Talos Energy has completed a workover on the Genovesa well and returned it to production, marking a key well intervention milestone during the second quarter of 2026.
The company reported the completion of the workover as part of its latest operational and financial results for the three months ended 30 June 2026. The well was brought back online late in the second quarter as Talos continued to focus on improving the performance and reliability of its offshore production portfolio.
Alongside the Genovesa intervention, Talos completed drilling operations at Monument #3, where the well encountered approximately 250 feet of net pay, in line with pre-drill expectations. The company also began its Daenerys appraisal well programme, with results from the first appraisal well expected by the end of 2026.
The operational progress contributed to stronger-than-expected production during the quarter. Talos produced 68.6 thousand barrels of oil per day and 93.7 thousand barrels of oil equivalent per day, with both oil and total equivalent production exceeding the company's guidance ranges. Talos attributed the performance to strong uptime and well performance.
The company generated $300.6 million in net cash from operating activities and US$231.6 million in Adjusted Free Cash Flow. Net income was US$149.7 million, while Adjusted EBITDA reached $402.4 million.
Talos invested $112.5 million in capital expenditure during the quarter, excluding plugging and abandonment and settled decommissioning obligations. At 30 June 2026, the company held $577.6 million in cash, with an undrawn credit facility and net debt to LTM Adjusted EBITDA of 0.5x.
Beyond the completed Genovesa workover, Talos is progressing several offshore development and exploration activities. The company announced a strategic development farm-in transaction with Repsol in offshore Mexico Block 29 and agreed to acquire an 80% operated interest in an offshore Honduras block covering more than 4 million gross acres through a seismic commitment.
Talos also announced the acquisition of Gulf of America deepwater oil assets from Shell, with the transaction expected to close during the third quarter of 2026. BP elected not to exercise its preferential right.
The company raised its full-year 2026 production guidance midpoint to 66 MBo/d and 89 MBoe/d, excluding the announced Gulf of America acquisition and after adjusting for the closed non-core shelf divestment.
Talos further strengthened its financial position through the issuance of US$800 million of 8.000% notes due 2034. The proceeds were used to fully redeem $625 million of 9.000% notes due 2029 and fund part of the previously announced Gulf of America acquisition.
Looking ahead, the company has also secured a rig contract for the West Vela drillship, which is scheduled to commence in mid-2027 for an initial one-year term with extension options.
"The second quarter marked another meaningful step forward in the execution of our strategy and reinforces our confidence in the long-term value creation opportunities ahead," said Paul Goodfellow, President and Chief Executive Officer of Talos.
"We advanced all three pillars of our strategic framework as we continue to build a long-lived, scaled portfolio by expanding our deepwater scale, enhancing our development inventory through greenfield opportunities, and adding large-scale exploration potential at low entry cost. At the same time, our teams continued delivering on the Optimal Performance Plan, achieving more than 65% of the 2026 target in the first half of the year and demonstrating our relentless focus on operational excellence, cost discipline and value creation.
These strategic achievements were complemented by strong execution across our base business. We exceeded the high end of our production guidance ranges, increased our full-year production outlook and generated record Free Cash Flow. We also commenced the Daenerys appraisal program, which has the potential to further enhance the longevity of our deepwater portfolio.
Taken together, these accomplishments demonstrate our ability to successfully execute on both fronts – advancing our Three Strategic Pillars while continuing to deliver exceptional operational and financial results from our base business. With strong momentum across the organization, we remain focused on building the foundation to be a leading pure-play offshore E&P and look forward to closing the previously announced Gulf of America bolt-on acquisition later in the third quarter."
