TALO 8-K
Talos Energy Inc. (TALO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry Into a Material Definitive Agreement. |
On July 22, 2026, contemporaneously with entry into the Farm-Out Agreement (as defined below), Talos Energy Inc., a Delaware corporation (“Talos”), Talos Production Inc., a Delaware corporation and a wholly owned subsidiary of Talos (“Talos Production”), and certain other direct and indirect subsidiaries of Talos and Talos Production entered into the Second Amendment to the Amended and Restated Credit Agreement (the “Second Amendment,” and the Amended and Restated Credit Agreement, as amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”). Effective upon the consummation of the transactions in connection with the Block 29 Project (as defined below), the Second Amendment, among other things, (i) increases the capacity of restricted foreign subsidiaries to incur up to $350 million of project financing indebtedness to finance assets in Mexico by $50 million (all of which indebtedness is excluded from the calculation of Consolidated Total Debt (as defined in the Credit Agreement)), provided that such incremental $50 million of indebtedness is incurred by the Block 29 Entity (as defined in the Credit Agreement) and is non-recourse to Talos, Talos Production and the other restricted subsidiaries, and (ii) increases the maximum Consolidated Total Debt to EBITDAX Ratio (as defined in the Credit Agreement) for making investments without regard to Available Free Cash Flow (as defined in the Credit Agreement) from 1.25 to 1.50, but solely with respect to investments in the Block 29 Entity prior to December 31, 2027 to finance the development, construction, expansion or improvement of the Block 29 Project.
The foregoing description of the Second Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Second Amendment, a copy of which is filed herewith as Exhibit 10.1 to this Current Report and incorporated into this Item 1.01 by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
| Item 7.01. | Regulation FD Disclosure. |
On July 27, 2026, Talos issued a press release regarding the entry into a farm-out agreement (the “Farm-Out Agreement”) by a wholly owned subsidiary of Talos with Repsol Exploración México S.A. de C.V. (“Repsol”) pursuant to which such subsidiary has agreed to acquire a 50% participating interest in Block 29 offshore Mexico (the “Block 29 Project”), operated by Repsol. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information furnished in this Current Report pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference in any filing of Talos under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. |
Description | |
| 10.1 | Second Amendment to Amended and Restated Credit Agreement, dated as of July 22, 2026, by and among Talos Energy Inc., Talos Production Inc., each other Credit Party, JPMorgan Chase Bank, N.A., as Administrative Agent, and each Lender party thereto. | |
| 99.1 | Press Release, dated July 27, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document) | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 27, 2026 | ||||||
| TALOS ENERGY INC. | ||||||
| By: | /s/ William S. Moss III | |||||
| Name: | William S. Moss III | |||||
| Title: | Executive Vice President, General Counsel and Secretary | |||||
Exhibit 10.1
Execution Version
SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of July 22, 2026 is among TALOS ENERGY INC., a Delaware corporation (“Holdings”), TALOS PRODUCTION INC., a Delaware corporation and a wholly owned Subsidiary of Holdings (the “Borrower”), each other Credit Party, JPMORGAN CHASE BANK, N.A., as the Administrative Agent (the “Administrative Agent”), and each Lender party hereto.
WITNESSETH:
WHEREAS, reference is made to that certain Amended and Restated Credit Agreement, dated as of January 20, 2026, among Holdings, the Borrower, the Administrative Agent, the Issuing Banks, the Lenders party thereto, and the other Persons from time to time party thereto (as amended by that certain Borrowing Base Redetermination Agreement, Incremental Agreement, and First Amendment to Amended and Restated Credit Agreement dated as of June 30, 2026, and as otherwise amended, supplemented, waived or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”; and the Existing Credit Agreement, as amended and extended hereby upon the occurrence of the Amendment Effective Date and the occurrence (but only if it shall occur) of the Block 29 Implementation Date, the “Credit Agreement”); and
WHEREAS, the Borrower has informed the Administrative Agent, the Issuing Banks and the Lenders that Repsol Exploración México, S.A. de C.V., as seller (“Repsol”), and Phoenix-Durango Offshore Company, S. de R.L. de C.V., an indirect Restricted Foreign Subsidiary of the Borrower (“Phoenix-Durango”), have entered into a certain Farm-Out Agreement executed on July 22, 2026 (the “Repsol Farm-Out Agreement”) pursuant to which Phoenix-Durango will acquire a 50% participating interest in the Block 29 project in the Salina Basin (the “Block 29 Project”); and
WHEREAS, each of Holdings and the Borrower desires to amend the Existing Credit Agreement on the terms and subject to the conditions set forth herein; and
WHEREAS, Section 13.1 of the Existing Credit Agreement provides that Holdings, the Borrower, the Issuing Banks and the Majority Lenders may amend the Existing Credit Agreement and the other Credit Documents in accordance with the provisions thereof;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1. Definitions. Unless otherwise defined in this Amendment, each capitalized term used in this Amendment has the meaning assigned to such term in the Existing Credit Agreement.
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SECTION 2. Representations and Warranties, Etc. To induce the Administrative Agent, the Lenders and Issuing Banks to enter into this Amendment, the Borrower and Holdings represent and warrant to the Administrative Agent, the Issuing Banks and the Lenders that on and as of the Amendment Effective Date:
(a) each representation and warranty made by any Credit Party contained in the Existing Credit Agreement or in the other Credit Documents is true and correct in all material respects (except for representations and warranties that are qualified by a materiality qualifier, which shall be true and correct in all respects) with the same effect as though such representations and warranties had been made on and as of the Amendment Effective Date, except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (except for representations and warranties that are qualified by a materiality qualifier, which shall be true and correct in all respects) as of such earlier date;
(b) each Credit Party executing this Amendment has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of this Amendment and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Amendment;
(c) the Existing Credit Agreement and each other Credit Document constitutes the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law); and
(d) no Default, Event of Default or Borrowing Base Deficiency exists under the Existing Credit Agreement or any of the other Credit Documents.
SECTION 3. Ratification; Reaffirmation of Security Documents.
(a) Each of Holdings, the Borrower and each other Credit Party hereby ratifies and confirms, on and as of the Amendment Effective Date, (i) the covenants and agreements contained in each Credit Document to which it is a party, including, in each case, as such covenants and agreements may be modified by this Amendment and the transactions contemplated thereby and (ii) all of the Obligations under the Existing Credit Agreement and the other Credit Documents.
(b) Each of Holdings, the Borrower and each other Credit Party (i) reaffirms the terms of and its obligations (and the security interests granted by it) under each Security Document, and agrees that each such Security Document will continue in full force and effect to secure the Obligations as the same may be amended, supplemented, or otherwise modified from time to time and (ii) acknowledges, represents, warrants and agrees that the Liens and security interests granted by it pursuant to the Security Documents are valid and subsisting and create a security interest to secure the Obligations.
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SECTION 4. Effectiveness. This Amendment shall become effective (the “Amendment Effective Date”) upon (i) receipt by the Administrative Agent of executed counterparts of this Amendment from Holdings, the Borrower, each other Credit Party, the Administrative Agent, and the Majority Lenders, and (ii) the execution of the Repsol Farm-Out Agreement.
SECTION 5. Block 29 Implementation Date. The agreements set forth in Section 6 of this Amendment shall become effective on the date on which the transactions in connection with the Block 29 Project have been consummated, or concurrently with the Block 29 Implementation Date (including after giving effect to the application of the proceeds of any Borrowings to be made on the Block 29 Implementation Date, if any), will be consummated, in all material respects in accordance with the terms of the Repsol Farm-Out Agreement, without giving effect to any modification, consent or waiver thereto that is materially adverse to the interests of the Administrative Agent, the Collateral Agent, the Lenders or the Issuing Banks (each, in their capacities as such) without the consent of each of the Administrative Agent, the Collateral Agent, the Lenders and the Issuing Banks (such date, the “Block 29 Implementation Date”).
The Administrative Agent shall notify the Borrower and the Lenders of the Block 29 Implementation Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the Block 29 Implementation Date shall not occur unless the foregoing condition is satisfied (or waived) on or before the date that is twelve (12) months following the Amendment Effective Date (and, in the event the condition is not so satisfied or waived, the agreements set forth in Section 6 of this Amendment shall be null and void).
SECTION 6. Amendments to Existing Credit Agreement. If the Block 29 Implementation Date occurs, then on the Block 29 Implementation Date, the Existing Credit Agreement shall be, and is hereby, amended as follows:
(a) Section 1.1 is hereby amended by inserting the following defined terms where alphabetically appropriate:
“Block 29 Entity” shall mean Phoenix-Durango Offshore Company, S. de R.L. de C.V., an indirect Restricted Foreign Subsidiary of the Borrower.
“Block 29 Project” shall mean the exploration, appraisal, development and production of contractual area #AP-CS-G10 (Block 29) located in the Salina Basin.
“Non-Recourse” shall mean, with respect to the Indebtedness of any Restricted Foreign Subsidiary to finance the acquisition, development, construction, expansion, or improvement of the assets or properties relating to the Borrower’s and its Restricted Subsidiaries operations in the United Mexican States:
(a) none of Holdings, the Borrower or any other Restricted Subsidiary guarantees or is otherwise liable in respect of, grants a Lien on any of its assets to secure, or provides credit support of any kind, for the Indebtedness of such Restricted Foreign Subsidiary other than a pledge of the Equity Interests in such Restricted Foreign Subsidiary to secure such Indebtedness of such Restricted Foreign Subsidiary or to secure equity contribution obligations (provided that no such equity contribution obligation shall otherwise be recourse to any of Holdings, the Borrower or any other Restricted Subsidiary), and
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(b) no default on the Indebtedness of such Restricted Foreign Subsidiary (including any rights that the holders of the Indebtedness may have to take enforcement action against such Restricted Foreign Subsidiary) would permit upon notice, lapse of time or both any holder of Indebtedness of Holdings, the Borrower or any of its other Restricted Subsidiaries to declare a default on such Indebtedness of Holdings, the Borrower or any of its other Restricted Subsidiaries or cause the payment of such Indebtedness of Holdings, the Borrower or any of its other Restricted Subsidiaries to be accelerated or payable prior to its stated maturity.
(b) Clause (a) of the definition of “Consolidated Total Debt” in Section 1.1 is hereby amended and restated to provide as follows:
“(a) the sum of (without duplication) all Indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of Capital Lease Obligations, Indebtedness for borrowed money, Disqualified Stock and any earn-outs (if such earn-outs constitute liabilities on the balance sheet of such Person in accordance with GAAP) of the Borrower and the Restricted Subsidiaries on such date determined on a consolidated basis in accordance with GAAP; provided that any Indebtedness of a Restricted Foreign Subsidiary to finance the acquisition, development, construction, expansion or improvement of the assets or properties relating to the Borrower’s and its Restricted Subsidiaries operations in the United Mexican States shall be excluded for purposes of this clause (a) so long as such Indebtedness is Non-Recourse, minus”
(c) The proviso of Section 10.1(f) is hereby amended by (i) adding a comma after “Indebtedness” and deleting “and” at the end of clause (A) and (ii) inserting immediately after clause (B) and before the semicolon, “and (C) for the avoidance of doubt, no Indebtedness that is Non-Recourse Indebtedness shall be guaranteed”.
(d) The last paragraph of Section 10.1 is hereby amended and restated, in its entirety, to read in full as follows:
“Notwithstanding any other provision of this Section 10.1, the maximum aggregate principal amount of outstanding Indebtedness created, incurred, assumed or suffered to exist by Restricted Subsidiaries that are not Subsidiary Guarantors permitted by this Section 10.1 shall not exceed $50.0 million at any time outstanding; provided, however, that with respect to any Restricted Foreign Subsidiary that is a special purpose vehicle established to finance a project for the acquisition, development, construction, expansion or improvement of the assets or properties relating to the Borrower’s and its Restricted Subsidiaries operations in the United Mexican States, the aggregate outstanding principal amount of outstanding Indebtedness permitted by Section 10.1(h) shall not at any time exceed the sum of (x) $350.0 million, plus (y) so long as such Indebtedness is Non-Recourse, $50.0 million of Indebtedness of the Block 29 Entity.”
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(e) Section 10.5(i) is hereby amended and restated, in its entirety, to read in full as follows:
“(i) Investments (including but not limited to (i) Minority Investments and Investments in Unrestricted Subsidiaries, (ii) Investments in joint ventures (regardless of the form of legal entity) or similar Persons that do not constitute Restricted Subsidiaries, (iii) Investments in Subsidiaries that are not Credit Parties and (iv) Investments in respect of royalty trusts and master limited partnerships), in each case, valued at the Fair Market Value (determined by the Borrower acting in good faith) of such Investment at the time each such Investment is made; provided that, in each case, after giving pro forma effect to the making of any such Investment, (1) no Default or Event of Default shall have occurred and be continuing, (2) the Borrower shall have Available Commitments of not less than 25% of the then effective Loan Limit (on a pro forma basis after giving effect to such Investment), (3) the Borrower is in compliance on a Pro Forma Basis with the Current Ratio, and (4) as applicable (A) as of the most recently ended fiscal quarter for which Section 9.1 Financials are available after giving pro forma effect to any such Investment, the Consolidated Total Debt to EBITDAX Ratio is not greater than 1.75 to 1.00 and the aggregate amount of such Investments shall not exceed the Available Free Cash Flow Amount at the time made, or (B) as of the most recently ended fiscal quarter for which Section 9.1 Financials are available after giving pro forma effect to any such Investment, the Consolidated Total Debt to EBITDAX Ratio is not greater than 1.25 to 1.00 (in which case, any such Investment shall be permitted without regard to the Available Free Cash Flow Amount at the time made) or (C) with respect to any Investment made in the Block 29 Entity or Block 29 Project prior to December 31, 2027, to finance the development, construction, expansion or improvement of the Block 29 Project, as of the most recently ended fiscal quarter for which Section 9.1 Financials are available after giving pro forma effect to any such Investment, the Consolidated Total Debt to EBITDAX Ratio is not greater than 1.50 to 1.00 (in which case, any such Investment shall be permitted without regard to the Available Free Cash Flow Amount at the time made); further provided that intercompany current liabilities incurred in the ordinary course of business and consistent with past practices, in connection with the cash management operations of the Borrower and the Subsidiaries shall not be included in calculating any limitations in this paragraph at any time and;”
SECTION 7. Counterparts. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by facsimile or other electronic transmission, i.e. a “pdf” or a “tif”), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Amendment signed by all the parties shall be lodged with the Borrower and the Administrative Agent.
SECTION 8. Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
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SECTION 9. Integration. This Amendment and the other Credit Documents represent the agreement of the Borrower, the Guarantors, the Collateral Agent, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Borrower, the Guarantors, the Collateral Agent, the Administrative Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.
SECTION 10. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 11. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted under the Existing Credit Agreement and the Credit Agreement, as applicable (including any Affiliate of each Issuing Bank that issues any Letter of Credit).
SECTION 12. Miscellaneous. (a) On and after the later of (i) the Amendment Effective Date and (ii) the Block 29 Implementation Date, each reference in each Credit Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended, waived or otherwise modified by Section 6 of this Amendment, and (b) this Amendment is a Credit Document executed pursuant to the Existing Credit Agreement and the Credit Agreement, as applicable, and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Existing Credit Agreement and the Credit Agreement, as applicable.
(Remainder of Page Left Intentionally Blank)
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the Amendment Effective Date.
| TALOS ENERGY INC., | ||
| as Holdings | ||
| By: | /s/ Zachary B. Dailey | |
| Name: Zachary B. Dailey | ||
| Title: Executive Vice President and Chief Financial Officer | ||
| TALOS PRODUCTION INC., | ||
| as the Borrower | ||
| By: | /s/ Zachary B. Dailey | |
| Name: Zachary B. Dailey | ||
| Title: Executive Vice President and Chief Financial Officer | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| CKB PETROLEUM, LLC, | ||
| STONE ENERGY HOLDING, L.L.C., | ||
| TALOS ENERGY HOLDINGS LLC, | ||
| TALOS ENERGY INTERNATIONAL LLC, | ||
| TALOS ENERGY LLC, | ||
| TALOS ENERGY OFFSHORE LLC, | ||
| TALOS ENERGY OPERATING COMPANY LLC, | ||
| TALOS ENERGY PHOENIX LLC, | ||
| TALOS ERT LLC, | ||
| TALOS EXPLORATION LLC, | ||
| TALOS GULF COAST LLC, | ||
| TALOS GULF COAST OFFSHORE LLC, | ||
| TALOS GULF COAST ONSHORE LLC, | ||
| TALOS OIL AND GAS LLC, | ||
| TALOS PETROLEUM LLC, | ||
| TALOS PRODUCTION FINANCE INC., | ||
| TALOS RESOURCES LLC, | ||
| TALOS ENERGY VENTURES, LLC, | ||
| TALOS ENERGY VENTURES HOLDING, LLC, | ||
| TALOS ENERGY VENTURES GOM LLC, | ||
| TALOS QN LLC, | ||
| TALOS QN EXPLORATION LLC, | ||
| as Credit Parties | ||
| By: | /s/ Zachary B. Dailey | |
| Name: Zachary B. Dailey | ||
| Title: Executive Vice President and Chief Financial Officer | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| JPMORGAN CHASE BANK, N.A., | ||
| as Administrative Agent and as a Lender | ||
| By: | /s/ Dalton Harris | |
| Name: Dalton Harris | ||
| Title: Authorized Officer | ||
Signature Page to Seconioid Amendment to Amended and Restated Credit Agreement
| Capital One, National Association, | ||
| as a Lender and an Issuing Bank | ||
| By: | /s/ Jason Groll | |
| Name: Jason Groll | ||
| Title: Director | ||
Signature Page to Seconioid Amendment to Amended and Restated Credit Agreement
| CITIBANK, N.A., | ||
| as a Lender | ||
| By: | /s/ Todd Mogil | |
| Name: Todd Mogil | ||
| Title: Vice President | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| DNB Capital LLC, | ||
| as a Lender | ||
| By: | /s/ Scott L. Joyce | |
| Name: Scott L. Joyce | ||
| Title: Managing Director | ||
| By: | /s/ Aleksander Lende | |
| Name: Aleksander Lende | ||
| Title: Associate Director | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| KeyBank National Association, | ||
| as a Lender | ||
| By: | /s/ David Bornstein | |
| Name: David Bornstein | ||
| Title: Senior Vice President | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| Mizuho Bank, Ltd., | ||
| as a Lender and an Issuing Bank | ||
| By: | /s/ Edward Sacks | |
| Name: Edward Sacks | ||
| Title: Managing Director | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| BARCLAYS BANK PLC, | ||
| as a Lender | ||
| By: | /s/ Sydney G. Dennis | |
| Name: Sydney G. Dennis | ||
| Title: Director | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| REGIONS BANK, | ||
| as a Lender | ||
| By: | /s/ Katie Hammons | |
| Name: Katie Hammons | ||
| Title: Director | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| Deutsche Bank AG, New York Branch, | ||
| as a Lender | ||
| By: | /s/ Timon Moeller | |
| Name: Timon Moeller | ||
| Title: Assistant Vice President | ||
| By: | /s/ Konni Geppert | |
| Name: Konni Geppert | ||
| Title: Director | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| GOLDMAN SACHS BANK USA, | ||
| as a Lender | ||
| By: | /s/ Andrew B. Vernon | |
| Name: Andrew Vernon | ||
| Title: Authorized Signatory | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
| Mizrahi Tefahot Bank Ltd., | ||
| as a Lender | ||
| By: | /s/ Aram Song | |
| Name: Aram Song | ||
| Title: SVP & CCO | ||
| By: | /s/ Michal Poran | |
| Name: Michal Poran | ||
| Title: SVP COO | ||
Signature Page to Second Amendment to Amended and Restated Credit Agreement
Exhibit 99.1
Talos Energy Announces Strategic Offshore Mexico Development Farm-In
Houston, Texas, July 27, 2026 – Talos Energy Inc. (“Talos” or the “Company”) (NYSE: TALO) today announced the execution of a definitive agreement to farm into the Block 29 development offshore Mexico, operated by Repsol, S.A. (“Repsol”). Talos will acquire a 50% working interest for a contingent $30 million payment at final investment decision (“FID”), a cash carry of up to $20 million on the next exploration well, and reimbursement of certain pre-closing costs (the “Transaction”).
Strategic Rationale:
| ☐ | Expands Resource Base with Material Greenfield Development: Adds a 50% working interest in a pre-FID development containing the Polok and Chinwol oil discoveries, which are estimated to contain more than 200 million barrels of oil equivalent (“MMBoe”) of gross recoverable resource. |
| ☐ | Strategic Infrastructure: Features a floating production, storage and offloading (“FPSO”) based development concept anchored by existing oil discoveries that is well-positioned to serve as a hub for future developments and nearby discoveries in the area. |
| ☐ | Future Exploration Upside: Establishes a platform for additional resource expansion through multiple identified exploration prospects within Block 29. |
| ☐ | Leverages Proven Deepwater Technical Expertise: The discoveries and identified prospects target amplitude-supported Miocene reservoirs analogous to fields Talos has successfully developed and produced in the Gulf of America, reinforcing our strategic focus on opportunities where our deepwater subsurface expertise provides a competitive advantage. |
Talos President and Chief Executive Officer Paul Goodfellow commented, “We are excited to participate in this pre-FID development opportunity and look forward to working alongside Repsol as we advance Block 29. The farm-in adds a high quality, large-scale development opportunity and meaningful exploration upside in a proven deepwater basin, further advancing Pillar Three of our strategy and strengthening our long-term growth portfolio. Together with the recently announced Gulf of America bolt-on acquisition, these transactions are expected to extend our resource life and further support long-term value creation as we continue to advance our strategy to build a long-lived, scaled portfolio and become the leading pure-play offshore E&P.”
OFFSHORE MEXICO FARM-IN TRANSACTION
The acquired assets include a 50% working interest in Block 29, located in the Salinas-Sureste Basin in the southern Gulf of Mexico, an area that has seen more than a dozen deepwater discoveries. Operated by Repsol, terms include a contingent $30 million payment if Talos elects to take a FID, a cash carry of up to $20 million on the next exploration well, and reimbursement of certain pre-closing costs, subject to customary terms, conditions (including Mexican regulatory approvals), and closing adjustments. Upon closing, Talos will hold a 50% working interest and, together with Repsol, will be the sole participants in the block. Block 29 contains the Polok and Chinwol oil discoveries, which together are estimated to contain more than 200 MMBoe of gross recoverable resource, along with multiple additional exploration prospects. The partners expect to progress the project toward FID in 2027.
The transaction is subject to approval by Mexico’s Secretaría de Energía (“SENER”) and the National Anti-trust Commission of Mexico.
ABOUT TALOS ENERGY
Talos Energy (NYSE: TALO) is a technically driven, innovative, independent energy company focused on safely maximizing long-term value through its Exploration & Production business in the United States Gulf of America and offshore Mexico. We leverage decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while maintaining a focus on safe and efficient operations, environmental responsibility, and community impact. For more information, visit www.talosenergy.com.
INVESTOR RELATIONS CONTACT
Kyle Sahni
| TALOS ENERGY INC. | 333 Clay St., Suite 3300, Houston, TX 77002 | |
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This communication may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this communication, the words “will,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “forecast,” “may,” “objective,” “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All statements, other than statements of historical fact included in this communication, are forward-looking statements, including, but not limited to, statements regarding our plans and expectations regarding the Transaction, including the anticipated financing terms and availability; the timing and benefits of the Transaction, the anticipated impact of the Transaction on our financial position, growth opportunities and competitive position, the anticipated gross recoverable resources related to the Transaction, and the projected costs, prospects, plans and objectives related to the Transaction. These forward-looking statements including estimates of gross recoverable resources, exploration opportunities and potential, timing of final investment decision, anticipated development costs and expected production commencement are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, our ability to consummate the Transaction on the terms currently contemplated, including the risk that we or other parties to the transaction may be unable to obtain regulatory approval or satisfy the conditions to closing the Transaction; our ability to realize the anticipated benefits of the Transaction; whether the parties elect to proceed with a FID and our ability to reach FID and/or production on the timeline currently contemplated or at all; risks associated with reliance on a third-party operator; changes in market conditions affecting the oil and gas industry or long-term oil and gas price levels; political or regulatory developments, including risks relating to operations in Mexico due to changes in applicable laws, regulations and policies affecting offshore energy projects; reservoir performance; the outcome of future exploration efforts; timely completion of projects; technical or operating factors; the uncertainty inherent in projecting resource potential, ultimate recoverable resources and future rates of production and cash flows and access to capital and project financing; the timing of and amount of exploration and development expenditures; potential adverse reactions or competitive responses to our acquisitions and other transactions, including the proposed Transaction; risks and uncertainties related to economic, market or business conditions; and the other risks and uncertainties discussed in our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other Securities and Exchange Commission filings.
Estimates of gross recoverable resources and exploration potential are by their nature uncertain and are based on numerous assumptions. Actual recovered volumes may differ materially from such estimates. Resource estimates should not be construed as reserves and do not constitute a guarantee that resources will be commercially recoverable.
Should one or more of the risks or uncertainties described herein occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this communication.
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