TALOS ENERGY INC.

Previous wording

Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report to “us,” “we,” “our,” “Talos” or the “Company” are to Talos Energy Inc. and its wholly-owned subsidiaries.

Current wording

Unless otherwise indicated or the context requires otherwise, references in this Quarterly Report to “us,” “we,” “our,” “Talos,” or the “Company” refer to Talos Energy Inc. and its subsidiaries. References to “Parent Company” refer to Talos Energy Inc.

Previous wording

The following encompasses recent developments since the filing of our 2025 Annual Report:

Current wording

The following encompasses recent developments since the filing of our Quarterly Report on Form 10-Q for the three months ended March 31, 2026.

Previous wording

No material events, such as acquisitions or divestitures, affected the comparability of our financial condition and results of operations for the periods presented herein. Management does not currently expect any material factors to affect the comparability of our future financial condition or results of operations.

Current wording

No material events, such as acquisitions or divestitures, affected the comparability of our financial condition or results of operations for the periods presented herein. Management does not currently expect any material factors to affect the comparability of our future financial condition or results of operations, other than the Coulomb and Na Kika Acquisition and the debt refinancing discussed above.

Previous wording

Volatility in Oil, Natural Gas and NGL Prices —Historically, the markets for oil and natural gas have been volatile. As such, oil, natural gas and NGL prices have been, and are expected to continue to be, subject to wide fluctuations. The ongoing military conflict in Iran, which began in February 2026, has heightened geopolitical risk in key global energy markets and contributed to increased volatility in oil and gas commodity prices. The conflict has resulted in disruptions and constraints on maritime transit, supply chains, and energy infrastructure in the Middle East, including in and around the Strait of Hormuz, a critical chokepoint for global oil and liquefied natural gas shipments. These developments have led to elevated risk premiums in energy commodity prices and greater short‑term price uncertainty, causing global crude oil prices to surpass $100 per Bbl. Sustained or escalating disruptions to global supply chains, shipping routes, or energy infrastructure could materially affect global supply‑demand balances and contribute to continued volatility or increases in commodity prices. In addition, heightened market volatility may influence customer demand, counterparty credit risk, and broader macroeconomic conditions. The duration and ultimate resolution of the conflict, as well as the extent of any further disruptions, remain uncertain. We continue to monitor geopolitical developments and their potential impact on commodity prices, offshore operations, and global energy markets, but cannot predict with assurance the nature, timing, or magnitude of any future effects on our business, financial condition, or results of operations.

Current wording

Volatility in Oil, Natural Gas and NGL Prices — Oil, natural gas and NGL prices have been, and are expected to continue to be, volatile. The war in Iran, which began in February 2026, has increased geopolitical risk in global energy markets and contributed to volatility in oil and gas prices. The war has also disrupted maritime transit, supply chains and energy infrastructure in the Middle East, including in and around the Strait of Hormuz, a key route for global oil and liquefied natural gas shipments. Diplomatic negotiations have further contributed to uncertainty in global energy markets. While certain actions have supported improved market access and the partial resumption of trade and shipping activity, the timing and extent of any sustained normalization of production, exports, transportation networks and related supply chains remain uncertain. Any deterioration in diplomatic efforts, renewed geopolitical tensions or continued disruptions to trade routes, supply chains or energy infrastructure could affect global supply-demand balances and contribute to further volatility in commodity prices. Such volatility could also affect customer demand, counterparty credit risk and broader macroeconomic conditions. We cannot predict the nature, timing or magnitude of any future effects on our business, financial condition or results of operations.

Previous wording

Inflation of Cost of Goods, Services and Personnel —The war in Iran has triggered inflationary pressures in the global economy. The federal funds rate target range is currently set at 3.50% to 3.75%, where it was left unchanged at the U.S. Federal Reserve’s latest meeting. Future changes to the benchmark interest rate remain uncertain in light of geopolitical conditions and expected changes to the membership of the Federal Reserve Board of Governors.

Current wording

Inflation of Cost of Goods, Services and Personnel —The war in Iran triggered inflationary pressures in the global economy. The federal funds rate target range is currently set at 3.50% to 3.75%, where it was left unchanged at the U.S. Federal Reserve’s latest meeting. Future changes to the benchmark interest rate remain uncertain in light of geopolitical conditions and recent changes to the membership of the Federal Reserve Board of Governors.

Previous wording

Impairment of Oil and Natural Gas Properties —Under the full cost method of accounting, the “ceiling test” under SEC rules and regulations specifies that evaluated and unevaluated properties’ capitalized costs, less accumulated amortization and related deferred income taxes (the “Full Cost Pool”), should be compared to a formulaic limitation (the “Ceiling”) each quarter on a country-by-country basis. If the Full Cost Pool exceeds the Ceiling, an impairment must be recorded. As a result of our ceiling test computations, an impairment of our U.S. oil and natural gas properties was recorded during the three months ended March 31, 2026 of $145.0 million. No impairment was recorded during the three months ended March 31, 2025. At March 31, 2026 our ceiling test computation was based on SEC pricing of $63.17 per Bbl of oil, $3.97 per Mcf of natural gas and $18.50 per Bbl of NGLs. See Part I, Item 1. “Financial Statements — Note 3 —Property, Plant and Equipment” for additional information.

Current wording

Impairment of Oil and Natural Gas Properties —Under the full cost method of accounting, the “ceiling test” under SEC rules and regulations specifies that evaluated and unevaluated properties’ capitalized costs, less accumulated amortization and related deferred income taxes (the “Full Cost Pool”), should be compared to a formulaic limitation (the “Ceiling”) each quarter on a country-by-country basis. If the Full Cost Pool exceeds the Ceiling, an impairment must be recorded. As a result of our ceiling test computations, an impairment of our U.S. oil and natural gas properties was recorded during the six months ended June 30, 2026 of $145.0 million. No impairment was recorded during the three months ended June 30, 2026. At June 30, 2026 our ceiling test computation was based on SEC pricing of $71.93 per Bbl of oil, $3.91 per Mcf of natural gas and $18.63 per Bbl of NGLs. During both the three and six months ended June 30, 2025, we recorded an impairment of $223.9 million. See Part I, Item 1. “Financial Statements — Note 3 —Property, Plant and Equipment” for additional information.

Previous wording

Update on National Marine Fisheries Service’s Gulf of America Revised Biological Opinion — In August 2024, the federal district court for the District of Maryland vacated the 2020 Biological Opinion issued by the National Marine Fisheries Service (“NMFS”), related to oil and gas activities in the Gulf of America. On May 20, 2025, NMFS published a new Biological Opinion for the Gulf of America oil and gas program, superseding and replacing all prior biological opinions relating to the program. Two lawsuits were filed opposing the new Biological Opinion, one by several environmental groups (Sierra Club, the Center for Biological Diversity, Friends of the Earth and Turtle Island Restoration Network) who filed in the federal district court for the District of Maryland, and the other by the State of Louisiana, the American Petroleum Institute and Chevron U.S.A. Inc. who filed in the Western Louisiana District Court. On February 20, 2026, the Western Louisiana District Court remanded without vacatur NMFS’ 2025 Biological Opinion, declaring that the Rice’s whale jeopardy finding and the Reasonable and Prudent Alternative are arbitrary, capricious and contrary to law. NMFS is required to complete the remand within 185 days of the Western Louisiana District Court’s order. As a result of the remand, the intervenors in the lawsuit filed in the District of Maryland have sought to stay the litigation pending completion of the remand order. The court has not yet ruled on this motion. At this time, it is uncertain how NMFS will address the Western Louisiana District Court’s findings and the effect this will have on the pending lawsuits.

Current wording

Update on National Marine Fisheries Service’s Gulf of America Revised Biological Opinion — In August 2024, the federal district court for the District of Maryland vacated the 2020 Biological Opinion issued by the National Marine Fisheries Service (“NMFS”), related to oil and gas activities in the Gulf of America. On May 20, 2025, NMFS published a new Biological Opinion for the Gulf of America oil and gas program, superseding and replacing all prior biological opinions relating to the program. Two lawsuits were filed opposing the new Biological Opinion, one by several environmental groups (Sierra Club, the Center for Biological Diversity, Friends of the Earth and Turtle Island Restoration Network) who filed in the federal district court for the District of Maryland, and the other by the State of Louisiana, the American Petroleum Institute and Chevron U.S.A. Inc. who filed in the Western Louisiana District Court. On February 20, 2026, the Western Louisiana District Court remanded without vacatur NMFS’ 2025 Biological Opinion, declaring that the Rice’s whale jeopardy finding and the Reasonable and Prudent Alternative are arbitrary, capricious and contrary to law. NMFS is required to complete the remand within 185 days of the Western Louisiana District Court’s order. At this time, it is uncertain how NMFS will address the Western Louisiana District Court’s findings. As a result of the remand, the intervenors in the lawsuit filed in the District of Maryland sought to stay the litigation pending completion of the remand order. On March 31, 2026, The Endangered Species Committee (“ESC”), comprised of the Secretary of the Interior, the Secretary of Agriculture, the Secretary of the Army, the Chair of the Council of Economic Advisers, the Administrator of the Environmental Protection Agency, and the Administrator of the National Oceanic and Atmospheric Administration, held a public meeting to address the Secretary of War’s national security finding that it was necessary to exempt Gulf of America oil and gas activities from requirements of the Endangered Species Act. By unanimous vote, the ESC exempted oil and gas activities in the Gulf of America from Section 7 consultation and Section 7(a)(2) requirements pursuant to section 7(h) of the Endangered Species Act. On June 24, 2026, the District of Maryland’s federal district court judge issued a decision from the bench to dismiss the challenge to the 2025 Biological Opinion on the basis that it is moot given the ESC’s exemption decision. On the same day, the Maryland court judge issued a written order dismissing the plaintiffs’ case without prejudice for lack of subject-matter jurisdiction. Several separate lawsuits have been filed challenging the ESC’s exemption decision and the underlying national security finding. At this time, the ultimate impact of the ESC decision is uncertain.

Previous wording

Three Months Ended March 31, 2026 and 2025 Volumetric Analysis — Production volumes decreased by 12.1 MBoepd to 88.8 MBoepd. This decrease is primarily attributable to a 6.3 MBoepd decline at the Brutus field, driven by a high-rate gas recompletion, where the well has declined as expected and will be sidetracked to a deeper target in the upcoming Brutus rig program, as well as a 3.7 MBoepd decrease at the Galapagos field primarily related to a shut-in due to a failure of the surface-controlled subsurface safety valve at the Genovesa well. We expect the Genovesa well to return to production in the third quarter of 2026 following completion of a planned workover. These decreases were partially offset by increases of 3.5 MBoepd related to incremental production at our Sunspear field.

Current wording

Six Months Ended June 30, 2026 and 2025 Volumetric Analysis —Production volumes decreased by 5.8 MBoepd to 91.3 MBoepd. This decrease is primarily attributable to a 4.9 MBoepd decline at the Brutus Field, driven by factors mentioned above, as well as a 1.5 MBoepd decrease at the Galapagos Field primarily related to a shut-in due to a failure of the surface-controlled subsurface safety valve at the Genovesa well. We completed the Genovesa workover and returned the well to production late in the second quarter of 2026. These decreases were partially offset by an increase of 3.8 MBoepd related to incremental production at our Sunspear Field.

Previous wording

Three Months Ended March 31, 2026 and 2025 — Depreciation, depletion and amortization (“DD&A”) expense for the three months ended March 31, 2026 decreased by approximately $50.3 million, or 18%. This decrease was primarily driven by decreased production volumes of 12.1 MBoepd discussed above as well as a decrease of $2.10 per Boe, or 7%, in the depletion rate on our proved oil and natural gas properties. The decreased production volumes and change in DD&A rate between periods caused DD&A expense to decrease by $33.5 million and $16.9 million, respectively.

Current wording

Six Months Ended June 30, 2026 and 2025 — DD&A expense for the six months ended June 30, 2026 decreased by approximately $90.7 million, or 16%. This decrease was primarily driven by a decrease of $3.49, or 11%, in the depletion rate on our proved oil and natural gas properties, as well as decreased production volumes of 5.8 MBoepd discussed above. The change in DD&A rate and decreased production volumes between periods caused DD&A expense to decrease by $57.7 million and $32.8 million, respectively.

Previous wording

Three Months Ended March 31, 2026 and 2025 — General and administrative expense for the three months ended March 31, 2026 increased by approximately $6.4 million, or 18%, primarily driven by higher employee related costs compared to the same period in 2025.

Current wording

Six Months Ended June 30, 2026 and 2025 — General and administrative expense for the six months ended June 30, 2026 increased by approximately $11.6 million, or 16%, primarily driven by higher employee related costs, including non-cash equity-based compensation, compared to the same period in 2025. Additionally, there was an increase in legal expenses related to the lawsuit described above.

Previous wording

Income Tax (Benefit) Expense — During the three months ended March 31, 2026, we recorded $65.3 million of income tax benefit compared to $0.1 million of income tax benefit during the three months ended March 31, 2025. See Part I, Item 1. “Financial Statements — Note 10 —Income Taxes” for additional information.

Current wording

Income Tax (Benefit) Expense — During the three months ended June 30, 2026, we recorded $44.8 million of income tax expense compared to $36.4 million of income tax benefit during the three months ended June 30, 2025. See Part I, Item 1. “Financial Statements — Note 10 —Income Taxes” for additional information.

Previous wording

Impairment of oil and natural gas properties — During the three months ended March 31, 2026, we recorded a $145.0 million impairment of our oil and natural gas properties. The impairment is a result of our ceiling test evaluation as described in Part I, Item 1. “Financial Statements—Note 3—Property, Plant and Equipment.”

Current wording

Impairment of oil and natural gas properties — During the six months ended June 30, 2026, we recorded a $145.0 million impairment of our oil and natural gas properties. During the six months ended June 30, 2025, we recorded a $223.9 million impairment of our oil and natural gas properties. See Part I, Item 1. “Financial Statements—Note 3—Property, Plant and Equipment.” for additional information.

Previous wording

Other Operating (Income) Expense —During the three months ended March 31, 2026, we agreed to settle a lawsuit for $14.3 million. See Part I, Item 1. “Financial Statements — Note 13 —Commitments and Contingencies” for additional information.

Current wording

Other Operating (Income) Expense —During the six months ended June 30, 2026, we settled a lawsuit for $14.3 million. See Part I, Item 1. “Financial Statements — Note 13 —Commitments and Contingencies” for additional information.

Previous wording

Price Risk Management Activities — The expense of $173.5 million for the three months ended March 31, 2026 consists of $151.1 million in non-cash losses from the decrease in the fair value of our open derivative contracts and $22.4 million in cash settlement losses. The expense of $15.9 million for the three months ended March 31, 2025 consists of $21.0 million in non-cash losses from the decrease in the fair value of our open derivative contracts and $5.2 million in cash settlement gains.

Current wording

Price Risk Management Activities — The expense of $143.0 million for the six months ended June 30, 2026 consists of $46.4 million in non-cash losses from the decrease in the fair value of our open derivative contracts and $96.6 million in cash settlement losses. The income of $71.0 million for the six months ended June 30, 2025 consists of $32.5 million in non-cash gains from the increase in the fair value of our open derivative contracts and $38.5 million in cash settlement gains.

Previous wording

Equity Method Investment (Income) Expense — During the three months ended March 31, 2026, we recorded equity income of $6.7 million, which includes a $6.8 million gain on the Incremental Mexico Equity Sale.

Current wording

Equity Method Investment (Income) Expense — During the six months ended June 30, 2026, we recorded equity income of $6.6 million, which includes a $6.8 million gain on the sale of an additional 30.1% equity interest in Talos Energy Mexico 7, S. de R.L. de C.V. (“TEM 7” and the “Incremental Mexico Equity Sale”). See Part I, Item 1. “Financial Statements—Note 6 –Equity Method Investments for additional information.

Previous wording

For the three months ended March 31, 2026, transaction expenses were not material. Other income (expense) includes other miscellaneous income and expenses that we do not view as a meaningful indicator of our operating performance. For the three months ended March 31, 2026, it includes a $14.3 million litigation settlement accrued as an expense offset by a $6.8 million gain on the Incremental Mexico Equity Sale. See Part I, Item 1. “Financial Statements — Note 13 —Commitments and Contingencies” for additional information on the litigation settlement and “Financial Statements — Note 6 —Equity Method Investments” for additional information on the Incremental Mexico Equity Sale. For the three months ended March 31, 2025, neither transaction expenses nor other income (expense) were material.

Current wording

For the three and six months ended June 30, 2026, transaction expenses were not material. Other income (expense) includes other miscellaneous income and expenses that we do not view as a meaningful indicator of our operating performance. For the six months ended June 30, 2026, it includes a $14.3 million litigation settlement expense offset by a $6.8 million gain on the Incremental Mexico Equity Sale. See Part I, Item 1. “Financial Statements — Note 13 —Commitments and Contingencies” for additional information on the litigation settlement and “Financial Statements — Note 6 —Equity Method Investments” for additional information on the Incremental Mexico Equity Sale. For the three months ended June 30, 2025, neither transaction expenses nor other income (expense) were material.

Previous wording

Our primary sources of liquidity are cash generated by our operations and borrowings under our bank credit facility. Our primary uses of cash are for capital expenditures, operating costs, working capital, debt service, share repurchases, future collateral payments and for general corporate purposes. The cost of borrowing under our bank credit facility is influenced by changes in the federal funds rate. As interest rates increase, it becomes more expensive to borrow money while interest rate cuts make it less expensive to borrow money.

Current wording

Our primary sources of liquidity are cash generated by our operations and borrowings under our bank credit facility. Our primary uses of cash are for capital expenditures, acquisitions, operating costs, working capital, debt service, share repurchases, future collateral payments and general corporate purposes. The cost of borrowing under our bank credit facility is influenced by changes in the federal funds rate. As interest rates increase, it becomes more expensive to borrow money while interest rate cuts make it less expensive to borrow money.

Previous wording

Our bank credit facility currently has a borrowing base of $700.0 million. Our available liquidity (cash plus available capacity under the bank credit facility) was $989.0 million as of March 31, 2026. Letters of credit that are outstanding reduce the available bank credit commitments. The next redetermination of our borrowing base is expected in the second quarter of 2026. The borrowing base in reserve-based lending, which is influenced by banking regulations and guidelines, is a dynamic figure subject to regular redeterminations. Changes in reserve estimations (e.g., lower production forecasts or reduced proved reserves), downward adjustments to the lender's internal price deck (i.e., commodity price expectations) and ongoing production can lead to a reduction in the borrowing base, impacting available liquidity under our bank credit facility.

Current wording

Our bank credit facility currently has a borrowing base of $700.0 million. Our available liquidity (cash plus available capacity under the bank credit facility) was $1,181.9 million as of June 30, 2026. Letters of credit that are outstanding reduce the available bank credit commitments. The next redetermination of our borrowing base is expected in the fourth quarter of 2026. As discussed above under the subsection entitled “— Recent Developments,” the borrowing base and commitments will be increased to $850.0 million upon closing of the Coulomb and Na Kika Acquisition. The borrowing base in reserve-based lending, which is influenced by banking regulations and guidelines, is a dynamic figure subject to regular redeterminations. Changes in reserve estimations (e.g., lower production forecasts or reduced proved reserves), downward adjustments to the lender's internal price deck (i.e., commodity price expectations) and ongoing production can lead to a reduction in the borrowing base, impacting available liquidity under our bank credit facility.

Previous wording

Capital and Other Expenditures —The following is a table of our capital expenditures, excluding acquisitions, for the three months ended March 31, 2026 (in thousands):

Current wording

Capital and Other Expenditures —The following is a table of our capital expenditures, excluding acquisitions, for the six months ended June 30, 2026 (in thousands):

Previous wording

Share Repurchase Program —The Board initially approved a share repurchase program of $100.0 million on March 20, 2023, with subsequent approval of increases in share repurchase capacity of $150.0 million on July 22, 2024 and approximately $42.5 million on March 25, 2025, for a total aggregate repurchase capacity of approximately $292.5 million. Approximately $42.7 million is remaining under the authorized program as of March 31, 2026. During the three months ended March 31, 2026, we repurchased approximately 2.7 million shares for $38.2 million excluding broker commissions. On April 27, 2026, our Board authorized an increase of $157.3 million to the previously approved limit increasing the amount remaining under the authorized program to $200.0 million. Since March 2023, in aggregate, we have repurchased 22.7 million shares for approximately $249.8 million excluding broker commissions. The share repurchase program has no set term limits. All repurchased shares are held in treasury.

Current wording

Share Repurchase Program —The Board initially approved a share repurchase program of $100.0 million on March 20, 2023, with subsequent approval of increases in share repurchase capacity of $150.0 million on July 22, 2024, approximately $42.5 million on March 25, 2025, and $157.3 million on April 27, 2026 for a total aggregate repurchase capacity of approximately $449.8 million. Approximately $200.0 million is remaining under the authorized program as of June 30, 2026. We did not repurchase any shares during the three months ended June 30, 2026 because SEC rules prohibit companies from conducting share buybacks while in possession of material, non-public information, such as undisclosed merger and acquisition negotiations or significant material agreements. During the six months ended June 30, 2026, we repurchased approximately 2.7 million shares for $38.2 million excluding broker commissions. Since March 2023, in aggregate, we have repurchased 22.7 million shares for approximately $249.8 million excluding broker commissions. The share repurchase program has no set term limits. All repurchased shares are held in treasury.

Previous wording

Operating Activities — Cash flow from operating activities decreased $94.2 million in the three months ended March 31, 2026 compared to the corresponding period in 2025. Key drivers of cash flow from operating activities are commodity prices, production volumes and operating costs. The change between periods is largely attributable to a $40.7 million decrease in revenues due to a decrease in production volumes between periods as discussed above under the subsection entitled “— Results of Operations.” During the three months ended March 31, 2026, $22.5 million of cash was paid to settle expired commodity derivative instruments compared to $5.2 million of cash received for the corresponding period in 2025. Additionally, settlement of asset retirement obligations increased $12.1 million between the current period and the corresponding period in 2025.

Current wording

Operating Activities — Cash flow from operating activities decreased $145.2 million in the six months ended June 30, 2026 compared to the corresponding period in 2025. Key drivers of cash flow from operating activities are commodity prices, production volumes and operating costs as presented and discussed under the subsection entitled “— Results of Operations.”

Previous wording

Investing Activities — Cash flow used in investing activities decreased $53.7 million in the three months ended March 31, 2026 compared to the corresponding period in 2025. This is primarily due to $49.7 million in cash consideration generated from the Incremental Mexico Equity Sale during three months ended March 31, 2026. Capital expenditures increased $23.4 million due to project timing between the current period and the corresponding period in 2025. During the three months ended March 31, 2025, we completed the acquisition of an incremental working interest in the Monument oil discovery in the Deepwater U.S. Gulf of America located on certain Walker Ridge lease blocks for$14.8 million compared to no acquisition payments during thethree months ended March 31, 2026. Additionally, proceeds from the sale of property and equipment increased $12.6 million between the current period and the corresponding period in 2025.

Current wording

Investing Activities — Cash flow used in investing activities decreased $99.8 million in the six months ended June 30, 2026 compared to the corresponding period in 2025. This is primarily due to $49.7 million in cash consideration generated from the Incremental Mexico Equity Sale during the six months ended June 30, 2026. Capital expenditures decreased $22.1 million due to project timing between the current period and the corresponding period in 2025. During the six months ended June 30, 2025, we completed the acquisition of an incremental working interest in the Monument oil discovery in the Deepwater U.S. Gulf of America located on certain Walker Ridge lease blocks for$14.8 million and made a $3.1 million project milestone payment related to this acquisition during thesix months ended June 30, 2026. Additionally, proceeds from the sale of property and equipment increased $14.3 million between the current period and the corresponding period in 2025.

Previous wording

Financing Activities —Cash flow used in financing activities increased $31.1 million in the three months ended March 31, 2026 compared to the corresponding period in 2025. During the three months ended March 31, 2026, we repurchased $38.2 million of our common stock through our share repurchase program compared to $17.3 million in the corresponding period in 2025. See subsection entitled “— Liquidity and Capital Resources — Share Repurchase Program” for additional information. Additionally, we incurred $6.9 million of deferred financing costs duringthe three months ended March 31, 2026 in connection with an amended and restated credit agreement that was executed on January 20, 2026. See Part I, Item 1. “Financial Statements — Note 7 —Debt” for additional information.

Current wording

Financing Activities —Cash flow used in financing activities decreased $10.4 million in the six months ended June 30, 2026 compared to the corresponding period in 2025. During the six months ended June 30, 2026, we repurchased $38.2 million of our common stock through our share repurchase program compared to $54.7 million in the corresponding period in 2025. See subsection entitled “— Liquidity and Capital Resources — Share Repurchase Program” for additional information. Additionally, we incurred $7.3 million of deferred financing costs duringthe six months ended June 30, 2026 primarilyin connection with an amended and restated credit agreement that was executed on January 20, 2026. See Part I, Item 1. “Financial Statements — Note 7 —Debt” for additional information.

Previous wording

9.000% Second-Priority Senior Secured Notes — due February 2029 —The 9.000% Second-Priority Senior Secured Notes due 2029 (the “9.000% Notes”) were issued pursuant to an indenture dated February 7, 2024, by and among the Company, Talos Production Inc. (the “Issuer”), the subsidiary guarantors party thereto (together with the Company, the “Guarantors”) and Wilmington Trust, National Association, as trustee and collateral agent. The 9.000% Notes were offered and sold to qualified institutional buyers pursuant to the exemptions from registration provided by Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 9.000% Notes are secured on a second-priority senior secured basis by liens on substantially the same collateral as the collateral securing the Issuer’s existing first-priority obligations under its Bank Credit Facility. The 9.000% Notes rank equally in right of payment with all of the Issuer’s and the Guarantors’ existing and future senior obligations, are senior in right of payment to any obligations of the Issuer and the Guarantors future debt that is, by its term, expressly subordinated in right of payment to the 9.000% Notes and, to the extent of the value of the collateral, are effectively senior to all existing and future unsecured obligations of the Issuer and the Guarantors (other than the Company) and any future obligations of the Issuer and the Guarantors that are secured by the collateral on a junior-priority basis. The 9.000% Notes are effectively pari passu with all of the Issuer’s and the Guarantors’ existing and future obligations that are secured by the collateral on a second-priority basis including the 9.375% Notes (as defined below) and are effectively junior to any existing and future obligations of the Issuer and the Guarantors that are secured by the collateral on a senior-priority basis to the 9.000% Notes including indebtedness under the Bank Credit Facility. The 9.000% Notes mature on February 1, 2029 and have interest payable semi-annually each February 1 and August 1, commencing August 1, 2024. See Part I, Item 1. “Financial Statements — Note 7 —Debt” for additional information.

Current wording

8.000% Second-Priority Senior Secured Notes — due July 2034—The 8.000% Notes were issued pursuant to an indenture dated July 13, 2026, by and among the Parent Company, the Issuer, the 8.000% Notes Guarantors and Wilmington Trust, National Association, as trustee and collateral agent. The 8.000% Notes were offered and sold to qualified institutional buyers pursuant to the exemptions from registration provided by Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 8.000% Notes are secured on a second-priority senior secured basis by liens on substantially the same collateral as the collateral securing the Issuer’s existing first-priority obligations under its bank credit facility. The 8.000% Notes rank equally in right of payment with all of the Issuer’s and the 8.000% Notes Guarantors’ existing and future senior obligations, are senior in right of payment to any obligations of the Issuer and the 8.000% Notes Guarantors’ future debt that is, by its term, expressly subordinated in right of payment to the 8.000% Notes and, to the extent of the value of the collateral, are effectively senior to all existing and future unsecured obligations of the Issuer and the 8.000% Notes Guarantors (other than the Company) and any future obligations of the Issuer and the 8.000% Notes Guarantors that are secured by the collateral on a junior-priority basis. The 8.000% Notes are effectively pari passu with all of the Issuer’s and the 8.000% Notes Guarantors’ existing and future obligations that are secured by the collateral on a second-priority basis including the 9.375% Second-Priority Senior Secured Notes due 2031 and are effectively junior to any existing and future obligations of the Issuer and the 8.000% Notes Guarantors that are secured by the collateral on a senior-priority basis to the 8.000% Notes including indebtedness under the bank credit facility. The 8.000% Notes mature on July 15, 2034 and have interest payable semi-annually each January 15 and July 15, commencing January 15, 2027.

Previous wording

9.375% Second-Priority Senior Secured Notes — due February 2031 —The 9.375% Second-Priority Senior Secured Notes due 2031 (the “9.375% Notes” and, together with the 9.000% Notes, the “Senior Notes”) were issued pursuant to an indenture dated February 7, 2024, by and among the Company, the Issuer, the Guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent. The 9.375% Notes were offered and sold to qualified institutional buyers pursuant to the exemptions from registration provided by Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 9.375% Notes are secured on a second-priority senior secured basis by liens on substantially the same collateral as the collateral securing the Issuer’s existing first-priority obligations under its Bank Credit Facility. The 9.375% Notes rank equally in right of payment with all of the Issuer’s and the Guarantors’ existing and future senior obligations, are senior in right of payment to any obligations of the Issuer and the Guarantors future debt that is, by its term, expressly subordinated in right of payment to the 9.375% Notes and, to the extent of the value of the collateral, are effectively senior to all existing and future unsecured obligations of the Issuer and the Guarantors (other than the Company) and any future obligations of the Issuer and the Guarantors that are secured by the collateral on a junior-priority basis. The 9.375% Notes are effectively pari passu with all of the Issuer’s and the Guarantors’ existing and future obligations that are secured by the collateral on a second-priority basis including the 9.000% Notes and are effectively junior to any existing and future obligations of the Issuer and the Guarantors that are secured by the collateral on a senior-priority basis to the 9.375% Notes including indebtedness under the Bank Credit Facility. The 9.375% Notes mature on February 1, 2031 and have interest payable semi-annually each February 1 and August 1, commencing August 1, 2024. See Part I, Item 1. “Financial Statements — Note 7 —Debt” for additional information.

Current wording

9.375% Second-Priority Senior Secured Notes — due February 2031 —The 9.375% Second-Priority Senior Secured Notes due 2031 (the “9.375% Notes” and, together with the 8.000% Notes, the “Senior Notes”) were issued pursuant to an indenture dated February 7, 2024, by and among the Parent Company, the Issuer, the subsidiary guarantors party thereto (the “9.375% Notes Guarantors”) and Wilmington Trust, National Association, as trustee and collateral agent. The 9.375% Notes were offered and sold to qualified institutional buyers pursuant to the exemptions from registration provided by Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 9.375% Notes are secured on a second-priority senior secured basis by liens on substantially the same collateral as the collateral securing the Issuer’s existing first-priority obligations under its bank credit facility. The 9.375% Notes rank equally in right of payment with all of the Issuer’s and the 9.375% Notes Guarantors’ existing and future senior obligations, are senior in right of payment to any obligations of the Issuer and the 9.375% Notes Guarantors future debt that is, by its term, expressly subordinated in right of payment to the 9.375% Notes and, to the extent of the value of the collateral, are effectively senior to all existing and future unsecured obligations of the Issuer and the 9.375% Notes Guarantors (other than the Company) and any future obligations of the Issuer and the 9.375% Notes Guarantors that are secured by the collateral on a junior-priority basis. The 9.375% Notes are effectively pari passu with all of the Issuer’s and the 9.375% Notes Guarantors’ existing and future obligations that are secured by the collateral on a second-priority basis including the 8.000% Notes and are effectively junior to any existing and future obligations of the Issuer and the 9.375% Notes Guarantors that are secured by the collateral on a senior-priority basis to the 9.375% Notes including indebtedness under the bank credit facility. The 9.375% Notes mature on February 1, 2031 and have interest payable semi-annually each February 1 and August 1, commencing August 1, 2024. See Part I, Item 1. “Financial Statements — Note 7 —Debt” for additional information.

Previous wording

Material Cash Requirements—We have various contractual obligations in the normal course of our operations. Some of these obligations may be reflected in our accompanying Condensed Consolidated Financial Statements, while other obligations, such as certain operating leases and capital commitments, are not reflected on our accompanying Condensed Consolidated Financial Statements. There have been no material changes to our contractual obligations since those reported in our 2025 Annual Report.

Current wording

Material Cash Requirements—We have various contractual obligations in the normal course of our operations. Some of these obligations may be reflected in our accompanying Condensed Consolidated Financial Statements, while other obligations, such as certain operating leases and capital commitments, are not reflected on our accompanying Condensed Consolidated Financial Statements.

Previous wording

Performance Obligations —As of March 31, 2026, we had outstanding performance bonds totaling $1.5 billion primarily related to plugging and abandonment of wells and removal of facilities in the U.S. Gulf of America. Additionally, we had outstanding letters of credit issued under our bank credit facility totaling $97.4 million. Letters of credit that are outstanding reduce the available revolving credit commitments. See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report subsection entitled “— Known Trends and Uncertainties — Financial Assurance Requirements” and “— Known Trends and Uncertainties — Financial Assurance Market Outlook” for additional information on BOEM’s supplemental bonding requirements and the potential lack of surety bond capacity to comply with BOEM’s financial assurance requirements, which could have a material adverse effect on our business, properties, results of operations and financial condition.

Current wording

Performance Obligations —As of June 30, 2026, we had outstanding performance bonds totaling $1.5 billion primarily related to plugging and abandonment of wells and removal of facilities in the U.S. Gulf of America. Additionally, we had outstanding letters of credit issued under our bank credit facility totaling $95.7 million. Letters of credit that are outstanding reduce the available revolving credit commitments. See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report subsection entitled “— Known Trends and Uncertainties — Financial Assurance Requirements” and “— Known Trends and Uncertainties — Financial Assurance Market Outlook” for additional information on BOEM’s supplemental bonding requirements and the potential lack of surety bond capacity to comply with BOEM’s financial assurance requirements, which could have a material adverse effect on our business, properties, results of operations and financial condition.