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]

分组1 - Talos Energy reported a quarterly loss of $0.27 per share, aligning with the Zacks Consensus Estimate, compared to earnings of $0.03 per share a year ago [1] - The company posted revenues of $424.72 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.85%, and down from $549.16 million year-over-year [2] - Talos Energy shares have declined approximately 18.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] 分组2 - The earnings outlook for Talos Energy is mixed, with the current consensus EPS estimate for the coming quarter at -$0.37 on revenues of $415.7 million, and -$0.89 on revenues of $1.8 billion for the current fiscal year [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is in the bottom 27% of over 250 Zacks industries, indicating potential challenges for the sector [8]

[PART I — FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The company reported a $195.8 million net loss for the first half of 2025, driven by a $223.9 million impairment charge, with total assets decreasing to $5.92 billion [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $5.92 billion as of June 30, 2025, from $6.19 billion, while cash and equivalents significantly increased Condensed Consolidated Balance Sheet Highlights (In thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $357,287 | $108,172 | | Total current assets | $870,645 | $659,383 | | Total property and equipment, net | $4,746,835 | $5,215,274 | | **Total assets** | **$5,924,702** | **$6,191,795** | | **Liabilities & Equity** | | | | Total current liabilities | $712,126 | $723,055 | | Long-term debt | $1,223,736 | $1,221,399 | | **Total liabilities** | **$3,405,689** | **$3,432,090** | | **Total stockholders' equity** | **$2,519,013** | **$2,759,705** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss for Q2 2025 was $185.9 million, and $195.8 million for the six months, primarily due to a $223.9 million impairment charge Statement of Operations Summary (In thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $424,721 | $549,165 | $937,780 | $979,097 | | Total operating expenses | $698,313 | $494,795 | $1,167,921 | $856,882 | | Impairment of oil and natural gas properties | $223,881 | $0 | $223,881 | $0 | | Operating income (expense) | ($273,592) | $54,370 | ($230,141) | $122,215 | | **Net income (loss)** | **($185,937)** | **$12,381** | **($195,805)** | **($100,058)** | | **Diluted EPS** | **($1.05)** | **$0.07** | **($1.10)** | **($0.59)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly increased to $619.9 million for H1 2025, while investing activities used $292.3 million Six Months Ended June 30, Cash Flow Summary (In thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $619,878 | $385,790 | | Net cash used in investing activities | ($292,303) | ($1,062,845) | | Net cash provided by (used in) financing activities | ($76,923) | $683,221 | | **Net increase in cash** | **$250,652** | **$6,166** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the $223.9 million impairment, a $20.0 million deferred tax valuation allowance, and a reduced credit facility - The company's Upstream Segment is its only reportable segment following the sale of its Carbon Capture and Sequestration (CCS) business in March 2024[39](index=39&type=chunk)[101](index=101&type=chunk) - A non-cash impairment of **$223.9 million** was recorded for U.S. oil and natural gas properties during Q2 2025 due to the ceiling test, based on SEC pricing of **$70.41/Bbl** for oil and **$3.24/Mcf** for natural gas[57](index=57&type=chunk) - The company recorded a **$20.0 million** valuation allowance against its deferred tax assets in Q2 2025, as it determined it could no longer rely on forecasts of taxable income to support their realizability due to recent losses[85](index=85&type=chunk) - Subsequent to quarter-end, on August 4, 2025, the company's bank credit facility borrowing base and commitments were decreased to **$700.0 million** from **$925.0 million**[75](index=75&type=chunk)[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q2 2025 net loss, driven by a $223.9 million impairment, and outlines an enhanced corporate strategy [Significant Developments](index=25&type=section&id=Significant%20Developments) Recent developments include new well production, a reduced credit facility, strategic acquisitions, and share repurchases - The Sunspear well was shut-in shortly after first production due to a valve failure and is expected to return to production in **October 2025**[123](index=123&type=chunk) - On June 17, 2025, the company announced an enhanced corporate strategy focused on increasing cash flow, high-margin organic growth, and building a scaled U.S. Gulf of Mexico portfolio[126](index=126&type=chunk) - During Q2 2025, the company repurchased **3.8 million** shares for **$32.6 million**, leaving **$145.4 million** available under its share repurchase program[127](index=127&type=chunk) [Known Trends and Uncertainties](index=26&type=section&id=Known%20Trends%20and%20Uncertainties) The company faces risks from volatile commodity prices, inflation, and regulatory changes, including potential for further impairments - The company recorded a **$223.9 million** impairment in Q2 2025; a hypothetical **10%** decrease in commodity prices could result in an additional impairment of approximately **$691.6 million**[144](index=144&type=chunk)[145](index=145&type=chunk) - The EIA forecasts NYMEX WTI spot prices to average **$65.22 per barrel** in 2025 and Henry Hub natural gas prices to average around **$3.70 per MMBtu**[136](index=136&type=chunk)[139](index=139&type=chunk) - Significant uncertainty remains regarding BOEM's financial assurance rule for offshore operations, though revisions may reduce potential bonding requirements[147](index=147&type=chunk)[148](index=148&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q2 2025 revenues decreased to $424.7 million due to lower oil prices, with results dominated by a $223.9 million impairment charge Production and Price Analysis | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total production volume (MBoepd) | 93.3 | 95.5 | (2.2) | | Average Oil Price (per Bbl) | $64.08 | $80.50 | ($16.42) | | Average Natural Gas Price (per Mcf) | $3.34 | $2.59 | $0.75 | | Total revenues ($ thousands) | $424,721 | $549,165 | ($124,444) | - Lease operating expense decreased by **$20.3 million (13%)** in Q2 2025 compared to Q2 2024, mainly due to reduced facility and workover expenses at the Phoenix Field[165](index=165&type=chunk) - General and administrative expense decreased by **$8.8 million (18%)** in Q2 2025, primarily because the prior-year period included **$12.0 million** in transaction and severance costs for the QuarterNorth Acquisition[169](index=169&type=chunk) [Supplemental Non-GAAP Measure](index=33&type=section&id=Supplemental%20Non-GAAP%20Measure) Adjusted EBITDA for Q2 2025 decreased to $294.2 million, while the six-month period saw an increase to $657.3 million Reconciliation of Net Income (Loss) to Adjusted EBITDA (In thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | ($185,937) | $12,381 | ($195,805) | ($100,058) | | EBITDA | $120,200 | $350,203 | $462,778 | $509,603 | | Impairment of oil and natural gas properties | $223,881 | $0 | $223,881 | $0 | | **Adjusted EBITDA** | **$294,247** | **$343,984** | **$657,250** | **$601,660** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was $1.01 billion as of June 30, 2025, with capital expenditures of $282.5 million for the first half - Total available liquidity was **$1,014.5 million** as of June 30, 2025, reflecting cash on hand and availability under the recently redetermined **$700.0 million** borrowing base[189](index=189&type=chunk) Capital Expenditures - Six Months Ended June 30, 2025 (In thousands) | Category | Amount | | :--- | :--- | | U.S. drilling & completions | $192,189 | | Asset management | $16,579 | | Seismic and G&G, land, capitalized G&A and other | $32,867 | | Plugging & abandonment | $38,249 | | **Total** | **$282,508** | - Since March 2023, the company has repurchased **13.5 million** shares for a total of **$147.1 million**, with **$145.4 million** remaining under authorization as of June 30, 2025[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in market risk exposures, including commodity price and interest rate risks, since the 2024 Annual Report - There have been no material changes from the disclosures presented in the 2024 Annual Report regarding the company's exposures to market risks[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal controls - The principal executive officer and principal financial officer concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[206](index=206&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[208](index=208&type=chunk) [PART II — OTHER INFORMATION](index=38&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with no material developments since the 2024 Annual Report - There have been no additional material developments with respect to legal proceedings previously reported in the 2024 Annual Report[211](index=211&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company highlights the risk of future ceiling test impairments, noting the $223.9 million impairment recorded in Q2 2025 - The company emphasizes the risk of future ceiling test impairments, noting that for the three and six months ended June 30, 2025, it recorded an impairment of **$223.9 million**; this risk increases with low or volatile commodity prices[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 3,838,670 shares for an average of $8.48 per share, with $145.4 million remaining for repurchases Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 0 | $0.00 | | May 2025 | 2,040,277 | $8.23 | | June 2025 | 1,798,393 | $8.76 | | **Total** | **3,838,670** | **$8.48** | [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - During Q2 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement[217](index=217&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and corporate agreements

Exhibit 99.1 Talos Energy Announces Second Quarter 2025 Operational and Financial Results Houston, Texas, August 6, 2025 – Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced its operational and financial results for the three months ended June 30, 2025. Talos also provided third quarter 2025 guidance for production and updated its operational and financial guidance for the full year 2025. Second Quarter and Recent Key Highlights "We continued to deliver on our commitments this quarter ...

Core Insights - Talos Energy Inc. reported strong operational and financial results for Q2 2025, exceeding consensus estimates for Adjusted EBITDA and Adjusted Free Cash Flow, while also repurchasing shares and increasing cash reserves [3][6][13]. Financial Performance - Total revenues for Q2 2025 were $424.7 million, down from $549.2 million in Q2 2024 [44]. - The company recorded a net loss of $185.9 million, including a non-cash ceiling test impairment charge of $223.9 million [12][44]. - Adjusted EBITDA for the quarter was $294.2 million, with Adjusted Free Cash Flow of $98.5 million [6][13]. - Capital expenditures for Q2 2025 totaled $126.1 million [19]. Production and Operational Updates - Average daily production for Q2 2025 was 93.3 MBoe/d, with 69% being oil [14][27]. - Talos initiated production from the Katmai West 2 and Sunspear wells, with the latter temporarily shut in due to equipment failure [4][8]. - The company resumed drilling at the Daenerys prospect, with results expected by the end of Q3 2025 [10][27]. Corporate Strategy - Talos has implemented an enhanced corporate strategy focusing on becoming a leading pure-play offshore exploration and production company [5][6]. - The strategy includes a share repurchase program, with management planning to allocate up to 50% of annual free cash flow for this purpose [5][6]. - The company aims to increase annualized cash flow by approximately $100 million in 2026 through capital efficiency and margin enhancement [7]. Guidance and Future Outlook - For Q3 2025, Talos expects average daily production to range from 86.0 to 90.0 MBoe/d [27]. - The full-year 2025 guidance has been revised to reflect average daily production of 91.0 to 95.0 MBoe/d, with lower cash operating expenses and capital expenditures [27][29].