TALOS ENERGY INC. (TALO): Results of Operations and Financial Condition
TALOS ENERGY INC. (TALO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 T alos Energy Announces Second Quarter 2026 Operational and Financial Results Houston, Texas, August 4, 2026 – Talos Energy Inc. (“Talos” or the “Company”) (NYSE: TALO) today announced its operational and financial results for the three months ended June 30, 2026. Ta
How this was made
The 30-second read
Why it matters
The most tradable elements are the raised full-year production guidance midpoint, record cash flow metrics, and the announced Shell deepwater asset acquisition with an expected Q3 close, plus the start of the Daenerys appraisal program with results expected by year-end 2026.
Market read
This is a primary-source earnings and guidance update with concrete numbers and a named acquisition timeline, which can drive near-term repricing and positioning ahead of Q3 closing and year-end appraisal readouts.
What to watch
The filing also includes non-core divestment and debt refinancing details; traders may focus on leverage metrics and ARO reduction, which can matter more than production volumes for valuation.
Talos exceeded its second-quarter production guidance ranges, generated $231.6 million of Adjusted Free Cash Flow, increased full-year 2026 production guidance midpoints, and advanced its Gulf of America acquisition and development program.
Production exceeded guidance ranges, operating cash flow was $300.6 million, Adjusted Free Cash Flow was $231.6 million, and Talos increased the midpoint of full-year 2026 production guidance to 66 MBo/d and 89 MBoe/d.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $664,813 | – | – |
| Net Income (Loss) attributable to Talos Energy Inc.GAAP | $149,667 | – | – |
| Net Income (Loss) attributable to Talos Energy Inc. per diluted shareGAAP | $0.88 | – | – |
| Adjusted Net Income (Loss) attributable to Talos Energy Inc.non-GAAP | $97,777 | – | – |
| Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted sharenon-GAAP | $0.57 | – | – |
| Adjusted EBITDA attributable to Talos Energy Inc.non-GAAP | $402,180 | – | – |
| Adjusted EBITDA attributable to Talos Energy Inc. excluding hedgesnon-GAAP | $476,326 | – | – |
| Net cash provided by operating activitiesGAAP | $300.6 million | – | – |
| Adjusted Free Cash Flownon-GAAP | $231.6 million | – | – |
| Capital Expendituresother | $112,518 | – | – |
| Oil productionother | 68.6 MBbl/d | – | – |
| Natural Gas productionother | 107.7 MMcf/d | – | – |
| NGL productionother | 7.2 MBbl/d | – | – |
| Total average net daily productionother | 93.7 MBoe/d | – | – |
| Oil production mixother | 73% | – | – |
| Liquids production mixother | 81% | – | – |
| Lease Operating ExpensesGAAP | $155,683 | – | – |
| Lease Operating Expenses per BoeGAAP | $18.25 | – | – |
| Adjusted General & Administrative Expensesnon-GAAP | $36,873 | – | – |
| Adjusted General & Administrative Expenses per Boenon-GAAP | $4.32 | – | – |
| Average realized oil price excluding hedgesother | $99.47 | – | – |
| Average realized natural gas price excluding hedgesother | $3.17 | – | – |
| Average realized NGL price excluding hedgesother | $19.85 | – | – |
| Average realized price excluding hedgesother | $77.95 | – | – |
| Average NYMEX WTI priceother | $92.79 | – | – |
| Average NYMEX Henry Hub priceother | $2.87 | – | – |
| Net Debt to LTM Adjusted EBITDAnon-GAAP | 0.5x | – | – |
full-year 2026 outlook
- NoteIncreased midpoint of full-year 2026 production guidance to 66 MBo/d and 89 MBoe/d; excluding the announced Gulf of America bolt-on acquisition and after adjusting for the closed non-core shelf divestment.
- NoteResults from the first Daenerys appraisal well expected by year-end 2026.
- NoteMonument first production is expected by year-end 2026 and to be between 20–30 MBoe/d gross.
- NoteAn initial 3D seismic campaign in offshore Honduras is planned for the second half of 2026.
- NoteThe Gulf of America bolt-on acquisition is expected to close in the third quarter of 2026.
Capital returns
- During the second quarter of 2026, Talos did not repurchase any shares due to the Company's corporate blackout period associated with the previously announced Gulf of America acquisition.
- Since announcing its current return of capital framework in the 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 August 1, 2026, is $200 million.
- Management expects to allocate up to 50% of annual free cash flow to share repurchases.
What drove it
- Oil and total equivalent production exceeded second-quarter guidance ranges, primarily driven by production optimization initiatives, strong base asset performance, high facility uptime, and continued outperformance from the new Cardona well.
- Talos completed the Genovesa workover and returned the well to production late in the quarter, with performance in line with expectations.
- The first Monument development well encountered approximately 250 feet of net pay, confirming pre-drill expectations.
- Talos achieved greater than 65% of the Optimal Performance Plan 2026 target.
- The company closed the non-core shelf divestment of non-operated gas assets on July 15, 2026.
Concerns
- Lease operating expense included approximately $1.75 per Boe associated with one-time well intervention work during the quarter.
- The acquisition of the remaining 35% working interest in offshore Honduras is subject to approval by Honduras's Secretaría de Energía (SEN).
- The credit-facility increase to $850 million is subject to and effective upon closing the Gulf of America bolt-on acquisition.
- Daenerys appraisal-well results are expected by year-end 2026.
- Monument development remains subject to drilling and completion operations before expected first production by year-end 2026.
What to watch
- Closing of the Gulf of America bolt-on acquisition in the third quarter of 2026 and the associated increase in the borrowing base to $850 million.
- Results from the first Daenerys appraisal well by year-end 2026.
- Drilling of the second Monument development well, completion operations on both Monument wells, and expected first production by year-end 2026.
- Approval by Honduras's Secretaría de Energía (SEN) for Talos's acquisition of the remaining 35% working interest.
- Execution against the full-year 2026 production guidance midpoints of 66 MBo/d and 89 MBoe/d.
Balance sheet and cash flow
- $577.6 million of cash as of June 30, 2026.
- An undrawn credit facility as of June 30, 2026.
- Net Debt to Last Twelve Months Adjusted EBITDA of 0.5x as of June 30, 2026.
- Talos issued $800 million of 8.000% notes due 2034 and used proceeds to fully redeem $625 million of 9.000% notes due 2029 and fund a portion of the Gulf of America bolt-on acquisition.
- The borrowing base is expected to increase from the current $700 million to $850 million, subject to and effective upon closing the Gulf of America bolt-on acquisition.
- The July 15, 2026 non-core shelf divestment eliminates approximately $54 million of ARO liabilities and decommissioning obligations.
Analysis
Talos reported $664,813 of total revenues, $149,667 of net income attributable to Talos Energy Inc., and $0.88 of net income per diluted share for the three months ended June 30, 2026. The company also reported $97,777 of adjusted net income, $0.57 of adjusted net income per diluted share, and $402,180 of adjusted EBITDA attributable to Talos Energy Inc. Operating cash flow of $300.6 million and Adjusted Free Cash Flow of $231.6 million were supported by production that exceeded the company’s second-quarter guidance ranges.
Second-quarter production was 93.7 MBoe/d, comprising 68.6 MBbl/d of oil, 107.7 MMcf/d of natural gas, and 7.2 MBbl/d of NGL. Oil represented 73% of production and liquids represented 81%. Management attributed the production outperformance to optimization initiatives, strong base-asset performance, high facility uptime, continued Cardona well outperformance, and the late-quarter return of the Genovesa well after its workover.
Cost and price disclosures show lease operating expenses of $155,683, or $18.25 per Boe, including approximately $1.75 per Boe for one-time well intervention work. Adjusted general and administrative expenses were $36,873, or $4.32 per Boe. Average realized prices excluding hedges were $99.47 for oil, $3.17 for natural gas, $19.85 for NGL, and $77.95 per Boe overall. Talos invested $112,518 of capital expenditures during the quarter.
The balance sheet was supported by $577.6 million of cash, an undrawn credit facility, and Net Debt to LTM Adjusted EBITDA of 0.5x as of June 30, 2026. Talos issued $800 million of 8.000% notes due 2034, fully redeemed $625 million of 9.000% notes due 2029, and is pursuing a borrowing-base increase from the current $700 million to $850 million upon the Gulf of America acquisition closing. The company did not repurchase shares during the quarter, but its remaining authorization was $200 million as of August 1, 2026.
Management increased the midpoint of full-year 2026 production guidance to 66 MBo/d and 89 MBoe/d, excluding the announced Gulf of America bolt-on acquisition and after adjusting for the closed non-core shelf divestment. Key operational catalysts are the Gulf of America acquisition expected to close in the third quarter of 2026, Daenerys appraisal results expected by year-end 2026, and Monument first production expected by year-end 2026 at between 20–30 MBoe/d gross. The filing does not provide the numerical third-quarter production guidance range or the detailed revised full-year guidance table.
Management, verbatim
We exceeded the high end of our production guidance ranges, increased our full-year production outlook and generated record Free Cash Flow.
Paul Goodfellow, President and Chief Executive Officer of Talos
Not in the filing
stated, not guessed- Prior-year and prior-quarter figures and percentage changes for all reported financial, production, cost, and price metrics.
- Gross profit, gross margin, operating income, operating margin, income-tax expense, and tax rate.
- Total debt balance and individual debt balances as of June 30, 2026.
- Cash balance prior-period comparison.
- GAAP free cash flow.
- Dividend amount, if any.
- Numerical third-quarter 2026 production guidance range.
- Detailed revised full-year 2026 guidance figures for capital expenditures, lease operating expenses, general and administrative expenses, realized prices, taxes, revenue, and other operating measures.
- Previous-release outlook needed to assess reported results against prior guidance.
- Revenue by operating segment.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Talos filed an SEC Form 8-K (Item 2.02) with Q2 2026 operational and financial results, third-quarter production guidance, and revised full-year 2026 guidance, alongside multiple portfolio and financing updates.
Ticker impact
Talos reported Q2 2026 operating results and raised full-year 2026 production guidance, plus announced a Shell deepwater asset acquisition expected to close in Q3.
Moderately positive bias for the next few sessions, with follow-through dependent on market focus between raised guidance and acquisition closing timeline.
The filing includes multiple fresh, decision-relevant datapoints: Q2 cash flow and earnings, updated full-year production midpoint, and a specific third-quarter 2026 closing expectation for a named acquisition from Shell.
Market effects
Reinforces offshore E&P capital discipline and deepwater inventory build, potentially supporting sentiment for other US-listed offshore operators with similar deepwater exposure.
May marginally influence Gulf of Mexico deepwater peer sentiment as Talos expands scale and exploration acreage via Mexico and Honduras transactions.
Limited direct global impact, but contributes to the broader narrative of continued deepwater development and appraisal activity.
Counterpoint
Raised guidance and acquisition headlines may already be partially anticipated; the market could discount them if execution risk around closing, appraisal results, or rig timing increases.
Key entities
- public_companyTalos Energy Inc.
US-listed offshore E&P company reporting Q2 2026 results, revised 2026 guidance, and multiple portfolio and financing actions.
- counterpartyShell
Seller of Gulf of America deepwater oil assets to Talos; BP did not exercise a preferential right.
- counterpartyRepsol
Partner in a strategic development farm-in transaction in offshore Mexico Block 29.
- counterpartyCaribX
Holds the remaining 20% working interest in the offshore Honduras block where Talos acquired an 80% operated interest subject to approval.
