Financial Liabilities and Capital Needs - The company has accrued $3.3 million in other current liabilities and $12.3 million in other long-term liabilities related to asset retirement obligations as of December 31, 2023[272]. - The company is dependent on its Bank Credit Facility for future capital needs, which requires compliance with certain debt covenants and financial ratios[262]. - The company may face limitations in accessing debt and equity capital markets due to financial market conditions, which could adversely affect its liquidity[265]. - The company may need to restructure or refinance its debt if it cannot generate sufficient cash flows from operating activities[263]. - The company’s ability to fund capital expenditures is subject to fluctuations in oil and natural gas prices, which could limit its operational capabilities[268]. - The company’s borrowing base under its Bank Credit Facility is redetermined semi-annually based on the evaluation of its proved oil and natural gas reserve values[262]. - The company does not anticipate paying cash dividends on its common stock in the foreseeable future due to its reliance on distributions from Talos Production Inc.[269]. Acquisitions and Mergers - The company plans to grow through targeted acquisitions in the U.S. Gulf of Mexico, with a pending acquisition of QuarterNorth expected to close in Q1 2024[273]. - Following the QuarterNorth Acquisition, existing stockholders will own approximately 86.5% of the combined company, while QuarterNorth's members will own about 13.5%[293]. - The QuarterNorth Acquisition is subject to customary closing conditions, and there is no assurance it will be completed on the currently contemplated terms[294]. - If the QuarterNorth Acquisition is not completed, the company may incur significant costs related to the acquisition, including legal and advisory fees[296]. - The company expects to file a registration statement for the resale of shares issued to QuarterNorth shareholders shortly after the acquisition closes[298]. - The QuarterNorth Merger Agreement imposes restrictions on business activities prior to the acquisition's closing, potentially limiting opportunities[302]. Market and Customer Dependence - For the year ended December 31, 2023, 54% of oil, natural gas, and NGL revenues were attributable to Shell Trading (US) Company, and 21% to Valero Energy Corporation, both representing significant customers[86]. - The market price of the company's common stock may decline due to future sales or perceived sales by existing stockholders[287]. - The Slim Family controls approximately 21.9% of the company's common stock, which may influence corporate decisions and affect other stockholders' interests[289]. - The concentration of voting power held by the Slim Family could discourage potential investors and affect the market price of the company's common stock[291]. - The company may face disruptions in business relationships due to uncertainty surrounding the QuarterNorth Acquisition, impacting operations and cash flows[301]. Regulatory and Compliance Risks - The company is subject to extensive federal, state, and local regulations, which may increase operational costs and impact profitability[96]. - Compliance with new safety and environmental regulations may result in significant costs, including increased capital expenditures[101]. - The Oil Pollution Act imposes strict liability for oil spills, with a current damages liability cap of $167.8 million, which could significantly impact financial results[114]. - The National Environmental Policy Act requires federal agencies to assess environmental impacts, potentially leading to increased costs and delays in project permitting[115]. - The CEQ's recent guidance encourages consideration of GHG emissions in project assessments, which may affect operational costs and project timelines[116]. - The company is subject to various environmental regulations that may lead to increased capital expenditures and operating expenses over time[111]. - The Resource Conservation and Recovery Act (RCRA) may lead to increased costs if certain oil and natural gas drilling wastes are reclassified as hazardous in the future[118]. - The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) imposes liability for hazardous substance releases, which could result in significant cleanup costs for the company[119]. - The Clean Air Act (CAA) may impose stricter permitting requirements and increased expenditures for pollution control equipment due to evolving regulations on air pollutants[120]. - The Occupational Safety and Health Act (OSHA) mandates compliance with worker safety standards, with potential penalties for non-compliance[121]. - The EPA's final rule on methane emissions requires a 95% reduction through capture and control systems, with significant fines for violations[123]. - The Inflation Reduction Act of 2022 increased offshore royalty rates to a range of 16.7% to 18.8% for the next ten years, impacting future profitability[98]. Operational and Environmental Risks - The company’s operations are vulnerable to tropical storms and hurricanes, which can lead to suspended operations and significant damage to infrastructure[102]. - The company has ongoing credit evaluations of its customers and provides allowances for probable credit losses when necessary[86]. - The company maintains general liability insurance with a limit of $500 million for each occurrence and in the aggregate, and Oil Pollution Act insurance up to $150 million[93]. - The company faces significant competition from larger integrated oil and gas companies, which may have more financial resources and better adaptability to industry changes[88]. - The company’s operations are concentrated in the U.S. Gulf of Mexico, exposing it to regional risks that could impact profitability[167]. - The company is vulnerable to public health events, such as pandemics, which could disrupt operations and lead to employee shortages and supply chain interruptions[225]. - The company maintains insurance against some operational risks, but coverage may not be sufficient to protect against all potential liabilities[226]. - The company may experience significant production shut-ins, leading to increased costs and potential decreases in proved reserve estimates[223]. - The company faces risks from hurricanes and adverse weather conditions in the U.S. Gulf of Mexico, which could significantly impact production and revenue[224]. Workforce and Management - The company has grown its workforce from 6 employees in 2012 to approximately 600 employees as of December 31, 2023[141]. - Approximately 320 employees (53%) are engaged in offshore operations, with 7 being Mexican nationals[151]. - The company has implemented a Leadership Development Program, with around 200 employees participating in 2023[153]. - The company ties employee compensation to corporate and individual performance through an Annual Incentive Plan (AIP) and long-term incentive awards[154]. - The company is dependent on key management and technical personnel, and the loss of these individuals could negatively impact operations[238]. Commodity Price Sensitivity - The company’s cash flow is highly dependent on oil and natural gas prices, which have a material impact on its liquidity position[261]. - The company’s revenues, cash flows, and profitability are significantly affected by the volatility of oil and natural gas prices[161]. - The daily NYMEX WTI crude oil price ranged from a low of $47.47 to a high of $123.64 from January 1, 2021, to December 31, 2023[163]. - The NYMEX Henry Hub natural gas price ranged from a low of $1.74 to a high of $23.86 during the same period[163]. - The company may face challenges in maintaining production levels if commodity prices decline significantly[162]. - The company’s ability to replace production and achieve future growth is contingent on finding and acquiring additional reserves at sustainable costs[172]. - Inflationary pressures have caused increases in the costs of goods, services, and personnel, leading to higher capital expenditures and operating costs for the company[183]. - The U.S. Federal Reserve has raised interest rates multiple times in 2022 and 2023, which could increase the cost of capital and negatively affect economic growth, impacting the company's financial results[183]. Geopolitical and Market Risks - Global geopolitical tensions, particularly the ongoing war in Ukraine and conflicts in the Middle East, may lead to heightened volatility in oil and gas prices, adversely impacting the company's business[201][209]. - The company has not experienced material interruptions in infrastructure or supply chains due to the war in Ukraine, but ongoing hostilities could significantly impact the global economy and its operations[207]. - Commodity prices increased during Q1 2022 due to sanctions on Russia, but prices subsequently decreased and remained stagnant in the second half of 2022, indicating potential revenue impacts if sanctions are lifted[208]. - The Biden Administration's actions, including the pause on new oil and gas leases and proposed increases in royalty rates, could adversely affect the offshore oil and gas industry and demand for the company's products[217]. - The upcoming presidential election in Mexico and potential changes in administration could adversely affect economic conditions and the oil and gas industry, impacting the company's financial position[202]. - The company is actively monitoring geopolitical developments and their potential impacts on business partners and customers, indicating a proactive approach to risk management[207]. Carbon Capture and Storage (CCS) Risks - The company faces risks related to its Carbon Capture and Storage (CCS) projects, including regulatory compliance and the availability of federal financial incentives, which are uncertain and could adversely affect operations[185][186]. - The successful development of CCS projects is contingent upon obtaining necessary permits and maintaining financial assurances, with potential regulatory changes posing additional risks[187][189]. - The company may struggle to secure sufficient quantities of CO2 for its CCS projects, which could hinder the execution of its CCS strategy[188]. - The availability of Section 45Q tax credits is critical for the economic viability of CCS projects, and any changes in these credits could materially impact the company's ability to develop such projects[191]. - The Bureau of Ocean Energy Management (BOEM) may impose additional financial assurance requirements, which could adversely affect the company's operations and financial condition[193][196]. - The company has successfully reduced the financial assurance required by BOEM from approximately $70 million to $37.7 million, but future demands could still pose challenges[195]. - New regulations from BOEM could lead to increased costs and operational difficulties, potentially impacting the company's liquidity and capital expenditures[197].

The market expects Talos Energy (TALO) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2023. 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 earnings report, which is expected to be released on February 28, 2024, might help the stock move higher if these key number ...

SAN ANTONIO--(BUSINESS WIRE)--Howard Energy Partners (HEP) announced today that Richard Sherrill has joined the company as division President of Howard Low Carbon Solutions. Sherrill brings more than thirty-five years of senior level leadership experience in the energy sector with the past five years devoted to developing carbon sequestration projects in the Midwest and MidAtlantic regions under the umbrella of his company Clean Aire Partners (CAP). Prior to starting CAP, Sherrill served as the founder a ...

HOUSTON, Jan. 25, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos") (NYSE: TALO) today announced that Talos Production Inc. (the "Company"), a wholly owned subsidiary of Talos, has priced an upsized offering (the "Offering") of $625 million in aggregate principal amount of new 9.000% Second-Priority Senior Secured Notes due 2029 and $625 million in aggregate principal amount of new 9.375% Second-Priority Senior Secured Notes due 2031 (collectively, the "New Notes"). The Company intends to use the net proceed ...

HOUSTON, Jan. 25, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos") (NYSE: TALO) today announced that Talos Production Inc. (the "Company"), a wholly owned subsidiary of Talos, has upsized its previously announced offering (the "Offering") of $1,250 million in aggregate principal amount of new Second-Priority Senior Secured Notes, consisting of Second-Priority Senior Secured Notes due 2029 and Second-Priority Senior Secured Notes due 2031 (collectively, the "New Notes"). The Offering has been upsized from th ...

HOUSTON, Jan. 23, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos") (NYSE: TALO) today announced that Talos Production Inc. (the "Company"), a wholly owned subsidiary of Talos, has commenced an offering (the "Offering") of $1,000 million in aggregate principal amount of new Second-Priority Senior Secured Notes, consisting of Second-Priority Senior Secured Notes due 2029 and Second-Priority Senior Secured Notes due 2031 (collectively, the "New Notes"). The Company intends to use the net proceeds from the Offe ...

HOUSTON, Jan. 17, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced the pricing of its upsized underwritten public offering of 30,000,000 shares of its common stock, for total gross proceeds of approximately $351.0 million. In connection with the offering, the Company also granted the underwriters a 30-day option to purchase up to an additional 4,500,000 shares of its common stock at the public offering price. The offering is expected to close on January 22, 2024 ...

HOUSTON, Jan. 17, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced that it has commenced an underwritten public offering of $300.0 million of shares of its common stock, par value $0.01 per share ("common stock"). The Company expects to grant the underwriters a 30-day option to purchase $45.0 million of additional shares of its common stock. The Company intends to use the net proceeds from this offering to fund a portion of the previously announced acquisition o ...

HOUSTON, Jan. 15, 2024 /PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced the execution of definitive agreements to acquire QuarterNorth Energy Inc. ("QuarterNorth") for $1.29 billion (the "Transaction"). QuarterNorth is a privately-held U.S. Gulf of Mexico exploration and production company with ownership in several prolific offshore fields. QuarterNorth's assets will provide additional scale from high quality deepwater assets with a favorable base decline profile alo ...

Talos Energy Inc. (TALO) has commenced oil and natural gas extraction at its Lime Rock and Venice discoveries located in the Gulf of Mexico.Located near the Ram Powell platform, the wells are exclusively owned and operated by Talos. The company possesses a 60% working interest in both wells.The Lime Rock and Venice wells were commissioned in late December 2023. The initial combined gross production rate of these wells has been noteworthy. It surpassed 18,500 barrels of oil equivalent per day, with productio ...