Talos Energy — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the three months ended September 30, 2026, were $595.99 million, compared to $450.05 million in the same period in 2025.
• Reported Net Loss attributable to Talos Energy Inc. was $81.24 million ($0.49 per diluted share), compared to a Net Loss of $95.91 million ($0.55 per diluted share) in the prior year period.
• Adjusted Net Income attributable to Talos Energy Inc. was $99.32 million ($0.58 per diluted share).
• Adjusted EBITDA attributable to Talos Energy Inc. was $406.07 million, with Adjusted EBITDA excluding hedges at $435.91 million.
• Net cash provided by operating activities was $325.8 million.
• Adjusted Free Cash Flow was $186.3 million.
• Capital expenditures excluding plugging and abandonment totaled $127.9 million; plugging and abandonment expenditures were $49.9 million.
• Lease operating expenses were $140.9 million ($16.74 per Boe).
• Adjusted General and Administrative expenses were $37.8 million ($4.50 per Boe).
• Average realized oil price was $87.19 per barrel, compared to a WTI price of $85.57 per barrel, resulting in a premium of approximately $1.60.
• Average realized natural gas price was $3.73 per Mcf, compared to a Henry Hub price of $2.98 per MMBtu.
• Total debt was $1,425.0 million; Net Debt was $1,014.8 million.
• Net Debt to Last Twelve Months (LTM) Adjusted EBITDA was 0.6x.
• Cash and cash equivalents were $410.2 million, providing total liquidity of approximately $1,076.3 million.

Guidance and Future Outlook:

• Full-year 2026 production guidance was increased to a range of 68 to 70 MBo/d and 92.5 to 94.5 MBoe/d.
• Revised full-year 2026 capital expenditures guidance is $475 million to $525 million.
• Revised full-year 2026 plugging and abandonment guidance is $135 million to $145 million.
• Revised full-year 2026 cash operating expenses and workovers guidance is $580 million to $600 million.
• Revised full-year 2026 G&A guidance is $135 million to $145 million.
• Revised full-year 2026 interest expense guidance is $155 million to $165 million.
• The updated guidance includes the impact of the Gulf of America acquisition, the non-core shelf divestment, and an expected reduction of approximately 7 MBoe/d in fourth-quarter production due to Hurricane Isaias.
• First oil at the Monument development is now expected in the first quarter of 2027, with gross production expected to reach 20–30 MBoe/d.
• First oil from the Brutus development program is expected to be phased from the second quarter through the fourth quarter of 2027.
• Additional appraisal activity at Daenerys is expected in 2027, with an exploration well targeting a nearby prospect expected in late 2027 or early 2028.
• Partners in Offshore Mexico Block 29 expect to progress the project toward Final Investment Decision (FID) in 2027.

Business Segments and Product Lines:

• Third-quarter production averaged 68.5 MBo/d of oil and 91.5 MBoe/d, exceeding guidance.
• Deepwater production accounted for 86.9 MBoe/d (75% oil, 83% liquids, 83% operated).
• Shelf and Gulf Coast production accounted for 4.6 MBoe/d (74% oil, 77% liquids, 92% operated).
• The Company completed the acquisition of deepwater assets from Shell on September 22, 2026, for a final net cash purchase price of $420 million.
• First oil was achieved at the CPN asset in September 2026, with the well performing in line with expectations.
• Drilling operations commenced at Monument #4 in early September.
• The Daenerys appraisal well was drilled to target depth in late August, meeting appraisal objectives.
• The Brutus development program commenced in the third quarter, expanding from four to five wells to include an additional sidetrack opportunity.
• Talos executed definitive agreements to acquire an 80% operated working interest in an offshore Honduras block, closing on a 45% interest and assuming operatorship in October.
• Talos was awarded both leases bid on at the August 2026 BBG3 Lease Sale.
• A farm-in transaction into Block 29 in Offshore Mexico was announced, where Talos will hold a 50% working interest alongside Repsol upon closing.

Market and Competitive Landscape:

• The Company delivered greater than 100% of its $100 million Optimal Performance Plan 2026 target ahead of schedule.
• Premium oil realizations of ~$1.60 above WTI supported peer-leading Adjusted EBITDA margins of ~$52/BOE.
• The Company aims to position itself as the leading pure-play offshore E&P through scale and portfolio depth.

Risks and Challenges:

• Forward-looking statements are subject to risks including commodity price volatility, global demand fluctuations, and OPEC production levels.
• Risks include geopolitical events, such as the war in Iran and conflicts in the Middle East, and their impact on commodity markets.
• Operational risks include adverse weather events (hurricanes, tropical storms), drilling risks, and well control risks.
• Regulatory risks include changes in financial assurance requirements, trade policies, and government regulations.
• Integration risks are associated with the Gulf of America acquisition and the ability to realize anticipated benefits.
• Risks related to foreign operations include changes in applicable laws, regulations, and policies in Mexico and Honduras.
• The Company faces risks regarding the availability of drilling equipment, skilled personnel, and infrastructure.

Management Commentary and Tone:

• Paul Goodfellow, President and CEO, stated the third quarter demonstrated the strength of the business being built, citing the addition of high-quality, oil-weighted assets from the Gulf of America acquisition.
• Management highlighted strong operational execution, disciplined cost management, and consistent financial outcomes.
• The tone emphasized confidence in executing strategy with greater scale, financial flexibility, and a deeper portfolio of development and exploration opportunities.
• Management expressed focus on fully integrating new deepwater assets and advancing development to drive long-term value creation.

Other Key Points:

• The Company repurchased 1.4 million shares for $23.6 million in the third quarter, returning a total of $61.8 million to shareholders through the first three quarters of 2026.
• Since announcing its return of capital framework in Q2 2025, Talos has returned approximately $160 million to shareholders, reducing shares outstanding by approximately 8%.
• The remaining share repurchase authorization as of September 30, 2026, was approximately $176 million.
• The borrowing base under the Bank Credit Facility increased to $850 million in conjunction with the Gulf of America acquisition; the facility remained undrawn as of September 30, 2026.
• The Company issued $800 million in senior notes and redeemed $653.125 million in senior notes during the nine months ended September 30, 2026.
• A 3D seismic campaign commenced in Honduras in October, less than three months after signing the agreements.
• The Company recorded a loss on extinguishment of debt of $37.4 million in the nine-month period.
• Equity method investment income was $6.5 million for the nine months ended September 30, 2026.