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Jun 30
Talos Energy Q2 2025 Earnings Report
Talos Energy reported its operational and financial results for the second quarter of 2025, exceeding consensus estimates for Adjusted EBITDA and Adjusted Free Cash Flow.
Key Takeaways
Talos Energy delivered strong operational and financial results in Q2 2025, with Adjusted EBITDA and Adjusted Free Cash Flow surpassing consensus. The company repurchased $33 million in shares and increased its cash position, while achieving key operational milestones including first production from Katmai West #2 and Sunspear wells, and resuming drilling at the Daenerys prospect. The company maintained a solid financial foundation with a low leverage ratio.
Adjusted EBITDA reached $294.2 million, and Adjusted Free Cash Flow before changes in working capital was $98.5 million, both exceeding consensus estimates.
The company repurchased 3.8 million shares for approximately $32.6 million, demonstrating a commitment to returning capital to shareholders.
Key operational milestones included first production from the Katmai West #2 and Sunspear wells, and the resumption of drilling at the high-impact Daenerys prospect.
Talos exited the quarter with a strong financial position, including $357.3 million in cash and a net debt to LTM Adjusted EBITDA ratio of 0.7x.
Talos Energy
Talos Energy
Talos Energy Revenue by Segment
Revenue by Segment
Oil Revenue
CapyFin.comNatural Gas Revenue
CapyFin.comNGL Revenue
CapyFin.com Forward Guidance
Talos Energy has revised its full-year 2025 operational and financial guidance, expecting average daily production to range from 91.0 to 95.0 MBoe/d, with lower cash operating expenses and capital expenditures. Third quarter 2025 average daily production is expected to be between 86.0 and 90.0 MBoe/d.
Positive Outlook
- Full year 2025 average daily production guidance maintained at 91.0 to 95.0 MBoe/d.
- Revised full year 2025 guidance reflects lower cash operating expenses, indicating improved cost efficiency.
- Revised full year 2025 guidance reflects lower capital expenditures, suggesting more efficient capital allocation.
- The company expects 69% oil volumes for both Q3 2025 and full year 2025, indicating a continued focus on higher-value liquids.
- Successful initiation of production from Katmai West #2 and Sunspear wells in Q2 2025, contributing to future production.
Challenges Ahead
- Third quarter 2025 average daily production guidance (86.0 to 90.0 MBoe/d) is lower than the full year guidance, indicating a potential dip in the upcoming quarter.
- Sunspear production was temporarily shut in due to a safety valve failure and is not expected to return until late October 2025, impacting Q3 production.
- The borrowing base under the Bank Credit Facility was reduced from $925.0 million to $700.0 million, potentially limiting future borrowing capacity.
- The facility at Tarantula is at maximum capacity, limiting current production rates from the greater Katmai area despite its large resource potential.
- The company recorded a $223.9 million non-cash ceiling test impairment charge in Q2 2025.