Transocean Ltd. press release

Talos Energy Announces Third Quarter 2025 Operational and Financial Results

2025-11-05

NYSE - New York Stock Exchange · Oil · Natural Gas · Cobalt · Nickel · Copper · Manganese · Switzerland · Corporate Finance

PR Newswire

HOUSTON, Nov. 5, 2025/PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced its operational and financial results for the three months ended September 30, 2025. Talos also updated its operational and financial guidance for the full year 2025.

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Third Quarter and Recent Key Highlights

Produced 95.2 thousand barrels of oil equivalent per day ("MBoe/d") (70% oil, 76% liquids). Recorded net cash provided by operating activities of $114.2 million. Generated Adjusted Free Cash Flow(1)(2) of $103.4 million. Repurchased approximately 5.0 million shares for $48.1 million; returned over $100 millionto shareholders in 2025. Exceeded $25 millionOptimal Performance Plan year-end goal with over $40 millionrealized in 2025. Announced discovery at the Daenerys exploration prospect; appraisal well to be drilled in second quarter of 2026. Improved full-year 2025 guidance reflects higher production, lower operating expenses and lower capital expenditures. Maintained strong balance sheet with $332.7 millionof cash, an undrawn credit facility, a Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA(1)(2)of 0.7x, as of September 30, 2025. Recorded Net Loss(2)of $95.9 million, or $0.55Net Loss(2) per diluted share which includes $60.2 millionof non-cash ceiling test impairment charges. Recorded Adjusted Net Loss(1)(2) of $33.0 million, or $0.19Adjusted Net Loss per diluted share(1)(2). Generated Adjusted EBITDA(1)(2)of $301.2 million. Invested $104.6 millionof capital expenditures, excluding plugging and abandonment and settled decommissioning obligations.

"As we continue to execute our strategy, we are seeing clear, measurable results as evidenced by an outstanding third quarter of production outperformance, capital discipline and expense management," said Paul Goodfellow, President and Chief Executive Officer of Talos. "We have accelerated progress on our Optimal Performance Plan, surpassing our year-end 2025 target of $25 million. To date, the team has realized over $40 millionin free cash flow enhancements, giving us excellent momentum toward achieving our $100 milliontarget in 2026."

"Third quarter results continued our track record of consistent operational execution, strong financial results, and returning capital to our shareholders. The Company generated over $100 millionof adjusted free cash flow which enabled us to repurchase 5 million shares for approximately $48 million, reinforcing our ongoing commitment to returning capital to shareholders."

"Operationally, we announced a successful exploration discovery at Daenerys and plan to drill an appraisal well in the second quarter of 2026 to further delineate this exciting discovery. In the third quarter, the absence of storm activity, strong base performance from our assets, and solid facility uptime contributed to production results that exceeded expectations."

| Footnotes: | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. | | (2) | Attributable to Talos Energy Inc. |

RECENT DEVELOPMENTS AND OPERATIONS UPDATE

Operations Updates:

_Production Update: _During the third quarter, the absence of storm activity, strong base performance across the asset base and facility uptime allowed Talos to exceed production expectations. The Talos-operated Tarantula facility, which processes production from the Katmai field, achieved a sustained output of over 36 Mboe/d through debottlenecking efforts.

_Sunspear:_In late September, Talos successfully replaced the surface-controlled subsurface safety valve ("SCSSV"). The well is back on line and is currently flowing to the Talos owned Prince facility. Talos holds a 48.0% working interest ("W.I.") in the well, an entity managed by Ridgewood Energy Corporation holds a 47.5% W.I., and Houston Energy, L.P. holds a 4.5% W.I.

Daenerys: In August, Talos announced successful drilling results at the Daenerys exploration prospect located on Walker Ridgeblocks 106, 107, 150 and 151. The discovery well was drilled to a total vertical depth of 33,228 feet utilizing the West Vela deepwater drillship and encountered oil pay in multiple high-quality, sub-salt Miocene sands. The well was drilled approximately 12 days ahead of schedule and was delivered approximately $16 millionunder budget. The discovery well has been temporarily suspended to preserve its future utility. Talos plans to drill an appraisal well in the second quarter of 2026 to further define the discovered resource. The Company is encouraged by the results of the Daenerys discovery well, which confirms the presence of oil and validates Talos's geologic and geophysical models. Talos, as operator, holds a 27% W.I., Shell Offshore Inc. holds a 22.5% W.I., Red Willowholds a 22.5% W.I., Houston Energy, L.P. holds 10%, HEQ II Daenerys, LLC holds 9% W.I., and Cathexis holds a 9% W.I.

Monument: Monument is a large Wilcox oil discovery in Walker Ridgeblocks 271, 272, 315, and 316. Talos expects to develop it as a subsea tie-back to the Shenandoah production facility in Walker Ridgewith committed firm capacity of 20 MBbl/d. The Company expects the first well to be spud by early first quarter of 2026. First production is expected between 20–30 MBoe/d gross by late 2026. There is an additional drilling location adjacent to the discovery with an estimated 25–35 million barrels of oil equivalent ("MMBoe") that could extend the resource. Beacon Offshore Energy LLC as operator, holds a 41.7% W.I., Talos holds 29.7% W.I. and Navitas Petroleum LP holds a 28.6% W.I.

Share Repurchase Program:

In the third quarter of 2025, Talos repurchased approximately 5.0 million shares for $48.1 million, representing an average price of $9.66per share. In 2025, the Company has repurchased 11.1 million shares for $102.7 millionthat have reduced its outstanding share count by 6%. The remaining share repurchase authorization as of September 30, 2025is approximately $97 million. Under Talos's capital allocation framework, management expects to allocate up to 50% of annual free cash flow to share repurchases. The timing and amount of any repurchases under the Company's share repurchase program will depend on market conditions, share price, legal requirements, and other factors, and may be made from time to time in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

Optimal Performance Plan for Cash Flow Enhancements:

In June 2025, Talos announced the Optimal Performance Plan for Cash Flow Enhancements targeting improvements in capital efficiency, margin enhancement, commercial opportunities, and organizational performance. The Company set a year-end 2025 target of $25 millionwhich was exceeded and achieved ahead of schedule during the third quarter of 2025 by accelerating capital efficiency, operating cost and production optimization opportunities. Talos has realized over $40 millionin free cash flow enhancements in 2025, providing the Company excellent momentum toward achieving the $100 milliontarget in 2026.

Impairment:

Talos accounts for its assets under the Full Cost method where the ceiling test impairment is calculated each quarter utilizing 12-month trailing commodity prices. Driven by lower average oil prices, the Company recorded a non-cash impairment charge of $60.2 millionin the third quarter of 2025 under the "ceiling test" of its full cost pool of oil and gas assets. This non-cash charge will have no impact on cash flows of the Company.

Surety Bond Framework:

The offshore surety bond market has undergone a recent structural shift driven largely by supply-side constraints and tightening market conditions. The lower risk tolerance and reduced market capacity of surety providers is leading to overall reduced bond capacity for offshore operators. In early November, the Company proactively entered into multi-year arrangements with its surety bond providers to limit the amount of collateral the Company will be required to provide on existing surety bonds through 2031. In return for manageable annual collateral commitments and manageable plugging and abandonment spending commitments by the Company, the surety providers have agreed not to require additional collateral under their existing surety agreements above the newly established amounts, draw on letters of credit posted for the sureties' benefit, or cancel any existing surety bonds unless requested by the Company. The Company's collateral commitments are estimated to range between $40 millionand $45 millionper year through 2031. The first year of collateral commitments will be covered by a letter of credit and subsequent years could be funded by either letters of credit or cash. These estimated collateral commitments are based on the Company's current surety bond exposure and will be reduced as the Company completes decommissioning activity and existing bonds are released. New surety bonds are not subject to these collateral limits. The Company believes this novel approach is advantageous in limiting the Company's collateral commitmentson existing bonds while enhancing its future access to the surety bonds in a tightening market.

THIRD QUARTER 2025 RESULTS

Key Financial Highlights:

| ($ thousands, except per share and per Boe amounts) | Three Months Ended September 30, 2025 | | | | Total revenues | $ | 450,053 | | | Net Income (Loss) attributable to Talos Energy Inc. | $ | (95,905) | | | Net Income (Loss) attributable to Talos Energy Inc. per diluted share | $ | (0.55) | | | Adjusted Net Income (Loss)(1)attributable to Talos Energy Inc. | $ | (32,997) | | | Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted share(1) | $ | (0.19) | | | Adjusted EBITDA attributable to Talos Energy Inc.(1) | $ | 301,240 | | | Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges(1) | $ | 284,635 | | | Capital Expenditures | $ | 104,563 | |

| | | | | | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. | | | | |

Production

Production for the third quarter 2025 was 95.2 MBoe/d (70% oil, 76% liquids).

| | Three Months Ended September 30, 2025 | | | | Oil (MBbl/d) | | 66.6 | | | Natural Gas (MMcf/d) | | 137.0 | | | NGL (MBbl/d) | | 5.8 | | | Total average net daily (MBoe/d) | | 95.2 | |

| | Three Months Ended September 30, 2025 | | | | | | | | | | | | | | Production | | % Oil | | % Liquids | | % Operated | | | | | | | Deepwater | | 87.0 | | | 72 | % | | 78 | % | | 83 | % | | Shelf and Gulf Coast | | 8.2 | | | 50 | % | | 58 | % | | 77 | % | | Total average net daily (MBoe/d) | | 95.2 | | | 70 | % | | 76 | % | | 83 | % |

| | Three Months Ended September 30, 2025 | | | | Average realized prices (excluding hedges): | | | | | Oil ($/Bbl) | $ | 65.32 | | | Natural Gas ($/Mcf) | $ | 3.28 | | | NGL ($/Bbl) | $ | 16.14 | | | Average realized price ($/Boe) | $ | 51.39 | | | | | | | | Average NYMEX prices: | | | | | WTI ($/Bbl) | $ | 65.13 | | | Henry Hub ($/MMBtu) | $ | 3.07 | |

Lease Operating & General and Administrative Expenses

Total lease operating expenses for the third quarter 2025, including workover, maintenance and insurance costs, were $133.7 million, or $15.27per Boe.

Adjusted General and Administrative expenses for the third quarter 2025, adjusted to exclude one-time transaction-related costs, and non-cash equity-based compensation, were $36.0 million, or $4.11 per Boe.

| ($ thousands, except per Boe amounts) | Three Months Ended September 30, 2025 | | | | Lease Operating Expenses | $ | 133,718 | | | Lease Operating Expenses per Boe | $ | 15.27 | | | Adjusted General & Administrative Expenses(1) | $ | 35,980 | | | Adjusted General & Administrative Expenses per Boe(1) | $ | 4.11 | |

| | | | | | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. | | | | |

Capital Expenditures

Capital expenditures for the third quarter 2025, excluding plugging and abandonment and settled decommissioning obligations, totaled $104.6 million.

| ($ thousands) | Three Months Ended September 30, 2025 | | | | U.S. drilling & completions | $ | 78,389 | | | Asset management(1) | | 7,941 | | | Seismic and G&G, land, capitalized G&A and other | | 18,233 | | | Total Capital Expenditures | | 104,563 | | | Investment in Mexico | | — | | | Total | $ | 104,563 | |

| | | | | | | | (1) | Asset management consists of capital expenditures for development-related activities primarily associated with recompletions and improvements to our facilities and infrastructure. | | | | |

Plugging & Abandonment Expenditures

Capital expenditures for plugging and abandonment and settled decommissioning obligations for the third quarter 2025 totaled $52.4 million.

| | Three Months Ended September 30, 2025 | | | | Plugging & Abandonment and Decommissioning Obligations Settled(1) | $ | 52,428 | | | | | | |

| | | | | | | | (1) | Settlement of decommissioning obligations as a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. | | | | |

Liquidity and Leverage

At September 30, 2025, Talos had a borrowing base of $700.0 millionunder its Bank Credit Facility, subject to a total availability of $700.0 millionwith approximately $43.3 millionin outstanding letters of credit. Letters of credit that are outstanding reduce the available revolving credit commitments. Cash was $332.7 million, providing Talos approximately $989.4 millionof liquidity at quarter end. On September 30, 2025, Talos had $1,250.0 millionin total debt. Net Debt(1) was $917.3 million, Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA attributable to Talos Energy Inc.(1)was 0.7x.

| Footnotes: | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. |

OPERATIONAL & FINANCIAL GUIDANCE UPDATES

For the fourth quarter 2025, Talos expects oil production to be approximately 72% of oil-equivalent production.

Talos has revised its full year 2025 operational and financial guidance and expects average daily production to range from 94.0 to 97.0 MBoe/d, consisting of 69% oil and 78% liquids. Full year guidance reflects higher production, lower cash operating expenses and lower capital expenditures.

The following summarizes Talos's full-year 2025 operational and production guidance.

| | | Prior | | Updated | | | | | | | | | | | | | FY 2025 | | FY 2025 | | | | | | | | | | | ($ Millions, unless highlighted): | | Low | | High | | Low | | High | | | | | | | Production | Oil (MMBbl) | | 23.0 | | | 24.0 | | | 23.8 | | | 24.5 | | | | Natural Gas (Bcf) | | 45.0 | | | 47.0 | | | 46.0 | | | 48.0 | | | | NGL (MMBbl) | | 2.8 | | | 3.0 | | | 2.8 | | | 3.0 | | | | Total Production (MMBoe) | | 33.3 | | | 34.7 | | | 34.3 | | | 35.5 | | | | Avg Daily Production (MBoe/d) | | 91.0 | | | 95.0 | | | 94.0 | | | 97.0 | | | | Avg. Daily Oil Production (MBo/d) | | 63.0 | | | 65.8 | | | 65.2 | | | 67.1 | | | Cash Expenses | Cash Operating Expenses and Workovers(1)(2)(4)(7) | $ | 555 | | $ | 585 | | $ | 545 | | $ | 575 | | | | G&A(2)(3)(7) | $ | 120 | | $ | 130 | | $ | 120 | | $ | 130 | | | Capex | Capital Expenditures(5) | $ | 490 | | $ | 530 | | $ | 480 | | $ | 520 | | | P&A Expenditures | P&A, Decommissioning | $ | 100 | | $ | 120 | | $ | 100 | | $ | 120 | | | Interest | Interest Expense(6) | $ | 155 | | $ | 165 | | $ | 155 | | $ | 165 | |

| | | | | | | | (1) | Includes Lease Operating Expenses and Maintenance. | | | | | | (2) | Includes insurance costs. | | | | | | (3) | Excludes non-cash equity-based compensation and transaction and other expenses. | | | | | | (4) | Includes reimbursements under production handling agreements. | | | | | | (5) | Excludes acquisitions. | | | | | | (6) | Includes cash interest expense on debt and finance lease, surety charges and amortization of deferred financing costs and original issue discounts. | | | | | | (7) | Due to the forward-looking nature a reconciliation of Cash Operating Expenses and Workovers and G&A to the most directly comparable GAAP measure could not be reconciled without unreasonable efforts. | | | | |

HEDGES

The following table reflects contracted volumes and weighted average prices the Company will receive under the terms of its derivative contracts as of October 31, 2025.

| | Instrument Type | Avg. Daily Volume | | W.A. Swap | | W.A. Floor | | W.A. Ceiling | | | | | | Crude – WTI | | (Bbls) | | (Per Bbl) | | (Per Bbl) | | (Per Bbl) | | | | | | October - December 2025 | Fixed Swaps | | 23,967 | | $ | 71.01 | | --- | | --- | | | | January - March 2026 | Fixed Swaps | | 15,000 | | $ | 66.03 | | --- | | --- | | | | | Collar | | 13,000 | | --- | | $ | 59.62 | | $ | 68.15 | | | April - June 2026 | Fixed Swaps | | 14,000 | | $ | 65.11 | | --- | | --- | | | | | Collar | | 11,000 | | --- | | $ | 60.46 | | $ | 68.50 | | | July - September 2026 | Fixed Swaps | | 2,000 | | $ | 65.00 | | --- | | --- | | | | | Collar | | 13,000 | | --- | | $ | 59.62 | | $ | 67.92 | | | October - December 2026 | Fixed Swaps | | 2,000 | | $ | 65.00 | | --- | | --- | | | | | Collar | | 11,000 | | --- | | $ | 60.46 | | $ | 68.50 | | | Natural Gas – HH NYMEX | | (MMBtu) | | (Per MMBtu) | | (Per MMBtu) | | (Per MMBtu) | | | | | | October - December 2025 | Fixed Swaps | | 40,000 | | $ | 3.53 | | --- | | --- | | | | January - March 2026 | Fixed Swaps | | 40,000 | | $ | 4.13 | | --- | | --- | | | | April - June 2026 | Fixed Swaps | | 35,000 | | $ | 3.77 | | --- | | --- | | | | July - September 2026 | Fixed Swaps | | 20,000 | | $ | 3.65 | | --- | | --- | | | | October - December 2026 | Fixed Swaps | | 20,000 | | $ | 3.65 | | --- | | --- | | |

CONFERENCE CALL AND WEBCAST INFORMATION Talos will host a conference call, broadcast live over the internet, on Thursday, November 6, 2025, at 10:00 AM Eastern Time(9:00 AM Central Time). Listeners can access the conference call through a webcast link on the Company's website at: Talos Third Quarter 2025 Webcast. Alternatively, the conference call can be accessed by dialing (800) 836-8184 (North American toll-free) or (646) 357-8785 (international). Please dial in approximately 15 minutes before the teleconference is scheduled to begin and ask to be joined into the Talos Energy call. A replay of the call will be available one hour after the conclusion of the conference until November 13, 2025and can be accessed by dialing (888) 660-6345 and using access code 13769#. For more information, please refer to the Third Quarter 2025 Earnings Presentation available under Presentations and Webcasts on the Investor Relations section of Talos's website.

ABOUT TALOS ENERGY

Talos Energy (NYSE: TALO) is a technically driven, innovative, independent energy company focused on maximizing long-term value through its Exploration & Production business in the United StatesGulf of America and offshore Mexico. We leverage decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while maintaining a focus on safe and efficient operations, environmental responsibility, and community impact. For more information, visit www.talosenergy.com.

INVESTOR RELATIONS CONTACT

Clay Jeansonne Clay.Jeansonne@talosenergy.com

Kyle Sahni Kyle.Sahni@talosenergy.com

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

The information in this communication includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact included in this communication regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words "will," "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "forecast," "may," "objective," "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. These forward-looking statements are based on our current beliefs, based on currently available information, as to the outcome and timing of future events. Forward-looking statements may include statements about: business strategy; estimated ultimate recovery (EUR), estimated gross resource potential and reserves; drilling prospects, inventories, projects and programs; our ability to replace the reserves that we produce through drilling and property acquisitions; financial strategy, borrowing base under our bank credit facility, availability of financing sources, liquidity position and capital required for our development program, acquisitions and other capital expenditures; anticipated levels of stock repurchases and leverage ratio; realized oil and natural gas prices; changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements and the impact of such policies on us, our customers and suppliers, and the global economic environment; our ability to obtain surety bonds on commercially reasonable terms; expected collateral requirements under existing or future surety agreements; volatility in the political, legal and regulatory environments where we currently or in the future may operate; risks related to future mergers and acquisitions, including the risk we may fail to realize the expected benefits of any such transaction; timing and amount of future production of oil, natural gas and NGLs; our hedging strategy and results; future drilling plans; availability of pipeline connections and other infrastructure on economic terms; competition, government regulations, including financial assurance requirements, and legislative and political developments; our ability to obtain permits and governmental approvals; pending legal, governmental or environmental matters; our marketing of oil, natural gas and NGLs; our integration of acquisitions and the anticipated post-acquisition performance of the Company; future leasehold or business acquisitions on desired terms; costs of developing properties; general economic conditions, including the impact of continued inflation and associated changes in monetary policy; political and economic conditions and events in foreign oil, natural gas and NGL producing countries and acts of terrorism or sabotage; credit markets; estimates of future income taxes; our estimates and forecasts of the timing, number, profitability and other results of wells we expect to drill and other exploration activities; our strategy with respect to our investment in the Zama asset; uncertainty regarding our future operating results and our future revenues and expenses; anticipated capital efficiency, margin enhancement and organizational improvements and additional cash flow; impact of new accounting pronouncements on earnings in future periods; and plans, objectives, expectations and intentions contained in this communication that are not historical. These forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control.