#Energy Talks Podcast U.S. Edition - TotalEnergies approach to U.S. Oil & Gas

Energy Talks Podcast – U.S. Edition: Episode 1

Speakers

Host: Lillian Wagner, TotalEnergies

Guest: Todd Lee, President and CEO of TotalEnergies E&P USA

[Intro opening with music]

Lillian Wagner: Welcome to the Energy Talks Podcast U.S. Edition. The podcast where we explore the people, technologies and ideas shaping the future of energy in America. Today, we're joined by Todd Lee, President and CEO of TotalEnergies E&P USA. Todd leads the Company's exploration and production activities across the United States, from deep water projects in the U.S. Gulf to growing natural gas operations onshore. Todd, welcome to the podcast.

Todd Lee: Thanks, Lillian. It's a pleasure to be with you today.

Lillian Wagner: Before we get into energy, I have to start with a Texas question. Okay. You're from Texas. You went to Texas A&M and you've lived and worked in a lot of places around the world. What is the difference in the way you work here in Texas versus other parts of the world?

Todd Lee: First of all, it’s a pleasure to be back in Texas, Lillian. And, you know, the state has such a long history of oil and gas. It was really the birthplace of the modern industry was Spindletop, you know, in 1901. So, you know, it's a great place to be in the oil and gas business. And, you know, Texans as a group and especially Aggies, you know, tend to be honest, you know, hardworking, practical people. So, you know, it's a way of working that works really well here. And honestly it's my style pretty much everywhere I go. And you know, sometimes it's appreciated more in some places than others. But in the end, the entire world needs safe, reliable energy. So, you know, everybody at the end of the day wants an effective development at a low cost and wants low emissions. So, you know, it's a good style here and it's a good style everywhere.

Lillian Wagner: So a very Aggie answer if I would say so myself. Practical, global and grounded.

Todd Lee: Well, exactly. You know, I really appreciate the Aggie shout out, by the way.

Lillian Wagner: Always. Let's make this very simple for our listeners: you lead TotalEnergies’ exploration and production activities all across the U.S. But what does that actually mean?

Todd Lee: In a simplest form, we, you know, we find develop and produce and gas. So, you know, our exploration is they use the latest technology to try and figure out where there's accumulations. And then we drill that, hopefully we have a discovery. And then we have to figure out what's the most cost effective and environmentally efficient way to develop it. And then we produce it and we try to produce it, you know, 100% safely, reliably and efficiently so that we can then, you know, make some money and give it back to the exploration so that they can go and find something else. So, you know, it's pretty simple at a high level. And we're blessed here to have really a great portfolio of assets we have four producing fields offshore with Chevron as the operator. And recently, we've acquired three interests in the U.S. onshore developing natural gas, two positions in the Eagle Ford and then one in Oklahoma.

Lillian Wagner: So not so much of a we do everything ourselves, but more of a we bring expertise where it matters.

Todd Lee: Well, that's right. You know, TotalEnergies is a global leader in exploration and production. And we operate all over the world. But here in the U.S. Gulf and U.S. onshore, we're choosing to do it a little bit differently and use strategic partnerships. So we try to partner with great operators and then bring complementary skills to them. So non-operator, yes, but don't think that we're passive.

[Show Anchor Platform Aerials]

You know a good example of that would be the Anchor development. So, we had some of our technical experts embedded into the project team and even the deputy asset manager. And while Chevron did a majority of the heavy lifting, our team was able to bring complementary skills, tap into the TotalEnergies’ technical expertise and really bring that to bear to solve problems on the day. And that's a serious, serious project. And you don't develop a 20,000-psi reservoir really by yourself. So it was, you know, great example of teamwork. And at the end of the day, these major developments it's about delivering them. It's not about logos.

Lillian Wagner: Let's talk more about the U.S. Gulf or as many call it now, the Gulf of America. Why is that region so important for TotalEnergies?

Todd Lee: Well, it's such a historic basin. It really is world class. The first offshore platform was actually developed in the U.S. Gulf. And, you know, it's been going since 1938. So you know, it's been an incubator for technology as the industry has really, you know, found more accumulations in deeper and deeper water than the developments have moved further offshore. And it's really, you know, enabled the rest of the world to learn from the Gulf. So it's a historic basin and it's got great infrastructure. I'm not sure if, you know, there's over 13, 000 miles of pipeline still active in the Gulf. So, as you have infrastructure, it enables more developments to occur. And in addition to all that infrastructure, it's such a stable fiscal and operational environment. So, we know the Gulf's going to be around for a long time. We're able to have certainty in our investments there. And then the small footprint and high risk for pressures allow us to really produce efficient barrels. So the point is not just more oil, it's that the world still needs oil. So, let's produce the right barrels. But here in the U.S. Well, for sure, you know, demand is real and it's going to be around for a really long time. If you look, you know, everywhere in your household, you know, there's petroleum products in everyday life from your your clothes to plastic bags to, you know, the things we use every day. In fact, my mother was in the hospital having a knee replacement surgery about two weeks ago, and I noticed that every single piece of equipment that doctors used was either made of plastic or wrapped in plastic. So, society needs oil and they're going to need it for a really long time. So, it's not a question of do we need to produce oil? It's what oil do we need to produce? You know, our Company’s strategy is more energy, less emissions. So we want to produce the right barrels that are highly efficient and low emissions. And the Gulf is really the poster child for that because these are some of the best barrels in our Company.

Lillian Wagner: So, what do you mean by best barrel?

Todd Lee: Yeah. No, that's a good question. So, best barrel in our mind is our lowest emission barrel that also gives us our highest margin financially. So, we make more money per barrel, and we produce less emissions per barrel. And as we reduce our carbon footprint as a Company, we want to make sure any investments that we have fit into that long term profile and the Gulf certainly will.

Lillian Wagner: Two project names have come up a lot recently, Ballymore and Anchor. What should people know about them?

Todd Lee: Well, they're two wonderful projects and major milestones, both for our Company as well as for Chevron. But they're very different. So, Anchor is a high-pressure reservoir, the first 20,000 psi reservoir ever developed in the world. It has a state-of-the-art facility, a lot of electrical and driven equipment. So, it really is a prime example of new technology coming to bear, producing a lot of oil for the least amount of emissions possible. So, we're really proud of that one and part of the role that we played with Chevron. Ballymore is a great example of us, you know, being in the entire exploration cycle. So, we farmed into that prospect before it was ever discovered. We participated in the exploration well. And then when we had a discovery, we appraised it, worked with Chevron on how best to develop it. And the decision was made to tie it into existing infrastructure, which was very close by.

Lillian Wagner: That's a great practical example. Lower emissions don't always mean one big futuristic technology or project, sometimes it means coming down to smart project design.

Todd Lee: Yeah, no, look, it's about being practical in everything that we do is, at the end of the day, you want to have a cost-effective development. So, a different way of more energy, less emissions. But a project that we're very proud of and those two together have allowed us to triple our production over the last two years in the Gulf. So, we're really happy about that and feel like we're delivering on the mantra of more energy, less emissions.

Lillian Wagner: You mentioned Chevron several times. What makes that partnership work?

Todd Lee: Well, I think we're really like-minded. You know, we have a similar technical approach; we have similar standards as far as you know, safety and efficiency. And then when you look at their history in the Gulf, they're the longest running active operator in the Gulf. So, you know, they're the exact right partner for us to work with. You know, we have that shared execution strategy, and they've done a great job, you know, Anchor, multi-billion-dollar project that they delivered on time, on budget, you know, and we're continuing to ramp it up even over and above the nameplate of the facility.

Lillian Wagner: And now that partnership is expanding into exploration as well?

Todd Lee: It is. Yeah. No, we're very excited about that. So, we recently entered into a deal where we got into 40 offshore blocks with them, and we've explored with them in the past. Ballymore was a good example of that, so we planned to drill several wells with them over the next five years. We anticipate that will lead to some additional discoveries and will be the next phase in development here in the Gulf.

Lillian Wagner: So, some listeners might ask, why explore for more oil if the world is also trying to reduce emissions, what would you say to that?

Todd Lee: Well, you know, I would say it's a fair question. We do believe the energy transition is real. That's why you've seen us investing in a lot of lower carbon technologies renewables, LNG, battery technology, power. So, we're embracing the transition, and we've reduced our emissions over the last five years, and we're very proud of that. But when it comes to oil, you know, as I mentioned earlier, oil demand is going to be here for a really long time. So, we're taking a practical approach. As long as the world needs oil, we're pretty good at finding and developing it. So, you know, we're going to keep doing that. And the trick is to really, you know, make sure that the oil we find will have the right emissions profile to fit into the portfolio for a really long time. And that's why we're so excited about the Gulf, it's because those barrels, you know, fit nicely into the strategy for 20, 30 years and beyond.

Lillian Wagner: It feels like that's a very important nuance, not more at any cost, but better barrels where they make sense.

Todd Lee: No, exactly. And that's the exact nuance. You're not going to see us, you know, doing a lot of things that produce high emissions. So, we want to find oil that fits our strategic profile and fits in what our investors want.

Lillian Wagner: And as you said earlier, better barrels.

Todd Lee: Exactly.

Lillian Wagner: Let's shift from offshore oil to onshore gas. TotalEnergies has been expanding in the upstream gas in the U.S., including shale gas acquisitions, can you explain the importance of that to us?

Todd Lee: Sure. It's actually an area that we're very excited about. So, we picked up three new acquisitions, two in Texas and one in Oklahoma. And upstream gas is very important to our integrated gas strategy here in the U.S. So, we're not just a producer of upstream gas. We're also a consumer through power and LNG. And so, these new assets that we've added are complementary to our legacy operated position in Fort Worth in the Barnett. But as we grow our portfolio, what we want to do is be balanced so that the integration works. So, we want exposure to local markets because it is a very dynamic local market, which can have price swings up and down. And then as we consume the gas and we're exposed to those price swings. So, we want to be balanced on both sides to give ourselves flexibility and then protect ourselves from that volatility. You may not know this, but we're the largest offtaker of U.S. LNG. We offtook 19 million tons in 2025 alone and then sent it to places all over the world. So, you know, having that upstream exposure is very important to us.

Lillian Wagner: So, it's both local and global at the same time.

Todd Lee: Well, it's exactly right. You know, our gas gets sold into the local market--the upstream gas that we produce gets sold into the local market. So, we're helping to power Texas with part of that, and then our LNG operations, then, you know, bring gas all over the world. And it's actually really important during times like these because it's a major stabilizing influence around the world. You know, everybody needs low-cost energy. And U.S. LNG is helping to provide that around the world.

Lillian Wagner: Looking ahead, what should we watch in TotalEnergies’ U.S.E&P activities?

Todd Lee: Well, we're excited about the future. Lillian, you know, we're going to keep ramping up our new facilities. We're just about done with all the original development drilling there and then hopefully continue to expand on those through future phases of development. We also have a significant infill drilling program with Chevron on our other assets that we have with them. So, we're excited about those opportunities. We're also going to start focusing on our 40 new blocks and hopefully drill another four or five exploration wells with Chevron over the next four or five years. And then also, you know, continue to add to our upstream gas portfolio so we can achieve that true balance with the consumption that we have.

Lillian Wagner: If you had to sum up U.S. E&P strategy in three words, what would it be?

Todd Lee: Well, I think the first one would have to be partnerships. That's certainly a big focus. And then maybe discipline because we're very disciplined about what we invest in and then resilience because, you know, we want a resilient portfolio and resilient business.

Lillian Wagner: Last question, Todd, you've worked around the world, but now you're back in Texas and you're leading U.S. E&P activities. What makes this chapter so exciting for you personally?

Todd Lee: Well, after working, you know, around the world in different countries, it's always good to be home. You know, so that makes it exciting. But I've spent about half my career in deep water, and then I've spent about half my career in U.S. onshore. And this role, you know, really brings the best of both worlds. I get to spend half of my time on each. So, it makes it interesting for me. You know, being back here in Houston is just the center of the industry. So, it's a wonderful place to be in business. Our portfolio is amazing. It's really a good mix of technical challenges and great opportunities. So that's very rewarding. But you know, more importantly, what I always reflect over time is it's not exactly what you're doing, but who you're doing it with. And we have a great team here. The Company is very supportive of what we want to do in the U.S., and we have great partners that are easy to work with and like-minded and delivering value. So, it's just a wonderful opportunity for me. It's a great fit for the Company and we're really, really happy to be doing this here in the U.S.

Lillian Wagner: Todd, thank you. Practical, clear and very Texas. Do you have any final things you would like to share with us?

Todd Lee: Maybe just that, you know, TotalEnergies is investing heavily in the U.S., you know, across all of our different business lines and across the entire energy value chain. So, we're looking to grow in the U.S. we're going to be here for a really long time and exploration and production, you know, plays a very pivotal role in what we want to do here. So, it's great to be here. And thank you for your time, Lillian.

Lillian Wagner: Great note to wrap up on. Thank you. And thank you for listening to Energy Talks Podcast U.S. Edition. Join us next time as we continue exploring the people and innovations helping shape the future of energy across the United States.

[Logo TotalEnergies]

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