisitions. This has just taken that a step further as we drive into the businesses, we've folded all of these businesses together over the last couple of years and really challenging the teams to come up with ideas to drive the underlying ideas that make up the $100 million. Maybe one more point. Yeah. Go ahead. Just one last point to add to it, Michael, is don't look at this as a once and done, a one-time thing. It's about changing and building on the culture that we have in Talos. We have a very strong culture of thinking like an owner. This absolutely is an embodiment of that where we are asking, supporting, but also challenging everybody in the organization to bring opportunities forward to allow us to be that top decile, leading pure-play E&P company that we, as a management team, and many of the employees believe that we can and should be. Thanks for that. Great response. I really appreciate the allocations within the four buckets there. For a follow-up, maybe a little quicker question, just some clarification on the shareholder return policy. In the prepared remarks, Talos is targeting up to 50% of free cash for the shareholders, prioritizing buybacks. Does this mean that there's other forms of shareholder returns that are going to be considered in that shareholder return policy, such as dividends or maybe even debt reduction? Let me pass that over to Greg to offer a few thoughts. Yeah. Yeah. Look, I think right now we're really focused on the share buyback plan that we've authorized by the board. And that gives us the most flexibility as we think about working through the allocation or the capital allocation framework. So right now, it's just focused on the buyback. Thank you. Thanks, Michael. Your next question comes from the line of Tim Rezvan from KeyBanc Capital Markets. Your line is now open. Good afternoon, everybody. Thank you for taking my questions. First question I have, Paul, you talk about organic production growth, and I think that caught a lot of folks' attention because there's just not a lot of growth right now. So trying to reconcile your comments about how you run the business with what looks like a flattish 2025 guide, perhaps a little conservative. Given that the outlook for this year was basically set before you joined the company, how should we think about the rest of 2025 and sort of the near-term future, given your view that the company should be in some sort of growth mode? Yeah. Thanks, Tim. Look, I mean, I will reaffirm the production guidance that we gave at the start of the year in terms of delivering between 90 and 95 thousand barrels a day and also the guidance for Second Quarter at 92-96. I do think that when we look at the inventory of opportunities that we have, the ability to actually continue to drive sort of production from an organic point of view is there. The balance and why we set the three pillars out is that we want to make sure that the capital dollars that we are deploying are being deployed to the best margin, most accretive opportunities that we can. Therefore, we will look to also enhance the quality of the portfolio by looking for those additional bolt-ons that we've done very successfully in the past to actually give us the option between either going the organic route or the sort of inorganic route. I think you've also seen a shift in terms of sort of the size of the organic opportunities that we're now developing in terms of projects like Sunspear [cap might], the Monument opportunity that we'll take forward with the partners there. Also starting to look at larger opportunities in the exploration sense, if you think about Daenerys, which is the well we have moved on to at the moment, and other similar type of opportunities that we have within the portfolio. I would not look at it, Tim, as sort of an in-year 2025 type of a comment, but really a midterm type of comment that says, if we look at that portfolio that we have from an organic point of view, which includes exploration opportunities as well as development, then we do see that as a potential outcome. As I said, that will be measured against what are those sort of bolt-on and inorganic opportunities that we see to make sure that we are looking at it through a lens that sort of drives accretion first and foremost for the shareholders. Okay. That makes sense. I appreciate the context on that. This is somewhat related to that. Just to go back to shareholder returns, saying up to 50% is a very wide range. That could mean zero. It could mean 50%. The small-cap E&P landscape is littered with companies that have gone into repurchases with the best intentions but ended up being far more pro-cyclical than they maybe anticipated and were unable to buy when shares hit multi-year lows. I think what might resonate with the investment community is understanding how regimented is there a base level that you anticipate doing, or will this be tactical, and would you turn it off if the right deal approached? Just trying to understand overall how to think about this going forward, given the strong free cash flow we see. Thank you. Greg, you want to start? Yeah. Look, I think we set up to 50% of annual free cash flow to provide some flexibility throughout a commodity cycle or as opportunities present themselves. Certainly, through the first quarter, at the end of the first quarter, we purchased $22 million or $2.3 million shares and plan to continue to do that here in the future. Our board has approved us and has the remaining $178 million authorization. I think, Paul, if you have anything to add. Yeah. I would say, Tim, that the intent is that we repurchase shares on a programmatic basis and also stop starting. If you look at it from a plan point of view, then clearly we see that we will drive towards that. That is why I started that very soon after I started here with the company and had some great support from the board to take that forward. Your point around that versus other opportunities is absolutely the reason why we put a capital allocation framework in place that allows us to balance that. Yes, we want to make sure that we are investing in the base business. Yes, we want to make sure that we are returning cash to shareholders. Yes, we want to make sure that we are sort of managing our leverage to beneath one. Recognizing if the right deal comes along, we may tick above that, but with a very clear line of sight to get it back to beneath one, which I think we did very effectively with the acquisition of QuarterNorth. Also to be able to acquire new assets and opportunities that give longevity to the portfolio. As we sort of model that out with the type of opportunities that we are looking at in a reasonable commodity price environment, we see the ability to maintain a reasonable pace of shareholder returns via the buyback program that we have. Okay. Thank you for those details. We have time to take one more question. Your next question comes from the line of Paul Diamond from Citi. Your line is now open. Thank you. Good afternoon. Thanks for taking the call. Just wanted to quickly touch base on, can you talk a bit about your preference or, I guess, what you are seeing in the market given recent volatilities? A preference between whether that would be corporate deals or asset-level deals for the inorganic side of the growth for the growth expectations in coming years? Yeah. Thanks, Paul. I mean, look, we will evaluate them to the same framework. Each will have different attributes that we'll look in terms of how they complement the business that we have. We do see opportunities, let's say, on both sides of the spectrum that you've raised. The sort of criteria that we will look through will be the same for both in terms of, are they really sort of accretive to the key metrics that we want to sort of drive in terms of cash flow and free cash per share, etc.? Regardless of the deal and which methodology of funding we use for it, do we have a clear line of sight to maintain the strength of the balance sheet that we have? From a sort of technical capability point of view, is it sort of adjacent to the core strengths and capabilities that we have within the company? I think both are clearly areas of opportunity that we will look at. I do not have a preference for one above the other. I think both will play a role in the sort of strategic frame that we look through in the sort of months and years ahead. Understood. Makes perfect sense. Just kind of a quick follow-up. Thinking about the same growth pattern, how should we think about the existing infrastructure? I guess the other 50% of the cash that is not part of the shareholder return framework, is that a cash build for these inorganic M&A? Is that towards infrastructure to permit more greenfield or more expansion accretion in that way? I guess, how should we think about the comfort with that 1x long-term leverage? Yes, how do you get there? Yeah. I was thinking in sort of the simplest way. Paul probably sort of think about it in a cash build such that we can then decide relative to the financial framework that we have and the sort of criteria that we think about investment to give ourselves if the options we were to deploy that cash, recognizing that we do not have control over the timeline of many of the opportunities that will be out there. We want to make sure that we have both the strength of balance sheet as well as the liquidity that we have. We are very fortunate to sit here today with over $900 million of liquidity, over $200 million of cash at the end of Q1, and no short-term maturities on our bonds. We want to make sure that we keep as pristine a balance sheet that we can. Such as opportunities come along, we've got choices in terms of being able to go after those if they have that accretive nature that we've been speaking about throughout this call. Understood. Appreciate the clarity. I'll leave it there. Thanks, Paul. There are no further questions at this time. I will now turn the call over to Mr. Paul Goodfellow. Please continue. John, thank you very much. And to all of you, appreciate you calling in. Thank you for your questions. I very much look forward to continuing the conversation with you and the rest of the Talos team in the sort of days and weeks ahead. I wish you all a good evening. Thank you very much. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. 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