Talos Energy (TALO) Q1 2026 earnings summary

Executive summary

• Achieved adjusted free cash flow of $113.2 million and adjusted EBITDA of $293 million on production of approximately 89,000 boe/d, exceeding guidance due to strong new well productivity and high facility uptime.

• Operational excellence and disciplined execution drove top-decile EBITDA margins and a resilient cost structure, with over 40% of the $100 million 2026 performance plan target met in Q1 2026.

• Oil production at the high end of guidance, with Cardona well commencing production ahead of schedule and CPN well completed with first production expected in Q3 2026.

• Repurchased 2.7 million shares for $38 million in Q1 2026; share repurchase authorization increased to $200 million, with cumulative $135 million returned since Q2 2025.

• Closed Zama transaction, reducing Talos Mexico ownership to 20% and receiving $49.7 million, with further contingent payments tied to Zama Field production.

Financial highlights

• Q1 2026 adjusted EBITDA was $293 million; adjusted free cash flow was $113.2 million before working capital changes.

• Total revenues for Q1 2026 were $472.3 million, with a net loss of $256.2 million including a $145 million non-cash impairment; adjusted net loss was $11.3 million.

• Lease operating expenses were $16.14/boe, below peer averages; adjusted G&A expenses were $4.25/boe.

• Net debt at quarter-end was $863.6 million; net debt to LTM adjusted EBITDA was 0.8x; total liquidity was approximately $989 million.

• Returned $38 million (~34% of adjusted free cash flow) to shareholders via share repurchases in Q1 2026.

Outlook and guidance

• Full-year 2026 production guidance reiterated at 62–66 MBo/d oil and 85–90 Mboe/d total; Q2 2026 guidance is 63–67 MBo/d oil and 88–92 Mboe/d total.

• Full-year 2026 capital expenditures expected at $500–$550 million; plugging & abandonment and decommissioning at $100–$130 million.

• Up to 50% of annual free cash flow may be allocated to share repurchases.

• Monument drilling underway, targeting first oil by late 2026; Daenerys appraisal well to spud in Q2 2026 with results expected by year-end.

• Development projects have breakevens in the $30s–$40s/boe, with corporate free cash flow breakeven in the low $50 WTI range.