second quarter 2026
Filed Aug 4, 2026Talos 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.