The market expects Talos Energy (TALO) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be releas ...

Core Insights - Talos Energy is currently navigating the downturn in the oil cycle, characterized by declining prices and fluctuating demand in Asia, leading to a generally pessimistic market outlook [1] Company Analysis - Despite the challenging market conditions, Talos Energy has managed to maintain its operations and show resilience [1] Investment Strategy - The investment strategy employed focuses on uncovering high-upside opportunities in overlooked sectors, particularly in small-cap, energy, and commodities [1] - The approach is rooted in the CAN SLIM framework, emphasizing fundamental momentum indicators such as EPS, ROE, and revenue, along with price-volume confirmation and macroeconomic filters [1] - Econometric tools like GARCH and Granger causality are utilized to assess risk, volatility, and the influence of macro data on market cycles [1] - The strategy does not rely on a single signal but aims to build conviction through a combination of technicals, fundamentals, and catalysts [1]

Core Insights - The focus of U.S. oil production is shifting from shale oil to offshore projects in the Gulf of Mexico due to technological advancements, maturity of shale reserves, and supportive federal policies [2][3] Industry Trends - The U.S. Energy Information Administration (EIA) predicts that oil production in the Gulf of Mexico will increase from 1.8 million barrels per day to 2.4 million barrels per day by 2027 [2] - The Bureau of Ocean Energy Management (BOEM) supports this forecast, attributing growth to streamlined approval processes, advancements in offshore drilling technology, and renewed investment interest [2] - BP announced a $5 billion investment in the Tiber-Guadalupe project, which is expected to produce approximately 350 million barrels of oil and increase BP's daily production in the U.S. by 80,000 barrels [2] Company Developments - Talos Energy discovered oil and gas resources in the Gulf of Mexico, marking the most significant exploration success since Shell's Whale field discovery in 2017, with peak daily production expected to reach 65,000 barrels [3] - BP aims to increase its daily oil production in the Gulf to 400,000 barrels by 2030 [2] Economic Considerations - Offshore projects, despite higher initial costs, may have a lower breakeven point compared to shale oil, with estimates suggesting breakeven could drop to $20 per barrel for offshore projects versus $48 per barrel for shale [4] - The EIA forecasts Gulf of Mexico oil production to reach 1.89 million barrels per day this year, with a modest increase to 1.96 million barrels per day by 2026 [4] Policy Implications - Analysts believe that if favorable federal policies continue, the growth in offshore oil production could offset declines in onshore production [5] - The previous administration's focus on domestic energy production through regulatory relaxation has boosted offshore drilling activities, but potential changes in governance could impact future developments [5]

Group 1 - Talos Energy Inc. plans to release its third quarter 2025 results on November 5, 2025, after the U.S. financial market closes [1] - A conference call will be held on November 6, 2025, at 10:00 AM Eastern Time to discuss the results [1] - The conference call can be accessed via a webcast link on the company's website or by dialing specific phone numbers for North American and international listeners [2] Group 2 - Talos Energy is an independent energy company focused on maximizing long-term value through its Exploration & Production business in the U.S. Gulf of America and offshore Mexico [3] - The company emphasizes technical expertise, safe operations, environmental responsibility, and community impact in its business model [3]

Core Insights - Talos Energy Inc. announced successful drilling results at the Daenerys exploration prospect in the U.S. Gulf of America [1] - The discovery well reached a total vertical depth of 33,228 feet and encountered oil pay in multiple high-quality, sub-salt Miocene sands [2] - The well was completed approximately 12 days ahead of schedule and $16 million under budget, with plans for an appraisal well underway [2][4] Company Overview - Talos Energy is an independent energy company focused on maximizing long-term value through its Exploration & Production business in the U.S. Gulf of America and offshore Mexico [5] - The company leverages technical and operational expertise to acquire, explore, and produce assets while maintaining a focus on safety, efficiency, and environmental responsibility [5] Ownership Structure - Talos holds a 27% working interest in the Daenerys project, with Shell Offshore Inc. at 22.5%, Red Willow at 22.5%, Houston Energy, L.P. at 10%, Cathexis at 9%, and HEQ II Daenerys, LLC at 9% [3]

Core Viewpoint - Talos Energy Inc. has announced significant additions to its executive leadership team to enhance its offshore leadership position, including the appointment of a new CFO and other key executives [1][6]. Executive Appointments - Zachary B. Dailey has been appointed as Executive Vice President and Chief Financial Officer, effective August 18, 2025, bringing over 17 years of oil and gas experience, previously serving at Marathon Oil [1][2]. - William R. Langin has been appointed as Executive Vice President – Exploration and Development, effective September 29, 2025, with over 20 years of experience in the oil and gas sector, most recently at Hess Corporation [1][4]. - Megan Dick has been promoted to Executive Vice President and Chief Human Resources Officer, having 23 years of experience in human resources, including over 17 years in the oil and gas industry [1][5]. Leadership Transition - Gregory M. Babcock will step down as interim CFO but will continue in his role as Vice President and Chief Accounting Officer, highlighting a smooth transition in leadership [3]. Company Overview - Talos Energy is an independent energy company focused on maximizing long-term value through its Exploration & Production business in the U.S. Gulf of Mexico and offshore Mexico, emphasizing technical expertise and operational efficiency [7].

Company Participants - The conference call included key participants such as Clay P. Jeansonne (VP of Investor Relations), Gregory M. Babcock (VP, Interim CFO & Chief Accounting Officer), and Paul R. A. Goodfellow (President, CEO & Director) [1][3] Conference Call Overview - The Talos Energy Second Quarter 2025 Earnings Conference Call was held on August 7, 2025, and was recorded for future reference [2] - The call was initiated by Clay Jeansonne, who welcomed participants and introduced the key executives present for the discussion [3] Earnings Presentation - A detailed look at the company's results and operations update was provided through a prepared earnings presentation available on Talos' website under the Investor Relations section [4]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $294 million for the second quarter, exceeding consensus estimates [11] - Adjusted free cash flow for the quarter was $99 million, with a netback margin of approximately $35 per barrel of oil equivalent [12] - Capital expenditures (CapEx) for the second quarter were $126 million, with an additional $29 million spent on plugging and abandonment activities [12] - The leverage ratio improved to 0.7 times, and cash balance increased by 75% from the first quarter to $357 million [13][31] Business Line Data and Key Metrics Changes - Second quarter production averaged 93,300 barrels of oil equivalent per day, with oil comprising 69% of total production [11] - The company aims to generate an additional $100 million in free cash flow annually starting in 2026, with $25 million expected in 2025 [7][14] Market Data and Key Metrics Changes - The company is focused on high-margin projects in the Gulf of America and is evaluating opportunities in other deepwater basins [8] - The current hedge portfolio has a mark-to-market value of $56 million as of June 30, providing cash flow stability [30] Company Strategy and Development Direction - The company has outlined a corporate strategy with three pillars: continuous improvement, growth through high-margin projects, and building a portfolio with scale and longevity [7][8] - The focus is on capital discipline, operational excellence, and free cash flow generation to enhance shareholder value [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic resilience of key projects, which are estimated to break even at an average oil price of $35 per barrel [27] - The company is optimistic about the increasing role of offshore and deepwater in meeting global energy needs [33] Other Important Information - The company repurchased 3.8 million shares for $33 million, totaling $100 million in repurchases under the program [13][32] - A non-cash impairment of $224 million was recorded due to historical non-productive capital expenditures [26] Q&A Session Summary Question: Free cash flow priorities with leverage at 0.7 times - Management emphasized a capital discipline framework, balancing investments in the business while maintaining a strong balance sheet and returning cash to shareholders [36][37] Question: Decision to maintain the West Vella rig - The West Vella rig was retained due to its outstanding performance and cost advantages, allowing for efficient execution of projects [40][42] Question: Update on Zama project and potential operatorship - The transaction related to Zama is expected to close by the end of the third quarter, with ongoing collaboration with Pemex to progress the project [46][48] Question: Acquisition targets and market state for deepwater offshore - Management is exploring various opportunities in the Gulf of America and internationally, with a positive outlook for deepwater investments [51][53] Question: Impact of new regulations on organic growth plans - New regulations are seen as positive, with plans to actively participate in upcoming lease sales in the Gulf of Mexico [57][58] Question: Near-term targets for the $100 million savings plan - Focus areas include capital efficiency, commercial opportunities, and supply chain optimization to achieve the savings target [72][74] Question: Cadence of incremental share repurchases - The company plans to continue share repurchases, targeting up to 50% of annual free cash flow, with a quarterly run rate of around $33 million [75][76] Question: Details on the shutdown of Sunspear and Marmalade Greenfield - The Sunspear well was shut in due to a safety valve failure, with repairs planned to be completed within 30 days [82][93]

2Q 2025 Earnings Conference Call & Webcast August 7, 2025 1 www.talosenergy.com NYSE: TALO Cautionary Statements Cautionary Statements The information in this presentation 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 presentation, regarding our strategy, f ...

Core Insights - Talos Energy reported a revenue of $424.72 million for the quarter ended June 2025, marking a year-over-year decline of 22.7% and an EPS of -$0.27 compared to $0.03 a year ago, which indicates a significant downturn in financial performance [1] - The reported revenue fell short of the Zacks Consensus Estimate of $432.71 million, resulting in a surprise of -1.85%, while the EPS aligned with the consensus estimate of -$0.27 [1] Financial Performance Metrics - Talos Energy's shares have returned -11.9% over the past month, contrasting with the Zacks S&P 500 composite's +0.5% change, and the stock currently holds a Zacks Rank 3 (Hold) [3] - Total average net daily production was 93.3 million barrels of oil equivalent per day, slightly exceeding the analyst estimate of 92.96 million barrels [4] - Average realized prices for NGL were $17.23, below the analyst estimate of $17.58, while average net daily production volumes for NGL were 7.7 million barrels, significantly lower than the estimate of 8.97 million barrels [4] - Average realized prices for natural gas were $3.34, compared to the estimate of $3.55, while average net daily production volumes for natural gas were 129.7 million cubic feet, exceeding the estimate of 122.93 million cubic feet [4] - Average realized prices for oil were $64.08, surpassing the estimate of $62.82, with average net daily production volumes for oil at 64 million barrels, slightly above the estimate of 63.95 million barrels [4] - Total production volumes reached 8,494.00 MBOE, slightly above the average estimate of 8,415.32 MBOE [4] - Revenues from oil were $373.2 million, close to the average estimate of $375.88 million, while revenues from NGL and natural gas were $12.11 million and $39.42 million, respectively, compared to estimates of $13.85 million and $38.81 million [4]