Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TALO | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Registrant Name | Talos Energy Inc. | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-38497 | |
Entity Tax Identification Number | 82-3532642 | |
Entity Address, Address Line One | 333 Clay Street | |
Entity Address, Address Line Two | Suite 3300 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77002 | |
City Area Code | 713 | |
Local Phone Number | 328-3000 | |
Entity Central Index Key | 0001724965 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 124,080,361 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 13,631 | $ 44,145 |
Accounts receivable | ||
Trade, net | 181,384 | 150,598 |
Joint interest, net | 93,798 | 54,697 |
Other, net | 10,744 | 6,684 |
Assets from price risk management activities | 11,497 | 25,029 |
Prepaid assets | 86,077 | 84,759 |
Other current assets | 14,457 | 1,917 |
Total current assets | 411,588 | 367,829 |
Property and equipment: | ||
Proved properties | 7,691,828 | 5,964,340 |
Unproved properties, not subject to amortization | 267,297 | 154,783 |
Other property and equipment | 33,795 | 30,691 |
Total property and equipment | 7,992,920 | 6,149,814 |
Accumulated depreciation, depletion and amortization | (3,985,613) | (3,506,539) |
Total property and equipment, net | 4,007,307 | 2,643,275 |
Other long-term assets: | ||
Restricted cash | 101,760 | 0 |
Assets from price risk management activities | 4,550 | 7,854 |
Equity method investments | 141,682 | 1,745 |
Other well equipment inventory | 44,643 | 25,541 |
Notes receivable, net | 15,805 | 0 |
Operating lease assets | 12,313 | 5,903 |
Other assets | 13,452 | 6,479 |
Total assets | 4,753,100 | 3,058,626 |
Current liabilities: | ||
Accounts payable | 125,557 | 128,174 |
Accrued liabilities | 205,095 | 219,769 |
Accrued royalties | 54,092 | 52,215 |
Current portion of long-term debt | 33,109 | 0 |
Current portion of asset retirement obligations | 69,288 | 39,888 |
Liabilities from price risk management activities | 55,042 | 68,370 |
Accrued interest payable | 30,536 | 36,340 |
Current portion of operating lease liabilities | 2,859 | 1,943 |
Other current liabilities | 54,221 | 60,359 |
Total current liabilities | 629,799 | 607,058 |
Long-term liabilities: | ||
Long-term debt | 1,018,774 | 585,340 |
Asset retirement obligations | 747,560 | 501,773 |
Liabilities from price risk management activities | 8,981 | 7,872 |
Operating lease liabilities | 18,888 | 14,855 |
Other long-term liabilities | 267,036 | 176,152 |
Total liabilities | 2,691,038 | 1,893,050 |
Commitments and Contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 30,000,000 shares authorized and zero shares issued or outstanding as of September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock $0.01 par value; 270,000,000 shares authorized; 127,480,361 and 82,570,328 shares issued as of September 30, 2023 and December 31, 2022, respectively | 1,275 | 826 |
Additional paid-in capital | 2,541,906 | 1,699,799 |
Accumulated deficit | (433,615) | (535,049) |
Treasury stock, at cost; 3,400,000 and zero shares as of September 30, 2023 and December 31, 2022, respectively | (47,504) | 0 |
Total stockholdersʼ equity | 2,062,062 | 1,165,576 |
Total liabilities and stockholdersʼ equity | $ 4,753,100 | $ 3,058,626 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 270,000,000 | 270,000,000 |
Common stock, shares issued | 127,480,361 | 82,570,328 |
Treasury stock, common, shares | 3,400,000 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 383,135 | $ 377,128 | $ 1,072,927 | $ 1,309,779 |
Operating expenses: | ||||
Lease operating expense | 103,548 | 81,760 | 286,075 | 229,156 |
Production taxes | 600 | 955 | 1,813 | 2,670 |
Depreciation, depletion and amortization | 163,359 | 92,323 | 480,476 | 295,174 |
Accretion expense | 21,256 | 13,179 | 63,430 | 42,400 |
General and administrative expense | 24,888 | 25,289 | 121,257 | 70,742 |
Other operating (income) expense | (57,287) | (366) | (55,172) | 12,142 |
Total operating expenses | 256,364 | 213,140 | 897,879 | 652,284 |
Operating income (expense) | 126,771 | 163,988 | 175,048 | 657,495 |
Interest expense | (45,637) | (29,265) | (128,850) | (91,531) |
Price risk management activities income (expense) | (98,802) | 114,180 | (13,668) | (231,133) |
Equity method investment income (expense) | (2,493) | 991 | 2,938 | 14,599 |
Other income (expense) | 2,193 | 692 | 10,450 | 31,991 |
Net income (loss) before income taxes | (17,968) | 250,586 | 45,918 | 381,421 |
Income tax benefit (expense) | 15,865 | (121) | 55,516 | (2,256) |
Net income (loss) | $ (2,103) | $ 250,465 | $ 101,434 | $ 379,165 |
Net income (loss) per common share: | ||||
Basic | $ (0.02) | $ 3.03 | $ 0.86 | $ 4.6 |
Diluted | $ (0.02) | $ 2.99 | $ 0.85 | $ 4.54 |
Weighted average common shares outstanding: | ||||
Basic | 124,103 | 82,576 | 118,459 | 82,406 |
Diluted | 124,103 | 83,818 | 119,262 | 83,438 |
Oil | ||||
Revenues: | ||||
Revenues | $ 359,404 | $ 295,585 | $ 995,081 | $ 1,078,800 |
Natural Gas | ||||
Revenues: | ||||
Revenues | 16,871 | 68,360 | 53,383 | 181,747 |
NGL | ||||
Revenues: | ||||
Revenues | $ 6,860 | $ 13,183 | $ 24,463 | $ 49,232 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Balance at Dec. 31, 2021 | $ 760,653 | $ 819 | $ 1,676,798 | $ (916,964) | $ 0 |
Balance, Shares at Dec. 31, 2021 | 81,881,477 | ||||
Balance, Shares at Dec. 31, 2021 | 0 | ||||
Equity-based compensation | 20,128 | 20,128 | |||
Equity-based compensation tax withholdings | (4,603) | (4,603) | |||
Equity-based compensation stock issuances | $ 7 | (7) | |||
Equity-based compensation stock issuances, shares | 688,851 | ||||
Net Income (Loss) | 379,165 | 379,165 | |||
Balance at Sep. 30, 2022 | 1,155,343 | $ 826 | 1,692,316 | (537,799) | $ 0 |
Balance, Shares at Sep. 30, 2022 | 82,570,328 | ||||
Balance, Shares at Sep. 30, 2022 | 0 | ||||
Balance at Jun. 30, 2022 | 897,510 | $ 825 | 1,684,949 | (788,264) | $ 0 |
Balance, Shares at Jun. 30, 2022 | 82,541,345 | ||||
Balance, Shares at Jun. 30, 2022 | 0 | ||||
Equity-based compensation | 7,495 | 7,495 | |||
Equity-based compensation tax withholdings | (127) | (127) | |||
Equity-based compensation stock issuances | $ 1 | (1) | |||
Equity-based compensation stock issuances, shares | 28,983 | ||||
Net Income (Loss) | 250,465 | 250,465 | |||
Balance at Sep. 30, 2022 | 1,155,343 | $ 826 | 1,692,316 | (537,799) | $ 0 |
Balance, Shares at Sep. 30, 2022 | 82,570,328 | ||||
Balance, Shares at Sep. 30, 2022 | 0 | ||||
Balance at Dec. 31, 2022 | $ 1,165,576 | $ 826 | 1,699,799 | (535,049) | $ 0 |
Balance, Shares at Dec. 31, 2022 | 82,570,328 | 82,570,328 | |||
Balance, Shares at Dec. 31, 2022 | 0 | 0 | |||
Equity-based compensation | $ 17,812 | 17,812 | |||
Equity-based compensation tax withholdings | (7,454) | (7,454) | |||
Equity-based compensation stock issuances | $ 11 | (11) | |||
Equity-based compensation stock issuances, shares | 1,110,143 | ||||
Issuance of common stock for acquisitions | 832,198 | $ 438 | 831,760 | ||
Issuance of common stock for acquisitions, shares | 43,799,890 | ||||
Purchase of treasury stock, Shares | 3,400,000 | ||||
Purchase of treasury stock | (47,504) | $ (47,504) | |||
Net Income (Loss) | 101,434 | 101,434 | |||
Balance at Sep. 30, 2023 | $ 2,062,062 | $ 1,275 | 2,541,906 | (433,615) | $ (47,504) |
Balance, Shares at Sep. 30, 2023 | 127,480,361 | 127,480,361 | |||
Balance, Shares at Sep. 30, 2023 | 3,400,000 | 3,400,000 | |||
Balance at Jun. 30, 2023 | $ 2,061,888 | $ 1,275 | 2,539,629 | (431,512) | $ (47,504) |
Balance, Shares at Jun. 30, 2023 | 127,455,965 | ||||
Balance, Shares at Jun. 30, 2023 | 3,400,000 | ||||
Equity-based compensation | 2,353 | 2,353 | |||
Equity-based compensation tax withholdings | (76) | (76) | |||
Equity-based compensation stock issuances, shares | 24,396 | ||||
Net Income (Loss) | (2,103) | (2,103) | |||
Balance at Sep. 30, 2023 | $ 2,062,062 | $ 1,275 | $ 2,541,906 | $ (433,615) | $ (47,504) |
Balance, Shares at Sep. 30, 2023 | 127,480,361 | 127,480,361 | |||
Balance, Shares at Sep. 30, 2023 | 3,400,000 | 3,400,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 101,434 | $ 379,165 |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Depreciation, depletion, amortization and accretion expense | 543,906 | 337,574 |
Amortization of deferred financing costs and original issue discount | 11,247 | 10,614 |
Equity-based compensation expense | 9,080 | 11,677 |
Price risk management activities (income) expense | 13,668 | 231,133 |
Net cash received (paid) on settled derivative instruments | (10,474) | (368,483) |
Equity method investment (income) expense | (2,938) | (14,599) |
Settlement of asset retirement obligations | (71,097) | (60,304) |
(Gain) loss on sale of assets | (66,115) | 390 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,821 | 23,783 |
Other current assets | (12,992) | (28,576) |
Accounts payable | (30,063) | 16,677 |
Other current liabilities | (89,511) | (6,682) |
Other non-current assets and liabilities, net | (57,155) | 6,559 |
Net cash provided by (used in) operating activities | 342,811 | 538,928 |
Net cash provided by (used in) investing activities | ||
Exploration, development and other capital expenditures | (438,506) | (209,592) |
Proceeds from (cash paid for) acquisitions, net of cash acquired | 17,617 | |
Proceeds from (cash paid for) acquisitions, net of cash acquired | (3,500) | |
Proceeds from (cash paid for) sale of property and equipment, net | 66,183 | 1,690 |
Contributions to equity method investees | (29,372) | (2,250) |
Proceeds from sale of equity method investments | 0 | 15,000 |
Investment in intangible assets | (7,796) | 0 |
Net cash provided by (used in) investing activities | (391,874) | (198,652) |
Cash flows from financing activities: | ||
Redemption of senior notes | (15,000) | (6,060) |
Proceeds from Bank Credit Facility | 675,000 | 35,000 |
Repayment of Bank Credit Facility | (460,000) | (350,000) |
Deferred financing costs | (11,775) | (211) |
Other deferred payments | (841) | 0 |
Payments of finance lease | (12,117) | (19,764) |
Purchase of treasury stock | (47,504) | 0 |
Employee stock awards tax withholdings | (7,454) | (4,603) |
Net cash provided by (used in) financing activities | 120,309 | (345,638) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 71,246 | (5,362) |
Cash, cash equivalents and restricted cash: | ||
Balance, beginning of period | 44,145 | 69,852 |
Balance, end of period | 115,391 | 64,490 |
Supplemental non-cash transactions: | ||
Capital expenditures included in accounts payable and accrued liabilities | 90,688 | 78,191 |
Supplemental cash flow information: | ||
Interest paid, net of amounts capitalized | $ 108,931 | $ 89,187 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (2,103) | $ 250,465 | $ 101,434 | $ 379,165 |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization, Nature of Busines
Organization, Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Nature of Business and Basis of Presentation | Not e 1 — Organization, Nature of Business and Basis of Presentation Organization and Nature of Business Talos Energy Inc. (the “Parent Company”) is a Delaware corporation originally incorporated on November 14, 2017 . The Parent Company conducts all business operations through its operating subsidiaries, owns no operating assets and has no material operations, cash flows or liabilities independent of its subsidiaries. The Parent Company’s common stock is traded on The New York Stock Exchange under the ticker symbol “TALO.” The Parent Company (including its subsidiaries, collectively “Talos” or the “Company”) is a technically driven independent exploration and production company focused on safely and efficiently maximizing long-term value through its operations, currently in the United States (“U.S.”) and offshore Mexico, both through upstream oil and gas exploration and production (“Upstream”) and the development of low carbon solutions opportunities. The Company leverages decades of technical and offshore operational expertise towards the acquisition, exploration and development of assets in key geological trends that are present in many offshore basins around the world. The Company is also utilizing its expertise to develop CCS projects to help reduce industrial emissions along the coast of the U.S. Gulf of Mexico. Basis of Presentation and Consolidation The Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and disclosures normally included in complete financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, these financial statements include all adjustments, which unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, cash flows and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The unaudited financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying notes included in the 2022 Annual Report. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Segments The Company has two operating segments: (i) exploration and production of oil, natural gas and NGLs (“Upstream Segment”) and (ii) CCS (“CCS Segment”). The Upstream Segment is the Company’s only reportable segment. The legal entities included in the CCS Segment have been designated as unrestricted, non-guarantor subsidiaries of the Company for purposes of the Bank Credit Facility (as defined in Note 5 — Financial Instruments ) and indentures governing the senior notes. See additional information in Note 12 — Segment Information . Summary of Significant Accounting Policies The Company has provided a discussion of its significant accounting policies, estimates and judgments in Note 2 – Summary of Significant Accounting Policies included in the accompanying Notes to Consolidated Financial Statements in the 2022 Annual Report. The Company has not changed any of its significant accounting policies from those described in our 2022 Annual Report except as set forth below. Restricted Cash — Any cash that is legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring a long-term asset, liquidating a long-term liability, or is otherwise unavailable for a period longer than one year from the balance sheet date, the restricted cash is included in other long-term assets. Otherwise, restricted cash is included in other current assets in the Condensed Consolidated Balance Sheets. The Company acquired funds held in escrow to be used for future plugging and abandonment (“P&A”) obligations assumed through the EnVen Acquisition (as defined in Note 2 — Acquisitions and Divestitures ). These escrow accounts required deposits of approximately $ 100.0 million, which was fully funded by EnVen (as defined in Note 2 — Acquisitions and Divestitures ) prior to the consummation of the acquisition. This is reflected as “Restricted cash” within “Other long-term assets” on the Condensed Consolidated Balance Sheets. Notes Receivable, net — The Company holds two notes receivable with an aggregate face value of $ 66.2 million acquired by the Company as part of the EnVen Acquisition (as defined herein), which consist of commitments from the sellers of oil and natural gas properties related to the costs associated with P&A obligations (the “P&A Notes Receivable”). The P&A Notes Receivable are being accreted to their principal amounts and are presented as such, net of the related cumulative estimated credit losses, on the accompanying Condensed Consolidated Balance Sheets. The Company estimates the current expected credit losses related to its P&A Notes Receivable using the probability of default method based on the long-term credit ratings of the counterparties of the notes, which are currently considered “investment grade.” Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of the amount of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows (in thousands): September 30, 2023 December 31, 2022 Cash and cash equivalents $ 13,631 $ 44,145 Restricted cash included in Other long-term assets 101,760 — Total cash, cash equivalent and restricted cash $ 115,391 $ 44,145 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 2 — Acquisitions and Divestitures Acquisitions — Business Combinations Acquisitions qualifying as business combinations are accounted for under the acquisition method of accounting, which requires, among other items, that assets acquired and liabilities assumed be recognized on the Consolidated Balance Sheets at their fair values as of the acquisition date. EnVen Acquisition — On September 21, 2022 , the Company executed a merger agreement to acquire EnVen Energy Corporation (“EnVen”), a private operator in the Deepwater U.S. Gulf of Mexico (the “EnVen Acquisition,” and such agreement, the “EnVen Merger Agreement”). On February 13, 2023 , the Company completed the EnVen Acquisition for consideration consisting of (i) $ 207.3 million in cash, (ii) 43.8 million shares of the Company’s common stock valued at $ 832.2 million and (iii) the effective settlement of an accounts receivable balance of $ 8.4 million . No gain or loss was recognized on settlement as the payable was effectively settled at the recorded amount. The cash payment was partially funded with borrowings under the Bank Credit Facility. The following table summarizes the purchase price (in thousands except share and per share data): Talos common stock 43,799,890 Talos common stock price per share (1) $ 19.00 Common stock value $ 832,198 Cash consideration $ 207,313 Settlement of preexisting relationship $ 8,388 Total purchase price $ 1,047,899 (1) Represents the closing price of the Company’s common stock on February 13, 2023 , the date of the closing of the EnVen Acquisition. The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on February 13, 2023 (in thousands): Current assets $ 238,293 Property and equipment 1,459,916 Other long-term assets: Restricted cash 100,753 Notes receivable, net 14,844 Other long-term assets 48,899 Current liabilities: Current portion of long-term debt ( 33,234 ) Current portion of asset retirement obligations ( 7,079 ) Other current liabilities ( 123,399 ) Long-term liabilities: Long-term debt ( 233,836 ) Asset retirement obligations ( 251,779 ) Deferred tax liabilities ( 150,504 ) Other long-term liabilities ( 14,975 ) Allocated purchase price $ 1,047,899 The fair values determined for accounts receivable, accounts payable and other current assets and most current liabilities were equivalent to the carrying value due to their short-term nature. Assumed debt was valued based on observable market prices. The fair value of proved oil and natural gas properties as of the acquisition date is based on estimated proved oil, natural gas and NGL reserves and related discounted future net cash flows incorporating market participant assumptions. Significant inputs to the valuation include estimates of future production volumes, future operating and development costs, future commodity prices, and a weighted average cost of capital discount rate. When estimating the fair value of proved and unproved properties, additional risk adjustments were applied to proved developed non-producing, proved undeveloped, probable and possible reserves to reflect the relative uncertainty of each reserve class. These inputs are classified as Level 3 unobservable inputs, including the underlying commodity price assumptions which are based on the five-year NYMEX forward strip prices, escalated for inflation thereafter, and adjusted for price differentials. The fair value of asset retirement obligations is determined by calculating the present value of estimated future cash flows related to the liabilities. The Company utilizes several assumptions, including a credit-adjusted risk-free interest rate, estimated costs of decommissioning services, estimated timing of when the work will be performed and a projected inflation rate. The Company is still finalizing the fair value analysis related to the oil and natural gas properties acquired, asset retirement obligations assumed, certain contingencies and recognized deferred tax liabilities arising from the assets acquired and liabilities assumed. The Company anticipates finalizing the determination of fair values by December 31, 2023. The Company incurred approximately $ 21.8 million of acquisition-related costs in connection with the EnVen Acquisition exclusive of severance expense, of which $ 12.8 million was recognized during the nine months ended September 30, 2023 and $ 9.0 million was recognized during the year ended December 31, 2022 and reflected in general and administrative expense on the Condensed Consolidated Statements of Operations. Additionally, the Company incurred $ 0.9 million and $ 24.9 million in severance expense in connection with the EnVen Acquisition for the three and nine months ended September 30, 2023, respectively. See Note 7 — Employee Benefits Plans and Share-Based Compensation for additional discussion. The following table presents revenue and net income (loss) attributable to the EnVen Acquisition for the three months ended September 30, 2023 and the period from February 13, 2023 to September 30, 2023 (in thousands): Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Revenue $ 126,358 $ 301,999 Net income (loss) $ 37,790 $ 57,578 Pro Forma Financial Information (Unaudited) — The following supplemental pro forma financial information (in thousands, except per common share amounts), presents the condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022 as if the EnVen Acquisition had occurred on January 1, 2022. The unaudited pro forma information was derived from historical statements of operations of the Company and EnVen adjusted to include (i) depletion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) interest expense to reflect borrowings under the Bank Credit Facility and to adjust the amortization of the premium of the 11.75 % Notes (as defined in Note 6 — Debt ), (iii) general and administrative expense adjusted for transaction related costs incurred (including severance), (iv) other income (expense) to adjust the accretion of the discount on the P&A Notes Receivable and (v) weighted average basic and diluted shares of common stock outstanding from the issuance of 43.8 million shares of common stock to EnVen. Supplemental pro forma earnings for the three and nine months ended September 30, 2022 were adjusted to exclude $ 8.6 million and include $ 71.1 million of general and administrative expenses, respectively, of which $ 16.3 million were incurred during the year ended December 31, 2022. Supplemental pro forma earnings for the three and nine months ended September 30, 2023 were adjusted to exclude $ 0.8 million and $ 64.9 million of general and administrative expenses, respectively. This information does not purport to be indicative of results of operations that would have occurred had the EnVen Acquisition occurred on January 1, 2022, nor is such information indicative of any expected future results of operations (in thousands, except for the per share data). Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenue $ 383,136 $ 552,168 $ 1,124,970 $ 1,888,702 Net income (loss) $ ( 1,483 ) $ 334,368 $ 131,421 $ 404,026 Basic net income (loss) per common share $ ( 0.01 ) $ 2.65 $ 1.05 $ 3.20 Diluted net income (loss) per common share $ ( 0.01 ) $ 2.62 $ 1.04 $ 3.18 Divestiture Mexico Divestiture — On September 27, 2023, the Company closed the sale of a 49.9 % equity interest in its subsidiary, Talos Energy Mexico 7, S. de R.L. de C.V. (“Talos Mexico”) to Zamajal, S.A. de C.V, a wholly owned subsidiary of Grupo Carso, for $ 74.9 million in cash consideration with an additional $ 49.9 million contingent on first oil production from the Zama Field (the “Mexico Divestiture”). The contingent consideration will be recognized when regular commercial production from the Zama Field becomes probable. Talos Mexico, through its wholly owned subsidiary, holds a 17.4 % unitized interest in the Zama Field. As a result of the Mexico Divestiture, Talos Mexico was deconsolidated on September 27, 2023 and is now accounted for as an equity method investment. Total assets derecognized included $ 112.3 million of unproved properties associated with exploration and appraisal activities in Block 7 located in the shallow waters off the coast of Mexico’s Tabasco state. The fair value of the Company’s retained equity method investment in Talos Mexico was $ 107.6 million. The determination of fair value was based on the implied fair value of Talos Mexico. The implied fair value of Talos Mexico was based on the transaction price of the Mexico Divestiture, which was an orderly transaction between market participants. A gain of $ 66.2 million was recognized on the Mexico Divestiture during the three and nine months ended September 30, 2023 which is included in “Other operating (income) expense” on the Condensed Consolidated Statements of Operations. Talos Mexico is a variable interest entity (“VIE”) because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. Based on the ownership and governance structure of Talos Mexico, the Company is not the primary beneficiary of this VIE. The Company does not have the unilateral power to direct the most significant activities of Talos Mexico. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Oil and Gas Property [Abstract] | |
Property, Plant and Equipment | Note 3 — Property, Plant and Equipment Proved Properties During the three and nine months ended September 30, 2023 and 2022 , the Company’s ceiling test computations did no t result in a write-down of its U.S. oil and natural gas properties. At September 30, 2023, the Company’s ceiling test computation was based on SEC pricing of $ 80.46 per Bbl of oil, $ 3.58 per Mcf of natural gas and $ 20.44 per Bbl of NGLs. Asset Retirement Obligations The asset retirement obligations included in the Condensed Consolidated Balance Sheets in current and non-current liabilities, and the changes in that liability were as follows (in thousands): Asset retirement obligations at December 31, 2022 $ 541,661 Obligations assumed (1) 258,858 Obligations incurred 297 Obligations settled ( 71,097 ) Obligations divested ( 19,417 ) Accretion expense 63,430 Changes in estimate 43,116 Asset retirement obligations at September 30, 2023 $ 816,848 Less: Current portion at September 30, 2023 69,288 Long-term portion at September 30, 2023 $ 747,560 (1) Assumed in connection with the EnVen Acquisition. See further discussion in Note 2 — Acquisitions and Divestitures. At September 30, 2023, the Company has (1) restricted cash of $ 101.8 million inclusive of interest earned to date, held in escrow and (2) the P&A Notes Receivable of $ 15.8 million to settle future asset retirement obligations. These assets are discussed in Note 1 — Organization, Nature of Business and Basis of Presentation. During the three and nine months ended September 30, 2023 , the Company recognized interest income of $ 0.4 million and $ 1.0 million, respectively, related to the P&A Notes Receivable. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 4 — Leases The Company has operating leases principally for office space, drilling rigs, compressors and other equipment necessary to support the Company’s operations. Additionally, the Company has a finance lease related to the use of the Helix Producer I (the “HP-I”), a dynamically positioned floating production facility that interconnects with the Phoenix Field through a production buoy. The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserves using the unit-of-production method, computed quarterly. Costs associated with the Company’s leases are either expensed or capitalized depending on how the underlying asset is utilized. The lease costs described below are presented on a gross basis and do not represent the Company’s net proportionate share of such amounts. A portion of these costs have been or may be billed to other working interest owners. The Company’s share of these costs is included in property and equipment, lease operating expense or general and administrative expense, as applicable. The components of lease costs were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Finance lease cost - interest on lease liabilities $ 3,604 $ 1,386 $ 10,969 $ 5,179 Operating lease cost, excluding short-term leases (1) 1,323 568 3,419 1,703 Short-term lease cost (2) 33,152 12,982 103,001 24,838 Variable lease cost (3) 666 363 1,856 1,088 Variable and fixed sublease income ( 207 ) — ( 276 ) — Total lease cost $ 38,538 $ 15,299 $ 118,969 $ 32,808 (1) Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. (2) Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the Condensed Consolidated Balance Sheets. (3) Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases. The present value of the fixed lease payments recorded as the Company’s right-of-use (“ROU”) assets and lease liabilities, adjusted for initial direct costs and incentives were as follows (in thousands): September 30, 2023 December 31, 2022 Operating leases: Operating lease assets $ 12,313 $ 5,903 Current portion of operating lease liabilities $ 2,859 $ 1,943 Operating lease liabilities 18,888 14,855 Total operating lease liabilities $ 21,747 $ 16,798 Finance leases: Proved properties $ 166,261 $ 166,261 Other current liabilities $ 17,426 $ 16,306 Other long-term liabilities 135,826 149,064 Total finance lease liabilities $ 153,252 $ 165,370 The table below presents the supplemental cash flow information related to leases (in thousands): Nine Months Ended September 30, 2023 2022 Operating cash outflow from finance leases $ 10,969 $ 5,179 Operating cash outflow from operating leases $ 4,880 $ 2,776 ROU assets obtained in exchange for new operating lease liabilities (1) $ 12,971 $ — Remeasurement of lease liability arising from modification of ROU asset (2) $ ( 5,124 ) $ — (1) See EnVen Acquisition in Note 2 — Acquisitions and Divestitures. (2) Lease termination accounted for as a lease modification based on the modified lease term. The termination did not take effect contemporaneously with the effective date of the modification. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Financial Instruments [Abstract] | |
Financial Instruments | Note 5 — Financial Instruments As of September 30, 2023 and December 31, 2022, the carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair values because they are highly liquid or due to the short-term nature of these instruments. Debt Instruments The following table presents the carrying amounts, net of discount, premium and deferred financing costs, and estimated fair values of the Company’s debt instruments (in thousands): September 30, 2023 December 31, 2022 Carrying Fair Carrying Fair 12.00 % Second-Priority Senior Secured Notes – due January 2026 $ 597,544 $ 664,523 $ 590,132 $ 674,542 11.75 % Senior Secured Second Lien Notes – due April 2026 (1) $ 250,006 $ 248,723 $ — $ — Bank Credit Facility – matures March 2027 $ 204,333 $ 215,000 $ ( 4,792 ) $ — (1) Assumed in connection with the EnVen Acquisition. See further discussion in Note 6 — Debt. The carrying value of the senior notes are adjusted for discount, premium and deferred financing costs. Fair value is estimated (representing a Level 1 fair value measurement) using quoted secondary market trading prices. The carrying amount of the Company’s bank credit facility, as amended and restated (the “Bank Credit Facility”), is presented net of deferred financing costs. The fair value of the Bank Credit Facility is estimated based on the outstanding borrowings under the Bank Credit Facility since it is secured by the Company’s reserves and the interest rates are variable and reflective of market rates (representing a Level 2 fair value measurement). Oil and Natural Gas Derivatives The Company attempts to mitigate a portion of its commodity price risk and stabilize cash flows associated with sales of oil and natural gas production. The Company is currently utilizing oil and natural gas swaps and costless collars. Swaps are contracts where the Company either receives or pays depending on whether the oil or natural gas floating market price is above or below the contracted fixed price. Costless collars consist of a purchased put option and a sold call option with no net premiums paid to or received from counterparties. Typical collar contracts require payments by the Company if the NYMEX average closing price is above the ceiling price or payments to the Company if the NYMEX average closing price is below the floor price (“two-way collar”). In connection with the EnVen Acquisition, the Company assumed oil and natural gas collar contracts that combine a two-way collar with a short put that holds an exercise price below the floor price (“three-way collar”). In these contracts, when the NYMEX average closing price is below the floor price, the Company receives the difference between the NYMEX average closing price and the floor price, capped at the difference between the floor price and the short put price. The following table presents the impact that derivatives, not designated as hedging instruments, had on its Condensed Consolidated Statements of Operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net cash received (paid) on settled derivative instruments $ ( 6,313 ) $ ( 81,162 ) $ ( 10,474 ) $ ( 368,483 ) Unrealized gain (loss) (1) ( 92,489 ) 195,342 ( 3,194 ) 137,350 Price risk management activities income (expense) $ ( 98,802 ) $ 114,180 $ ( 13,668 ) $ ( 231,133 ) (1) Includes $ 1.4 million gain from the unrealized derivative instruments acquired from the EnVen Acquisition for the nine months ended September 30, 2023 . The following tables reflect the contracted average daily volumes and weighted average prices under the terms of the Company's derivative contracts as of September 30, 2023: Swap Contracts Production Period Settlement Index Volumes Swap Price Crude oil: (Bbls) (per Bbl) October 2023 – December 2023 NYMEX WTI CMA 12,000 $ 75.25 January 2024 – December 2024 NYMEX WTI CMA 16,105 $ 74.37 January 2025 – December 2025 NYMEX WTI CMA 6,986 $ 74.11 Natural gas: (MMBtu) (per MMBtu) October 2023 – December 2023 NYMEX Henry Hub 20,000 $ 4.22 January 2024 – December 2024 NYMEX Henry Hub 17,459 $ 3.44 January 2025 – December 2025 NYMEX Henry Hub 12,466 $ 4.00 Two-Way Collar Contracts Production Period Settlement Index Volumes Floor Price Ceiling Price Crude oil: (Bbls) (per Bbl) (per Bbl) October 2023 – December 2023 NYMEX WTI CMA 7,826 $ 67.76 $ 86.39 January 2024 – December 2024 NYMEX WTI CMA 1,497 $ 70.00 $ 79.32 Natural gas: (MMBtu) (per MMBtu) (per MMBtu) October 2023 – December 2023 NYMEX Henry Hub 10,000 $ 5.25 $ 8.46 January 2024 – December 2024 NYMEX Henry Hub 10,000 $ 4.00 $ 6.90 Three-Way Collar Contracts Production Period Settlement Index Volumes Short Put Price Floor Price Ceiling Price Crude oil: (Bbls) (per Bbl) (per Bbl) (per Bbl) October 2023 – December 2023 NYMEX WTI CMA 9,200 $ 51.86 $ 65.11 $ 109.25 January 2024 – March 2024 NYMEX WTI CMA 3,200 $ 57.27 $ 70.00 $ 98.01 The following tables provide additional information related to financial instruments measured at fair value on a recurring basis (in thousands): September 30, 2023 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 16,047 $ — $ 16,047 Liabilities: Oil and natural gas derivatives — ( 64,023 ) — ( 64,023 ) Total net asset (liability) $ — $ ( 47,976 ) $ — $ ( 47,976 ) December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 32,883 $ — $ 32,883 Liabilities: Oil and natural gas derivatives — ( 76,242 ) — ( 76,242 ) Total net asset (liability) $ — $ ( 43,359 ) $ — $ ( 43,359 ) Financial Statement Presentation Derivatives are classified as either current or non-current assets or liabilities based on their anticipated settlement dates. Although the Company has master netting arrangements with its counterparties, the Company presents its derivative financial instruments on a gross basis in its Condensed Consolidated Balance Sheets. The following table presents the fair value of derivative financial instruments as well as the potential effect of netting arrangements on the Company's recognized derivative asset and liability amounts (in thousands): September 30, 2023 December 31, 2022 Assets Liabilities Assets Liabilities Oil and natural gas derivatives: Current $ 11,497 $ 55,042 $ 25,029 $ 68,370 Non-current 4,550 8,981 7,854 7,872 Total gross amounts presented on balance sheet 16,047 64,023 32,883 76,242 Less: Gross amounts not offset on the balance sheet 16,047 16,047 32,883 32,883 Net amounts $ — $ 47,976 $ — $ 43,359 Credit Risk The Company is subject to the risk of loss on its financial instruments as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. The Company has entered into International Swaps and Derivative Association agreements with counterparties to mitigate this risk. The Company also maintains credit policies with regard to its counterparties to minimize overall credit risk. These policies require (i) the evaluation of potential counterparties’ financial condition to determine their credit worthiness; (ii) the regular monitoring of counterparties’ credit exposures; (iii) the use of contract language that affords the Company netting or set off opportunities to mitigate exposure risk; and (iv) potentially requiring counterparties to post cash collateral, parent guarantees, or letters of credit to minimize credit risk. The Company’s assets and liabilities from commodity price risk management activities at September 30, 2023 represent derivative instruments from nine counterparties; all of which are registered swap dealers that have an “investment grade” (minimum Standard & Poor’s rating of BBB- or better) credit rating, and eight of which are parties under the Company’s Bank Credit Facility. The Company enters into derivatives directly with these counterparties and, subject to the terms of the Company’s Bank Credit Facility, is not required to post collateral or other securities for credit risk in relation to the derivative activities. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 — Debt A summary of the detail comprising the Company’s debt and the related book values for the respective periods presented is as follows (in thousands): September 30, 2023 December 31, 2022 12.00 % Second-Priority Senior Secured Notes – due January 2026 $ 638,541 $ 638,541 11.75 % Senior Secured Second Lien Notes – due April 2026 242,500 — Bank Credit Facility – matures March 2027 (1 ) 215,000 — Total debt, before discount, premium and deferred financing cost 1,096,041 638,541 Unamortized discount, premium and deferred financing cost, net ( 44,158 ) ( 53,201 ) Total debt (2) 1,051,883 585,340 Less: Current portion of long-term debt 33,109 — Long-term debt $ 1,018,774 $ 585,340 (1) As of September 30, 2023 , the Company had outstanding borrowings at a weighted average interest rate of 8.42 %. (2) At September 30, 2023 , the Company was in compliance with all debt covenants. 11.75% Senior Secured Second Lien Notes On February 13, 2023 , in conjunction with the closing of the EnVen Acquisition, the Company assumed EnVen’s 11.75 % Senior Secured Second Lien Notes due 2026 (the “11.75% Notes”) with a principal amount of $ 257.5 million. The 11.75% Notes mature on April 15, 2026 and interest accrues and is to be paid semi-annually in cash in arrears on April 15th and October 15th of each year. The indenture governing the 11.75% Notes requires the redemption of $ 15.0 million of the principal amount outstanding at par value on April 15th and October 15th of each year , a discussion of which is included in the accompanying Notes to Consolidated Financial Statements in the 2022 Annual Report. Bank Credit Facility The Company maintains the Bank Credit Facility with a syndicate of financial institutions. The Bank Credit Facility provides for the determination of the borrowing base based on the Company’s proved producing reserves and a portion of the Company's proved undeveloped reserves. The borrowing base is redetermined by the lenders at least semi-annually during the second quarter and fourth quarter of each year. On December 23, 2022, the Company entered into the Incremental Agreement and Ninth Amendment to Credit Agreement (the “Ninth Amendment”). The Ninth Amendment, among other things, (i) extended the maturity date of the Bank Credit Facility from November 12, 2024 to March 31, 2027 and includes a springing maturity commencing on the 91 st day prior to the earliest stated maturity date of any of the junior lien notes if such junior lien notes have not been refinanced, redeemed or repaid in full, (ii) increased the borrowing base from $ 1.1 billion to $ 1.5 billion and (iii) increased commitments from $ 806.3 million to $ 965.0 million, in each case went into effect upon the closing of the EnVen Acquisition and the occurrence of certain events related thereto, a discussion of which is included in the accompanying Notes to Consolidated Financial Statements in the 2022 Annual Report. On June 9, 2023, the borrowing base decreased from $ 1.5 billion to $ 1.1 billion and commitments were reaffirmed at $ 965.0 million as part of the most recent biannual redetermination. |
Employee Benefits Plans and Sha
Employee Benefits Plans and Share-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Compensation And Employee Benefit Plans [Abstract] | |
Employee Benefits Plans and Share-Based Compensation | Note 7 — Employee Benefits Plans and Share-Based Compensation EnVen Acquisition Severance The following table summarizes severance accrual activity in connection the EnVen Acquisition included in “Other current liabilities” and “Other long-term liabilities” on the Condensed Consolidated Balance Sheets as of September 30, 2023 (in thousands): Severance accrual at December 31, 2022 $ — Accrual additions 24,904 Benefit payments ( 13,915 ) Severance accrual at September 30, 2023 10,989 Less: Current portion at September 30, 2023 10,842 Long-term portion at September 30, 2023 $ 147 The above table includes involuntary termination benefits that are being provided pursuant to a one-time benefit arrangement that is being spread over the future service period through the termination date. Involuntary termination benefits are also being provided pursuant to contractual termination benefits required by the terms of existing employment agreements. Pursuant to the EnVen Merger Agreement, a rabbi trust was established and funded with $ 14.5 million at closing to pay a portion of future severance benefits associated with the contractual termination benefits. As of September 30, 2023 , the rabbi trust held $ 6.5 million in assets of which $ 6.2 million and $ 0.3 million are included in “Other current assets” and “Other assets,” respectively, on the Condensed Consolidated Balance Sheets and both of which are included in the severance accrual at September 30, 2023 listed above. The assets of the rabbi trust are available to satisfy the claims of our creditors in the event of bankruptcy or insolvency. Severance costs are reflected in “General and administrative expense” on the Condensed Consolidated Statements of Operations. Long Term Incentive Plans Restricted Stock Units (“RSUs”) — The following table summarizes RSU activity under the Talos Energy Inc. 2021 Long Term Incentive Plan (the “2021 LTIP”) for the nine months ended September 30, 2023: RSUs Weighted Average Unvested RSUs at December 31, 2022 3,215,504 $ 12.79 Granted 1,153,580 $ 16.24 Vested ( 1,644,828 ) $ 12.06 Forfeited ( 277,400 ) $ 14.07 Unvested RSUs at September 30, 2023 (1) 2,446,856 $ 14.77 (1) As of September 30, 2023 , 26,975 of the unvested RSUs were accounted for as liability awards in “Accrued liabilities” on the Condensed Consolidated Balance Sheets. Performance Share Units (“PSUs”) — The following table summarizes PSU activity under the 2021 LTIP for the nine months ended September 30, 2023: PSUs Weighted Average Unvested PSUs at December 31, 2022 638,601 $ 23.66 Granted (1) 593,472 $ 18.78 Forfeited ( 147,286 ) $ 21.47 Unvested PSUs at September 30, 2023 1,084,787 $ 21.29 (1) There were 296,736 PSUs granted that are eligible to vest based on continued employment and the Company’s annualized absolute total shareholder return (“TSR”) over a three-year performance period. An additional 296,736 PSUs were granted and are eligible to vest based on continued employment and the Company’s return on the wells included in the 2023 drill program over a three-year performance period. The following table summarizes the assumptions used in the Monte Carlo simulations to calculate the fair value of the absolute TSR PSUs granted at the date indicated: 2023 Grant Grant July 1 March 5 Expected term (in years) 2.5 2.8 Expected volatility 66.2 % 73.1 % Risk-free interest rate 4.6 % 4.5 % Dividend yield — % — % Fair value (in thousands) $ 173 $ 6,165 Share-based Compensation Costs Share-based compensation costs associated with RSUs, PSUs and other awards are reflected as “General and administrative expense,” on the Condensed Consolidated Statements of Operations, net amounts capitalized to “Proved Properties,” on the Condensed Consolidated Balance Sheets. Because of the non-cash nature of share-based compensation, the expensed portion of share-based compensation is added back to net income in arriving at “Net cash provided by operating activities” on the Condensed Consolidated Statements of Cash Flows. The following table presents the amount of costs expensed and capitalized (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Share-based compensation costs $ 2,556 $ 7,626 $ 18,038 $ 20,597 Less: Amounts capitalized to oil and gas properties 2,163 3,316 8,958 8,920 Total share-based compensation expense $ 393 $ 4,310 $ 9,080 $ 11,677 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 — Income Taxes The Company is a corporation that is subject to U.S. federal, state and foreign income taxes. For the three months ended September 30, 2023, the Company recognized an income tax benefit of $ 15.9 million for an effective tax rate of 88.3 %. The Company’s effective tax rate of 88.3 % is different than the U.S. federal statutory income tax rate of 21 % primarily due to the change of its valuation allowance on its federal deferred tax assets. For the three months ended September 30, 2022, the Company recognized an income tax expense of $ 0.1 million for an effective tax rate of 0.0 %. The Company’s effective tax rate of 0.0 % is different than the U.S. federal statutory income tax rate of 21 % primarily due to recording a valuation allowance for its deferred tax assets. For the nine months ended September 30, 2023, the Company recognized an income tax benefit of $ 55.5 million for an effective tax rate of - 120.9 %. The Company’s effective tax rate of - 120.9 % is different than the U.S. federal statutory income tax rate of 21 % primarily due to a non-cash benefit discrete item of $ 54.9 million related to the partial release of its valuation allowance on its federal deferred tax assets not subject to separate return limitations offset by the impact of other permanent differences. The release of the valuation allowance is a result of the deferred tax liabilities acquired with the EnVen Acquisition . For the nine months ended September 30, 2022, the Company recognized an income tax expense of $ 2.3 million for an effective tax rate of 0.6 %. The Company’s effective tax rate of 0.6 % is lower than the U.S. federal statutory income tax rate of 21 % primarily due to recording a valuation allowance for its deferred tax assets. The Company evaluates and updates the estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of the Company’s actual earnings compared to annual projections, the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The quarterly income tax provision is generally comprised of tax expense on income or benefit on loss at the most recent estimated annual effective tax rate. The tax effect of discrete items is recognized in the period in which they occur at the applicable statutory rate. Deferred income tax assets and liabilities are recorded related to net operating losses and temporary differences between the book and tax basis of assets and liabilities expected to produce deductions and income in the future. The deferred tax asset estimates are subject to revision, either up or down, in future periods based on new facts or circumstances. The Company reduces deferred tax assets by a valuation allowance when, based on estimates, it is more likely than not that a portion of those assets will not be realized in a future period. In evaluating the Company’s valuation allowance, the Company considers cumulative losses, the reversal of existing temporary differences, the existence of taxable income in carryback years, tax optimization planning and future taxable income for each of its taxable jurisdictions. The Company assesses the realizability of its deferred tax assets quarterly; changes to the Company’s assessment of its valuation allowance in future periods could materially impact its results of operations. The Company maintains a partial valuation allowance against certain federal deferred tax assets in which it is more likely than not such assets will not be realized in a future period. The Company also maintains a partial valuation allowance against its federal net deferred tax assets subject to separate return limitations, its state net deferred tax assets and its foreign net deferred tax assets. A deferred tax liability of $ 96.6 million and $ 2.1 million is included in “Other long-term liabilities” on the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively. EnVen Acquisition On February 13, 2023, the Company completed the EnVen Acquisition, which is further discussed in Note 2 — Acquisitions and Divestitures . The Company recognized a net deferred tax liability of $ 150.5 million in its purchase price allocation as of the acquisition date to reflect differences between tax basis and the fair value of EnVen’s assets acquired and liabilities assumed. The deferred tax balance is based on preliminary calculations and on information available to management at the time such estimates were made. Further analysis will be made upon filing EnVen’s tax returns that will result in a change to the net deferred tax impact recorded. |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note 9 — Income (Loss) Per Share Basic earnings per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Except when the effect would be antidilutive, diluted earnings per common share includes the impact of RSUs and PSUs. The following table presents the computation of the Company’s basic and diluted income (loss) per share were as follows (in thousands, except for the per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) $ ( 2,103 ) $ 250,465 $ 101,434 $ 379,165 Weighted average common shares outstanding — basic 124,103 82,576 118,459 82,406 Dilutive effect of securities — 1,242 803 1,032 Weighted average common shares outstanding — diluted 124,103 83,818 119,262 83,438 Net income (loss) per common share: Basic $ ( 0.02 ) $ 3.03 $ 0.86 $ 4.60 Diluted $ ( 0.02 ) $ 2.99 $ 0.85 $ 4.54 Anti-dilutive potentially issuable securities excluded from diluted common shares 1,851 120 1,491 1,149 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 — Related Party Transactions Apollo Funds and Riverstone Funds On February 3, 2012, Talos Energy LLC completed a transaction with funds and other alternative investment vehicles managed by Apollo Management VII, L.P. and Apollo Commodities Management, L.P., with respect to Series I (“Apollo Funds”), and entities controlled by or affiliated with Riverstone Energy Partners V, L.P. (“Riverstone Funds”) and members of management pursuant to which the Company received a private equity capital commitment. On January 3, 2022, the Apollo Funds ceased being a beneficial owner of more than five percent of the Company’s common stock. On July 5, 2023, the Riverstone Funds ceased being a beneficial owner of more than five percent of the Company’s common stock. Registration Rights Agreements Riverstone Funds as well as ILX Holdings, LLC; ILX Holdings II, LLC; ILX Holdings III LLC and Castex Energy 2014, LLC, each a related party and an affiliate of the Riverstone Funds, are parties to an amended registration rights agreement relating to the registered resale of the Company’s common stock owned by such parties, a discussion of which is included in the accompanying Notes to the Consolidated Financial Statements in the 2022 Annual Report. Effective July 5, 2023, the Registration Rights Agreement terminated as there are no Registrable Securities (defined therein) outstanding. Adage Capital Partners, L.P. (“Adage”) and affiliated entities of Bain Capital, LP (“Bain”) are parties to a registration rights agreement entered into in connection with the EnVen Acquisition relating to the registered resale of the Company’s common stock owned by such parties, a discussion of which is included in the accompanying Notes to the Consolidated Financial Statements in the 2022 Annual Report. Adage and Bain held approximately 5.2 % and 12.2 %, respectively, of the Company’s outstanding shares of common stock as of September 30, 2023 based on SEC beneficial ownership reports filed by each of Adage and Bain. The Company will bear all of the expenses incurred in connection with any offer and sale, while the selling stockholders will be responsible for paying underwriting fees, discounts and selling commissions. For the three and nine months ended September 30, 2023 and 2022 , the Company did no t incur any such fees. Amended and Restated Stockholders’ Agreement On May 10, 2018 , the Company entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”) by and among the Company and the other parties thereto. On February 24, 2020 , the Company and the other parties thereto amended the Stockholders’ Agreement (the “Stockholders’ Agreement Amendment”). On March 29, 2022 , the Company and other parties thereto, entered into the Amended and Restated Stockholders’ Agreement, in connection with the termination of the Apollo Funds’ rights thereunder and the resignation of certain members of the Company's Board of Directors (the “Amended and Restated Stockholders’ Agreement”). A discussion of the Stockholders’ Agreement Amendment is included in the accompanying Notes to Consolidated Financial Statements in the 2022 Annual Report. On February 13, 2023 , in connection with the EnVen Acquisition, the Amended and Restated Stockholders’ Agreement was terminated and Mr. Robert M. Tichio resigned from the Company’s Board of Directors. Riverstone Funds Support Agreement On February 13, 2023, in connection with the EnVen Acquisition, the Company, EnVen and the Riverstone Funds entered into a support agreement, a discussion of which is included in the accompanying Notes to Consolidated Financial Statements in the 2022 Annual Report. Legal Fees The Company has engaged the law firm Vinson & Elkins L.L.P. (“V&E”) to provide legal services. An immediate family member of William S. Moss III, the Company’s Executive Vice President and General Counsel and one of its executive officers, is a partner at V&E. For the three and nine months ended September 30, 2023 , the Company incurred fees for legal services performed by V&E of approximately $ 0.1 million and $ 2.2 million, respectively, of which $ 0.4 million was payable for legal services performed by V&E. For the three and nine months ended September 30, 2022 , the Company incurred fees for legal services performed by V&E of approximately $ 2.0 million and $ 3.5 million, respectively, of which $ 2.5 million was payable for legal services performed by V&E. Bayou Bend CCS LLC On March 8, 2022, the Company made a $ 2.3 million cash contribution for a 50 % membership interest in Bayou Bend CCS LLC (“Bayou Bend”). Bayou Bend has a CCS site that is in the early stages of development located offshore Jefferson County, Texas, near the Beaumont and Port Arthur, Texas industrial corridor. In May 2022, the Company sold a 25 % membership interest to Chevron U.S.A. Inc. (“Chevron”) for upfront cash consideration of $ 15.0 million. The Company recognized a $ 13.9 million gain on the partial sale of its investment in Bayou Bend during the nine months ended September 30, 2022 , which is included in “Equity method investments income (expense)” on the Condensed Consolidated Statements of Operations. Chevron also agreed to fund up to $ 10.0 million of contributions to Bayou Bend on the Company’s behalf, which was fully funded during the first quarter of 2023. The Bayou Bend investment was increased with an offsetting gain as the capital carry was funded by Chevron. The Company recognized an $ 8.6 million gain during the nine months ended September 30, 2023 and a $ 1.4 million gain during the three and nine months ended September 30, 2022 on the funding of the capital carry of its investment in Bayou Bend. This is included in “Equity method investment income (expense)” on the Condensed Consolidated Statements of Operations. Effective March 1, 2023, Chevron became the operator of Bayou Bend. The Company had a $ 0.4 million related party receivable from Bayou Bend as of September 30, 2023. This is reflected as “Other, net” within “Accounts receivable” on the Condensed Consolidated Balance Sheets. During March 2023, Bayou Bend expanded its storage footprint through the acquisition of onshore acreage in Chambers and Jefferson Counties, Texas located within the Houston Ship Channel, Beaumont and Port Arthur region. As of September 30, 2023 , the Company owns a 25 % membership interest in Bayou Bend, which is a VIE and accounted for using the equity method of accounting. The development of the Bayou Bend CCS hub project is currently being financed through equity contributions from its members. The Company’s maximum exposure to loss as result of its involvement with Bayou Bend is the carrying amount of its investment. Coastal Bend CCS LLC As of September 30, 2023 , the Company owns a 50 % membership interest in Coastal Bend CCS LLC (“Coastal Bend”), which is a VIE and accounted for using the equity method of accounting. Coastal Bend has a CCS point source project site at the Port of Corpus Christi that is in the early stages of development. The development of the Coastal Bend point source project is currently being financed through equity contributions from its members. The Company’s maximum exposure to loss as a result of its involvement with Coastal Bend is the carrying amount of its investment. The Company had a $ 4.2 million related party receivable from Coastal Bend as of September 30, 2023. This is reflected as “Other, net” within “Accounts receivable” on the Condensed Consolidated Balance Sheets. Talos Mexico As of September 30, 2023 , the Company owns a 50.1 % equity interest in Talos Mexico (see Note 2 - Acquisitions and Divestitures for additional information). The Company had a $ 0.3 million related party receivable from Talos Mexico as of September 30, 2023 . This is reflected as “Other, net” within “Accounts receivable” on the Condensed Consolidated Balance Sheets. The Company’s maximum exposure to loss as a result of its involvement with Talos Mexico is the carrying amount of its investment. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 — Commitments and Contingencies Performance Obligations Regulations with respect to the Company's operations govern, among other things, engineering and construction specifications for production facilities, safety procedures, plugging and abandonment of wells, removal of facilities in the U.S. Gulf of Mexico and certain obligations under the production sharing contracts with Mexico. As of September 30, 2023, the Company had secured performance bonds from third party sureties totaling $ 1.4 billion . The cost of securing these bonds is reflected as “Interest expense” on the Condensed Consolidated Statements of Operations. Additionally, as of September 30, 2023, the Company had secured letters of credit issued under its Bank Credit Facility totaling $ 10.8 million . Letters of credit that are outstanding reduce the available revolving credit commitments. See Note 6 — Debt for further information on the Bank Credit Facility. Legal Proceedings and Other Contingencies From time to time, the Company is involved in litigation, 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. On March 23, 2022, the Company entered into a settlement agreement to receive $ 27.5 million to resolve previously pending litigation, which was filed on October 23, 2017, against a third-party supplier related to quality issues. As part of the settlement agreement, the Company released all of its claims in the litigation. The settlement is reflected as “Other income (expense)” on the Condensed Consolidated Statements of Operations. The following proceedings represent previous EnVen litigation that was assumed as part of the EnVen Acquisition. In June 2019, David M. Dunwoody, Jr., former President of EnVen, filed a lawsuit against EnVen in Texas District Court alleging that the circumstances of his resignation entitled him to the severance payments and benefits under his employment agreement dated as of November 6, 2015 as a resignation for “Good Reason.” In September 2021, the trial court entered a judgment in favor of Mr. Dunwoody, inclusive of Mr. Dunwoody’s legal fees and interest. EnVen filed a Notice of Appeal in December 2021. In April 2023, the appellate court affirmed the trial court’s judgment. The Company filed a petition for review with the Texas Supreme Court on August 2, 2023. As of September 30, 2023 , the Company has recorded $ 14.1 million as “Other current liabilities” on the Condensed Consolidated Balance Sheets related to the litigation. In July 2019, EnVen filed a lawsuit against Mr. Dunwoody in Delaware Chancery Court for breach of fiduciary duty and equitable fraud relating to Mr. Dunwoody’s conduct while he was President of EnVen. In January 2020, EnVen filed an amended complaint that added claims against Oilfield Pipe of Texas, LLC for aiding and abetting Mr. Dunwoody’s breach of his fiduciary duty and equitable fraud. On April 21, 2022, the Delaware Chancery Court denied Mr. Dunwoody’s renewed motion to dismiss the suit. The trial was held in the Delaware Chancery Court in late July 2023. The Company agreed to dismiss the litigation with prejudice on September 14, 2023. Decommissioning Obligations The Company, as a co-lessee or predecessor-in-interest in oil and natural gas leases located in the U.S. Gulf of Mexico, is in the chain of title with unrelated third parties either directly or by virtue of divestiture of certain oil and natural gas assets previously owned and assigned by our subsidiaries. Certain counterparties in these divestiture transactions or third parties in existing leases have filed for bankruptcy protection or undergone associated reorganizations and may not be able to perform required abandonment obligations. Regulations or federal laws could require the Company to assume such obligations. The Company reflects such costs as “Other operating (income) expense” on the Condensed Consolidated Statements of Operations. The decommissioning obligations are included in the Condensed Consolidated Balance Sheets as “Other current liabilities” and “Other long-term liabilities” and the changes in that liability were as follows (in thousands): September 30, 2023 December 31, 2022 Balance, beginning of period $ 54,269 $ 24,336 Additions 266 8,900 Changes in estimate 9,188 22,658 Settlements ( 40,415 ) ( 1,625 ) Balance, end of period $ 23,308 $ 54,269 Less: Current portion 7,200 42,069 Long-term portion $ 16,108 $ 12,200 Although it is reasonably possible that the Company could receive state or federal decommissioning orders in the future or be notified of defaulting third parties in existing leases, the Company cannot predict with certainty, if, how or when such orders or notices will be resolved or estimate a possible loss or range of loss that may result from such orders. However, the Company could incur judgments, enter into settlements or revise its opinion regarding the outcome of certain notices or matters, and such developments could have a material adverse effect on its results of operations in the period in which the amounts are accrued and its cash flows in the period in which the amounts are paid. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12 — Segment Information The Company’s operations are managed through two operating segments: (i) Upstream Segment and (ii) CCS Segment. The Upstream Segment is the Company’s only reportable segment. The Company’s chief operating decision-maker (“CODM”) is the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. A reportable segment is an operating segment that meets materiality thresholds. The 10% tests, as prescribed by the segment reporting accounting guidance, are based on the reported measures of revenue, profit, and assets that are used by the CODM to assess performance and allocate resources. The CCS Segment currently does not meet any of the reportable segment quantitative thresholds. The profit or loss metric used to evaluate segment performance is Adjusted EBITDA, which is defined by the Company as net income (loss) plus interest expense; income tax expense (benefit); depreciation, depletion, and amortization; accretion expense; non-cash write-down of oil and natural gas properties; transaction and other (income) expenses; decommissioning obligations; the net change in the fair value of derivatives (mark to market effect, net of cash settlements and premiums related to these derivatives); (gain) loss on debt extinguishment; non-cash write-down of other well equipment inventory; and non-cash equity-based compensation expense. Corporate general and administrative expense include certain shared costs such as finance, accounting, tax, human resources, information technology and legal costs that are not directly attributable to each of operating segment. A portion of these expenses are allocated based on the percentage of employees dedicated to each operating segment. The remaining expenses are included in the reconciliation of reportable segment Adjusted EBITDA to consolidated pre-tax net income (loss) as an unallocated corporate general and administrative expense. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company’s CODM does not review assets by segment as part of the financial information provided and therefore, no asset information is provided in the table below. The following table presents selected segment information for the periods indicated (in thousands): Upstream All Other (1) Total Revenues from External Customers: Three Months Ended September 30, 2023 $ 383,135 $ — $ 383,135 Three Months Ended September 30, 2022 377,128 — 377,128 Nine Months Ended September 30, 2023 1,072,927 — 1,072,927 Nine Months Ended September 30, 2022 1,309,779 — 1,309,779 Equity in the Net Income (Loss) of Investees Accounted for by the Equity Method: Three Months Ended September 30, 2023 $ 118 $ ( 2,612 ) $ ( 2,494 ) Three Months Ended September 30, 2022 75 ( 497 ) ( 422 ) Nine Months Ended September 30, 2023 373 ( 6,023 ) ( 5,650 ) Nine Months Ended September 30, 2022 5 ( 694 ) ( 689 ) Adjusted EBITDA: Three Months Ended September 30, 2023 $ 255,228 $ ( 5,045 ) $ 250,183 Three Months Ended September 30, 2022 199,675 ( 715 ) 198,960 Nine Months Ended September 30, 2023 719,326 ( 13,562 ) 705,764 Nine Months Ended September 30, 2022 669,103 ( 8,659 ) 660,444 Segment Expenditures: Nine Months Ended September 30, 2023 $ 559,873 $ 37,183 $ 597,056 Nine Months Ended September 30, 2022 297,486 2,027 299,513 (1) The CCS Segment is included in the “All Other” category. The CCS Segment is an emerging business in the start-up phase of operations and the business that does not currently generate any revenues. The CCS Segment’s business activities are conducted through both wholly owned subsidiaries and equity method investments with industry partners. Equity method investments is a business strategy that enables us to achieve favorable economies of scale relative to the level of investment and business risk assumed. Reconciliations The following table presents the reconciliation of Adjusted EBITDA to the Company’s consolidated totals (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted EBITDA: Total for reportable segments $ 255,228 $ 199,675 $ 719,326 $ 669,103 All other ( 5,045 ) ( 715 ) ( 13,562 ) ( 8,659 ) Unallocated corporate general and administrative expense ( 1,366 ) ( 1,400 ) ( 4,161 ) ( 3,894 ) Interest expense ( 45,637 ) ( 29,265 ) ( 128,850 ) ( 91,531 ) Depreciation, depletion and amortization ( 163,359 ) ( 92,323 ) ( 480,476 ) ( 295,174 ) Accretion expense ( 21,256 ) ( 13,179 ) ( 63,430 ) ( 42,400 ) Transaction and other income (expenses) (1) 64,321 ( 3,219 ) 38,799 38,856 Decommissioning obligations (2) ( 7,972 ) ( 20 ) ( 9,454 ) ( 10,553 ) Derivative fair value gain (loss) (3) ( 98,802 ) 114,180 ( 13,668 ) ( 231,133 ) Net cash (received) paid on settled derivative instruments (3) 6,313 81,162 10,474 368,483 Non-cash equity-based compensation expense ( 393 ) ( 4,310 ) ( 9,080 ) ( 11,677 ) Income (loss) before income taxes $ ( 17,968 ) $ 250,586 $ 45,918 $ 381,421 (1) For the three and nine months ended September 30, 2023 , transaction expenses includes $ 1.5 million and $ 39.4 million, respectively, in costs related to the EnVen Acquisition, inclusive of $ 0.9 million and $ 24.9 million, respectively, in severance expense. For the three and nine months ended September 30, 2022 , transaction expenses includes $ 4.3 million and $ 5.0 million, respectively, in costs related to the EnVen Acquisition. See further discussion in Note 2 — Acquisitions and Divestitures and Note 7 — Employee Benefits Plans and Share-Based Compensation . 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 and nine months ended September 30, 2023, the amount includes a $ 66.2 million gain on the Mexico Divestiture. See further discussion in Note 2 — Acquisitions and Divestitures. The amount includes a gain on the funding of the capital carry of our investment in Bayou Bend by Chevron of $ 8.6 million for the nine months ended September 30, 2023 and a $ 1.4 million for the three and nine months ended September 30, 2022 . Additionally, it includes a $ 13.9 million gain on the partial sale of its investment in Bayou Bend to Chevron for the nine months ended September 30, 2022. See further discussion in Note 10 — Related Party Transactions . For the nine months ended September 30, 2022 , the amount includes $ 27.5 million gain as a result of the settlement agreement to resolve previously pending litigation that was filed in October 2017 that is further discussed in Note 11 — Commitments and Contingencies . (2) Estimated decommissioning obligations were a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. See Note 11 — Commitments and Contingencies for additional information on decommissioning obligations. (3) The adjustments for the derivative fair value (gains) losses and net cash receipts (payments) on settled commodity derivative instruments have the effect of adjusting net loss for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDA on an unrealized basis during the period the derivatives settled. The following table presents the reconciliation of Segment Expenditures to the Company’s consolidated totals (in thousands): Nine Months Ended September 30, 2023 2022 Segment Expenditures: Total reportable segments $ 559,873 $ 297,486 All other 37,183 2,027 Change in capital expenditures included in accounts payable and accrued liabilities 15,085 ( 32,430 ) Plugging & abandonment ( 71,097 ) ( 60,304 ) Decommissioning obligations settled ( 40,415 ) — Investment in CCS intangibles and equity method investees ( 37,168 ) ( 2,027 ) Deferred payments ( 841 ) — Non-cash well equipment inventory transfers ( 24,476 ) 3,403 Other 362 1,437 Exploration, development and other capital expenditures $ 438,506 $ 209,592 |
Organization, Nature of Busin_2
Organization, Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business, Basis of Presentation and Consolidation | Organization and Nature of Business Talos Energy Inc. (the “Parent Company”) is a Delaware corporation originally incorporated on November 14, 2017 . The Parent Company conducts all business operations through its operating subsidiaries, owns no operating assets and has no material operations, cash flows or liabilities independent of its subsidiaries. The Parent Company’s common stock is traded on The New York Stock Exchange under the ticker symbol “TALO.” The Parent Company (including its subsidiaries, collectively “Talos” or the “Company”) is a technically driven independent exploration and production company focused on safely and efficiently maximizing long-term value through its operations, currently in the United States (“U.S.”) and offshore Mexico, both through upstream oil and gas exploration and production (“Upstream”) and the development of low carbon solutions opportunities. The Company leverages decades of technical and offshore operational expertise towards the acquisition, exploration and development of assets in key geological trends that are present in many offshore basins around the world. The Company is also utilizing its expertise to develop CCS projects to help reduce industrial emissions along the coast of the U.S. Gulf of Mexico. Basis of Presentation and Consolidation The Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and disclosures normally included in complete financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, these financial statements include all adjustments, which unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, cash flows and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The unaudited financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying notes included in the 2022 Annual Report. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Segments | Segments The Company has two operating segments: (i) exploration and production of oil, natural gas and NGLs (“Upstream Segment”) and (ii) CCS (“CCS Segment”). The Upstream Segment is the Company’s only reportable segment. The legal entities included in the CCS Segment have been designated as unrestricted, non-guarantor subsidiaries of the Company for purposes of the Bank Credit Facility (as defined in Note 5 — Financial Instruments ) and indentures governing the senior notes. See additional information in Note 12 — Segment Information . |
Restricted Cash | Restricted Cash — Any cash that is legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring a long-term asset, liquidating a long-term liability, or is otherwise unavailable for a period longer than one year from the balance sheet date, the restricted cash is included in other long-term assets. Otherwise, restricted cash is included in other current assets in the Condensed Consolidated Balance Sheets. The Company acquired funds held in escrow to be used for future plugging and abandonment (“P&A”) obligations assumed through the EnVen Acquisition (as defined in Note 2 — Acquisitions and Divestitures ). These escrow accounts required deposits of approximately $ 100.0 million, which was fully funded by EnVen (as defined in Note 2 — Acquisitions and Divestitures ) prior to the consummation of the acquisition. This is reflected as “Restricted cash” within “Other long-term assets” on the Condensed Consolidated Balance Sheets. |
Notes Receivable, net | Notes Receivable, net — The Company holds two notes receivable with an aggregate face value of $ 66.2 million acquired by the Company as part of the EnVen Acquisition (as defined herein), which consist of commitments from the sellers of oil and natural gas properties related to the costs associated with P&A obligations (the “P&A Notes Receivable”). The P&A Notes Receivable are being accreted to their principal amounts and are presented as such, net of the related cumulative estimated credit losses, on the accompanying Condensed Consolidated Balance Sheets. The Company estimates the current expected credit losses related to its P&A Notes Receivable using the probability of default method based on the long-term credit ratings of the counterparties of the notes, which are currently considered “investment grade.” |
Organization, Nature of Busin_3
Organization, Nature of Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of the amount of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows (in thousands): September 30, 2023 December 31, 2022 Cash and cash equivalents $ 13,631 $ 44,145 Restricted cash included in Other long-term assets 101,760 — Total cash, cash equivalent and restricted cash $ 115,391 $ 44,145 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) - EnVen Energy Corporation | 9 Months Ended |
Sep. 30, 2023 | |
Business Acquisition [Line Items] | |
Summary of Purchase Price | The following table summarizes the purchase price (in thousands except share and per share data): Talos common stock 43,799,890 Talos common stock price per share (1) $ 19.00 Common stock value $ 832,198 Cash consideration $ 207,313 Settlement of preexisting relationship $ 8,388 Total purchase price $ 1,047,899 (1) Represents the closing price of the Company’s common stock on February 13, 2023 , the date of the closing of the EnVen Acquisition. |
Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on February 13, 2023 (in thousands): Current assets $ 238,293 Property and equipment 1,459,916 Other long-term assets: Restricted cash 100,753 Notes receivable, net 14,844 Other long-term assets 48,899 Current liabilities: Current portion of long-term debt ( 33,234 ) Current portion of asset retirement obligations ( 7,079 ) Other current liabilities ( 123,399 ) Long-term liabilities: Long-term debt ( 233,836 ) Asset retirement obligations ( 251,779 ) Deferred tax liabilities ( 150,504 ) Other long-term liabilities ( 14,975 ) Allocated purchase price $ 1,047,899 |
Summary Of Revenues And Net Income Attributable To Acquisition | The following table presents revenue and net income (loss) attributable to the EnVen Acquisition for the three months ended September 30, 2023 and the period from February 13, 2023 to September 30, 2023 (in thousands): Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Revenue $ 126,358 $ 301,999 Net income (loss) $ 37,790 $ 57,578 |
Supplemental Proforma Information | This information does not purport to be indicative of results of operations that would have occurred had the EnVen Acquisition occurred on January 1, 2022, nor is such information indicative of any expected future results of operations (in thousands, except for the per share data). Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenue $ 383,136 $ 552,168 $ 1,124,970 $ 1,888,702 Net income (loss) $ ( 1,483 ) $ 334,368 $ 131,421 $ 404,026 Basic net income (loss) per common share $ ( 0.01 ) $ 2.65 $ 1.05 $ 3.20 Diluted net income (loss) per common share $ ( 0.01 ) $ 2.62 $ 1.04 $ 3.18 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Oil and Gas Property [Abstract] | |
Schedule of Asset Retirement Obligations | The asset retirement obligations included in the Condensed Consolidated Balance Sheets in current and non-current liabilities, and the changes in that liability were as follows (in thousands): Asset retirement obligations at December 31, 2022 $ 541,661 Obligations assumed (1) 258,858 Obligations incurred 297 Obligations settled ( 71,097 ) Obligations divested ( 19,417 ) Accretion expense 63,430 Changes in estimate 43,116 Asset retirement obligations at September 30, 2023 $ 816,848 Less: Current portion at September 30, 2023 69,288 Long-term portion at September 30, 2023 $ 747,560 (1) Assumed in connection with the EnVen Acquisition. See further discussion in Note 2 — Acquisitions and Divestitures. At September 30, 2023, the Company has (1) restricted cash of $ 101.8 million inclusive of interest earned to date, held in escrow and (2) the P&A Notes Receivable of $ 15.8 million to settle future asset retirement obligations. These assets are discussed in Note 1 — Organization, Nature of Business and Basis of Presentation. During the three and nine months ended September 30, 2023 , the Company recognized interest income of $ 0.4 million and $ 1.0 million, respectively, related to the P&A Notes Receivable. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Components of Lease Costs | The components of lease costs were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Finance lease cost - interest on lease liabilities $ 3,604 $ 1,386 $ 10,969 $ 5,179 Operating lease cost, excluding short-term leases (1) 1,323 568 3,419 1,703 Short-term lease cost (2) 33,152 12,982 103,001 24,838 Variable lease cost (3) 666 363 1,856 1,088 Variable and fixed sublease income ( 207 ) — ( 276 ) — Total lease cost $ 38,538 $ 15,299 $ 118,969 $ 32,808 (1) Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. (2) Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the Condensed Consolidated Balance Sheets. (3) Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases. |
Schedule of Right-of-Use ("ROU") Asset and Lease Liability, Adjusted for Initial Direct Costs and Incentives | The present value of the fixed lease payments recorded as the Company’s right-of-use (“ROU”) assets and lease liabilities, adjusted for initial direct costs and incentives were as follows (in thousands): September 30, 2023 December 31, 2022 Operating leases: Operating lease assets $ 12,313 $ 5,903 Current portion of operating lease liabilities $ 2,859 $ 1,943 Operating lease liabilities 18,888 14,855 Total operating lease liabilities $ 21,747 $ 16,798 Finance leases: Proved properties $ 166,261 $ 166,261 Other current liabilities $ 17,426 $ 16,306 Other long-term liabilities 135,826 149,064 Total finance lease liabilities $ 153,252 $ 165,370 |
Supplemental Cash Flow Information Related to Leases | The table below presents the supplemental cash flow information related to leases (in thousands): Nine Months Ended September 30, 2023 2022 Operating cash outflow from finance leases $ 10,969 $ 5,179 Operating cash outflow from operating leases $ 4,880 $ 2,776 ROU assets obtained in exchange for new operating lease liabilities (1) $ 12,971 $ — Remeasurement of lease liability arising from modification of ROU asset (2) $ ( 5,124 ) $ — (1) See EnVen Acquisition in Note 2 — Acquisitions and Divestitures. (2) Lease termination accounted for as a lease modification based on the modified lease term. The termination did not take effect contemporaneously with the effective date of the modification. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Financial Instruments [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | The following table presents the carrying amounts, net of discount, premium and deferred financing costs, and estimated fair values of the Company’s debt instruments (in thousands): September 30, 2023 December 31, 2022 Carrying Fair Carrying Fair 12.00 % Second-Priority Senior Secured Notes – due January 2026 $ 597,544 $ 664,523 $ 590,132 $ 674,542 11.75 % Senior Secured Second Lien Notes – due April 2026 (1) $ 250,006 $ 248,723 $ — $ — Bank Credit Facility – matures March 2027 $ 204,333 $ 215,000 $ ( 4,792 ) $ — (1) Assumed in connection with the EnVen Acquisition. See further discussion in Note 6 — Debt. |
Schedule of Impact that Derivatives not Qualifying as Hedging Instruments in Condensed Consolidated Statements of Operations | The following table presents the impact that derivatives, not designated as hedging instruments, had on its Condensed Consolidated Statements of Operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net cash received (paid) on settled derivative instruments $ ( 6,313 ) $ ( 81,162 ) $ ( 10,474 ) $ ( 368,483 ) Unrealized gain (loss) (1) ( 92,489 ) 195,342 ( 3,194 ) 137,350 Price risk management activities income (expense) $ ( 98,802 ) $ 114,180 $ ( 13,668 ) $ ( 231,133 ) (1) Includes $ 1.4 million gain from the unrealized derivative instruments acquired from the EnVen Acquisition for the nine months ended September 30, 2023 . |
Schedule of Contracted Volumes and Weighted Average Prices and will Receive Under the Terms of Derivative Contracts | The following tables reflect the contracted average daily volumes and weighted average prices under the terms of the Company's derivative contracts as of September 30, 2023: Swap Contracts Production Period Settlement Index Volumes Swap Price Crude oil: (Bbls) (per Bbl) October 2023 – December 2023 NYMEX WTI CMA 12,000 $ 75.25 January 2024 – December 2024 NYMEX WTI CMA 16,105 $ 74.37 January 2025 – December 2025 NYMEX WTI CMA 6,986 $ 74.11 Natural gas: (MMBtu) (per MMBtu) October 2023 – December 2023 NYMEX Henry Hub 20,000 $ 4.22 January 2024 – December 2024 NYMEX Henry Hub 17,459 $ 3.44 January 2025 – December 2025 NYMEX Henry Hub 12,466 $ 4.00 Two-Way Collar Contracts Production Period Settlement Index Volumes Floor Price Ceiling Price Crude oil: (Bbls) (per Bbl) (per Bbl) October 2023 – December 2023 NYMEX WTI CMA 7,826 $ 67.76 $ 86.39 January 2024 – December 2024 NYMEX WTI CMA 1,497 $ 70.00 $ 79.32 Natural gas: (MMBtu) (per MMBtu) (per MMBtu) October 2023 – December 2023 NYMEX Henry Hub 10,000 $ 5.25 $ 8.46 January 2024 – December 2024 NYMEX Henry Hub 10,000 $ 4.00 $ 6.90 Three-Way Collar Contracts Production Period Settlement Index Volumes Short Put Price Floor Price Ceiling Price Crude oil: (Bbls) (per Bbl) (per Bbl) (per Bbl) October 2023 – December 2023 NYMEX WTI CMA 9,200 $ 51.86 $ 65.11 $ 109.25 January 2024 – March 2024 NYMEX WTI CMA 3,200 $ 57.27 $ 70.00 $ 98.01 |
Summary of Additional Information Related to Financial Instruments Measured at Fair Value on Recurring Basis | The following tables provide additional information related to financial instruments measured at fair value on a recurring basis (in thousands): September 30, 2023 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 16,047 $ — $ 16,047 Liabilities: Oil and natural gas derivatives — ( 64,023 ) — ( 64,023 ) Total net asset (liability) $ — $ ( 47,976 ) $ — $ ( 47,976 ) December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 32,883 $ — $ 32,883 Liabilities: Oil and natural gas derivatives — ( 76,242 ) — ( 76,242 ) Total net asset (liability) $ — $ ( 43,359 ) $ — $ ( 43,359 ) |
Schedule of Fair Value of Derivative Financial Instruments | The following table presents the fair value of derivative financial instruments as well as the potential effect of netting arrangements on the Company's recognized derivative asset and liability amounts (in thousands): September 30, 2023 December 31, 2022 Assets Liabilities Assets Liabilities Oil and natural gas derivatives: Current $ 11,497 $ 55,042 $ 25,029 $ 68,370 Non-current 4,550 8,981 7,854 7,872 Total gross amounts presented on balance sheet 16,047 64,023 32,883 76,242 Less: Gross amounts not offset on the balance sheet 16,047 16,047 32,883 32,883 Net amounts $ — $ 47,976 $ — $ 43,359 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Detail Comprising Debt and Related Book Values | A summary of the detail comprising the Company’s debt and the related book values for the respective periods presented is as follows (in thousands): September 30, 2023 December 31, 2022 12.00 % Second-Priority Senior Secured Notes – due January 2026 $ 638,541 $ 638,541 11.75 % Senior Secured Second Lien Notes – due April 2026 242,500 — Bank Credit Facility – matures March 2027 (1 ) 215,000 — Total debt, before discount, premium and deferred financing cost 1,096,041 638,541 Unamortized discount, premium and deferred financing cost, net ( 44,158 ) ( 53,201 ) Total debt (2) 1,051,883 585,340 Less: Current portion of long-term debt 33,109 — Long-term debt $ 1,018,774 $ 585,340 (1) As of September 30, 2023 , the Company had outstanding borrowings at a weighted average interest rate of 8.42 %. (2) At September 30, 2023 , the Company was in compliance with all debt covenants. |
Employee Benefits Plans and S_2
Employee Benefits Plans and Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Acquisition Severance Costs | The following table summarizes severance accrual activity in connection the EnVen Acquisition included in “Other current liabilities” and “Other long-term liabilities” on the Condensed Consolidated Balance Sheets as of September 30, 2023 (in thousands): Severance accrual at December 31, 2022 $ — Accrual additions 24,904 Benefit payments ( 13,915 ) Severance accrual at September 30, 2023 10,989 Less: Current portion at September 30, 2023 10,842 Long-term portion at September 30, 2023 $ 147 |
Summary of Restricted Stock Units Activity | The following table summarizes RSU activity under the Talos Energy Inc. 2021 Long Term Incentive Plan (the “2021 LTIP”) for the nine months ended September 30, 2023: RSUs Weighted Average Unvested RSUs at December 31, 2022 3,215,504 $ 12.79 Granted 1,153,580 $ 16.24 Vested ( 1,644,828 ) $ 12.06 Forfeited ( 277,400 ) $ 14.07 Unvested RSUs at September 30, 2023 (1) 2,446,856 $ 14.77 (1) As of September 30, 2023 , 26,975 of the unvested RSUs were accounted for as liability awards in “Accrued liabilities” on the Condensed Consolidated Balance Sheets. |
Summary of Performance Share Units Activity | The following table summarizes PSU activity under the 2021 LTIP for the nine months ended September 30, 2023: PSUs Weighted Average Unvested PSUs at December 31, 2022 638,601 $ 23.66 Granted (1) 593,472 $ 18.78 Forfeited ( 147,286 ) $ 21.47 Unvested PSUs at September 30, 2023 1,084,787 $ 21.29 (1) There were 296,736 PSUs granted that are eligible to vest based on continued employment and the Company’s annualized absolute total shareholder return (“TSR”) over a three-year performance period. An additional 296,736 PSUs were granted and are eligible to vest based on continued employment and the Company’s return on the wells included in the 2023 drill program over a three-year performance period. |
Summary of Assumptions Used to Calculate the Grant Date Fair Value of PSUs Granted | The following table summarizes the assumptions used in the Monte Carlo simulations to calculate the fair value of the absolute TSR PSUs granted at the date indicated: 2023 Grant Grant July 1 March 5 Expected term (in years) 2.5 2.8 Expected volatility 66.2 % 73.1 % Risk-free interest rate 4.6 % 4.5 % Dividend yield — % — % Fair value (in thousands) $ 173 $ 6,165 |
Schedule of Recognized Share Based Compensation Expense, Net | The following table presents the amount of costs expensed and capitalized (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Share-based compensation costs $ 2,556 $ 7,626 $ 18,038 $ 20,597 Less: Amounts capitalized to oil and gas properties 2,163 3,316 8,958 8,920 Total share-based compensation expense $ 393 $ 4,310 $ 9,080 $ 11,677 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Income (Loss) Per Share | The following table presents the computation of the Company’s basic and diluted income (loss) per share were as follows (in thousands, except for the per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) $ ( 2,103 ) $ 250,465 $ 101,434 $ 379,165 Weighted average common shares outstanding — basic 124,103 82,576 118,459 82,406 Dilutive effect of securities — 1,242 803 1,032 Weighted average common shares outstanding — diluted 124,103 83,818 119,262 83,438 Net income (loss) per common share: Basic $ ( 0.02 ) $ 3.03 $ 0.86 $ 4.60 Diluted $ ( 0.02 ) $ 2.99 $ 0.85 $ 4.54 Anti-dilutive potentially issuable securities excluded from diluted common shares 1,851 120 1,491 1,149 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Decommissioning Obligations Included in Consolidated Balance Sheets | The decommissioning obligations are included in the Condensed Consolidated Balance Sheets as “Other current liabilities” and “Other long-term liabilities” and the changes in that liability were as follows (in thousands): September 30, 2023 December 31, 2022 Balance, beginning of period $ 54,269 $ 24,336 Additions 266 8,900 Changes in estimate 9,188 22,658 Settlements ( 40,415 ) ( 1,625 ) Balance, end of period $ 23,308 $ 54,269 Less: Current portion 7,200 42,069 Long-term portion $ 16,108 $ 12,200 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Information by Business Segment | The following table presents selected segment information for the periods indicated (in thousands): Upstream All Other (1) Total Revenues from External Customers: Three Months Ended September 30, 2023 $ 383,135 $ — $ 383,135 Three Months Ended September 30, 2022 377,128 — 377,128 Nine Months Ended September 30, 2023 1,072,927 — 1,072,927 Nine Months Ended September 30, 2022 1,309,779 — 1,309,779 Equity in the Net Income (Loss) of Investees Accounted for by the Equity Method: Three Months Ended September 30, 2023 $ 118 $ ( 2,612 ) $ ( 2,494 ) Three Months Ended September 30, 2022 75 ( 497 ) ( 422 ) Nine Months Ended September 30, 2023 373 ( 6,023 ) ( 5,650 ) Nine Months Ended September 30, 2022 5 ( 694 ) ( 689 ) Adjusted EBITDA: Three Months Ended September 30, 2023 $ 255,228 $ ( 5,045 ) $ 250,183 Three Months Ended September 30, 2022 199,675 ( 715 ) 198,960 Nine Months Ended September 30, 2023 719,326 ( 13,562 ) 705,764 Nine Months Ended September 30, 2022 669,103 ( 8,659 ) 660,444 Segment Expenditures: Nine Months Ended September 30, 2023 $ 559,873 $ 37,183 $ 597,056 Nine Months Ended September 30, 2022 297,486 2,027 299,513 (1) The CCS Segment is included in the “All Other” category. The CCS Segment is an emerging business in the start-up phase of operations and the business that does not currently generate any revenues. The CCS Segment’s business activities are conducted through both wholly owned subsidiaries and equity method investments with industry partners. Equity method investments is a business strategy that enables us to achieve favorable economies of scale relative to the level of investment and business risk assumed. |
Schedule of Reconciliation of Adjusted EBITDA to the Company's Consolidated Totals | The following table presents the reconciliation of Adjusted EBITDA to the Company’s consolidated totals (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted EBITDA: Total for reportable segments $ 255,228 $ 199,675 $ 719,326 $ 669,103 All other ( 5,045 ) ( 715 ) ( 13,562 ) ( 8,659 ) Unallocated corporate general and administrative expense ( 1,366 ) ( 1,400 ) ( 4,161 ) ( 3,894 ) Interest expense ( 45,637 ) ( 29,265 ) ( 128,850 ) ( 91,531 ) Depreciation, depletion and amortization ( 163,359 ) ( 92,323 ) ( 480,476 ) ( 295,174 ) Accretion expense ( 21,256 ) ( 13,179 ) ( 63,430 ) ( 42,400 ) Transaction and other income (expenses) (1) 64,321 ( 3,219 ) 38,799 38,856 Decommissioning obligations (2) ( 7,972 ) ( 20 ) ( 9,454 ) ( 10,553 ) Derivative fair value gain (loss) (3) ( 98,802 ) 114,180 ( 13,668 ) ( 231,133 ) Net cash (received) paid on settled derivative instruments (3) 6,313 81,162 10,474 368,483 Non-cash equity-based compensation expense ( 393 ) ( 4,310 ) ( 9,080 ) ( 11,677 ) Income (loss) before income taxes $ ( 17,968 ) $ 250,586 $ 45,918 $ 381,421 (1) For the three and nine months ended September 30, 2023 , transaction expenses includes $ 1.5 million and $ 39.4 million, respectively, in costs related to the EnVen Acquisition, inclusive of $ 0.9 million and $ 24.9 million, respectively, in severance expense. For the three and nine months ended September 30, 2022 , transaction expenses includes $ 4.3 million and $ 5.0 million, respectively, in costs related to the EnVen Acquisition. See further discussion in Note 2 — Acquisitions and Divestitures and Note 7 — Employee Benefits Plans and Share-Based Compensation . 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 and nine months ended September 30, 2023, the amount includes a $ 66.2 million gain on the Mexico Divestiture. See further discussion in Note 2 — Acquisitions and Divestitures. The amount includes a gain on the funding of the capital carry of our investment in Bayou Bend by Chevron of $ 8.6 million for the nine months ended September 30, 2023 and a $ 1.4 million for the three and nine months ended September 30, 2022 . Additionally, it includes a $ 13.9 million gain on the partial sale of its investment in Bayou Bend to Chevron for the nine months ended September 30, 2022. See further discussion in Note 10 — Related Party Transactions . For the nine months ended September 30, 2022 , the amount includes $ 27.5 million gain as a result of the settlement agreement to resolve previously pending litigation that was filed in October 2017 that is further discussed in Note 11 — Commitments and Contingencies . (2) Estimated decommissioning obligations were a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. See Note 11 — Commitments and Contingencies for additional information on decommissioning obligations. (3) The adjustments for the derivative fair value (gains) losses and net cash receipts (payments) on settled commodity derivative instruments have the effect of adjusting net loss for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDA on an unrealized basis during the period the derivatives settled. |
Reconciliation of Reportable Segment Expenditures | The following table presents the reconciliation of Segment Expenditures to the Company’s consolidated totals (in thousands): Nine Months Ended September 30, 2023 2022 Segment Expenditures: Total reportable segments $ 559,873 $ 297,486 All other 37,183 2,027 Change in capital expenditures included in accounts payable and accrued liabilities 15,085 ( 32,430 ) Plugging & abandonment ( 71,097 ) ( 60,304 ) Decommissioning obligations settled ( 40,415 ) — Investment in CCS intangibles and equity method investees ( 37,168 ) ( 2,027 ) Deferred payments ( 841 ) — Non-cash well equipment inventory transfers ( 24,476 ) 3,403 Other 362 1,437 Exploration, development and other capital expenditures $ 438,506 $ 209,592 |
Organization, Nature of Busin_4
Organization, Nature of Business and Basis of Presentation - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) Segment | |
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |
Date of incorporation | Nov. 14, 2017 |
Number of operating segments | Segment | 2 |
EnVen Energy Corporation | |
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |
Receivable with Imputed Interest, Face Amount | $ 66.2 |
EnVen Energy Corporation | Future plugging and abandonment obligations | |
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |
Escrow Deposit | $ 100 |
Organization, Nature of Busin_5
Organization, Nature of Business and Basis of Presentation - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 13,631 | $ 44,145 | ||
Restricted cash included in Other long term assets | 101,760 | 0 | ||
Total cash, cash equivalent and restricted cash | $ 115,391 | $ 44,145 | $ 64,490 | $ 69,852 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Business Combinations - Additional Information (Details) - EnVen Energy Corporation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Feb. 13, 2023 | Sep. 21, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||||
Business acquisition, effective date | Feb. 13, 2023 | ||||||
Pro forma financial information | The following supplemental pro forma financial information (in thousands, except per common share amounts), presents the condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022 as if the EnVen Acquisition had occurred on January 1, 2022. The unaudited pro forma information was derived from historical statements of operations of the Company and EnVen adjusted to include (i) depletion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) interest expense to reflect borrowings under the Bank Credit Facility and to adjust the amortization of the premium of the 11.75% Notes (as defined in Note 6 — Debt), (iii) general and administrative expense adjusted for transaction related costs incurred (including severance), (iv) other income (expense) to adjust the accretion of the discount on the P&A Notes Receivable and (v) weighted average basic and diluted shares of common stock outstanding from the issuance of 43.8 million shares of common stock to EnVen. Supplemental pro forma earnings for the three and nine months ended September 30, 2022 were adjusted to exclude $8.6 million and include $71.1 million of general and administrative expenses, respectively, of which $16.3 million were incurred during the year ended December 31, 2022. Supplemental pro forma earnings for the three and nine months ended September 30, 2023 were adjusted to exclude $0.8 million and $64.9 million of general and administrative expenses, respectively. | ||||||
Supplemental pro forma earnings | $ (1,483) | $ 334,368 | $ 131,421 | $ 404,026 | |||
Cash consideration | $ 207,313 | ||||||
Business Acquisition, Date of Acquisition Agreement | Sep. 21, 2022 | ||||||
Common stock value | 832,198 | ||||||
Settlement of preexisting relationship | 8,388 | ||||||
Settlement of preexisting relationship | |||||||
Business Acquisition [Line Items] | |||||||
Gain or loss recognized on settlement | $ 0 | ||||||
Employee Severance | |||||||
Business Acquisition [Line Items] | |||||||
Aquisition severance cost | 900 | 24,900 | |||||
General and Administrative Expense | |||||||
Business Acquisition [Line Items] | |||||||
Cumulative transaction related costs | 21,800 | 21,800 | |||||
Acquisition, transaction related cost | 12,800 | $ 9,000 | |||||
General and Administrative Expense | Pro Forma | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition, transaction related cost | $ 16,300 | ||||||
General and Administrative Expense | Nonrecurring Adjustments [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Supplemental pro forma earnings | $ (800) | $ (8,600) | $ (64,900) | $ 71,100 | |||
Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Aggregate shares issued | 43,799,890 | ||||||
Common Stock | Pro Forma | |||||||
Business Acquisition [Line Items] | |||||||
Aggregate shares issued | 43,800,000 | 43,800,000 | |||||
11.75% notes | |||||||
Business Acquisition [Line Items] | |||||||
Debt instrument interest rate | 11.75% | 11.75% |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Business Combinations - Summary of Purchase Price (Details) - EnVen Energy Corporation $ / shares in Units, $ in Thousands | Feb. 13, 2023 USD ($) $ / shares shares | |
Business Acquisition [Line Items] | ||
Talos common stock price per share | $ / shares | $ 19 | [1] |
Common stock value | $ 832,198 | |
Cash consideration | 207,313 | |
Settlement of preexisting relationship | 8,388 | |
Total purchase price | $ 1,047,899 | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Talos common stock | shares | 43,799,890 | |
[1] Represents the closing price of the Company’s common stock on February 13, 2023 , the date of the closing of the EnVen Acquisition. |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Business Combinations - Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed (Details) - EnVen Energy Corporation $ in Thousands | Feb. 13, 2023 USD ($) |
Business Acquisition [Line Items] | |
Current assets | $ 238,293 |
Property and equipment | 1,459,916 |
Restricted cash | 100,753 |
Notes receivable, net | 14,844 |
Other long-term assets | 48,899 |
Current portion of long-term debt | (33,234) |
Current portion of asset retirement obligations | (7,079) |
Other current liabilities | (123,399) |
Long-term debt | (233,836) |
Asset retirement obligations | (251,779) |
Deferred tax liabilities | (150,504) |
Other long-term liabilities | (14,975) |
Allocated purchase price | $ 1,047,899 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Business Combinations - Summary of Revenue and Net Income Attributable to Acquisition (Details) - EnVen Energy Corporation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Business Acquisition [Line Items] | ||
Revenue | $ 126,358 | $ 301,999 |
Net income (loss) | $ 37,790 | $ 57,578 |
Acquisitions and Divestitures_5
Acquisitions and Divestitures - Business Combinations - Supplemental Proforma Information (Details) - EnVen Energy Corporation - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Business Acquisition, Pro Forma Revenue | $ 383,136 | $ 552,168 | $ 1,124,970 | $ 1,888,702 |
Net income (loss) | $ (1,483) | $ 334,368 | $ 131,421 | $ 404,026 |
Basic net income (loss) per common share | $ (0.01) | $ 2.65 | $ 1.05 | $ 3.2 |
Diluted net income (loss) per common share | $ (0.01) | $ 2.62 | $ 1.04 | $ 3.18 |
Acquisitions and Divestitures_6
Acquisitions and Divestitures - Divestiture - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Unproved properties, not subject to amortization | $ 267,297 | $ 267,297 | $ 154,783 | |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Operating Income (Expense), Net | Other Operating Income (Expense), Net | ||
Talos Mexico [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Percentage of Equity Interests Sold | 49.90% | |||
Proceeds from Divestiture of Businesses | $ 74,900 | |||
Unproved properties, not subject to amortization | 112,300 | |||
Fair value of Company's retained equity method investment | $ 107,600 | |||
Talos Mexico [Member] | Earnout | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from Divestiture of Businesses | $ 49,900 | |||
Talos Mexico [Member] | Disposal Group, Held-for-Sale or Disposed of by Sale, Not Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 66,200 | $ 66,200 | ||
Zama Field | Talos Mexico [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Oil And Gas Ownership Working Interest | 17.40% |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / bbl $ / Mcf | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Restricted cash | $ 101,760,000 | $ 101,760,000 | $ 0 | ||
Notes receivable, net | 15,805,000 | 15,805,000 | $ 0 | ||
Other Nonoperating Income (Expense) | Financing Receivable | |||||
Property, Plant and Equipment [Line Items] | |||||
Interest income | 400,000 | 1,000,000 | |||
Future plugging and abandonment obligations | |||||
Property, Plant and Equipment [Line Items] | |||||
Restricted cash | 101,800,000 | 101,800,000 | |||
Notes receivable, net | 15,800,000 | 15,800,000 | |||
US | |||||
Property, Plant and Equipment [Line Items] | |||||
Write-down of oil and natural gas properties | $ 0 | $ 0 | $ 0 | $ 0 | |
US | Oil (MBbls) | |||||
Property, Plant and Equipment [Line Items] | |||||
SEC pricing | $ / bbl | 80.46 | ||||
US | Gas (MMcf) | |||||
Property, Plant and Equipment [Line Items] | |||||
SEC pricing | $ / Mcf | 3.58 | ||||
US | NGL (MBbls) | |||||
Property, Plant and Equipment [Line Items] | |||||
SEC pricing | $ / bbl | 20.44 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Schedule of Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | ||
Oil and Gas Property [Abstract] | ||||||
Asset retirement obligations at December 31, 2022 | $ 541,661 | |||||
Obligations assumed | [1] | 258,858 | ||||
Obligations incurred | 297 | |||||
Obligations settled | (71,097) | |||||
Obligations divested | (19,417) | |||||
Accretion expense | $ 21,256 | $ 13,179 | 63,430 | $ 42,400 | ||
Changes in estimate | 43,116 | |||||
Asset retirement obligations at September 30, 2023 | 816,848 | 816,848 | ||||
Less: Current portion at September 30 , 2023 | 69,288 | 69,288 | $ 39,888 | |||
Long-term portion at September 30, 2023 | $ 747,560 | $ 747,560 | $ 501,773 | |||
[1] Assumed in connection with the EnVen Acquisition. See further discussion in Note 2 — Acquisitions and Divestitures. |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Lease, Cost [Abstract] | |||||
Finance lease cost - interest on lease liabilities | $ 3,604 | $ 1,386 | $ 10,969 | $ 5,179 | |
Operating lease cost, excluding short-term leases | [1] | 1,323 | 568 | 3,419 | 1,703 |
Short-term lease cost | [2] | 33,152 | 12,982 | 103,001 | 24,838 |
Variable lease cost | [3] | 666 | 363 | 1,856 | 1,088 |
Variable and fixed sublease income | (207) | 0 | (276) | 0 | |
Total lease cost | $ 38,538 | $ 15,299 | $ 118,969 | $ 32,808 | |
[1] Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the Condensed Consolidated Balance Sheets. Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases. |
Leases - Schedule of Right-of-U
Leases - Schedule of Right-of-Use Asset and Liability, Adjusted for Initial Direct Costs and Incentives (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating lease assets | $ 12,313 | $ 5,903 |
Current portion of operating lease liabilities | $ 2,859 | $ 1,943 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current portion of operating lease liabilities | Current portion of operating lease liabilities |
Operating lease liabilities | $ 18,888 | $ 14,855 |
Total operating lease liabilities | 21,747 | 16,798 |
Proved properties | $ 166,261 | $ 166,261 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Capitalized Costs, Proved Properties | Capitalized Costs, Proved Properties |
Other current liabilities | $ 17,426 | $ 16,306 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Other long-term liabilities | $ 135,826 | $ 149,064 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Total finance lease liabilities | $ 153,252 | $ 165,370 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Cash Flow, Operating Activities, Lessee [Abstract] | |||
Operating cash outflow from finance leases | $ 10,969 | $ 5,179 | |
Operating cash outflow from operating leases | 4,880 | 2,776 | |
ROU assets obtained in exchange for new operating lease liabilities | [1] | 12,971 | 0 |
Remeasurement of lease liability arising from modification of ROU asset | [2] | $ (5,124) | $ 0 |
[1] See EnVen Acquisition in Note 2 — Acquisitions and Divestitures. Lease termination accounted for as a lease modification based on the modified lease term. The termination did not take effect contemporaneously with the effective date of the modification. |
Financial Instruments - Schedul
Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Carrying Amount | [1] | $ 1,051,883 | $ 585,340 |
12.00% Second-Priority Senior Secured Notes - due January 2026 | |||
Debt Instrument [Line Items] | |||
Carrying Amount | 597,544 | 590,132 | |
Fair Value | 664,523 | 674,542 | |
11.75% Senior Secured Second Lien Notes - due April 2026 | |||
Debt Instrument [Line Items] | |||
Carrying Amount | [2] | 250,006 | 0 |
Fair Value | [2] | 248,723 | 0 |
Bank Credit Facility - matures March 2027 | |||
Debt Instrument [Line Items] | |||
Carrying Amount | 204,333 | ||
Fair Value | $ 215,000 | 0 | |
Carrying Amount | $ (4,792) | ||
[1] At September 30, 2023 , the Company was in compliance with all debt covenants. Assumed in connection with the EnVen Acquisition. See further discussion in Note 6 — Debt. |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended | |
Feb. 13, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
12.00% Second-Priority Senior Secured Notes - due January 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 12% | 12% | |
Senior notes, maturity date | Jan. 15, 2026 | Jan. 15, 2026 | |
11.75% Senior Secured Second Lien Notes - due April 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 11.75% | 11.75% | |
Senior notes, maturity date | Apr. 15, 2026 | Apr. 15, 2026 | Apr. 15, 2026 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 Counterparty | |
Concentration Risk [Line Items] | |
Credit risk, financial instruments | The Company is subject to the risk of loss on its financial instruments as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. The Company has entered into International Swaps and Derivative Association agreements with counterparties to mitigate this risk. The Company also maintains credit policies with regard to its counterparties to minimize overall credit risk. These policies require (i) the evaluation of potential counterparties’ financial condition to determine their credit worthiness; (ii) the regular monitoring of counterparties’ credit exposures; (iii) the use of contract language that affords the Company netting or set off opportunities to mitigate exposure risk; and (iv) potentially requiring counterparties to post cash collateral, parent guarantees, or letters of credit to minimize credit risk. The Company’s assets and liabilities from commodity price risk management activities at September 30, 2023 represent derivative instruments from nine counterparties; all of which are registered swap dealers that have an “investment grade” (minimum Standard & Poor’s rating of BBB- or better) credit rating, and eight of which are parties under the Company’s Bank Credit Facility. The Company enters into derivatives directly with these counterparties and, subject to the terms of the Company’s Bank Credit Facility, is not required to post collateral or other securities for credit risk in relation to the derivative activities. |
Counterparty Risk Investment Grade | |
Concentration Risk [Line Items] | |
Number of counter parties description | all of which |
Counterparty Risk Diversification | |
Concentration Risk [Line Items] | |
Number of counterparties | 9 |
Financial Instruments - Sched_3
Financial Instruments - Schedule of Impact that Derivatives not Qualifying as Hedging Instruments in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | $ (98,802) | $ 114,180 | $ (13,668) | $ (231,133) | |
Gain Loss On Derivative Instruments Unrealized Component | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | [1] | (92,489) | 195,342 | (3,194) | 137,350 |
Commodity Contract | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | (98,802) | 114,180 | (13,668) | (231,133) | |
Commodity Contract | Gain Loss On Derivative Instruments Realized Component | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | $ (6,313) | $ (81,162) | $ (10,474) | $ (368,483) | |
[1] Includes $ 1.4 million gain from the unrealized derivative instruments acquired from the EnVen Acquisition for the nine months ended September 30, 2023 . |
Financial Instruments - Sched_4
Financial Instruments - Schedule of Impact that Derivatives not Qualifying as Hedging Instruments in Condensed Consolidated Statements of Operations (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | $ (98,802) | $ 114,180 | $ (13,668) | $ (231,133) | |
Gain Loss On Derivative Instruments Unrealized Component | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | [1] | $ (92,489) | $ 195,342 | (3,194) | $ 137,350 |
Gain Loss On Derivative Instruments Unrealized Component | EnVen Energy Corporation | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative fair value gain (loss) | $ 1,400 | ||||
[1] Includes $ 1.4 million gain from the unrealized derivative instruments acquired from the EnVen Acquisition for the nine months ended September 30, 2023 . |
Financial Instruments - Sched_5
Financial Instruments - Schedule of Contracted Volumes and Weighted Average Prices and will Receive Under the Terms of Derivative Contracts (Details) | 9 Months Ended |
Sep. 30, 2023 MMBTU $ / MMBTU $ / bbl bbl | |
Crude Oil | October 2023 - December 2023 | Swap | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 12,000 |
Swap Price | 75.25 |
Crude Oil | October 2023 - December 2023 | Collar | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 7,826 |
Floor Price | 67.76 |
Ceiling Price | 86.39 |
Crude Oil | October 2023 - December 2023 | Three-Way Collar Contracts | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 9,200 |
Floor Price | 65.11 |
Ceiling Price | 109.25 |
Crude Oil | October 2023 - December 2023 | Three-Way Collar Contracts | Short | |
Derivative [Line Items] | |
Short Put Price | 51.86 |
Crude Oil | January 2024 - December 2024 | Swap | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 16,105 |
Swap Price | 74.37 |
Crude Oil | January 2024 - December 2024 | Collar | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 1,497 |
Floor Price | 70 |
Ceiling Price | 79.32 |
Crude Oil | January 2024 - March 2024 | Three-Way Collar Contracts | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 3,200 |
Floor Price | 70 |
Ceiling Price | 98.01 |
Crude Oil | January 2024 - March 2024 | Three-Way Collar Contracts | Short | |
Derivative [Line Items] | |
Short Put Price | 57.27 |
Crude Oil | January 2025 - December 2025 | Swap | |
Derivative [Line Items] | |
Settlement Index | NYMEX WTI CMA |
Volumes | bbl | 6,986 |
Swap Price | 74.11 |
Natural Gas | October 2023 - December 2023 | Swap | |
Derivative [Line Items] | |
Settlement Index | NYMEX Henry Hub |
Average Daily Volumes | MMBTU | 20,000 |
Swap Price | $ / MMBTU | 4.22 |
Natural Gas | October 2023 - December 2023 | Collar | |
Derivative [Line Items] | |
Settlement Index | NYMEX Henry Hub |
Average Daily Volumes | MMBTU | 10,000 |
Floor Price | $ / MMBTU | 5.25 |
Ceiling Price | $ / MMBTU | 8.46 |
Natural Gas | January 2024 - December 2024 | Swap | |
Derivative [Line Items] | |
Settlement Index | NYMEX Henry Hub |
Average Daily Volumes | MMBTU | 17,459 |
Swap Price | $ / MMBTU | 3.44 |
Natural Gas | January 2024 - December 2024 | Collar | |
Derivative [Line Items] | |
Settlement Index | NYMEX Henry Hub |
Average Daily Volumes | MMBTU | 10,000 |
Floor Price | $ / MMBTU | 4 |
Ceiling Price | $ / MMBTU | 6.9 |
Natural Gas | January 2025 - December 2025 | Swap | |
Derivative [Line Items] | |
Settlement Index | NYMEX Henry Hub |
Average Daily Volumes | MMBTU | 12,466 |
Swap Price | $ / MMBTU | 4 |
Financial Instruments - Summary
Financial Instruments - Summary of Additional Information Related to Financial Instruments Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Oil and Natural Gas Derivatives | ||
Assets: | ||
Oil and natural gas derivatives | $ 0 | $ 0 |
Liabilities: | ||
Oil and natural gas derivatives | 47,976 | 43,359 |
Fair Value on Recurring Basis | ||
Liabilities: | ||
Total net asset (liability) | (47,976) | (43,359) |
Fair Value on Recurring Basis | Oil and Natural Gas Derivatives | ||
Assets: | ||
Oil and natural gas derivatives | $ 16,047 | $ 32,883 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | Assets |
Liabilities: | ||
Oil and natural gas derivatives | $ (64,023) | $ (76,242) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Fair Value on Recurring Basis | Level 1 | ||
Liabilities: | ||
Total net asset (liability) | $ 0 | $ 0 |
Fair Value on Recurring Basis | Level 1 | Oil and Natural Gas Derivatives | ||
Assets: | ||
Oil and natural gas derivatives | $ 0 | $ 0 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | Assets |
Liabilities: | ||
Oil and natural gas derivatives | $ 0 | $ 0 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Fair Value on Recurring Basis | Level 2 | ||
Liabilities: | ||
Total net asset (liability) | $ (47,976) | $ (43,359) |
Fair Value on Recurring Basis | Level 2 | Oil and Natural Gas Derivatives | ||
Assets: | ||
Oil and natural gas derivatives | $ 16,047 | $ 32,883 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | Assets |
Liabilities: | ||
Oil and natural gas derivatives | $ (64,023) | $ (76,242) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Fair Value on Recurring Basis | Level 3 | ||
Liabilities: | ||
Total net asset (liability) | $ 0 | $ 0 |
Fair Value on Recurring Basis | Level 3 | Oil and Natural Gas Derivatives | ||
Assets: | ||
Oil and natural gas derivatives | $ 0 | $ 0 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | Assets |
Liabilities: | ||
Oil and natural gas derivatives | $ 0 | $ 0 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Financial Instruments - Sched_6
Financial Instruments - Schedule of Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Price Risk Derivatives [Line Items] | ||
Derivative Asset, Current | $ 11,497 | $ 25,029 |
Derivative Asset, Noncurrent | 4,550 | 7,854 |
Derivative Liability, Current | 55,042 | 68,370 |
Derivative Liability, Noncurrent | 8,981 | 7,872 |
Oil and Natural Gas Derivatives | ||
Price Risk Derivatives [Line Items] | ||
Derivative Asset, Current | 11,497 | 25,029 |
Derivative Asset, Noncurrent | 4,550 | 7,854 |
Total gross amounts presented on balance sheet, Assets | 16,047 | 32,883 |
Gross amounts not offset on the balance sheet | 16,047 | 32,883 |
Net Amounts | 0 | 0 |
Derivative Liability, Current | 55,042 | 68,370 |
Derivative Liability, Noncurrent | 8,981 | 7,872 |
Total gross amounts presented on balance sheet, Liabilities | 64,023 | 76,242 |
Gross amounts not offset on the balance sheet | 16,047 | 32,883 |
Net Amounts | $ 47,976 | $ 43,359 |
Debt - Summary of Detail Compri
Debt - Summary of Detail Comprising Debt and Related Book Values (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Total debt, before discount, premium and deferred financing cost | $ 1,096,041 | $ 638,541 | |
Unamortized discount, premium and deferred financing cost, net | (44,158) | (53,201) | |
Total debt | [1] | 1,051,883 | 585,340 |
Less: current portion of long-term debt | 33,109 | 0 | |
Long-term debt | 1,018,774 | 585,340 | |
Senior Notes | 12.00% Second-Priority Senior Secured Notes - due January 2026 | |||
Debt Instrument [Line Items] | |||
Total debt, before discount, premium and deferred financing cost | 638,541 | 638,541 | |
Senior Notes | 11.75% Senior Secured Second Lien Notes due April 2026 | |||
Debt Instrument [Line Items] | |||
Total debt, before discount, premium and deferred financing cost | 242,500 | 0 | |
Line of Credit | Bank Credit Facility - matures March 2027 | |||
Debt Instrument [Line Items] | |||
Total debt, before discount, premium and deferred financing cost | [2] | $ 215,000 | $ 0 |
[1] At September 30, 2023 , the Company was in compliance with all debt covenants. As of September 30, 2023 , the Company had outstanding borrowings at a weighted average interest rate of 8.42 %. |
Debt - Summary of Detail Comp_2
Debt - Summary of Detail Comprising Debt and Related Book Values (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Feb. 13, 2023 | |
11.75% Senior Secured Second Lien Notes due April 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 11.75% | ||
Senior Notes | 12.00% Second-Priority Senior Secured Notes - due January 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 12% | 12% | |
Senior notes, maturity date | Jan. 15, 2026 | Jan. 15, 2026 | |
Senior Notes | 11.75% Senior Secured Second Lien Notes due April 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 11.75% | 11.75% | |
Senior notes, maturity date | Apr. 15, 2026 | Apr. 15, 2026 | |
Line of Credit | Bank Credit Facility - matures March 2027 | |||
Debt Instrument [Line Items] | |||
Bank credit facility, maturity date | Mar. 31, 2027 | Mar. 31, 2027 | |
Weighted average interest rate | 8.42% |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||
Feb. 13, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Jun. 09, 2023 | Dec. 23, 2022 | ||
Debt Instrument [Line Items] | ||||||
Debt Instruments | $ 1,096,041 | $ 638,541 | ||||
Debt Instrument, Frequency of Periodic Payment | The indenture governing the 11.75% Notes requires the redemption of $15.0 million of the principal amount outstanding at par value on April 15th and October 15th of each year | |||||
Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Borrowing Capacity, Description | The Bank Credit Facility provides for the determination of the borrowing base based on the Company’s proved producing reserves and a portion of the Company's proved undeveloped reserves. | |||||
Bank Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Commitments | $ 965,000 | $ 965,000 | ||||
Bank Credit Facility [Member] | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility, maximum borrowing capacity | 1,100,000 | |||||
Bank Credit Facility [Member] | Minimum | Pro Forma | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility, maximum borrowing capacity | $ 1,100,000 | |||||
Line of Credit Facility, Commitments | 806,300 | |||||
Bank Credit Facility [Member] | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility, maximum borrowing capacity | $ 1,500,000 | |||||
Bank Credit Facility [Member] | Maximum | Pro Forma | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility, maximum borrowing capacity | 1,500,000 | |||||
Line of Credit Facility, Commitments | $ 965,000 | |||||
Bank Credit Facility - matures March 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Bank credit facility, description | The borrowing base is redetermined by the lenders at least semi-annually during the second quarter and fourth quarter of each year. On December 23, 2022, the Company entered into the Incremental Agreement and Ninth Amendment to Credit Agreement (the “Ninth Amendment”). The Ninth Amendment, among other things, (i) extended the maturity date of the Bank Credit Facility from November 12, 2024 to March 31, 2027 and includes a springing maturity commencing on the 91st day prior to the earliest stated maturity date of any of the junior lien notes if such junior lien notes have not been refinanced, redeemed or repaid in full, (ii) increased the borrowing base from $1.1 billion to $1.5 billion and (iii) increased commitments from $806.3 million to $965.0 million, in each case went into effect upon the closing of the EnVen Acquisition and the occurrence of certain events related thereto, a discussion of which is included in the accompanying Notes to Consolidated Financial Statements in the 2022 Annual Report. On June 9, 2023, the borrowing base decreased from $1.5 billion to $1.1 billion and commitments were reaffirmed at $965.0 million as part of the most recent biannual redetermination. | |||||
Bank Credit Facility - matures March 2027 | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instruments | [1] | $ 215,000 | $ 0 | |||
11.75% Senior Secured Second Lien Notes due April 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 11.75% | |||||
Debt instrument interest rate | 11.75% | |||||
11.75% Senior Secured Second Lien Notes due April 2026 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 11.75% | 11.75% | ||||
Debt instrument interest rate | 11.75% | 11.75% | ||||
Debt Instruments | $ 242,500 | $ 0 | ||||
Debt instrument maturity date | Apr. 15, 2026 | Apr. 15, 2026 | ||||
EnVen's11.75% Senior Secured Second Notes Due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 11.75% | 11.75% | ||||
Debt instrument interest rate | 11.75% | 11.75% | ||||
Debt instrument maturity date | Apr. 15, 2026 | Apr. 15, 2026 | Apr. 15, 2026 | |||
EnVen's11.75% Senior Secured Second Notes Due 2026 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Periodic Payment, Principal | $ 15,000 | |||||
EnVen Energy Corporation | ||||||
Debt Instrument [Line Items] | ||||||
Business acquisition, effective date | Feb. 13, 2023 | |||||
EnVen Energy Corporation | EnVen's11.75% Senior Secured Second Notes Due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instruments | $ 257,500 | |||||
[1] As of September 30, 2023 , the Company had outstanding borrowings at a weighted average interest rate of 8.42 %. |
Employee Benefits Plans and S_3
Employee Benefits Plans and Share-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Feb. 13, 2023 | |
Employee Severance [Member] | Enven Energy Corporation [Member] | Rabbi Trust [Member] | ||
Employee Benefits Plans and Share Based Compensation [Line Items] | ||
Assets Held-in-trust | $ 6.5 | $ 14.5 |
Asset, Held-in-Trust, Current | 6.2 | |
Asset, Held-in-Trust, Noncurrent | $ 0.3 | |
2021 Long Term Incentive Plan | Performance Share Units | ||
Employee Benefits Plans and Share Based Compensation [Line Items] | ||
Description of method used to calculate fair value | Monte Carlo simulations |
Employee Benefits Plans and S_4
Employee Benefits Plans and Share-Based Compensation - Schedule of Acquisition Severance Costs (Details) - Employee Severance [Member] - Enven Energy Corporation [Member] - USD ($) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 | |
Acquisition Severance Costs [Line Items] | |
Severance accrual at December 31, 2022 | $ 0 |
Accrual additions | 24,904 |
Benefit payments | (13,915) |
Less: Current portion at September 30, 2023 | 10,842 |
Long-term portion at September 30, 2023 | 147 |
Severance accrual at September 30, 2023 | $ 10,989 |
Employee Benefits Plans and S_5
Employee Benefits Plans and Share-Based Compensation - Schedule of Restricted Stock and Performance Share Units Activity (Details) | 9 Months Ended | |
Sep. 30, 2023 $ / shares shares | ||
Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested beginning of the period | shares | 3,215,504 | |
Granted | shares | 1,153,580 | |
Vested | shares | (1,644,828) | |
Forfeited | shares | (277,400) | |
Unvested end of the period | shares | 2,446,856 | [1] |
Unvested weighted average grant date fair value, beginning of the period | $ / shares | $ 12.79 | |
Unvested weighted average grant date fair value, granted | $ / shares | 16.24 | |
Unvested weighted average grant date fair value, vested | $ / shares | 12.06 | |
Unvested weighted average grant date fair value, forfeited | $ / shares | 14.07 | |
Unvested weighted average grant date fair value, end of the period | $ / shares | $ 14.77 | [1] |
Performance Share Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested beginning of the period | shares | 638,601 | |
Granted | shares | 593,472 | [2] |
Forfeited | shares | (147,286) | |
Unvested end of the period | shares | 1,084,787 | |
Unvested weighted average grant date fair value, beginning of the period | $ / shares | $ 23.66 | |
Unvested weighted average grant date fair value, granted | $ / shares | 18.78 | [2] |
Unvested weighted average grant date fair value, forfeited | $ / shares | 21.47 | |
Unvested weighted average grant date fair value, end of the period | $ / shares | $ 21.29 | |
[1] As of September 30, 2023 , 26,975 of the unvested RSUs were accounted for as liability awards in “Accrued liabilities” on the Condensed Consolidated Balance Sheets. There were 296,736 PSUs granted that are eligible to vest based on continued employment and the Company’s annualized absolute total shareholder return (“TSR”) over a three-year performance period. An additional 296,736 PSUs were granted and are eligible to vest based on continued employment and the Company’s return on the wells included in the 2023 drill program over a three-year performance period. |
Employee Benefits Plans and S_6
Employee Benefits Plans and Share-Based Compensation - Schedule of Restricted Stock and Performance Share Units Activity (Parenthetical) (Details) - shares | 9 Months Ended | |||
Sep. 30, 2023 | Dec. 31, 2022 | |||
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Granted | 1,153,580 | |||
Unvested | 2,446,856 | [1] | 3,215,504 | |
Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Granted | [2] | 593,472 | ||
Unvested | 1,084,787 | 638,601 | ||
Absolute Total Shareholder Return Award | Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Granted | 296,736 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||
Return On Drilling Program Award | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||
Return On Drilling Program Award | Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Granted | 296,736 | |||
Accrued Liabilities | Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unvested | 26,975 | |||
[1] As of September 30, 2023 , 26,975 of the unvested RSUs were accounted for as liability awards in “Accrued liabilities” on the Condensed Consolidated Balance Sheets. There were 296,736 PSUs granted that are eligible to vest based on continued employment and the Company’s annualized absolute total shareholder return (“TSR”) over a three-year performance period. An additional 296,736 PSUs were granted and are eligible to vest based on continued employment and the Company’s return on the wells included in the 2023 drill program over a three-year performance period. |
Employee Benefits Plans and S_7
Employee Benefits Plans and Share-Based Compensation - Summary of Assumptions Used to Calculate the Grant And Modification Date Fair Value (Details) - Performance Share Units - Grant Date March 5, 2023 - USD ($) $ in Thousands | Jul. 01, 2023 | Mar. 05, 2023 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 2 years 6 months | 2 years 9 months 18 days |
Expected volatility | 66.20% | 73.10% |
Risk-free interest rate | 4.60% | 4.50% |
Dividend yield | 0% | 0% |
Fair value | $ 173 | $ 6,165 |
Employee Benefits Plans and S_8
Employee Benefits Plans and Share-Based Compensation - Schedule of Recognized Share Based Compensation Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Share-based compensation costs | $ 2,556 | $ 7,626 | $ 18,038 | $ 20,597 |
Less: Amounts capitalized to oil and gas properties | 2,163 | 3,316 | 8,958 | 8,920 |
Share-Based Payment Arrangement, Expense | $ 393 | $ 4,310 | $ 9,080 | $ 11,677 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 13, 2023 | Dec. 31, 2022 | |
Income tax benefit (expense) | $ 15,865 | $ (121) | $ 55,516 | $ (2,256) | ||
Effective tax rate | 88.30% | 0% | (120.90%) | 0.60% | ||
U.S. Federal statutory rate | 21% | 21% | 21% | 21% | ||
Decrease in valuation allowance | $ (54,900) | |||||
Valuation allowance, deferred tax asset, explanation of change | The release of the valuation allowance is a result of the deferred tax liabilities acquired with the EnVen Acquisition | |||||
Other Noncurrent Liabilities | ||||||
Deferred tax liabilities | $ 96,600 | $ 96,600 | $ 2,100 | |||
EnVen Energy Corporation [Member] | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | $ 150,504 |
Income (Loss) Per Share - Summa
Income (Loss) Per Share - Summary of Computation of Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (2,103) | $ 250,465 | $ 101,434 | $ 379,165 |
Weighted average common shares outstanding — basic | 124,103 | 82,576 | 118,459 | 82,406 |
Dilutive effect of securities | 0 | 1,242 | 803 | 1,032 |
Weighted average common shares outstanding — diluted | 124,103 | 83,818 | 119,262 | 83,438 |
Basic | $ (0.02) | $ 3.03 | $ 0.86 | $ 4.6 |
Diluted | $ (0.02) | $ 2.99 | $ 0.85 | $ 4.54 |
Anti-dilutive potentially issuable securities excluded from diluted common shares | 1,851 | 120 | 1,491 | 1,149 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Feb. 13, 2023 | May 24, 2022 | Mar. 08, 2022 | May 31, 2022 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | ||||||||||
General and administrative expense | $ 24,888 | $ 25,289 | $ 121,257 | $ 70,742 | ||||||
Equity method investment payment | 29,372 | 2,250 | ||||||||
Proceeds from sale of equity method investment | $ 0 | 15,000 | ||||||||
Stockholders agreement date | May 10, 2018 | |||||||||
Stockholders agreement amendment date | Feb. 24, 2020 | |||||||||
Amended restated stockholders agreement date | Mar. 29, 2022 | |||||||||
Amended restated stockholders agreement termination date | Feb. 13, 2023 | |||||||||
Secondary Offering Expenses | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
General and administrative expense | $ 0 | 0 | $ 0 | 0 | ||||||
Equity Method Investment Income | Bayou Bend CCS LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Gain on partial disposal of investment | 13,900 | |||||||||
Equity Method Investment Income | Capital Carry | Bayou Bend CCS LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Gain on partial disposal of investment | 1,400 | $ 8,600 | 1,400 | |||||||
Equity Method Investee | Variable Interest Entity, Not Primary Beneficiary | Bayou Bend CCS LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity Method Investment, Ownership Percentage | 50% | 25% | 25% | |||||||
Equity method investment payment | $ 2,300 | |||||||||
Related party receivable | $ 400 | $ 400 | ||||||||
Equity Method Investee | Variable Interest Entity, Not Primary Beneficiary | Coastal Bend CCS LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity Method Investment, Ownership Percentage | 50% | 50% | ||||||||
Related party receivable | $ 4,200 | $ 4,200 | ||||||||
Equity Method Investee | Variable Interest Entity, Not Primary Beneficiary | Talos Mexico | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity Method Investment, Ownership Percentage | 50.10% | 50.10% | ||||||||
Related party receivable | $ 300 | $ 300 | ||||||||
Chevron U.S.A Inc | Bayou Bend CCS LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity Method Investment Ownership Percentage Sold | 25% | |||||||||
Proceeds from sale of equity method investment | $ 15,000 | |||||||||
Capital carry contribution funded | $ 10,000 | |||||||||
Chevron U.S.A Inc | Maximum | Bayou Bend CCS LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Additional Mandatory Cash Contributions Capital Carry Company Portion | $ 10,000 | |||||||||
Bain | Beneficial Owner | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Stock ownership percentage | 12.20% | 12.20% | ||||||||
Adage | Beneficial Owner | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Stock ownership percentage | 5.20% | 5.20% | ||||||||
Vinson & Elkins L.L.P. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
General and administrative expense | $ 100 | 2,000 | $ 2,200 | 3,500 | ||||||
Legal fees payable | $ 400 | $ 2,500 | $ 400 | $ 2,500 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 23, 2022 | Sep. 30, 2023 | |
Loss Contingencies [Line Items] | ||
Gain (Loss) Related to Litigation Settlement | $ 27.5 | |
Bank Credit Facility | Letter of Credit | ||
Loss Contingencies [Line Items] | ||
Letters of credit outstanding amount | $ 10.8 | |
Dunwoody | Judicial ruling | Other Current Liabilities | EnVen Energy Corporation | ||
Loss Contingencies [Line Items] | ||
Litigation settlement, amount awarded to other party | 14.1 | |
Surety Bond | ||
Loss Contingencies [Line Items] | ||
Surety performance bonds outstanding | $ 1,400 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Decommisioning Obligations Included in consolidated Balance Sheets (Details) - Decommissioning Abandonment Obligations - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | ||
Balance, beginning of period | $ 54,269 | $ 24,336 |
Additions | 266 | 8,900 |
Changes in estimate | 9,188 | 22,658 |
Settlements | (40,415) | (1,625) |
Balance, end of period | 23,308 | 54,269 |
Other Current Liabilities | ||
Loss Contingencies [Line Items] | ||
Less: Current portion | 7,200 | 42,069 |
Other Noncurrent Liabilities | ||
Loss Contingencies [Line Items] | ||
Long-term portion | $ 16,108 | $ 12,200 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Reporting, No Asset Information [true false] | true |
Segment Information - Summary o
Segment Information - Summary of Information by Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Segment Reporting Information [Line Items] | |||||
Revenues from External Customers | $ 383,135 | $ 377,128 | $ 1,072,927 | $ 1,309,779 | |
Equity in the Net Income (Loss) of Investees Accounted for by the Equity Method | (2,493) | 991 | 2,938 | 14,599 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from External Customers | 383,135 | 377,128 | 1,072,927 | 1,309,779 | |
Equity in the Net Income (Loss) of Investees Accounted for by the Equity Method | (2,494) | (422) | (5,650) | (689) | |
Adjusted EBITDA | 250,183 | 198,960 | 705,764 | 660,444 | |
Segment Expenditures | 597,056 | 299,513 | |||
Operating Segments [Member] | Upstream [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from External Customers | 383,135 | 377,128 | 1,072,927 | 1,309,779 | |
Equity in the Net Income (Loss) of Investees Accounted for by the Equity Method | 118 | 75 | 373 | 5 | |
Adjusted EBITDA | 255,228 | 199,675 | 719,326 | 669,103 | |
Segment Expenditures | 559,873 | 297,486 | |||
Operating Segments [Member] | All Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from External Customers | [1] | 0 | 0 | 0 | 0 |
Equity in the Net Income (Loss) of Investees Accounted for by the Equity Method | [1] | (2,612) | (497) | (6,023) | (694) |
Adjusted EBITDA | [1] | $ (5,045) | $ (715) | (13,562) | (8,659) |
Segment Expenditures | [1] | $ 37,183 | $ 2,027 | ||
[1] The CCS Segment is included in the “All Other” category. The CCS Segment is an emerging business in the start-up phase of operations and the business that does not currently generate any revenues. The CCS Segment’s business activities are conducted through both wholly owned subsidiaries and equity method investments with industry partners. Equity method investments is a business strategy that enables us to achieve favorable economies of scale relative to the level of investment and business risk assumed. |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Adjusted EBITDA to the Company's Consolidated Totals (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate general and administrative expense | $ (24,888) | $ (25,289) | $ (121,257) | $ (70,742) | |
Interest expense | (45,637) | (29,265) | (128,850) | (91,531) | |
Depreciation, depletion and amortization | (163,359) | (92,323) | (480,476) | (295,174) | |
Derivative fair value gain (loss) | (98,802) | 114,180 | (13,668) | (231,133) | |
Non-cash equity-based compensation expense | (393) | (4,310) | (9,080) | (11,677) | |
Income (loss) before income taxes | (17,968) | 250,586 | 45,918 | 381,421 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted EBITDA | 250,183 | 198,960 | 705,764 | 660,444 | |
Corporate Non Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate general and administrative expense | (1,366) | (1,400) | (4,161) | (3,894) | |
Segment Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest expense | (45,637) | (29,265) | (128,850) | (91,531) | |
Depreciation, depletion and amortization | (163,359) | (92,323) | (480,476) | (295,174) | |
Accretion expense | (21,256) | (13,179) | (63,430) | (42,400) | |
Transaction and other income (expenses) | [1] | 64,321 | (3,219) | 38,799 | 38,856 |
Decommissioning Obligations | [2] | (7,972) | (20) | (9,454) | (10,553) |
Derivative fair value gain (loss) | [3] | (98,802) | 114,180 | (13,668) | (231,133) |
Net cash (received) paid on settled derivative instruments | [3] | 6,313 | 81,162 | 10,474 | 368,483 |
Non-cash equity-based compensation expense | (393) | (4,310) | (9,080) | (11,677) | |
Reportable segment | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted EBITDA | 255,228 | 199,675 | 719,326 | 669,103 | |
All Other [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted EBITDA | [4] | $ (5,045) | $ (715) | $ (13,562) | $ (8,659) |
[1] For the three and nine months ended September 30, 2023 , transaction expenses includes $ 1.5 million and $ 39.4 million, respectively, in costs related to the EnVen Acquisition, inclusive of $ 0.9 million and $ 24.9 million, respectively, in severance expense. For the three and nine months ended September 30, 2022 , transaction expenses includes $ 4.3 million and $ 5.0 million, respectively, in costs related to the EnVen Acquisition. See further discussion in Note 2 — Acquisitions and Divestitures and Note 7 — Employee Benefits Plans and Share-Based Compensation . 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 and nine months ended September 30, 2023, the amount includes a $ 66.2 million gain on the Mexico Divestiture. See further discussion in Note 2 — Acquisitions and Divestitures. The amount includes a gain on the funding of the capital carry of our investment in Bayou Bend by Chevron of $ 8.6 million for the nine months ended September 30, 2023 and a $ 1.4 million for the three and nine months ended September 30, 2022 . Additionally, it includes a $ 13.9 million gain on the partial sale of its investment in Bayou Bend to Chevron for the nine months ended September 30, 2022. See further discussion in Note 10 — Related Party Transactions . For the nine months ended September 30, 2022 , the amount includes $ 27.5 million gain as a result of the settlement agreement to resolve previously pending litigation that was filed in October 2017 that is further discussed in Note 11 — Commitments and Contingencies . Estimated decommissioning obligations were a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. See Note 11 — Commitments and Contingencies for additional information on decommissioning obligations. The adjustments for the derivative fair value (gains) losses and net cash receipts (payments) on settled commodity derivative instruments have the effect of adjusting net loss for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDA on an unrealized basis during the period the derivatives settled. The CCS Segment is included in the “All Other” category. The CCS Segment is an emerging business in the start-up phase of operations and the business that does not currently generate any revenues. The CCS Segment’s business activities are conducted through both wholly owned subsidiaries and equity method investments with industry partners. Equity method investments is a business strategy that enables us to achieve favorable economies of scale relative to the level of investment and business risk assumed. |
Segment Information - Schedul_2
Segment Information - Schedule of Reconciliation of Adjusted EBITDA to the Company's Consolidated Totals (Details) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 23, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | |||||
Gain (Loss) Related to Litigation Settlement, Total | $ 27.5 | ||||
Employee Severance | EnVen Energy Corporation | |||||
Segment Reporting Information [Line Items] | |||||
Aquisition severance cost | $ 0.9 | $ 24.9 | |||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gain (Loss) Related to Litigation Settlement, Total | $ 27.5 | ||||
Operating Segments [Member] | Talos Mexico | |||||
Segment Reporting Information [Line Items] | |||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 66.2 | 66.2 | |||
Operating Segments [Member] | EnVen Energy Corporation | |||||
Segment Reporting Information [Line Items] | |||||
Transaction and other income (expenses) | 1.5 | $ 4.3 | 39.4 | 5 | |
Operating Segments [Member] | Bayou Bend CCS LLC | |||||
Segment Reporting Information [Line Items] | |||||
Gain on partial disposal of investment | 13.9 | ||||
Operating Segments [Member] | Bayou Bend CCS LLC | Capital Carry [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Gain on partial disposal of investment | $ 1.4 | 8.6 | $ 1.4 | ||
Operating Segments [Member] | Employee Severance | EnVen Energy Corporation | |||||
Segment Reporting Information [Line Items] | |||||
Aquisition severance cost | $ 0.9 | $ 24.9 |
Segment Information - Reconcili
Segment Information - Reconciliation of Reportable Segment Expenditures (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||
Plugging & abandonment | $ (71,097) | $ (60,304) |
Deferred payments | (841) | 0 |
Exploration, development and other capital expenditures | 438,506 | 209,592 |
Operating Segments [Member] | Reportable segment | ||
Segment Reporting Information [Line Items] | ||
Segment Expenditures | 559,873 | 297,486 |
Operating Segments [Member] | All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment Expenditures | 37,183 | 2,027 |
Segment Reconciling Items [Member] | ||
Segment Reporting Information [Line Items] | ||
Change in capital expenditures included in accounts payable and accrued liabilities | 15,085 | (32,430) |
Plugging & abandonment | (71,097) | (60,304) |
Decommissioning obligations settled | (40,415) | 0 |
Investment in CCS intangibles and equity method investees | (37,168) | (2,027) |
Deferred payments | (841) | 0 |
Non-cash well equipment inventory transfers | (24,476) | 3,403 |
Other | $ 362 | $ 1,437 |