Talos Energy (7T2) Q3 2026 Earnings Report

The call was strongly positive, with production and free cash flow above expectations, increased full-year production guidance, successful acquisition and project execution, a strong balance sheet, and an expanded development and exploration portfolio. The principal challenges were the temporary Hurricane Ian production impact, higher P&A guidance, and continued technical and timing uncertainty around Dorado.

Talos increased full year 2026 production guidance to 68 thousand to 70 thousand barrels of oil per day and 92.5 thousand to 94.5 thousand BOE per day, with the midpoint representing an increase of approximately 8% for oil production relative to the original guidance; the outlook includes Hurricane Ian’s impact of approximately 7 thousand barrels of oil equivalent per day, the closed Gulf of Mexico acquisition, and the non core shelf divestment. 2026 combined capital and P&A spend remains unchanged from the original guidance, while the company expects the current P&A level to be a reasonable number to think about at a P&A level going forward. The company delivered its full year $100 million target by the end of the third quarter, expects year-end 2027 leverage to be well below 1.0x, and expects to return up to 50% of annual free cash flow to shareholders through share repurchases. Monument first oil is expected in the first quarter of 27, Brutus first oil beginning in the second quarter of 27 with production phased in through the fourth quarter, Dorado’s next appraisal sidetrack is planned for 2027, and a nearby exploration well is expected in late 27, or early 28; Zama and Block 29 are progressing toward FID in 2027, with a Block 29 exploration well planned late in next year, while first processed Honduras seismic data is expected in the early part of 27.