Talos Energy (NYSE: TALO) details 2025 loss, cash flow and 2026 plan
Rhea-AI Filing Summary
Talos Energy Inc. reported fourth-quarter and full-year 2025 results showing strong cash generation but a GAAP loss driven by non-cash impairments. For 2025, revenue was
The company produced an average of 94.6 MBoe/d in 2025, 70% oil, and ended the year with proved reserves of 174.7 MMBoe and a proved PV‑10 of
Talos repurchased 12.6 million shares for
Positive
- None.
Negative
- None.
Insights
Talos posts strong cash flow and reserves despite impairment-driven loss.
Talos Energy delivered solid 2025 operating results with total revenues of
The headline net loss of
Strategically, Talos is emphasizing a pure‑play offshore focus, with 2026 capex of
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 24, 2026, Talos Energy Inc. (the “Company”) issued a press release announcing its financial and operational results for the fiscal quarter and full year ended December 31, 2025. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference.
In accordance with the General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K under Item 2.02 and set forth in the attached Exhibit 99.1 is deemed to be “furnished” solely pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
The information set forth under Item 2.02 is incorporated into this Item 7.01 by reference as if fully set forth herein.
On February 24, 2026, the Company posted a new investor presentation on its website, www.talosenergy.com. A copy of the presentation can be reviewed at the Company’s website by first selecting “Investors Relations,” then selecting the “Presentations & Webcasts – Latest Presentations” in the drop-down tab. Information on the Company’s website does not constitute a part of this Current Report on Form 8-K.
In accordance with the General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K under this Item 7.01 is deemed to be “furnished” solely pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit |
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Description |
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99.1 |
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Press Release dated February 24, 2026 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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TALOS ENERGY INC. |
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Date: |
February 24, 2026 |
By: |
/s/ William S. Moss III |
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William S. Moss III |
Exhibit 99.1
Talos Energy Announces Fourth Quarter and Full-Year 2025 Results
Houston, Texas, February 24, 2026 – Talos Energy Inc. (“Talos” or the “Company”) (NYSE: TALO) today announced its operational and financial results for the three and twelve months ended December 31, 2025. Talos also announced its year-end 2025 reserves and 2026 operational and financial guidance.
Fourth Quarter 2025 Highlights
Full-Year 2025 and Recent Highlights
TALOS ENERGY INC. |
1 |
333 Clay St., Suite 3300, Houston, TX 77002 |
“2025 marked the start of our transformation – building the foundation for the future,” said Paul Goodfellow, President and Chief Executive Officer of Talos. “In June, we introduced an enhanced corporate strategy designed to position Talos as the leading pure‑play offshore E&P company. Our strategy is built on three core pillars: driving continuous improvement across our business, growing production and profitability, and building a long‑lived, scalable portfolio, all supported by a disciplined capital allocation framework. Since announcing this strategy, we strengthened our leadership team and we’ve been laser‑focused on execution. In 2025, we realized more than $70 million in free cash flow enhancements, putting us on a strong trajectory toward achieving our $100 million target in 2026. We generated approximately $420 million in free cash flow, enabling us to return $120 million of capital to shareholders while strengthening our balance sheet. We delivered several key operational milestones, including bringing Sunspear and Katmai West #2 online and announcing an exciting discovery at Daenerys, which we plan to appraise in the second quarter of 2026. Our accomplishments in 2025 underscore the momentum we are building and reinforce our confidence in the path ahead. In 2026, we are looking forward to the opportunities to continue investing for the future and executing our strategy with discipline and focus.”
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 fourth quarter, Talos temporarily shut in production from the Genovesa well due to the failure of the surface-controlled subsurface safety valve (SCSSV) which impacted production by approximately 3 Mboe/d. Talos expects the Genovesa well to return to production in the third quarter of 2026 following completion of the planned workover.
Katmai: In mid‑2025, gross processing capacity from the Talos-owned Tarantula facility was expanded to 35 Mboe/d to accommodate higher volumes following the success of the Katmai West #2 well. Most recently, additional debottlenecking efforts have boosted Tarantula’s throughput to approximately 38 Mboe/d. Talos, as operator, holds a 50% working interest (“W.I.”), and entities managed by Ridgewood Energy Corporation holds a 50% W.I.
Cardona: The Company successfully drilled and completed the Cardona well in late 2025, delivering the project under budget and ahead of schedule. Production commenced early 2026, with the well flowing to the Talos-owned Pompano facility. Talos, as operator, holds a 65% W.I., and entities managed by Ridgewood Energy Corporation holds a 35% W.I.
CPN: The Company recently successfully drilled the CPN well in the first quarter of 2026. CPN was delivered under budget and ahead of schedule, with first production from the well expected in the second half of 2026. Talos, as operator, holds 65% W.I., Walter Oil and Gas Corp. holds a 25% W.I., and HEQ holds a 10% W.I.
Zama: Harbour Energy plc was named operator of the Zama project offshore Mexico in December 2025. Under the agreement, Talos retains the right to appoint key personnel to the project team. The focus will shift to completing engineering and design activities in 2026, paving the way for a final investment decision thereafter.
Manta Ray: The non-operated Manta Ray well was drilled in late 2025. The well encountered hydrocarbons but was deemed non-commercial. Talos held a 40% W.I. and Walter Oil and Gas Corp., as operator, held a 60% W.I.
Exploration and Appraisal Update:
Daenerys: In August 2025, Talos announced successful drilling results at the Daenerys exploration prospect located on Walker Ridge blocks 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 discovery well has been temporarily suspended to preserve its future utility. Talos plans to drill an appraisal well later in the second quarter of 2026 to further define the discovered resource. Talos 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 Willow holds a 22.5% W.I., Houston Energy, L.P. holds a 10%, HEQ II Daenerys, LLC holds a 9% W.I., and Cathexis holds a 9% W.I.
Gulf of America Lease Sale: Talos was an active participant in the Gulf of America Lease Sale held in December 2025, where the Company was named as the apparent high bidder on 11 new leases for approximately $15 million. The new leases bring eight new development and exploration prospects into the Company's portfolio.
TALOS ENERGY INC. |
2 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Share Repurchase Program:
In the fourth quarter of 2025, Talos repurchased 1.5 million shares for $16.4 million, representing an average price of $11.04 per share. In 2025, Talos returned $119.1 million or approximately 29% of annual free cash flow to shareholders through share repurchases which reduced outstanding share count by approximately 7%. And since announcing its current return of capital framework, Talos has returned approximately 44% of free cash flow to shareholders.
The remaining share repurchase authorization as of December 31, 2025, is approximately $81 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 initiated the Optimal Performance Plan for Cash Flow Enhancements, targeting improvements in capital efficiency, margin enhancement, commercial opportunities, and organizational performance. The Company set a 2025 year-end target of $25 million, which was surpassed by realizing $72 million in 2025. Based on the strong execution and delivery in 2025, Talos is well-positioned to achieve the 2026 target of $100 million.
Credit Facility Update:
In January 2026, the Company entered into an Amended and Restated Credit Agreement, which reaffirmed the Company's borrowing base of $700 million and extended the maturity date to January 30, 2030.
Impairment:
Talos accounts for its assets under the full cost method requiring the ceiling test to be calculated each quarter utilizing 12-month trailing commodity prices. Driven by lower average oil prices, the Company recorded a non-cash impairment charge of $170.4 million in the fourth quarter of 2025 under the "ceiling test" of its full cost pool of oil and gas assets. This non-cash charge does not impact cash flows of the Company.
TALOS ENERGY INC. |
3 |
333 Clay St., Suite 3300, Houston, TX 77002 |
FOURTH QUARTER AND FULL YEAR 2025 RESULTS
Key Financial Highlights:
($ thousands, except per share and per Boe amounts) |
Three Months Ended December 31, 2025 |
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Twelve Months Ended December 31, 2025 |
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Total revenues |
$ |
392,237 |
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$ |
1,780,070 |
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Net Income (Loss) attributable to Talos Energy Inc. |
$ |
(202,580 |
) |
$ |
(494,290 |
) |
Net Income (Loss) attributable to Talos Energy Inc. per diluted share |
$ |
(1.19 |
) |
$ |
(2.82 |
) |
Adjusted Net Income (Loss)(1) attributable to Talos Energy Inc. |
$ |
(76,481 |
) |
$ |
(146,297 |
) |
Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted share(1) |
$ |
(0.44 |
) |
$ |
(0.84 |
) |
Adjusted EBITDA attributable to Talos Energy Inc.(1) |
$ |
240,130 |
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$ |
1,198,620 |
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Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges(1) |
$ |
213,746 |
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$ |
1,117,149 |
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Capital Expenditures |
$ |
150,432 |
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$ |
498,626 |
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Production
Production for the fourth quarter and full-year 2025 was 89.2 MBoe/d (73% oil, 81% liquids) and 94.6 MBoe/d (70% oil, 78% liquids), respectively.
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Three Months Ended December 31, 2025 |
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Twelve Months Ended December 31, 2025 |
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Oil (MBbl/d) |
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64.9 |
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65.9 |
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Natural Gas (MMcf/d) |
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103.2 |
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126.4 |
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NGL (MBbl/d) |
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7.1 |
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7.6 |
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Total average net daily (MBoe/d) |
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89.2 |
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94.6 |
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Three Months Ended December 31, 2025 |
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Production |
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% Oil |
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% Liquids |
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% Operated |
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Deepwater |
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80.9 |
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75 |
% |
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83 |
% |
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80 |
% |
Shelf and Gulf Coast |
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8.3 |
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52 |
% |
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61 |
% |
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79 |
% |
Total average net daily (MBoe/d) |
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89.2 |
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73 |
% |
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81 |
% |
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80 |
% |
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Twelve Months Ended December 31, 2025 |
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Production |
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% Oil |
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% Liquids |
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% Operated |
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Deepwater |
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85.1 |
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72 |
% |
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80 |
% |
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81 |
% |
Shelf and Gulf Coast |
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9.5 |
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51 |
% |
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60 |
% |
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76 |
% |
Total average net daily (MBoe/d) |
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94.6 |
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70 |
% |
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78 |
% |
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81 |
% |
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Three Months Ended December 31, 2025 |
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Twelve Months Ended December 31, 2025 |
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Average realized prices (excluding hedges): |
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Oil ($/Bbl) |
$ |
58.00 |
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$ |
64.84 |
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Natural Gas ($/Mcf) |
$ |
3.79 |
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$ |
3.67 |
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NGL ($/Bbl) |
$ |
15.35 |
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$ |
18.05 |
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Average realized price ($/Boe) |
$ |
47.82 |
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$ |
51.55 |
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Average NYMEX prices: |
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WTI ($/Bbl) |
$ |
59.06 |
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$ |
65.32 |
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Henry Hub ($/MMBtu) |
$ |
3.55 |
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$ |
3.44 |
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TALOS ENERGY INC. |
4 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Lease Operating & General and Administrative Expenses
Total lease operating expenses for the fourth quarter and full-year 2025, inclusive of workover, maintenance and insurance costs, were $148.2 million, or $18.07 per Boe, and $546.7 million, or $15.83 per Boe, respectively.
General and Administrative expenses for the fourth quarter and full-year 2025, adjusted for one-time transaction-related costs and non-cash equity-based compensation, were $33.3 million, or $4.06 per Boe, and $134.0 million, or $3.88 per Boe, respectively.
($ thousands, except per Boe amounts) |
Three Months Ended December 31, 2025 |
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Twelve Months Ended December 31, 2025 |
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Lease Operating Expenses |
$ |
148,222 |
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$ |
546,716 |
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Lease Operating Expenses per Boe |
$ |
18.07 |
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$ |
15.83 |
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Adjusted General & Administrative Expenses(1) |
$ |
33,332 |
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$ |
133,986 |
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Adjusted General & Administrative Expenses per Boe(1) |
$ |
4.06 |
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$ |
3.88 |
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Capital Expenditures
Capital expenditures for the fourth quarter and full-year 2025, excluding plugging and abandonment and settled decommissioning obligations, totaled $150.4 million and $498.6 million, respectively.
($ thousands) |
Three Months Ended December 31, 2025 |
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Twelve Months Ended December 31, 2025 |
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U.S. drilling & completions |
$ |
123,686 |
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$ |
394,264 |
|
Asset management(1) |
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7,471 |
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|
31,991 |
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Seismic and G&G, land, capitalized G&A and other |
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16,712 |
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|
67,812 |
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Total Capital Expenditures |
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147,869 |
|
|
494,067 |
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Investment in Mexico |
|
2,563 |
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|
4,559 |
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Total |
$ |
150,432 |
|
$ |
498,626 |
|
Plugging & Abandonment and Decommissioning Expenditures
Upstream capital expenditures for plugging and abandonment and settled decommissioning obligations for the fourth quarter and full-year 2025 totaled $27.6 million, and $118.9 million, respectively.
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Three Months Ended December 31, 2025 |
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Twelve Months Ended December 31, 2025 |
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Plugging & Abandonment and Decommissioning Obligations Settled(1) |
$ |
27,644 |
|
$ |
118,949 |
|
Liquidity and Leverage
At December 31, 2025, Talos had a borrowing base of $700.0 million under its undrawn credit facility with $97.4 million in outstanding letters of credit. Cash was $362.8 million, providing Talos $965.4 million of liquidity. On December 31, 2025, Talos had $1,250.0 million in total debt. Net Debt(1) was $887.2 million, Net Debt to Pro Forma 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.
TALOS ENERGY INC. |
5 |
333 Clay St., Suite 3300, Houston, TX 77002 |
YEAR-END 2025 RESERVES
As of December 31, 2025, Talos had proved reserves of 174.7 MMBoe, comprised of 75% oil and 81% liquids. The Standardized Measure of Talos's standalone reserves was approximately $2.8 billion and the PV-10 of Talos proved reserves(1) was approximately $3.2 billion. In addition to proved reserves, Talos's probable reserves as of December 31, 2025 were 102.5 MMBoe with a corresponding PV-10(1)(2) of approximately $2.3 billion. The proved and probable reserves are prepared by Netherland, Sewell & Associates, Inc. (“NSAI”). All figures are fully burdened by and net of all plugging and abandonment costs associated with the properties included in the reserves report. The following tables summarize proved reserves at December 31, 2025 based on SEC pricing of $65.37 per barrel of oil and $3.39 per MMBtu of natural gas, before differentials.
Proved Reserves
The following table presents Talos's estimated proved reserves and PV-10 values as of December 31, 2025.
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SEC Reserves as of December 31, 2025 |
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MBoe |
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% of Total Proved |
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% Oil |
|
Standardized Measure |
|
PV -10(1) |
|
|||||
Proved Developed Producing |
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102,902 |
|
|
59 |
% |
|
76 |
% |
|
|
$ |
2,419,008 |
|
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Proved Developed Non-Producing |
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33,843 |
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19 |
% |
|
66 |
% |
|
|
|
438,503 |
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Total Proved Developed |
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136,745 |
|
|
78 |
% |
|
74 |
% |
|
|
|
2,857,511 |
|
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Proved Undeveloped |
|
37,948 |
|
|
22 |
% |
|
78 |
% |
|
|
|
331,526 |
|
|
Total Proved |
|
174,693 |
|
|
100 |
% |
|
75 |
% |
$ |
2,804,857 |
|
$ |
3,189,037 |
|
Probable Reserves
The following table presents Talos's estimated probable reserves and PV-10 value as of December 31, 2025.
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Reserves as of December 31, 2025 |
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MBoe |
|
PV -10(1)(2) |
|
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Total Probable |
|
102,477 |
|
$ |
2,266,846 |
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2026 OPERATIONAL & FINANCIAL GUIDANCE
Talos intends to prioritize high-margin oil production in 2026 underpinned by balanced investment in infrastructure-led development, exploration and appraisal, and the multi-well, non-operated development at Monument. Capital Expenditures guidance for 2026 is expected to range from $500 to $550 million. P&A Expenditures are expected to range from $100 to $130 million. Approximately 40% of total capex is non-operated, largely driven by the Beacon-operated Monument project. Approximately 10% of total capex will be allocated to exploration. Production for 2026 is expected to be in the range from 62 to 66 MBo/d; 85 to 90 MBoe/d.
Production for the first quarter 2026 is estimated to be in the range from 60 to 64 MBo/d; 84 to 88 MBoe/d.
Talos's production guidance takes into account known and anticipated factors, including expected planned downtime. Furthermore, the guidance also considers potential expected but unplanned downtime due to unforeseen risks and weather-related disruptions.
TALOS ENERGY INC. |
6 |
333 Clay St., Suite 3300, Houston, TX 77002 |
The following summarizes Talos's full-year 2026 operational and production guidance.
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FY 2026 |
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($ Millions, unless highlighted): |
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Low |
|
High |
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Production |
Avg Daily Production (MBoe/d) |
|
85.0 |
|
|
90.0 |
|
|
Avg Daily Production (MBo/d) |
|
62.0 |
|
|
66.0 |
|
Capex |
Capital Expenditures(1) |
$ |
500 |
|
$ |
550 |
|
P&A Expenditures |
P&A, Decommissioning |
$ |
100 |
|
$ |
130 |
|
Cash Expenses |
Cash Operating Expenses and Workovers(2)(3)(4)* |
$ |
560 |
|
$ |
590 |
|
|
G&A(3)(5)* |
$ |
130 |
|
$ |
140 |
|
|
Interest Expense(6) |
$ |
155 |
|
$ |
165 |
|
*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 February 20, 2026.
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Instrument Type |
Avg. Daily Volume |
|
W.A. Swap |
|
W.A. Floor |
|
W.A. Ceiling |
|
||||
Crude – WTI |
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(Bbls) |
|
(Per Bbl) |
|
(Per Bbl) |
|
(Per Bbl) |
|
||||
January - March 2026 |
Fixed Swaps |
|
15,000 |
|
$ |
66.03 |
|
--- |
|
--- |
|
||
|
Collar |
|
14,311 |
|
--- |
|
$ |
59.19 |
|
$ |
68.78 |
|
|
April - June 2026 |
Fixed Swaps |
|
14,000 |
|
$ |
65.11 |
|
--- |
|
--- |
|
||
|
Collar |
|
13,000 |
|
--- |
|
$ |
59.62 |
|
$ |
69.50 |
|
|
July - September 2026 |
Fixed Swaps |
|
2,000 |
|
$ |
65.00 |
|
--- |
|
--- |
|
||
|
Collar |
|
15,000 |
|
--- |
|
$ |
59.00 |
|
$ |
68.87 |
|
|
October - December 2026 |
Fixed Swaps |
|
4,000 |
|
$ |
62.50 |
|
--- |
|
--- |
|
||
|
Collar |
|
14,989 |
|
--- |
|
$ |
59.00 |
|
$ |
68.57 |
|
|
Natural Gas – HH NYMEX |
|
(MMBtu) |
|
(Per MMBtu) |
|
(Per MMBtu) |
|
(Per MMBtu) |
|
||||
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 |
|
23,315 |
|
$ |
3.77 |
|
--- |
|
--- |
|
||
CONFERENCE CALL AND WEBCAST INFORMATION
Talos will host a conference call, which will be broadcast live over the internet, on Wednesday, February 25, 2026 at 10:00 AM Eastern Time (9:00 AM Central Time). Listeners can access the conference call through a webcast link at Talos Fourth 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 March 4, 2026 and can be accessed by dialing (888) 660-6345 and using access code 34508#. For more information, please refer to the Fourth Quarter 2024 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 Upstream 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.
TALOS ENERGY INC. |
7 |
333 Clay St., Suite 3300, Houston, TX 77002 |
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 including such changes that may be implemented by the current or future presidential administrations or foreign governments, 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; market factors impacting the availability of surety bonds; 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 including a potential increase in Venezuelan oil supply and any related impact on global oil prices 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; 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, timeline and results 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. These risks include, but are not limited to, commodity price volatility; global demand for oil and natural gas; the ability or willingness of OPEC and other state-controlled oil companies to set and maintain oil production levels and the impact of any such actions; foreign wars and conflicts, including the lack of a resolution to the war in Ukraine and ongoing hostilities in Israel and the Middle East and recent U.S. intervention in Venezuela, and their impact on commodity markets; the impact of any pandemic, and governmental measures related thereto; lack of necessary infrastructure, transportation and storage capacity as a result of oversupply, government and regulations; political risks, including a global trade war or the impact of a prolonged federal government shutdown or lapse in federal appropriations that could disrupt our operations and future drilling plans and opportunities; lack of availability of drilling and production equipment and services; adverse weather events, including tropical storms, hurricanes, winter storms and loop currents; cybersecurity threats and incidents; elevated inflation and the impact of central bank policy in response thereto; environmental risks; failure to find, acquire or gain access to other discoveries and prospects or to successfully develop and produce from our current discoveries and prospects; geologic risk; drilling and other operating risks; well control risk; regulatory changes, including the impact of financial assurance requirements; changes in U.S. trade policy, including the imposition of increased tariffs and resulting consequences; the uncertainty inherent in estimating reserves and in projecting future rates of production; cash flow and access to capital; the timing of development expenditures; potential adverse reactions or competitive responses to our acquisitions and other transactions; the possibility that the anticipated benefits of our acquisitions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of acquired assets and operations; risks to our industry and business operations associated with legal challenges by non-governmental
TALOS ENERGY INC. |
8 |
333 Clay St., Suite 3300, Houston, TX 77002 |
organizations and other groups; and the other risks discussed in “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 and our subsequent Quarterly Reports on Form 10-Qs, each as filed with the SEC. Should any risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this communication.
PRODUCTION ESTIMATES
Estimates of our future production volumes are based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and gas will continue at levels that allow for economic production of these products. The production, transportation, marketing and storage of oil and gas are subject to disruption due to infrastructure constraints, transportation, processing and storage availability, mechanical failure, human error, adverse weather conditions such as hurricanes, global political and macroeconomic events and numerous other factors. Our estimates are based on certain other assumptions, such as well performance and estimated resource potential and ultimate recovery, which may vary significantly from those assumed. Therefore, we can give no assurance that our future production volumes will be as estimated.
RESERVE INFORMATION
Reserve engineering is a process of estimating underground accumulations of oil, natural gas and NGLs that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions used by reserve engineers. In addition, the results of drilling, testing and production activities may justify upward or downward revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil, natural gas and NGLs that are ultimately recovered. In addition, we may use “estimated resource potential,” “gross reserves,” "estimated resource," "total recoverable resource potential" and “estimated ultimate recovery” (or EUR) which are not measures of “reserves” prepared in accordance with SEC guidelines or permitted to be included in SEC filings. These types of resource estimates do not represent, and are not intended to represent, any category of reserves based on SEC definitions, are inherently more uncertain than estimates of proved reserves or other reserves prepared in accordance with SEC guidelines. These types of estimates are subject to a substantially greater risk of actually being realized.
USE OF NON-GAAP FINANCIAL MEASURES
This release may include the use of various measures that have not been calculated in accordance with U.S. generally acceptable accounting principles (GAAP) such as, but not limited to, EBITDA, Adjusted EBITDA, Adjusted EBITDA attributable to Talos Energy Inc., LTM Adjusted EBITDA attributable to Talos Energy Inc., Net Debt, Net Debt to LTM Adjusted EBITDA attributable to Talos Energy Inc., Adjusted Free Cash Flow attributable to Talos Energy Inc. and Leverage, Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges, Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted share, Adjusted Earnings Per Share, Cash Operating Expenses and Workovers, Adjusted General & Administrative Expense and PV-10. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Reconciliations for non-GAAP measures to GAAP measures are included at the end of this release.
TALOS ENERGY INC. |
9 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Talos Energy Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)
|
December 31, 2025 |
|
December 31, 2024 |
|
||
|
|
|
|
|
||
ASSETS |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
$ |
362,809 |
|
$ |
108,172 |
|
Accounts receivable, net |
|
323,058 |
|
|
404,258 |
|
Assets from price risk management activities |
|
54,420 |
|
|
33,486 |
|
Prepaid assets |
|
83,080 |
|
|
77,487 |
|
Other current assets |
|
17,939 |
|
|
35,980 |
|
Total current assets |
|
841,306 |
|
|
659,383 |
|
Property and equipment: |
|
|
|
|
||
Proved properties |
|
10,621,012 |
|
|
9,784,832 |
|
Unproved properties, not subject to amortization |
|
480,555 |
|
|
587,238 |
|
Other property and equipment |
|
22,643 |
|
|
35,069 |
|
Total property and equipment |
|
11,124,210 |
|
|
10,407,139 |
|
Accumulated depreciation, depletion and amortization |
|
(6,686,575 |
) |
|
(5,191,865 |
) |
Total property and equipment, net |
|
4,437,635 |
|
|
5,215,274 |
|
Other long-term assets: |
|
|
|
|
||
Restricted cash |
|
76,181 |
|
|
106,260 |
|
Assets from price risk management activities |
|
— |
|
|
253 |
|
Equity method investments |
|
112,382 |
|
|
111,269 |
|
Other well equipment |
|
49,307 |
|
|
58,306 |
|
Notes receivable, net |
|
19,636 |
|
|
17,748 |
|
Operating lease assets |
|
9,214 |
|
|
11,294 |
|
Other assets |
|
6,396 |
|
|
12,008 |
|
Total assets |
$ |
5,552,057 |
|
$ |
6,191,795 |
|
LIABILITIES AND EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
$ |
92,979 |
|
$ |
117,055 |
|
Accrued liabilities |
|
290,223 |
|
|
326,913 |
|
Accrued royalties |
|
59,768 |
|
|
77,672 |
|
Current portion of asset retirement obligations |
|
112,489 |
|
|
97,166 |
|
Liabilities from price risk management activities |
|
6,708 |
|
|
6,474 |
|
Accrued interest payable |
|
48,972 |
|
|
49,084 |
|
Current portion of operating lease liabilities |
|
3,657 |
|
|
3,837 |
|
Other current liabilities |
|
29,925 |
|
|
44,854 |
|
Total current liabilities |
|
644,721 |
|
|
723,055 |
|
Long-term liabilities: |
|
|
|
|
||
Long-term debt |
|
1,226,189 |
|
|
1,221,399 |
|
Asset retirement obligations |
|
1,219,639 |
|
|
1,052,569 |
|
Liabilities from price risk management activities |
|
- |
|
|
3,537 |
|
Operating lease liabilities |
|
11,956 |
|
|
15,489 |
|
Other long-term liabilities |
|
281,429 |
|
|
416,041 |
|
Total liabilities |
|
3,383,934 |
|
|
3,432,090 |
|
Commitments and contingencies |
|
|
|
|
||
Equity |
|
|
|
|
||
Talos Energy Inc. stockholdersʼ equity: |
|
|
|
|
||
Preferred stock; $0.01 par value; 30,000,000 shares authorized and zero shares issued or outstanding as of December 31, 2025 and 2024, respectively |
|
— |
|
|
— |
|
Common stock; $0.01 par value; 270,000,000 shares authorized; 188,530,052 and 187,434,908 shares issued as of December 31, 2025 and 2024, respectively |
|
1,885 |
|
|
1,874 |
|
Additional paid-in capital |
|
3,296,643 |
|
|
3,274,626 |
|
Accumulated deficit |
|
(918,400 |
) |
|
(424,110 |
) |
Treasury stock, at cost; 20,015,369 and 7,417,385 shares as of December 31, 2025 and 2024, respectively |
|
(212,144 |
) |
|
(92,685 |
) |
Total Talos Energy Inc. stockholders' equity |
|
2,167,984 |
|
|
2,759,705 |
|
Noncontrolling interest |
|
139 |
|
|
— |
|
Total equity |
|
2,168,123 |
|
|
2,759,705 |
|
Total liabilities and equity |
$ |
5,552,057 |
|
$ |
6,191,795 |
|
TALOS ENERGY INC. |
10 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Talos Energy Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
||||
Oil |
$ |
346,273 |
|
$ |
437,914 |
|
$ |
1,560,401 |
|
$ |
1,806,148 |
|
Natural gas |
|
35,989 |
|
|
29,840 |
|
|
169,445 |
|
|
105,528 |
|
NGL |
|
9,975 |
|
|
17,431 |
|
|
50,224 |
|
|
61,892 |
|
Total revenues |
|
392,237 |
|
|
485,185 |
|
|
1,780,070 |
|
|
1,973,568 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||
Lease operating expense |
|
148,222 |
|
|
110,206 |
|
|
546,716 |
|
|
566,041 |
|
Production taxes |
|
87 |
|
|
133 |
|
|
418 |
|
|
1,377 |
|
Depreciation, depletion and amortization |
|
243,222 |
|
|
274,554 |
|
|
1,056,281 |
|
|
1,023,558 |
|
Impairment of oil and natural gas properties |
|
170,392 |
|
|
— |
|
|
454,482 |
|
|
— |
|
Accretion expense |
|
31,592 |
|
|
30,551 |
|
|
125,296 |
|
|
117,604 |
|
General and administrative expense |
|
39,776 |
|
|
41,563 |
|
|
155,368 |
|
|
201,517 |
|
Other operating (income) expense |
|
2,904 |
|
|
1,013 |
|
|
1,789 |
|
|
(109,454 |
) |
Total operating expenses |
|
636,195 |
|
|
458,020 |
|
|
2,340,350 |
|
|
1,800,643 |
|
Operating income (expense) |
|
(243,958 |
) |
|
27,165 |
|
|
(560,280 |
) |
|
172,925 |
|
Interest expense |
|
(40,796 |
) |
|
(41,536 |
) |
|
(163,381 |
) |
|
(187,638 |
) |
Price risk management activities income (expense) |
|
30,227 |
|
|
(42,989 |
) |
|
105,455 |
|
|
(1,458 |
) |
Equity method investment income (expense) |
|
(1,770 |
) |
|
(1,235 |
) |
|
(1,807 |
) |
|
(10,289 |
) |
Other income (expense) |
|
4,238 |
|
|
3,535 |
|
|
15,520 |
|
|
(44,930 |
) |
Net income (loss) before income taxes |
|
(252,059 |
) |
|
(55,060 |
) |
|
(604,493 |
) |
|
(71,390 |
) |
Income tax benefit (expense) |
|
48,448 |
|
|
(9,448 |
) |
|
109,169 |
|
|
(5,003 |
) |
Net income (loss) |
$ |
(203,611 |
) |
$ |
(64,508 |
) |
$ |
(495,324 |
) |
$ |
(76,393 |
) |
Net income (loss) attributable to noncontrolling interest |
|
(1,031 |
) |
|
— |
|
|
(1,034 |
) |
|
— |
|
Net income (loss) attributable to Talos Energy Inc. |
$ |
(202,580 |
) |
$ |
(64,508 |
) |
$ |
(494,290 |
) |
$ |
(76,393 |
) |
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
||||
Basic |
$ |
(1.19 |
) |
$ |
(0.37 |
) |
$ |
(2.82 |
) |
$ |
(0.44 |
) |
Diluted |
$ |
(1.19 |
) |
$ |
(0.37 |
) |
$ |
(2.82 |
) |
$ |
(0.44 |
) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||
Basic |
|
169,789 |
|
|
175,605 |
|
|
175,136 |
|
|
175,605 |
|
Diluted |
|
169,789 |
|
|
175,605 |
|
|
175,136 |
|
|
175,605 |
|
TALOS ENERGY INC. |
11 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Talos Energy Inc.
Consolidated Statements of Cash Flows
(In thousands)
|
Year Ended December 31, |
|
|||||||
|
2025 |
|
2024 |
|
2023 |
|
|||
Cash flows from operating activities: |
|
|
|
|
|
|
|||
Net income (loss) |
$ |
(495,324 |
) |
$ |
(76,393 |
) |
$ |
187,332 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
|
|
|
|
|
|
|||
Depreciation, depletion, amortization and accretion expense |
|
1,181,577 |
|
|
1,141,162 |
|
|
749,686 |
|
Impairment of oil and natural gas properties |
|
454,482 |
|
|
— |
|
|
— |
|
Amortization of deferred financing costs and original issue discount |
|
8,359 |
|
|
9,303 |
|
|
15,039 |
|
Equity-based compensation expense |
|
18,418 |
|
|
14,462 |
|
|
12,953 |
|
Price risk management activities (income) expense |
|
(105,455 |
) |
|
1,458 |
|
|
(80,928 |
) |
Net cash received (paid) on settled derivative instruments |
|
81,471 |
|
|
4,710 |
|
|
(9,457 |
) |
Equity method investment (income) expense |
|
1,807 |
|
|
10,289 |
|
|
3,209 |
|
Loss (gain) on extinguishment of debt |
|
— |
|
|
60,256 |
|
|
— |
|
Settlement of asset retirement obligations |
|
(117,847 |
) |
|
(108,789 |
) |
|
(86,615 |
) |
Loss (gain) on sale of assets |
|
381 |
|
|
38 |
|
|
(66,115 |
) |
Loss (gain) on sale of business |
|
— |
|
|
(100,482 |
) |
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|||
Accounts receivable |
|
85,459 |
|
|
8,576 |
|
|
20,352 |
|
Other current assets |
|
15,895 |
|
|
(6,964 |
) |
|
7,066 |
|
Accounts payable |
|
(22,833 |
) |
|
(3,831 |
) |
|
(60,401 |
) |
Other current liabilities |
|
(66,563 |
) |
|
1,290 |
|
|
(96,960 |
) |
Other non-current assets and liabilities, net |
|
(104,001 |
) |
|
7,508 |
|
|
(76,092 |
) |
Net cash provided by (used in) operating activities |
|
935,826 |
|
|
962,593 |
|
|
519,069 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|||
Exploration, development and other capital expenditures |
|
(481,905 |
) |
|
(508,914 |
) |
|
(561,434 |
) |
Cash acquired in excess of payments for acquisitions |
|
1,690 |
|
|
— |
|
|
17,617 |
|
Payments for acquisitions, net of cash acquired |
|
(49,978 |
) |
|
(936,214 |
) |
|
— |
|
Proceeds from (cash paid for) sale of property and equipment, net |
|
1,716 |
|
|
1,161 |
|
|
73,004 |
|
Contributions to equity method investees |
|
(4,559 |
) |
|
(22,988 |
) |
|
(29,447 |
) |
Investment in intangible assets |
|
— |
|
|
— |
|
|
(12,366 |
) |
Proceeds from sales of business |
|
— |
|
|
146,676 |
|
|
— |
|
Other |
|
(13,710 |
) |
|
— |
|
|
— |
|
Net cash provided by (used in) investing activities |
|
(546,746 |
) |
|
(1,320,279 |
) |
|
(512,626 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|||
Issuance of common stock |
|
— |
|
|
387,717 |
|
|
— |
|
Issuance of senior notes |
|
— |
|
|
1,250,000 |
|
|
— |
|
Redemption of senior notes |
|
— |
|
|
(897,116 |
) |
|
(30,000 |
) |
Proceeds from Bank Credit Facility |
|
— |
|
|
880,000 |
|
|
825,000 |
|
Repayment of Bank Credit Facility |
|
— |
|
|
(1,080,000 |
) |
|
(625,000 |
) |
Deferred financing costs |
|
— |
|
|
(32,872 |
) |
|
(11,775 |
) |
Other deferred payments |
|
(20,539 |
) |
|
(2,389 |
) |
|
(1,545 |
) |
Payments of finance lease |
|
(19,589 |
) |
|
(17,834 |
) |
|
(16,306 |
) |
Purchase of treasury stock |
|
(119,459 |
) |
|
(45,181 |
) |
|
(47,504 |
) |
Employee stock awards tax withholdings |
|
(3,588 |
) |
|
(6,206 |
) |
|
(7,459 |
) |
Distribution to noncontrolling interest |
|
(1,347 |
) |
|
— |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
(164,522 |
) |
|
436,119 |
|
|
85,411 |
|
|
|
|
|
|
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
224,558 |
|
|
78,433 |
|
|
91,854 |
|
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
|||
Balance, beginning of period |
|
214,432 |
|
|
135,999 |
|
|
44,145 |
|
Balance, end of period |
$ |
438,990 |
|
$ |
214,432 |
|
$ |
135,999 |
|
|
|
|
|
|
|
|
|||
Supplemental non-cash transactions: |
|
|
|
|
|
|
|||
Capital expenditures included in accounts payable and accrued liabilities |
$ |
84,721 |
|
$ |
85,550 |
|
$ |
114,972 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
|||
Interest paid, net of amounts capitalized |
$ |
118,037 |
|
$ |
130,841 |
|
$ |
130,313 |
|
TALOS ENERGY INC. |
12 |
333 Clay St., Suite 3300, Houston, TX 77002 |
SUPPLEMENTAL NON-GAAP INFORMATION
Certain financial information included in our financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures which may be reported by other companies. In addition, we believe that non-GAAP measures are a meaningful measure of financial performance that can be used by investors, analysts and management in evaluating the performance of our business and will assist such readers of our financial statements in considering the results of this business in comparative periods.
Reconciliation of General and Administrative Expenses to Adjusted General and Administrative
We believe the presentation of Adjusted General and Administrative Expenses provides management and investors with (i) important supplemental indicators of the operational performance of our business, (ii) additional criteria for evaluating our performance relative to our peers and (iii) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Adjusted General & Administrative Expenses has limitations as an analytical tool and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP or as alternatives to net income (loss), operating income (loss) or any other measure of financial performance presented in accordance with GAAP. We define these as the following:
General and Administrative Expenses. General and Administrative Expenses generally consist of costs incurred for overhead, including payroll and benefits for our corporate staff, costs of maintaining our headquarters, costs of managing our production operations, bad debt expense, equity-based compensation expense, audit and other fees for professional services and legal compliance. A portion of these expenses are allocated based on the percentage of employees dedicated to each operating segment.
($ thousands) |
Three Months Ended December 31, 2025 |
|
Twelve Months Ended December 31, 2025 |
|
||
Reconciliation of General & Administrative Expenses to Adjusted General & Administrative Expenses: |
|
|
|
|
||
Total General and administrative expense |
$ |
39,776 |
|
$ |
155,368 |
|
Transaction expenses |
|
(1,525 |
) |
|
(2,964 |
) |
Non-cash equity-based compensation expense |
|
(4,919 |
) |
|
(18,418 |
) |
Adjusted General & Administrative Expenses |
$ |
33,332 |
|
$ |
133,986 |
|
Reconciliation of Net Income (Loss) attributable to Talos Energy Inc. to EBITDA, Adjusted EBITDA and Adjusted EBITDA attributable to Talos Energy Inc.
“EBITDA,” and “Adjusted EBITDA” provide management and investors with (i) additional information to evaluate, with certain adjustments, items required or permitted in calculating covenant compliance under our debt agreements, (ii) important supplemental indicators of the operational performance of our business, (iii) additional criteria for evaluating our performance relative to our peers and (iv) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. EBITDA and Adjusted EBITDA limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP or as alternatives to net income (loss), operating income (loss) or any other measure of financial performance presented in accordance with GAAP. We define these as the following:
EBITDA. Net income (loss) plus interest expense; income tax expense (benefit); depreciation, depletion and amortization; and accretion expense.
Adjusted EBITDA. EBITDA plus non-cash write-down of oil and natural gas properties, transaction and other (income) expenses, decommissioning obligations, the net change in fair value of derivatives (mark to market effect, net of cash settlements and premiums related to these derivatives), (gain) loss on debt extinguishment, non-cash write-down of other well equipment and non-cash equity-based compensation expense.
Adjusted EBITDA attributable to Talos Energy Inc. Adjusted EBITDA, less adjustments for noncontrolling interest.
Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges. We have historically provided as a supplement to—rather than in lieu of—Adjusted EBITDA including hedges, provides useful information regarding our results of operations and profitability by illustrating the operating results of our oil and natural gas properties without the benefit or detriment, as applicable, of our financial oil and natural gas hedges. By excluding our oil and natural gas hedges, we are able to convey actual operating results using realized market prices during the period, thereby providing analysts and investors with additional information they can use to evaluate the impacts of our hedging strategies over time.
TALOS ENERGY INC. |
13 |
333 Clay St., Suite 3300, Houston, TX 77002 |
The following tables present a reconciliation of the GAAP financial measure of Net Income (loss) attributable to Talos Energy Inc. to EBITDA, Adjusted EBITDA, Adjusted EBITDA attributable to Talos Energy Inc., Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges for each of the periods indicated (in thousands):
|
Three Months Ended |
|
||||||||||
($ thousands) |
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
||||
Reconciliation of Net Income (Loss) attributable to Talos Energy Inc. to Adjusted EBITDA attributable to Talos Energy Inc.: |
|
|
|
|
|
|
|
|
||||
Net Income (loss) attributable to Talos Energy Inc. |
$ |
(202,580 |
) |
$ |
(95,905 |
) |
$ |
(185,937 |
) |
$ |
(9,868 |
) |
Net income (loss) attributable to noncontrolling interest |
|
(1,031 |
) |
|
(3 |
) |
|
— |
|
|
— |
|
Net Income (loss) |
|
(203,611 |
) |
|
(95,908 |
) |
|
(185,937 |
) |
|
(9,868 |
) |
Interest expense |
|
40,796 |
|
|
40,847 |
|
|
40,811 |
|
|
40,927 |
|
Income tax expense (benefit) |
|
(48,448 |
) |
|
(24,204 |
) |
|
(36,426 |
) |
|
(91 |
) |
Depreciation, depletion and amortization |
|
243,222 |
|
|
262,637 |
|
|
269,706 |
|
|
280,716 |
|
Accretion expense |
|
31,592 |
|
|
30,764 |
|
|
32,046 |
|
|
30,894 |
|
EBITDA |
|
63,551 |
|
|
214,136 |
|
|
120,200 |
|
|
342,578 |
|
Impairment of oil and natural gas properties |
|
170,392 |
|
|
60,209 |
|
|
223,881 |
|
|
— |
|
Transaction and other (income) expenses(1) |
|
1,100 |
|
|
9,253 |
|
|
(773 |
) |
|
(4,579 |
) |
Decommissioning obligations(2) |
|
3,010 |
|
|
316 |
|
|
76 |
|
|
(157 |
) |
Derivative fair value (gain) loss(3) |
|
(30,227 |
) |
|
(4,226 |
) |
|
(86,855 |
) |
|
15,853 |
|
Net cash received (paid) on settled derivative instruments(3) |
|
26,384 |
|
|
16,605 |
|
|
33,315 |
|
|
5,167 |
|
Non-cash equity-based compensation expense |
|
4,919 |
|
|
4,955 |
|
|
4,403 |
|
|
4,141 |
|
Adjusted EBITDA |
|
239,129 |
|
|
301,248 |
|
|
294,247 |
|
|
363,003 |
|
Less: adjustment for noncontrolling interest |
|
(1,001 |
) |
|
8 |
|
|
— |
|
|
— |
|
Adjusted EBITDA attributable to Talos Energy Inc. |
|
240,130 |
|
|
301,240 |
|
|
294,247 |
|
|
363,003 |
|
Add: Net cash (received) paid on settled derivative instruments(3) |
|
(26,384 |
) |
|
(16,605 |
) |
|
(33,315 |
) |
|
(5,167 |
) |
Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges |
$ |
213,746 |
|
$ |
284,635 |
|
$ |
260,932 |
|
$ |
357,836 |
|
Production: |
|
|
|
|
|
|
|
|
||||
Boe(4) |
|
8,203 |
|
|
8,757 |
|
|
8,494 |
|
|
9,080 |
|
Adjusted EBITDA attributable to Talos Energy Inc. and Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges margin: |
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA attributable to Talos Energy Inc. per Boe(4) |
$ |
29.27 |
|
$ |
34.40 |
|
$ |
34.64 |
|
$ |
39.98 |
|
Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges per Boe(1)(4) |
$ |
26.06 |
|
$ |
32.50 |
|
$ |
30.72 |
|
$ |
39.41 |
|
TALOS ENERGY INC. |
14 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Reconciliation of Adjusted EBITDA attributable to Talos Energy Inc. to Adjusted Free Cash Flow attributable to Talos Energy Inc. and Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow attributable to Talos Energy Inc.
"Adjusted Free Cash Flow attributable to Talos Energy Inc." before changes in working capital provides management and investors with (i) important supplemental indicators of the operational performance of our business, (ii) additional criteria for evaluating our performance relative to our peers and (iii) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Adjusted Free Cash Flow attributable to Talos Energy Inc. has limitations as an analytical tool and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP or as alternatives to net income (loss), net income (loss) attributable to Talos Energy Inc., operating income (loss) or any other measure of financial performance presented in accordance with GAAP. We define these as the following:
Capital Expenditures and Plugging & Abandonment. Actual capital expenditures and plugging & abandonment recognized in the quarter, inclusive of accruals.
Interest Expense. Actual interest expense per the income statement.
($ thousands) |
Three Months Ended December 31, 2025 |
|
Twelve Months Ended December 31, 2025 |
|
||
Reconciliation of Adjusted EBITDA attributable to Talos Energy Inc. to Adjusted Free Cash Flow attributable to Talos Energy Inc. (before changes in working capital): |
|
|
|
|
||
Adjusted EBITDA attributable to Talos Energy Inc. |
$ |
240,130 |
|
$ |
1,198,620 |
|
Capital expenditures |
|
(147,869 |
) |
|
(494,067 |
) |
Plugging & abandonment |
|
(27,769 |
) |
|
(117,847 |
) |
Decommissioning obligations settled |
|
125 |
|
|
(1,102 |
) |
Investment in Mexico |
|
(2,563 |
) |
|
(4,559 |
) |
Interest expense |
|
(40,796 |
) |
|
(163,381 |
) |
Adjusted Free Cash Flow attributable to Talos Energy Inc. (before changes in working capital) |
|
21,258 |
|
|
417,664 |
|
($ thousands) |
Three Months Ended December 31, 2025 |
|
Twelve Months Ended December 31, 2025 |
|
||
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow attributable to Talos Energy Inc. (before changes in working capital): |
|
|
|
|
||
Net cash provided by operating activities(1) |
$ |
201,780 |
|
$ |
935,826 |
|
(Increase) decrease in operating assets and liabilities |
|
16,827 |
|
|
92,043 |
|
Capital expenditures(2) |
|
(147,869 |
) |
|
(494,067 |
) |
Decommissioning obligations settled |
|
125 |
|
|
(1,102 |
) |
Investment in Mexico |
|
(2,563 |
) |
|
(4,559 |
) |
Transaction and other (income) expenses(3) |
|
1,100 |
|
|
5,001 |
|
Decommissioning obligations(4) |
|
3,010 |
|
|
3,245 |
|
Amortization of deferred financing costs and original issue discount |
|
(1,764 |
) |
|
(8,359 |
) |
Income tax benefit |
|
(48,448 |
) |
|
(109,169 |
) |
Adjustment for noncontrolling interest |
|
1,001 |
|
|
993 |
|
Other adjustments |
|
(1,941 |
) |
|
(2,188 |
) |
Adjusted Free Cash Flow attributable to Talos Energy Inc. (before changes in working capital) |
|
21,258 |
|
|
417,664 |
|
TALOS ENERGY INC. |
15 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Reconciliation of Net Income (Loss) attributable to Talos Energy Inc. to Adjusted Net Income (Loss) attributable to Talos Energy Inc. and Adjusted Earnings per Share
"Adjusted Net Income (Loss) attributable to Talos Energy Inc." and "Adjusted Earnings per Share" are to provide management and investors with (i) important supplemental indicators of the operational performance of our business, (ii) additional criteria for evaluating our performance relative to our peers and (iii) supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Adjusted Net Income (Loss) attributable to Talos Energy Inc. and Adjusted Earnings per Share have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP or as an alternative to net income (loss), net income (loss) attributable to Talos Energy Inc., operating income (loss), earnings per share or any other measure of financial performance presented in accordance with GAAP.
Adjusted Net Income (Loss) attributable to Talos Energy Inc. Net income (loss) attributable to Talos Energy Inc. plus impairment of oil and natural gas properties, transaction related costs, derivative fair value (gain) loss, net cash receipts (payments) on settled derivative instruments, income tax expense (benefit) and non-cash equity-based compensation expense.
Adjusted Earnings per Share. Adjusted Net Income (Loss) attributable to Talos Energy Inc. divided by the number of common shares.
|
Three Months Ended December 31, 2025 |
|
Twelve Months Ended December 31, 2025 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
($ thousands, except per share amounts) |
|
|
Basic per Share |
|
Diluted per Share |
|
|
|
Basic per Share |
|
Diluted per Share |
|
||||||
Reconciliation of Net Income (Loss) attributable to Talos Energy Inc. to Adjusted Net Income (Loss) attributable to Talos Energy Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net Income (loss) attributable to Talos Energy Inc. |
$ |
(203,611 |
) |
$ |
(1.19 |
) |
$ |
(1.19 |
) |
$ |
(494,290 |
) |
$ |
(2.82 |
) |
$ |
(2.82 |
) |
Impairment of oil and natural gas properties |
|
170,392 |
|
$ |
1.00 |
|
$ |
1.00 |
|
|
454,482 |
|
$ |
2.60 |
|
$ |
2.60 |
|
Transaction and other (income) expenses(1) |
|
1,100 |
|
$ |
0.01 |
|
$ |
0.01 |
|
|
5,001 |
|
$ |
0.03 |
|
$ |
0.03 |
|
Decommissioning obligations(2) |
|
3,010 |
|
$ |
0.02 |
|
$ |
0.02 |
|
|
3,245 |
|
$ |
0.02 |
|
$ |
0.02 |
|
Derivative fair value (gain) loss(3) |
|
(30,227 |
) |
$ |
(0.18 |
) |
$ |
(0.18 |
) |
|
(105,455 |
) |
$ |
(0.60 |
) |
$ |
(0.60 |
) |
Net cash received (paid) on settled derivative instruments(3) |
|
26,384 |
|
$ |
0.16 |
|
$ |
0.16 |
|
|
81,471 |
|
$ |
0.47 |
|
$ |
0.47 |
|
Non-cash income tax benefit |
|
(48,448 |
) |
$ |
(0.29 |
) |
$ |
(0.29 |
) |
|
(109,169 |
) |
$ |
(0.62 |
) |
$ |
(0.62 |
) |
Non-cash equity-based compensation expense |
|
4,919 |
|
$ |
0.03 |
|
$ |
0.03 |
|
|
18,418 |
|
$ |
0.11 |
|
$ |
0.11 |
|
Adjusted Net Income (Loss)(4) attributable to Talos Energy Inc. |
$ |
(76,481 |
) |
$ |
(0.44 |
) |
$ |
(0.44 |
) |
$ |
(146,297 |
) |
$ |
(0.84 |
) |
$ |
(0.84 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding at December 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
169,789 |
|
|
|
|
|
|
175,136 |
|
|
|
|
|
||||
Diluted |
|
169,789 |
|
|
|
|
|
|
175,136 |
|
|
|
|
|
||||
TALOS ENERGY INC. |
16 |
333 Clay St., Suite 3300, Houston, TX 77002 |
Reconciliation of Total Debt to Net Debt and Net Debt to LTM Adjusted EBITDA attributable to Talos Energy Inc.
We believe the presentation of Net Debt, LTM Adjusted EBITDA attributable to Talos Energy Inc. and Net Debt to LTM Adjusted EBITDA attributable to Talos Energy Inc. is important to provide management and investors with additional important information to evaluate our business. These measures are widely used by investors and ratings agencies in the valuation, comparison, rating and investment recommendations of companies.
Net Debt. Total Debt principal minus cash and cash equivalents.
Net Debt to LTM Adjusted EBITDA attributable to Talos Energy Inc. Net Debt divided by the LTM Adjusted EBITDA attributable to Talos Energy Inc.
($ thousands) |
December 31, 2025 |
|
|
Reconciliation of Net Debt: |
|
|
|
9.000% Second-Priority Senior Secured Notes |
$ |
625,000 |
|
9.375% Second-Priority Senior Secured Notes |
|
625,000 |
|
Bank Credit Facility – matures March 2027 |
|
— |
|
Total Debt |
|
1,250,000 |
|
Less: Cash and cash equivalents |
|
(362,809 |
) |
Net Debt |
$ |
887,191 |
|
|
|
|
|
Calculation of LTM Adjusted EBITDA attributable to Talos Energy Inc.: |
|
|
|
Adjusted EBITDA for three months period ended March 31, 2025 |
$ |
363,003 |
|
Adjusted EBITDA for three months period ended June 30, 2025 |
|
294,247 |
|
Adjusted EBITDA for three months period ended September 30, 2025 |
|
301,240 |
|
Adjusted EBITDA for three months period ended December 31, 2025 |
|
240,130 |
|
LTM Adjusted EBITDA attributable to Talos Energy Inc. |
$ |
1,198,620 |
|
|
|
|
|
Reconciliation of Net Debt to LTM Adjusted EBITDA attributable to Talos Energy Inc.: |
|
|
|
Net Debt / LTM Adjusted EBITDA attributable to Talos Energy Inc.(1) |
0.7x |
|
|
Reconciliation of PV-10 to Standardized Measure - Proved Reserves
Reconciliation of PV-10 to Standardized Measure PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues. PV-10 is not an estimate of the fair market value of the Company’s properties. Talos and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies and of the potential return on investment related to the companies’ properties without regard to the specific tax characteristics of such entities. PV-10 may be reconciled to the Standardized Measure of discounted future net cash flows at such dates by adding the discounted future income taxes associated with such reserves to the Standardized Measure.
The table below presents the reconciliation of the standardized measure of discounted future net cash flows to PV-10 of our proved reserves:
($ thousands) |
Year Ended December 31, 2025 |
|
|
Standardized measure (1)(2) |
$ |
2,804,857 |
|
Present value of future income taxes discounted at 10% |
|
384,180 |
|
PV-10 (Non-GAAP) |
$ |
3,189,037 |
|
TALOS ENERGY INC. |
17 |
333 Clay St., Suite 3300, Houston, TX 77002 |
FAQ
How did Talos Energy (TALO) perform financially in full-year 2025?
What were Talos Energy’s 2025 production levels and mix?
What is Talos Energy’s liquidity and leverage position at December 31, 2025?
How much stock did Talos Energy repurchase in 2025 and what remains authorized?
What are Talos Energy’s 2026 capital expenditure and production guidance ranges?
What are Talos Energy’s year-end 2025 reserves and PV-10 values?
What operational milestones did Talos Energy highlight for 2025?
Filing Exhibits & Attachments
2 documentsPress Releases
