Talos Raises 2026 Oil Guidance After Shell Close

The Tip Desk · November 4, 2026 · 4 min read

Talos reported third-quarter 2026 revenue of $596.0 million and a GAAP net loss of $81.2 million, and now expects 68 to 70 thousand barrels of oil a day for the full year after closing a $420 million Gulf of America deal.

Talos Energy Inc. (TALO) reported third-quarter 2026 revenue of $596.0 million and a GAAP net loss of $81.2 million, and raised its full-year 2026 production guidance after closing a $420 million deepwater acquisition from Shell, lifting the oil midpoint to 69 thousand barrels a day and the total equivalent midpoint to 93.5 thousand barrels of oil equivalent a day.

The offshore independent now expects production of 68 to 70 thousand barrels of oil a day and 92.5 to 94.5 thousand barrels of oil equivalent a day for the year, up from original ranges of 62 to 66 thousand barrels of oil a day and 85.0 to 90.0 thousand barrels of oil equivalent a day. The company said the update includes the Gulf of America deal completed on September 22, 2026, a non-core shelf divestment closed on July 15 and Hurricane Isaias in early October, which is expected to reduce fourth-quarter production by about 7 thousand barrels of oil equivalent a day.

Third-quarter oil production was 68.5 thousand barrels a day and total equivalent production 91.5 thousand barrels of oil equivalent a day, versus 68.6 thousand barrels of oil a day and 93.7 thousand barrels of oil equivalent a day in the second quarter. Talos said the quarter exceeded guidance on strong base business, no storm downtime and contributions from the completed Shell acquisition.

Total revenues were $596.0 million for the three months ended September 30, 2026. GAAP results swung to a net loss of $81.2 million, or $0.49 a share, from net income of $149.7 million, or $0.88 a share, in the second quarter. Adjusted net income was $99.3 million, or $0.58 a share.

Adjusted EBITDA was $406.1 million, versus $402.4 million in the second quarter. Adjusted EBITDA excluding hedges was $435.9 million. Premium oil realizations of about $1.60 above WTI supported Adjusted EBITDA margins of about $52 a barrel of oil equivalent. Average realized prices excluding hedges were $87.19 a barrel for oil, $3.73 a thousand cubic feet for natural gas, $20.94 a barrel for NGL and $70.82 a barrel of oil equivalent, versus WTI at $85.57 a barrel.

Lease operating expenses were $140.9 million, or $16.74 a barrel of oil equivalent. Adjusted general and administrative expenses, excluding one-time transaction costs and non-cash equity compensation, were $37.8 million, or $4.50 a barrel of oil equivalent.

Capital expenditures excluding plugging and abandonment and settled decommissioning were $127.9 million, versus $112.5 million in the second quarter. Plugging and abandonment and settled decommissioning obligations were $49.9 million.

Net cash from operations was $325.8 million and Adjusted Free Cash Flow was $186.3 million, versus $300.6 million of operating cash flow and $231.6 million of Adjusted Free Cash Flow in the second quarter.

Cash fell to $410.2 million from $577.6 million at June 30, 2026, as the company completed the Shell deepwater acquisition for a final net cash purchase price of $420 million. Total debt was $1,425.0 million, net debt $1,014.8 million and Net Debt to last-twelve-months Adjusted EBITDA 0.6x, versus 0.5x at June 30. The borrowing base increased to $850 million with the credit facility undrawn; liquidity was about $1,076.3 million after accounting for $183.8 million of outstanding letters of credit that reduced available revolving credit commitments.

Talos repurchased 1.4 million shares for $23.6 million in the third quarter and returned $61.8 million to shareholders through the first three quarters of 2026. Remaining authorization was about $176 million.

Full-year capital expenditure guidance, excluding acquisitions, was lowered to $475 million to $525 million from $500 million to $550 million. P&A and decommissioning guidance was raised to $135 million to $145 million from $100 million to $130 million. Cash operating expenses and workovers were raised to $580 million to $600 million from $560 million to $590 million. G&A guidance, excluding non-cash equity-based compensation and transaction and other expenses from both ranges, was raised to $135 million to $145 million from $130 million to $140 million. Interest expense remained $155 million to $165 million.

CPN achieved first oil late in the third quarter with the well performing in line with expectations. Monument #4 drilling commenced in early September; first oil is now expected in the first quarter of 2027 with gross production of 20 to 30 thousand barrels of oil equivalent a day. The Brutus program commenced with first oil expected phased from the second through fourth quarter of 2027 and the program expanded from four to five wells. The Daenerys appraisal well was drilled to target depth in late August.

The company also announced a 50% farm-in into Repsol-operated Block 29 in offshore Mexico, closed a 45% operated working interest in an offshore Honduras block with a further 35% subject to SEN approval, and commenced a deepwater 3D seismic campaign in Honduras in October.