Talos Energy Inc. press release

Talos Energy Announces Second Quarter 2026 Operational and Financial Results

2026-08-04

NYSE - New York Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · United States · Corporate Finance

PR Newswire

HOUSTON, Aug. 4, 2026/PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced its operational and financial results for the three months ended June 30, 2026. Talos also provided third quarter 2026 production guidance and revised full-year 2026 guidance.

Second Quarter Operational and Financial Highlights

Produced 68.6 thousand barrels of oil per day ("MBo/d") and 93.7 thousand barrels of oil equivalent per day ("MBoe/d"); oil and total equivalent production exceeded guidance ranges driven by strong uptime and well performance. Reported net cash provided by operating activities of $300.6 million. Generated Adjusted Free Cash Flow(1)(2) of $231.6 million. Recorded Net Income(2)of $149.7 million or $0.88 Net Income(2) per diluted share; Adjusted Net Income(1)(2) of $97.8 million or $0.57 Adjusted Net Income per diluted share(1)(2). Generated Adjusted EBITDA(1)(2) of $402.4 million. Invested $112.5 million of capital expenditures, excluding plugging and abandonment and settled decommissioning obligations. Strengthened balance sheet with $577.6 million of cash, an undrawn credit facility, a Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA(1)(2)of 0.5x, as of June 30, 2026. Completed the Genovesa workover and returned the well to production late in the second quarter. Finished drilling operations at Monument #3 and encountered approximately 250 feet of net pay, in-line with pre-drill expectations. Commenced the Daenerys appraisal well program; results from the first appraisal well expected by year-end 2026.

Key Strategic Highlights

Increased midpoint of full-year 2026 production guidance to 66 MBo/d and 89 MBoe/d; excluding the announced Gulf of America bolt-on acquisition and after adjusting for the closed non-core shelf divestment. Achieved greater than 65% of the Optimal Performance Plan 2026 target; on track to fully achieve by year-end 2026. Announced acquisition of Gulf of America deepwater oil assets from Shell; BP elected not to exercise its preferential right, with the transaction expected to close in the third quarter of 2026. Announced strategic development farm-in transaction with Repsol in offshore Mexico Block 29. Signed agreements to acquire an 80% operated interest in an offshore Honduras block spanning more than 4 million gross acres through a seismic commitment, providing access to a large-scale exploration position within a working petroleum system. Closed non-core shelf divestment of non-operated gas assets on July 15th; eliminates approximately $54 million of ARO and decommissioning obligations. Enhanced financial flexibility through issuance of $800 million of 8.000% notes due 2034; proceeds used to fully redeem $625 million of 9.000% notes due 2029 and fund a portion of the previously announced Gulf of America bolt-on acquisition. Upsized credit facility to $850 million from $700 million, effective upon closing of the Gulf of America bolt-on acquisition. Executed a rig contract for the West Vela drillship commencing in mid-2027; primary term of one year with extension options.

"The second quarter marked another meaningful step forward in the execution of our strategy and reinforces our confidence in the long-term value creation opportunities ahead," said Paul Goodfellow, President and Chief Executive Officer of Talos. "We advanced all three pillars of our strategic framework as we continue to build a long-lived, scaled portfolio by expanding our deepwater scale, enhancing our development inventory through greenfield opportunities, and adding large-scale exploration potential at low entry cost. At the same time, our teams continued delivering on the Optimal Performance Plan, achieving more than 65% of the 2026 target in the first half of the year and demonstrating our relentless focus on operational excellence, cost discipline and value creation.

These strategic achievements were complemented by strong execution across our base business. We exceeded the high end of our production guidance ranges, increased our full-year production outlook and generated record Free Cash Flow. We also commenced the Daenerys appraisal program, which has the potential to further enhance the longevity of our deepwater portfolio.

Taken together, these accomplishments demonstrate our ability to successfully execute on both fronts – advancing our Three Strategic Pillars while continuing to deliver exceptional operational and financial results from our base business. With strong momentum across the organization, we remain focused on building the foundation to be a leading pure-play offshore E&P and look forward to closing the previously announced Gulf of America bolt-on acquisition later in the third quarter."

| 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 Update:

_Production Update: _During the second quarter, oil and total equivalent production exceeded second quarter guidance ranges, primarily driven by production optimization initiatives, strong base asset performance, high facility uptime, and continued outperformance from the new Cardona well. Additionally, the Company successfully completed the Genovesa workover and returned the well to production late in the quarter, with performance in line with expectations. Lease operating expense totaled $18.25 per Boe, including approximately $1.75 per Boe associated with one-time well intervention work performed during the quarter.

Monument: The first Monument development well was successfully drilled to its total measured depth of 32,250 feet and encountered approximately 250 feet of net pay, confirming pre-drill expectations. Drilling is set to commence on the second development well followed by completion operations on both wells. First production is expected by year-end 2026 and to be between 20–30 MBoe/d gross. Monument is a large Wilcox oil discovery in Walker Ridge blocks 271, 272, 315, and 316. Monument is being developed as a subsea tie-back to the Shenandoah production facility in Walker Ridge with committed firm capacity of 20 MBbl/d. There is a prospective drilling location that could extend the resource beyond the base development case. 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.

_Non-Core Shelf Divestment: _On July 15, 2026, the Company closed the sale of non-operated, gas Shelf and Gulf Coast properties through the divestiture of a legal subsidiary to a counterparty. The divestment eliminates approximately $54 million of ARO liabilities and decommissioning obligations. Production for the second quarter 2026 was approximately 700 Bo/d / 3.5 MBoe/d, ~20% oil.

Exploration and Appraisal Update:

_Daenerys: _The Daenerys appraisal well was spud on July 1, 2026, and operations are progressing according to plan. Results are expected by year-end 2026.

_Offshore Honduras:_Talos executed definitive agreements to acquire an 80% operated working interest in an offshore Honduras block spanning more than 4 million gross acres, with CaribX retaining the remaining 20% working interest. Talos has closed on a 45% working interest and assumed operatorship. The acquisition of the remaining 35% working interest is subject to approval by Honduras's Secretaría de Energía (SEN), which is expected within approximately 90 days.

The acreage provides exposure to both shallow and deepwater exploration opportunities, including untested deepwater Miocene prospects within a working petroleum system. The transaction is structured as a seismic carry and minimal sunk-cost reimbursement, providing access to large-scale exploration potential at a low entry cost. Talos has the option to participate in an exploration well, subject to the results of the seismic program. An initial 3D seismic campaign is planned for the second half of 2026.

Share Repurchase Program:

During the second quarter of 2026, Talos did not repurchase any shares due to the Company's corporate blackout period associated with the previously announced Gulf of America acquisition. Since announcing its current return of capital framework in the second quarter 2025, Talos has returned approximately $135 million to shareholders through share repurchases resulting in a reduction to outstanding share count by approximately 7%.

The Company's Board of Directors recently authorized an increase in total share repurchase authorization back up to $200 million. The remaining share repurchase authorization as of August 1, 2026, is $200 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.

Credit Facility Update:

In connection with the previously announced Gulf of America bolt-on acquisition, Talos has secured $150 million of incremental commitments from its existing lenders, increasing the Company's borrowing base from the current $700 million to $850 million, subject to and effective upon closing the acquisition.

| SECOND QUARTER 2026 RESULTS | | | | Key Financial Highlights: | | | | | | | | ($ thousands, except per share and per Boe amounts) | Three Months Ended June30, 2026 | | | Total revenues | $ | 664,813 | | Net Income (Loss) attributable to Talos Energy Inc. | $ | 149,667 | | Net Income (Loss) attributable to Talos Energy Inc. per diluted share | $ | 0.88 | | Adjusted Net Income (Loss)(1)attributable to Talos Energy Inc. | $ | 97,777 | | Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted share(1) | $ | 0.57 | | Adjusted EBITDA attributable to Talos Energy Inc.(1) | $ | 402,180 | | Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges(1) | $ | 476,326 | | Capital Expenditures | $ | 112,518 |

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

Production

Production for the second quarter 2026 was 93.7 MBoe/d (73% oil, 81% liquids).

| | Three Months Ended June30, 2026 | | | Oil (MBbl/d) | | 68.6 | | Natural Gas (MMcf/d) | | 107.7 | | NGL (MBbl/d) | | 7.2 | | Total average net daily (MBoe/d) | | 93.7 |

| | Three Months Ended June30, 2026 | | | | | | | | | | | | | | Production | | %Oil | | %Liquids | | %Operated | | | | | | | Deepwater | | 85.6 | | | 75 | % | | 83 | % | | 82 | % | | Shelf and Gulf Coast | | 8.1 | | | 49 | % | | 59 | % | | 74 | % | | Total average net daily (MBoe/d) | | 93.7 | | | 73 | % | | 81 | % | | 81 | % |

| | Three Months Ended June30, 2026 | | | Average realized prices (excluding hedges): | | | | Oil ($/Bbl) | $ | 99.47 | | Natural Gas ($/Mcf) | $ | 3.17 | | NGL ($/Bbl) | $ | 19.85 | | Average realized price ($/Boe) | $ | 77.95 | | | | | | Average NYMEX prices: | | | | WTI ($/Bbl) | $ | 92.79 | | Henry Hub ($/MMBtu) | $ | 2.87 |

Lease Operating & General and Administrative Expenses

Total lease operating expenses for the second quarter 2026, including workover, maintenance and insurance costs, were $155.7 million, or $18.25 per Boe.

Adjusted General and Administrative expenses for the second quarter 2026, adjusted to exclude one-time transaction-related costs, and non-cash equity-based compensation, were $36.9 million, or $4.32 per Boe.

| ($ thousands, except per Boe amounts) | Three Months Ended June30, 2026 | | | Lease Operating Expenses | $ | 155,683 | | Lease Operating Expenses per Boe | $ | 18.25 | | Adjusted General & Administrative Expenses(1) | $ | 36,873 | | Adjusted General & Administrative Expenses per Boe(1) | $ | 4.32 |

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

Capital Expenditures

Capital expenditures for the second quarter 2026, excluding plugging and abandonment and settled decommissioning obligations, totaled $112.5 million.

| ($ thousands) | Three Months Ended June30, 2026 | | | U.S. drilling & completions | $ | 85,294 | | Asset management(1) | | 13,152 | | Seismic and G&G, land, capitalized G&A and other | | 14,072 | | Total Capital Expenditures | $ | 112,518 |

| _ | | | (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 second quarter 2026 totaled $18.9 million.

| | Three Months Ended June30, 2026 | | | Plugging & Abandonment and Decommissioning Obligations Settled(1) | $ | 18,923 |

| _ | | | (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 June 30, 2026, Talos had a borrowing base of $700.0 million under its Bank Credit Facility with approximately $95.7 million in outstanding letters of credit. Letters of credit that are outstanding reduce the available revolving credit commitments. Cash was $577.6 million, providing Talos approximately $1,181.9 million of liquidity at quarter end. On June 30, 2026, Talos had $1,250.0 million in total debt. Net Debt(1) was $672.4 million, Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA attributable to Talos Energy Inc.(1)was 0.5x.

| 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 third quarter 2026, Talos expects production to be in the range from 61 to 65 MBo/d and 81 to 85 MBoe/d.

Talos has increased its full-year 2026 production guidance and now expects production to range from 64 to 68 MBo/d and 87 to 91 MBoe/d. This guidance excludes the previously announced Gulf of America bolt-on acquisition and reflects the impact of the closed non-core shelf divestment. The Company expects to update its 2026 operating and financial guidance following the close of the acquisition.

The following table summarizes Talos's revised full-year 2026 operational and production guidance.

| | | Original | | Revised | | | | | | | | | | | | FY 2026 | | FY 2026 | | | | | | | | | | ($ Millions, unless highlighted): | | Low | | High | | Low | | High | | | | | | Production | Avg Daily Production (MBoe/d) | | 85.0 | | | 90.0 | | | 87.0 | | | 91.0 | | | Avg Daily Production (MBo/d) | | 62.0 | | | 66.0 | | | 64.0 | | | 68.0 | | Capex | Capital Expenditures(1) | $ | 500 | | $ | 550 | | $ | 500 | | $ | 550 | | P&A Expenditures | P&A, Decommissioning | $ | 100 | | $ | 130 | | $ | 100 | | $ | 130 | | Cash Expenses | Cash Operating Expenses and Workovers(2)(3)(4)* | $ | 560 | | $ | 590 | | $ | 560 | | $ | 590 | | G&A(3)(5)* | $ | 130 | | $ | 140 | | $ | 135 | | $ | 145 | | | Interest Expense(6) | $ | 155 | | $ | 165 | | $ | 155 | | $ | 165 | |

| _ | | | (1) | Excludes acquisitions. | | (2) | Includes Lease Operating Expenses and Maintenance. | | (3) | Includes insurance costs. | | (4) | Includes reimbursements under production handling agreements. | | (5) | Excludes non-cash equity-based compensation and transaction and other expenses. | | (6) | Includes cash interest expense on debt and finance lease, surety charges and amortization of deferred financing costs and original issue discounts. | | *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 July 31, 2026.

| | Instrument Type | Avg. Daily Volume | | W.A. Swap | | W.A. Floor | | W.A. Ceiling | | | | | | Crude – WTI | | (Bbls) | | (Per Bbl) | | (Per Bbl) | | (Per Bbl) | | | | | | July - September 2026 | Fixed Swaps | | 3,685 | | $ | 67.77 | | --- | | --- | | | | | Collar | | 21,000 | | --- | | $ | 61.67 | | $ | 74.80 | | | October - December 2026 | Fixed Swaps | | 4,000 | | $ | 62.50 | | --- | | --- | | | | | Collar | | 22,978 | | --- | | $ | 61.52 | | $ | 73.81 | | | January - March 2027 | Fixed Swaps | | 7,000 | | $ | 73.27 | | --- | | --- | | | | | Collar | | 22,000 | | --- | | $ | 60.91 | | $ | 75.58 | | | April - June 2027 | Fixed Swaps | | 7,000 | | $ | 73.27 | | --- | | --- | | | | | Collar | | 14,000 | | --- | | $ | 65.36 | | $ | 77.93 | | | Natural Gas – HH NYMEX | | (MMBtu) | | (Per MMBtu) | | (Per MMBtu) | | (Per MMBtu) | | | | | | July - September 2026 | Fixed Swaps | | 26,739 | | $ | 3.48 | | --- | | --- | | | | | Collar | | 6,631 | | --- | | $ | 2.75 | | $ | 3.71 | | | October - December 2026 | Fixed Swaps | | 29,946 | | $ | 3.78 | | --- | | --- | | | | | Collar | | 10,000 | | --- | | $ | 2.75 | | $ | 3.71 | | | January - March 2027 | Collar | | 45,000 | | --- | | $ | 3.39 | | $ | 4.70 | | | April - June 2027 | Collar | | 10,000 | | --- | | $ | 3.00 | | $ | 3.67 | | | | | | | | | | | | | | | |

CONFERENCE CALL AND WEBCAST INFORMATION Talos will host a conference call, broadcast live over the internet, on Wednesday, August 5, 2026, 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 Second Quarter 2026 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 August 12, 2026 and can be accessed by dialing (888) 660-6345 and using access code 99686#. For more information, please refer to the Second Quarter 2026 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 safely maximizing long-term value through its Exploration & Production business in the United States Gulf 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

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, potential or recoverable resources, reserves and production; drilling prospects, inventories, projects and programs, including operating cost efficiencies, and non-operated assets; our ability to replace the reserves that we produce through drilling, acquisitions, recompletions or enhanced recovery; financial strategy, borrowing base under our bank credit facility, availability of financing sources, including project financing options, 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 financial assurance instruments, including surety bonds, on commercially reasonable terms; expected collateral requirements under existing or future acquisitions, surety agreements, hedging transactions, letters of credit and other secured debt; 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 not close when expected or at all, and may fail to realize the expected benefits of any such transaction; timing, restrictions and amount of future production of oil, natural gas and NGLs, including changes in supply caused by OPEC or the war in Iran, and any related impact on global oil prices, available resources, and domestic oil production; 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; our ability to identify and acquire future leases, reserves, exploration projects and or business acquisitions on desired terms; costs of exploring, developing, acquiring or abandoning 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 and availability of financial instruments on reasonable terms; 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 minority 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. Additionally, forward-looking statements may include statements regarding pending acquisitions which are based on management's current expectations and assumptions such as: future exploration and development opportunities; financing options; estimates of recoverable resources and resource potential; timing of final investment decisions; anticipated costs and expected production commencement and volumes; the timing, closing and benefits of the pending acquisitions; the anticipated impact on our financial position, growth opportunities and competitive position; and projected prospects, plans and objectives related to these assets. All of the 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.