Fourth Quarter 2025 Highlights
Produced 64.9 thousand barrels of oil per day ("MBo/d") and 89.2 thousand barrels of oil equivalent per day ("MBoe/d").
Reported net cash provided by operating activities of $201.8 million.
Generated Adjusted Free Cash Flow(1)(2) of $21.3 million.
Repurchased approximately 1.5 million shares for $16.4 million.
Recorded Net Loss(2) of $202.6 million, or $1.19 Net Loss(2) per diluted share which includes $170.4 million of non-cash ceiling test impairment charges, and Adjusted Net Loss(1)(2) of $76.5 million, or $0.44 Adjusted Net Loss per diluted share(1)(2).
Generated Adjusted EBITDA(1)(2) of $240.1 million.
Invested $150.4 million of capital expenditures, excluding plugging and abandonment and settled decommissioning obligations.
Achieved record throughput at the Tarantula Facility of 38 Mboe/d by further debottlenecking efforts.
Drilled and completed the Cardona well under budget and ahead of schedule.
Named apparent high bidder on 11 blocks at the Gulf of America Lease Sale in December 2025.
Full-Year 2025 and Recent Highlights
Produced 65.9 MBo/d and 94.6 MBoe/d.
Reported net cash provided by operating activities of $935.8 million.
Generated Adjusted Free Cash Flow(1)(2) of $417.7 million.
Repurchased approximately 12.6 million shares for $119.1 million.
Recorded Net Loss(2) of $494.3 million, or $2.82 Net Loss(2) per diluted share which includes $454.5 million of non-cash ceiling test impairment charges, and Adjusted Net Loss(1)(2) of $146.3 million, or $0.84 Adjusted Net Loss per diluted share(1)(2).
Generated Adjusted EBITDA(1)(2) of $1,198.6 million.
Invested $498.6 million of capital expenditures, excluding plugging and abandonment and settled decommissioning obligations.
Strengthened balance sheet with $362.8 million of cash, an undrawn credit facility recently extended to 2030, a Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA(1)(2) of 0.7x, as of December 31, 2025.
Achieved zero serious injuries or fatalities (SIF) during 2025.
Developed and launched new strategy to be a leading pure-play offshore E&P.
Delivered $72 million of free cash flow enhancements exceeding the Optimal Performance Plan 2025 year-end goal.
Announced discovery at Daenerys exploration prospect; appraisal well to be drilled later in second quarter of 2026.
Year-end 2025 proved reserves of 174.7 million barrels of oil equivalent ("MMBoe") with a PV-10 value(1) of $3.2 billion.
"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.
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 $170.4 million in the fourth quarter of 2025 under the "ceiling test" of its full cost pool of oil and gas assets. This non-cash charge does not impact cash flows of the Company.
FOURTH QUARTER AND FULL YEAR 2025 RESULTS
Key Financial Highlights:
($ thousands, except per share and per Boe amounts)
Three Months Ended December 31, 2025
Twelve Months Ended December 31, 2025
Total revenues
$
392,237
$
1,780,070
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
$
1,198,620
Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges(1)
$
213,746
$
1,117,149
Capital Expenditures
$
150,432
$
498,626
_______________
(1)
Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
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.
Three Months Ended December 31, 2025
Twelve Months Ended December 31, 2025
Oil (MBbl/d)
64.9
65.9
Natural Gas (MMcf/d)
103.2
126.4
NGL (MBbl/d)
7.1
7.6
Total average net daily (MBoe/d)
89.2
94.6
Three Months Ended December 31, 2025
Production
% Oil
% Liquids
% Operated
Deepwater
80.9
75
%
83
%
80
%
Shelf and Gulf Coast
8.3
52
%
61
%
79
%
Total average net daily (MBoe/d)
89.2
73
%
81
%
80
%
Twelve Months Ended December 31, 2025
Production
% Oil
% Liquids
% Operated
Deepwater
85.1
72
%
80
%
81
%
Shelf and Gulf Coast
9.5
51
%
60
%
76
%
Total average net daily (MBoe/d)
94.6
70
%
78
%
81
%
Three Months Ended December 31, 2025
Twelve Months Ended December 31, 2025
Average realized prices (excluding hedges):
Oil ($/Bbl)
$
58.00
$
64.84
Natural Gas ($/Mcf)
$
3.79
$
3.67
NGL ($/Bbl)
$
15.35
$
18.05
Average realized price ($/Boe)
$
47.82
$
51.55
Average NYMEX prices:
WTI ($/Bbl)
$
59.06
$
65.32
Henry Hub ($/MMBtu)
$
3.55
$
3.44
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
Twelve Months Ended December 31, 2025
Lease Operating Expenses
$
148,222
$
546,716
Lease Operating Expenses per Boe
$
18.07
$
15.83
Adjusted General & Administrative Expenses(1)
$
33,332
$
133,986
Adjusted General & Administrative Expenses per Boe(1)
$
4.06
$
3.88
_______________
(1)
Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
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
Twelve Months Ended December 31, 2025
U.S. drilling & completions
$
123,686
$
394,264
Asset management(1)
7,471
31,991
Seismic and G&G, land, capitalized G&A and other
16,712
67,812
Total Capital Expenditures
147,869
494,067
Investment in Mexico
2,563
4,559
Total
$
150,432
$
498,626
_______________
(1)
Asset management consists of capital expenditures for development-related activities primarily associated with recompletions and improvements to our facilities and infrastructure.
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.
Three Months Ended December 31, 2025
Twelve Months Ended December 31, 2025
Plugging & Abandonment and Decommissioning Obligations Settled(1)
$
27,644
$
118,949
_______________
(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 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.
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.
SEC Reserves as of December 31, 2025
MBoe
% of Total Proved
% Oil
Standardized Measure (in thousands)
PV -10(1)(in thousands)
Proved Developed Producing
102,902
59
%
76
%
$
2,419,008
Proved Developed Non-Producing
33,843
19
%
66
%
438,503
Total Proved Developed
136,745
78
%
74
%
2,857,511
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.
Reserves as of December 31, 2025
MBoe
PV -10(1)(2)(in thousands)
Total Probable
102,477
$
2,266,846
_______________
(1)
PV-10 is a non-GAAP financial measure and differs from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. See "Supplemental Non-GAAP Information" below for additional detail and a reconciliation of PV-10 of our proved reserves to the corresponding standardized measure of discounted future net cash flows at December 31, 2025. PV-10 is presented inclusive of the plugging and abandonment obligations and before hedges. SEC pricing of $65.39 per barrel of oil and $3.39 per MMBtu of natural gas, before differentials.
(2)
Investors should be cautioned that estimates of PV-10 of probable reserves, as well as underlying volumetric estimates, are inherently more uncertain of being recovered and realized than comparable measures for proved reserves. Further, because estimates of probable reserve volumes have not been adjusted for risk due to this uncertainty of recovery, their summation may be of limited use.
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 $130 million. Approximately 40% of total capex is non-operated, largely driven by the Beacon-operated Monument project. Approximately 10% of total capex will be allocated to exploration. Production for 2026 is expected to be in the range from 62 to 66 MBo/d; 85 to 90 MBoe/d.
Production for the first quarter 2026 is estimated to be in the range from 60 to 64 MBo/d; 84 to 88 MBoe/d.
Talos's production guidance takes into account known and anticipated factors, including expected planned downtime. Furthermore, the guidance also considers potential expected but unplanned downtime due to unforeseen risks and weather-related disruptions.
The following summarizes Talos's full-year 2026 operational and production guidance.
FY 2026
($ Millions, unless highlighted):
Low
High
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
_______________
(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 February 20, 2026.
Instrument Type
Avg. Daily Volume
W.A. Swap
W.A. Floor
W.A. Ceiling
Crude, WTI
(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.
INVESTOR RELATIONS CONTACT
Clay Jeansonne[email protected]
Kyle Sahni[email protected]
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 ...
