First Quarter and Recent Key Highlights
Produced 63.8 thousand barrels of oil per day ("MBo/d") and 88.8 thousand barrels of oil equivalent per day ("MBoe/d"); oil production at the high-end and total equivalent production exceeding first quarter guidance ranges.
Reported net cash provided by operating activities of $174.0 million.
Generated Adjusted Free Cash Flow(1)(2) of $113.2 million.
Repurchased approximately 2.7 million shares for $38.2 million or 34% of Adjusted Free Cash Flow(1)(2). Board of Directors approved increase in share repurchase authorization to $200 million.
Recorded Net Loss(2) of $256.2 million, or $1.52 Net Loss(2) per diluted share which includes $145.0 million of non-cash ceiling test impairment charges. Recorded Adjusted Net Loss(1)(2) of $11.3 million, or $0.07 Adjusted Net Loss per diluted share(1)(2).
Generated Adjusted EBITDA(1)(2) of $293.4 million.
Invested $118.9 million of capital expenditures, excluding plugging and abandonment and settled decommissioning obligations.
Strengthened strong balance sheet with $386.4 million of cash, an undrawn credit facility, a Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA(1)(2) of 0.8x, as of March 31, 2026.
Achieved greater than 40% of the Optimal Performance Plan target in 2026; on track to fully achieve goal by year-end 2026.
Initiated first production at Cardona in early first quarter; ahead of expectations.
Finished well completion operations at CPN, with first production expected in third quarter 2026.
Commenced drilling operations at Monument; first oil remains on track by late 2026.
Awarded all 11 leases from the Gulf of America Lease Sale held in December 2025.
Closed previously announced Zama transaction on March 25th.
Reiterated midpoints of full year production and CAPEX guidance; on track to deliver the 2026 plan.
"Amid significant macro volatility, Talos remains firmly focused on executing the 2026 plan that we outlined earlier this year, anchored by our disciplined capital allocation framework," said Paul Goodfellow, President and Chief Executive Officer of Talos. "We delivered strong first quarter results underpinned by comprehensive execution across the business, oil production at the high-end and total equivalent production exceeding guidance, efficient drilling and completion performance, strong free cash generation at a low reinvestment rate, and consistent with our track record we returned capital to shareholders through share repurchases. Over the last four quarters since announcing our return of capital framework, we've executed $135 million of share repurchases driving per share growth through a 7% reduction to our outstanding share count.
Our teams are hitting the ground running in 2026 with comprehensive execution highlighted by delivering Cardona ahead of schedule with the well performing at the high-end of our expectations, CPN drilled and completed under budget and ahead of schedule, and drilling is underway at Monument with first oil on track by late 2026. This level of execution from our D&C program combined with the impressive operational excellence of our deepwater facilities creates strong momentum as we move through the year.
Looking ahead to the rest of 2026, we are excited to return to Daenerys and drill an appraisal well in the second quarter to further inform our understanding of the discovered resource. While the macro environment is sure to remain volatile, Talos is well positioned to execute on our strategic priorities while staying guided by our disciplined capital allocation framework."
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 first quarter, oil production came in at the high-end and total equivalent production exceeded first quarter guidance ranges largely driven by the Cardona well producing at the high-end of expectations along with continued strong base performance and facility uptime.
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 an entity managed by Ridgewood holds a 35% W.I.
CPN: The Company successfully drilled the CPN well and finished well completion operations in the first quarter of 2026. CPN was delivered under budget and ahead of schedule, with first production from the well expected in the third quarter of 2026. Talos, as operator, holds 65% W.I., Walter Oil and Gas Corp. holds a 25% W.I., and Houston Energy, L.P. holds a 10% W.I.
Monument: Drilling operations have commenced with continuous drilling and completion activities planned throughout 2026. First production is expected between 20–30 MBoe/d gross and remains on track by late 2026. Monument is a large Wilcox oil discovery in Walker Ridge blocks 271, 272, 315, and 316. Monument is being developed as a subsea tie-back to the Shenandoah production facility in Walker Ridge with committed firm capacity of 20 MBbl/d. There is a prospective drilling location that could extend the resource beyond the base development case. Beacon Offshore Energy LLC as operator, holds a 41.7% W.I., Talos holds 29.7% W.I. and Navitas Petroleum LP holds a 28.6% W.I.
Zama: In March 2026, Talos closed the sale of a 30.1% interest in Talos Mexico to Zamajal, S.A. de C.V. , a subsidiary of Grupo Carso, S.A.B. de C.V., for $83 million, $50 million of which was received at closing, with the remaining due upon the achievement of commercial production from the Zama Field. Talos expects to receive approximately $83 million of additional cash contingent consideration upon achievement of commercial production. Of this amount, approximately $50 million is associated with the original Talos Mexico equity sale that closed in September 2023 and the remainder is associated with the March 2026 sale.
Exploration and Appraisal Update:
Daenerys: Talos anticipates drilling operations commencing on the Daenerys appraisal well late in the second quarter 2026 to further define the discovered resource. 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 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 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. During the first quarter, Talos was successfully awarded all 11 leases. The new leases bring eight new development and exploration prospects into the Company's portfolio.
Share Repurchase Program:
In the first quarter of 2026, Talos repurchased 2.7 million shares for $38.2 million or 34% of Adjusted Free Cash Flow. Since announcing its current return of capital framework in second quarter 2025, Talos has returned approximately $135 million to shareholders through share repurchases resulting in a reduction to outstanding share count by approximately 7%.
The Company's Board of Directors recently authorized an increase in total share repurchase authorization back up to $200 million. The remaining share repurchase authorization as of May 1, 2026, is $200 million. Under Talos's capital allocation framework, management expects to allocate up to 50% of annual free cash flow to share repurchases. The timing and amount of any repurchases under the Company's share repurchase program will depend on market conditions, share price, legal requirements, and other factors, and may be made from time to time in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
Credit Facility Update:
In 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 where the ceiling test impairment is calculated each quarter utilizing 12-month trailing commodity prices. Driven by lower average oil prices, the Company recorded a non-cash impairment charge of $145.0 million in the first quarter of 2026 under the "ceiling test" of its full cost pool of oil and gas assets. This non-cash charge will have no impact on cash flows of the Company.
FIRST QUARTER 2026 RESULTS
Key Financial Highlights:
($ thousands, except per share and per Boe amounts)
Three Months EndedMarch 31, 2026
Total revenues
$
472,310
Net Income (Loss) attributable to Talos Energy Inc.
$
(256,165)
Net Income (Loss) attributable to Talos Energy Inc. per diluted share
$
(1.52)
Adjusted Net Income (Loss)(1) attributable to Talos Energy Inc.
$
(11,259)
Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted share(1)
$
(0.07)
Adjusted EBITDA attributable to Talos Energy Inc.(1)
$
293,207
Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges(1)
$
315,677
Capital Expenditures
$
118,946
(1)
Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
Production
Production for the first quarter 2026 was 88.8 MBoe/d (72% oil, 80% liquids).
Three Months EndedMarch 31, 2026
Oil (MBbl/d)
63.8
Natural Gas (MMcf/d)
107.7
NGL (MBbl/d)
7.1
Total average net daily (MBoe/d)
88.8
Three Months Ended March 31, 2026
Production
% Oil
% Liquids
% Operated
Deepwater
80.7
74
%
82
%
82
%
Shelf and Gulf Coast
8.1
51
%
60
%
79
%
Total average net daily (MBoe/d)
88.8
72
%
80
%
82
%
Three Months EndedMarch 31, 2026
Average realized prices (excluding hedges):
Oil ($/Bbl)
$
71.08
Natural Gas ($/Mcf)
$
5.46
NGL ($/Bbl)
$
17.85
Average realized price ($/Boe)
$
59.08
Average NYMEX prices:
WTI ($/Bbl)
$
72.59
Henry Hub ($/MMBtu)
$
5.04
Lease Operating & General and Administrative Expenses
Total lease operating expenses for the first quarter 2026, including workover, maintenance and insurance costs, were $129.0 million, or $16.14 per Boe.
Adjusted General and Administrative expenses for the first quarter 2026, adjusted to exclude one-time transaction-related costs, and non-cash equity-based compensation, were $34.0 million, or $4.25 per Boe.
($ thousands, except per Boe amounts)
Three Months EndedMarch 31, 2026
Lease Operating Expenses
$
129,035
Lease Operating Expenses per Boe
$
16.14
Adjusted General & Administrative Expenses(1)
$
34,012
Adjusted General & Administrative Expenses per Boe(1)
$
4.25
(1)
Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
Capital Expenditures
Capital expenditures for the first quarter 2026, excluding plugging and abandonment and settled decommissioning obligations, totaled $118.9 million.
($ thousands)
Three Months EndedMarch 31, 2026
U.S. drilling & completions
$
68,925
Asset management(1)
16,051
Seismic and G&G, land, capitalized G&A and other
33,970
Total Capital Expenditures
$
118,946
(1)
Asset management consists of capital expenditures for development-related activities primarily associated with recompletions and improvements to our facilities and infrastructure.
Plugging & Abandonment Expenditures
Capital expenditures for plugging and abandonment and settled decommissioning obligations for the first quarter 2026 totaled $21.9 million.
Three Months EndedMarch 31, 2026
Plugging & Abandonment and Decommissioning Obligations Settled(1)
$
21,928
(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 March 31, 2026, Talos had a borrowing base of $700.0 million under its Bank Credit Facility with approximately $97.4 million in outstanding letters of credit. Letters of credit that are outstanding reduce the available revolving credit commitments. Cash was $386.4 million, providing Talos approximately $989.0 million of liquidity at quarter end. On March 31, 2026, Talos had $1,250.0 million in total debt. Net Debt(1) was $863.6 million, Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA attributable to Talos Energy Inc.(1) was 0.8x.
Footnotes:
(1)
Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures.
OPERATIONAL & FINANCIAL GUIDANCE UPDATES
For the second quarter 2026, Talos expects production to be in the range from 63 to 67 MBo/d; 88 to 92 MBoe/d.
Talos reiterates its full year 2026 operational and financial guidance and expects production to range from 62 to 66 MBo/d; 85 to 90 MBoe/d.
The following summarizes Talos's full-year 2026 operational and production guidance.
FY 2026
($ 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 May 1, 2026.
Instrument Type
Avg. DailyVolume
W.A. Swap
W.A. Floor
W.A. Ceiling
Crude, WTI
(Bbls)
(Per Bbl)
(Per Bbl)
(Per Bbl)
April - June 2026
Fixed Swaps
19,000
$
66.90
---
---
Collar
19,000
---
$
62.37
$
77.45
July - September 2026
Fixed Swaps
3,685
$
67.77
---
---
Collar
19,674
---
$
61.11
$
73.64
October - December 2026
Fixed Swaps
4,000
$
62.50
---
---
Collar
20,978
---
$
60.72
$
72.07
January - March 2027
Fixed Swaps
4,000
$
73.75
---
---
Collar
19,000
---
$
60.26
$
75.67
April - June 2027
Fixed Swaps
4,000
$
73.75
---
---
Collar
9,000
---
$
66.11
$
78.89
Natural Gas, HH NYMEX
(MMBtu)
(Per MMBtu)
(Per MMBtu)
(Per MMBtu)
April - June 2026
Fixed Swaps
45,055
$
3.58
---
---
July - September 2026
Fixed Swaps
26,739
$
3.48
---
---
October - December 2026
Fixed Swaps
29,946
$
3.78
---
---
January - March 2027
Collar
35,000
---
$
3.51
$
5.00
CONFERENCE CALL AND WEBCAST INFORMATION Talos will host a conference call, broadcast live over the internet, on Wednesday, May 6, 2026, at 10:00 AM Eastern Time (9:00 AM Central Time). Listeners can access the conference call through a webcast link on the Company's website at: Talos First Quarter 2026 Webcast. Alternatively, the conference call can be accessed by dialing (800) 836-8184 (North American toll-free) or (646) 357-8785 (international). Please dial in approximately 15 minutes before the teleconference is scheduled to begin and ask to be joined into the Talos Energy call. A replay of the call will be available one hour after the conclusion of the conference until May 13, 2026 and can be accessed by dialing (888) 660-6345 and using access code 27677#. For more information, please refer to the First Quarter 2026 Earnings Presentation available under Presentations and Webcasts on the Investor Relations section of Talos's website.
ABOUT TALOS ENERGY
Talos Energy (NYSE:TALO) is a technically driven, innovative, independent energy company focused on safely maximizing long-term value through its Exploration & Production business in the United States Gulf of America and offshore Mexico. We leverage decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while maintaining a focus on safe and efficient operations, environmental responsibility, and community impact. For more information, visit www.talosenergy.com.
INVESTOR RELATIONS CONTACT
Kyle Sahni[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 to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. These forward-looking statements are based on our current beliefs, based on currently available information, as to the outcome and timing of future events. Forward-looking statements may include statements about: business strategy; estimated, potential or recoverable resources and reserves; drilling prospects, inventories, projects and programs; our ability to replace the reserves that we ...
