An independent oil and gas exploration and production company focused on the Gulf of Mexico. The company assumed litigation tied to its acquisition of EnVen, including a severance case against Dunwoody that was affirmed on appeal in April 2023 and a Delaware suit over breach of fiduciary duty that went to trial in July 2023.
Talos swings to a $150M net profit as oil prices nearly double, while a pending $850M acquisition reshapes the balance sheet.
Talos Energy returned to profitability. rose 57% to $665 million and swung to a $198 million profit as realized oil prices nearly doubled to $99.47 per barrel and Sunspear production ramped up. The company is now funding an $850 million acquisition with new debt, adding a major growth bet to a quarter already lifted by commodity prices.
Key takeaways
rose 57% to $664.8 million, driven by a 55% increase in realized oil prices to $99.47 per barrel and incremental production from the Sunspear Field.
swung to a $198.2 million profit from a $273.6 million loss a year earlier, when results were weighed down by a $223.9 million non-cash ; no such was recorded in Q2 2026.
A $145 million non-cash of U.S. oil and gas properties was recorded in the first half of 2026, compared with a $224 million in the first half of 2025, reflecting the continued decline in the 12-month average SEC oil price.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 57% to $665M driven by higher oil prices and Sunspear production, while a $145M impairment was recorded in H1.
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Total revenues increased $240M to $665M in Q2, primarily due to a 55% rise in realized oil prices to $99.47/Bbl and incremental production at the Sunspear Field.
Lease operating expense rose 14% to $156M in Q2, driven by major well costs at the Galapagos Field to return the Genovesa well to production.
Lease operating expense rose 14% to $156 million, driven by major well workover costs at the Galapagos Field to return the Genovesa well to production.
After the quarter, the company issued $800 million of 8.000% Senior Notes to redeem $625 million of 9.000% Senior Notes and fund the pending $850 million Coulomb and Na Kika Acquisition, with a $175 million triggered if the deal fails to close.
Available liquidity stood at $1.2 billion as of June 30, 2026, and full-year 2026 is expected to be $500 million to $550 million, with an additional $100 million to $130 million for plugging and abandonment.
What changed
The Q1 2026 watch item on further ceiling-test impairments materialized: a $145 million non-cash was recorded in the first half of 2026, though the pace slowed from the $224 million recorded in the first half of 2025.
Production volumes, which fell to 88.8 MBoepd in Q1 2026, were not explicitly reported for Q2 2026, but the increase suggests the Sunspear ramp and higher prices more than offset any continued volume pressure.
The risk of drawing on the $700 million borrowing base to fund appears to have eased, as cash and equivalents rose 62% to $577.6 million and the company issued new notes post-quarter to fund the acquisition and refinance higher-cost debt.
The two material weaknesses in internal controls, flagged since FY 2023, were again not discussed in the provided filing sections, leaving their remediation status unclear.
What to watch
Whether the Coulomb and Na Kika Acquisition closes by the Outside Date; failure to close triggers a $175 million of the 8.000% Notes and could cost the company its $42.5 million deposit.
Whether the SEC 12-month average oil price, which triggered a $145 million in H1 2026, continues to decline and forces additional ceiling-test write-downs in the second half of the year.
Whether production volumes can be sustained or grown as the Sunspear Field ramps up and the Genovesa well at Galapagos returns to production, offsetting natural declines at legacy fields.
The status of the two material weaknesses in internal controls, which have remained unremediated since FY 2023 and were not addressed in this filing.
A $145M of U.S. oil and natural gas properties was recorded in H1 2026 under the , compared to a $224M impairment in H1 2025.
Available liquidity was $1.2B as of June 30, 2026; post-quarter, the company issued $800M of 8.000% Notes to redeem $625M of 9.000% Notes and fund the pending $850M Coulomb and Na Kika Acquisition.
Full-year 2026 is expected to be $500M-$550M, with an additional $100M-$130M for plugging & abandonment and decommissioning obligations.
Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposures to certain market risks, refer to Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in our 2025 Annual Report. There have been no material changes from the disclosures presented in our 2025 Annual Report regard…
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For information regarding our exposures to certain market risks, refer to Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in our 2025 Annual Report. There have been no material changes from the disclosures presented in our 2025 Annual Report regarding our exposures to certain market risks.
From time to time, the Company is involved in litigation, disputes related to our business, regulatory examinations and administrative proceedings primarily arising in the ordinary course of business in jurisdictions in which the Company does business. Although the outcome of th…
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From time to time, the Company is involved in litigation, disputes related to our business, regulatory examinations and administrative proceedings primarily arising in the ordinary course of business in jurisdictions in which the Company does business. Although the outcome of these matters cannot be predicted with certainty, the Company’s management believes none of these matters, either individually or in the aggregate, would have a material effect upon the Company’s financial position; however, an unfavorable outcome could have a material adverse effect on the Company’s results from operations for a specific interim period or year.
There have been no additional material developments with respect to the information previously reported under Part I, Item 3. “Legal Proceedings” of our 2025 Annual Report.
Failure to close the Coulomb and Na Kika Acquisition or Offshore Mexico Farm-In could trigger a $175M note redemption and materially harm operations.
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The Coulomb and Na Kika Acquisition requires antitrust clearance and no legal injunctions; failure to close by the Outside Date forces a $175.0 million of 8.000% Notes.
If the acquisition closes later or costs more than expected, additional borrowings would increase total debt and while reducing bank availability.
The Offshore Mexico Farm-In Transaction remains subject to approval by Mexico’s energy ministry and antitrust commission, with no assurance of closing.
A failed closing could cost the company its $42.5 million deposit (5% of the purchase price) payable to Shell as under certain circumstances.
Management distraction, unrecovered transaction costs, and potential litigation or negative market reaction could further pressure results, cash flows, and stock price if the Pending Transactions do not complete.