Talos Energy Inc. (TALO): Analyse de Pestle [Jan-2025 MISE À JOUR]

Dans le monde dynamique de l'exploration énergétique offshore, Talos Energy Inc. (TALO) se dresse à une intersection critique de l'innovation, du défi et de la transformation. À mesure que les marchés mondiaux changent, que les pressions environnementales montent et que les frontières technologiques se développent, cette entreprise navigue dans un paysage complexe où 6 Les principaux facteurs externes convergent pour façonner sa trajectoire stratégique. Des tensions géopolitiques du golfe du Mexique aux technologies durables émergentes, le voyage de Talos Energy représente un microcosme de l'évolution du secteur de l'énergie plus large, remettant en question les paradigmes traditionnels tout en recherchant des opportunités dans un environnement mondial de plus en plus incertain.

Talos Energy Inc. (TALO) - Analyse du pilon: facteurs politiques

Règlements de forage offshore aux États-Unis et au Mexique

En 2024, Talos Energy fonctionne dans des environnements réglementaires complexes aux États-Unis et au Mexique. Le Bureau of Safety and Environmental Enforcement (BSEE) a imposé 97 exigences de conformité réglementaire pour le forage offshore dans le golfe du Mexique.

Agence de réglementation	Nombre d'exigences de conformité	Coût potentiel de conformité
Bsee (nous)	97	12,3 millions de dollars par an
CNH (Mexique)	83	8,7 millions de dollars par an

Tensions géopolitiques dans le golfe du Mexique

Risques d'exploration et de production ont augmenté en raison des complexités régionales. Les défis géopolitiques spécifiques comprennent:

• Différends frontaliers maritimes entre nous et Mexique
• Augmentation des exigences de sécurité maritime
• Processus de permis complexes

Chart de politique énergétique américaine

La transition des énergies renouvelables a un impact direct sur la planification stratégique de Talos Energy. Les indicateurs de politique clés comprennent:

Métrique politique	Valeur 2024
Crédits d'impôt d'investissement en énergies renouvelables	30%
Cible de réduction des combustibles fossiles projetés	40% d'ici 2030

Règlement sur l'environnement de l'administration Biden

Les exigences de conformité environnementale ont considérablement augmenté la complexité opérationnelle de Talos Energy.

• Mandat de réduction des émissions de méthane: 75% d'ici 2030
• Exigences d'impact environnemental améliorées
• Protocoles de sécurité de forage offshore plus stricts

Coûts de conformité supplémentaires estimés pour Talos Energy en 2024: 15,6 millions de dollars.

Talos Energy Inc. (TALO) - Analyse du pilon: facteurs économiques

Prix ​​du pétrole mondial volatil

Brent Prix du pétrole brut à partir de janvier 2024: 81,40 $ le baril. West Texas Intermediate (WTI) Prix de pétrole brut: 76,28 $ par baril.

Année	Gamme de volatilité des prix du pétrole	Impact sur les revenus de l'énergie Talos
2023	68 $ - 93 $ par baril	856,3 millions de dollars de revenus totaux
2024 (projeté)	70 $ - 85 $ le baril	920 $ à 980 millions de dollars revenus estimés

Risques de récession économique

Prévision d'investissement du secteur de l'énergie mondial pour 2024: 570 milliards de dollars, ce qui représente une augmentation de 2,5% par rapport à 2023.

Indicateur économique	Valeur 2023	2024 projection
Budget d'exploration énergétique	485 milliards de dollars	510 milliards de dollars
Croissance mondiale du PIB	3.1%	3.0%

Investisseur Focus d'énergie durable

Investissement en énergies renouvelables en 2024: 1,8 billion de dollars dans le monde.

Catégorie d'investissement	2023 Montant	2024 projection
Énergie durable	1,7 billion de dollars	1,8 billion de dollars
Huile & Investissements en gaz	570 milliards de dollars	590 milliards de dollars

Réformes du marché de l'énergie mexicaine

Investissement étranger direct dans le secteur de l'énergie mexicain pour 2024: 12,5 milliards de dollars.

Segment de marché	2023 Investissement	2024 Investissement projeté
Huile & Exploration du gaz	8,3 milliards de dollars	9,7 milliards de dollars
Énergie renouvelable	3,2 milliards de dollars	2,8 milliards de dollars

Talos Energy Inc. (TALO) - Analyse du pilon: facteurs sociaux

La sensibilisation au public croissant au changement climatique a un impact sur la responsabilité sociale des entreprises

Depuis 2024, les initiatives de responsabilité sociale de Talos Energy reflètent des préoccupations environnementales croissantes:

Métrique de la RSE	2023 données	2024 projection
Cible de réduction des émissions de carbone	Réduction de 15%	Réduction de 22%
Investissement d'énergie renouvelable	47,3 millions de dollars	62,5 millions de dollars
Dépenses de conformité environnementale	18,2 millions de dollars	23,6 millions de dollars

Les changements démographiques de la main-d'œuvre nécessitent des stratégies de gestion des talents adaptatifs

Tendances de composition de la main-d'œuvre pour Talos Energy:

Catégorie démographique	Pourcentage de 2023	2024 pourcentage prévu
Employés du millénaire	42%	47%
Employés de la génération Z	12%	18%
Représentation de la diversité	36%	41%

Relations communautaires dans les régions de la côte du Golfe cruciale pour la durabilité opérationnelle

Métriques d'engagement communautaire:

Zone d'investissement communautaire	2023 dépenses	2024 dépenses prévues
Support d'infrastructure local	5,7 millions de dollars	7,2 millions de dollars
Bourses éducatives	1,3 million de dollars	1,8 million de dollars
Projets de restauration environnementale	3,9 millions de dollars	5,4 millions de dollars

Demande croissante de pratiques environnementales transparentes des parties prenantes

Métriques de transparence des parties prenantes:

Indicateur de transparence	Performance de 2023	Cible 2024
ESG rapporte l'exhaustivité	78%	85%
Score de divulgation environnementale	72/100	80/100
Cote de satisfaction des parties prenantes	68%	75%

Talos Energy Inc. (TALO) - Analyse du pilon: facteurs technologiques

Technologies d'imagerie sismique avancées

Talos Energy utilise les technologies d'imagerie sismique 3D avec les spécifications suivantes:

Technologie	Spécification	Impact opérationnel
Sismique multi-azimut	Résolution jusqu'à 30m	Accrue de la précision de l'exploration offshore
Sismique à large bande	Plage de fréquences 5-250 Hz	Imagerie souterraine améliorée
Interprétation de l'apprentissage automatique	Analyse alimentée par l'IA	85% d'interprétation géologique plus rapide

Métriques de transformation numérique

Améliorations de l'efficacité opérationnelle par le biais des technologies numériques:

Technologie numérique	Réduction des coûts	Gain d'efficacité
Capteurs IoT	12,4% Réduction des coûts opérationnels	Surveillance de l'équipement en temps réel
Cloud computing	Économies annuelles de l'infrastructure informatique de 2,3 millions de dollars	25% de traitement des données plus rapide

Technologies de capture de carbone

Technologies de réduction du carbone émergentes:

• Capacité de capture de l'air direct: 50 000 tonnes métriques CO2 / an
• Investissement de séquestration en carbone: 18,5 millions de dollars en 2023
• Objectif de réduction des émissions: 30% d'ici 2030

Automatisation et intégration en IA

Métriques de mise en œuvre technologique:

Technologie	Taux de mise en œuvre	Économies de coûts
Automatisation de processus robotique	42% des processus d'exploration	Économies opérationnelles annuelles de 4,7 millions de dollars
AI de maintenance prédictive	67% de couverture de l'équipement	Réduction de 22% des temps d'arrêt imprévus

Talos Energy Inc. (TALO) - Analyse du pilon: facteurs juridiques

Environnement réglementaire complexe dans le forage offshore

Talos Energy Inc. fait face à de vastes exigences de conformité juridique dans plusieurs juridictions. Depuis 2024, la société opère dans le cadre réglementaire suivant:

Corps réglementaire	Exigences de conformité clés	Coût annuel de conformité
Bureau de la sécurité et de l'application de l'environnement (BSEE)	Règlements sur la sécurité du forage offshore	3,2 millions de dollars
Agence de protection de l'environnement (EPA)	Émissions et gestion des déchets	2,7 millions de dollars
Garde côtière américaine	Protocoles de sécurité maritime	1,5 million de dollars

Lois sur la protection de l'environnement

Les risques juridiques associés aux réglementations environnementales comprennent:

• Coût de conformité de la loi sur l'eau Clean: 4,6 millions de dollars par an
• Pénalités d'émission de carbone: amendes potentielles jusqu'à 12 millions de dollars par an
• Frais de permis environnementaux de forage offshore: 2,3 millions de dollars

Risques potentiels en matière de litige

Catégorie de litige	Exposition juridique estimée	Couverture d'assurance
Réclamations de dommages environnementaux	45 millions de dollars	30 millions de dollars
Litige d'incident de sécurité	22 millions de dollars	18 millions de dollars

Règlement international maritime et énergétique

La conformité juridique opérationnelle transfrontalière implique:

• Coût de conformité des réglementations de l'Organisation maritime internationale (OMI): 3,8 millions de dollars
• Exigences légales de forage offshore mexicain: 2,5 millions de dollars
• Adhésion au traité environnemental international: 1,9 million de dollars

Talos Energy Inc. (TALO) - Analyse du pilon: facteurs environnementaux

Pression croissante pour réduire l'empreinte carbone et les émissions de gaz à effet de serre

Talos Energy Inc. a signalé des émissions totales de gaz à effet de serre de 1 285 000 tonnes métriques CO2 équivalentes en 2022. Les émissions directes de la société (Scope 1) étaient de 1 103 000 tonnes métriques, tandis que les émissions indirectes (Scope 2) étaient de 182 000 tonnes métriques.

Type d'émission	Tonnes métriques co2e	Pourcentage du total
Émissions de la portée 1	1,103,000	85.8%
Émissions de la portée 2	182,000	14.2%
Émissions totales	1,285,000	100%

La durabilité environnementale devient une métrique de performance clé pour les investisseurs

En 2023, Talos Energy a alloué 45,2 millions de dollars aux initiatives de durabilité environnementale, ce qui représente 6,8% de sa dépense en capital totale.

Catégorie d'investissement en durabilité	Montant d'investissement
Technologies de réduction des émissions	22,7 millions de dollars
Intégration d'énergie renouvelable	15,3 millions de dollars
Systèmes de surveillance environnementale	7,2 millions de dollars

Les risques de changement climatique affectant l'évaluation des actifs à long terme et la planification stratégique

Talos Energy a identifié des risques potentiels liés au climat ayant un impact sur l'évaluation des actifs, avec un impact financier potentiel estimé à 127,6 millions de dollars au cours de la prochaine décennie.

Catégorie de risque	Impact financier potentiel
Dommages à des actifs physiques	52,3 millions de dollars
Conformité réglementaire	38,9 millions de dollars
Perturbation opérationnelle	36,4 millions de dollars

Exigences réglementaires croissantes pour les évaluations d'impact environnemental

Talos Energy a effectué 17 évaluations complètes d'impact environnemental en 2022, couvrant les sites d'exploration et de production offshore.

Type d'évaluation	Nombre d'évaluations	Coût total d'évaluation
Sites d'exploration offshore	12	8,6 millions de dollars
Évaluations des installations de production	5	3,9 millions de dollars
Évaluations totales	17	12,5 millions de dollars

Talos Energy Inc. (TALO) - PESTLE Analysis: Social factors

Growing investor and public pressure for Environmental, Social, and Governance (ESG) compliance pushes the CCS pivot.

You know the pressure from Wall Street is real; it's not just talk anymore. Large asset managers, including BlackRock, have made ESG criteria central to their investment strategies, which is why ESG-focused assets globally are projected to reach over $53 trillion by 2025. This shift directly impacts the cost of capital for traditional energy companies.

Talos Energy Inc. has made smart, visible moves to address this. They have maintained an MSCI ESG "A" rating since 2023, which is a strong signal to the market. Plus, the company already reached its 15% Absolute GHG Emissions Reduction Target, which was originally set for 2030, well ahead of schedule in August 2025. This proactive stance helps manage the social license to operate, even after the strategic sale of the Low Carbon Solutions business for $148 million in March 2024, realizing value from their initial CCS development.

Talent scarcity in specialized deepwater engineering and CCS technology roles is a defintely operational risk.

The biggest long-term operational risk for Talos Energy Inc. isn't a hurricane, it's the workforce pipeline. The Gulf of Mexico oil and gas industry is facing a rising scarcity of trained personnel, especially in deepwater drilling and subsea operations, which are core to Talos Energy Inc.'s business. This is happening while the U.S. Energy Information Administration (EIA) forecasts a 25% rise in deepwater production by 2025 in the Gulf of Mexico, making the competition for talent fierce.

The problem is structural: the pool of new entrants for petroleum engineering programs at U.S. colleges has shrunk to its smallest size in over a decade. Honestly, young engineers are hesitant to join a sector they perceive as sunsetting. This creates a dual-threat: you need deepwater expertise now, but you also need people with carbon capture and storage (CCS) skills to manage future transition projects, even if the business unit was sold. It's a tough recruiting pitch.

Local community support is crucial for successful CCS project siting and permitting along the Gulf Coast.

For any large-scale energy project, whether it's deepwater infrastructure or a carbon storage site, local buy-in is the real gatekeeper for permitting. The Gulf Coast is Talos Energy Inc.'s backyard, and community support is generally strong for projects that promise economic stability and jobs.

CCS projects, like the ones Talos Energy Inc. initially developed (which supported an estimated 1.7 billion tons of gross prospective storage resources), are receiving broad support from key stakeholders, including the Houston CCS Alliance and the Texas Association of Manufacturers, because they are seen as a path to industrial decarbonization and economic growth. For example, in July 2025, the Bayou Bend Community Listening Session was held to engage residents directly on carbon storage, showing that continuous, transparent engagement is the cost of doing business.

Demand for reliable, dispatchable energy sources still outweighs renewable capacity in the near term.

Despite the massive push for renewables, the grid still relies heavily on dispatchable power-the kind you can turn on and off as needed-which is where natural gas comes in. U.S. power consumption is forecast to hit a record high of 4,205 billion kilowatt hours (kWh) in 2025, driven by things like data centers and electrification.

In 2025, natural gas is still projected to account for 40% of U.S. power generation, making it the largest single source. The share of intermittent renewable generation (wind and solar) is forecast to be 25%. This gap highlights a core social factor: society still demands reliable, 24/7 energy, and Talos Energy Inc.'s deepwater production of oil and gas is a critical component of that near-term energy security.

Here's the quick math on the energy mix that governs the market:

U.S. Power Generation Source (2025 Projection)	Share of Total Generation	Nature of Source
Natural Gas	40%	Dispatchable/Reliable
Renewable (Wind & Solar)	25%	Intermittent/Variable
Nuclear Power	19%	Baseload/Dispatchable
Coal	16%	Baseload/Dispatchable

Next step: Operations team should start a formal partnership program with Gulf Coast universities to recruit deepwater and energy transition engineers by Q1 2026.

Talos Energy Inc. (TALO) - PESTLE Analysis: Technological factors

Advanced seismic imaging and subsea tie-back technology lower development costs for GOM fields.

Talos Energy's core technological advantage remains its ability to use advanced seismic imaging (geophysical and geological modeling) to identify and efficiently develop deepwater, sub-salt prospects in the Gulf of Mexico (GOM). This precision is what allows for the high success rate and capital efficiency you see in their recent results. For instance, the successful drilling of the Daenerys exploration prospect in 2025 validated their models, and the project was completed 12 days ahead of schedule and approximately $16 million under budget, which is a defintely strong result.

The subsea tie-back strategy-connecting new wells to existing, owned infrastructure-is the financial engine of this efficiency. Instead of building new, costly platforms, Talos leverages assets like the Prince and Ram Powell facilities. The Katmai West #2 well, brought online in Q2 2025, nearly doubled the anticipated proved estimated ultimate recovery (EUR) of the Katmai West field to approximately 50 MMBoe gross, affirming a total resource potential of about 100 MMBoe for the Katmai West area. This strategic use of existing infrastructure is a key pillar in their plan to generate approximately $100 million in increased annualized cash flow by 2026.

• Validate models: Daenerys well drilled $16 million under budget.
• Maximize assets: Katmai/Tarantula tie-back producing approximately 35 MBoe/d gross.
• Future efficiency: Targeting $100 million in 2026 increased annualized cash flow.

Strategic divestiture of CCS technology shifts capital to core E&P.

While Talos Energy was an early mover in Carbon Capture and Sequestration (CCS) technology development, the company made a strategic decision to monetize its technological efforts in this space to focus capital on its core Upstream business. In March 2024, Talos sold its entire CCS subsidiary, Talos Low Carbon Solutions (TLCS), to TotalEnergies E&P USA, Inc. The initial purchase price was $125 million, with the total transaction value reaching approximately $148 million after adjustments.

This move, while seemingly a retreat from a new technology, was a successful realization of value from a technically advanced portfolio that included an estimated 1.7 billion tons of gross prospective storage resource. The capital was immediately redirected to their core, high-return E&P projects. This is a clear example of a company using technology development not just for operations, but as a strategic, monetizable asset.

Increased automation in offshore platforms reduces operating expenses (OpEx) and improves safety metrics.

The push for automation and operational excellence across Talos Energy's offshore platforms is directly translating into lower operating costs and a safer work environment. The company's Optimal Performance Plan, a series of efficiency initiatives, has already realized approximately $40 million in free cash flow enhancements in 2025, exceeding its original year-end target. This focus on topsides optimization and SIMOPS (Simultaneous Operations) efficiencies is critical for maintaining competitive Lease Operating Expenses (LOE).

For Q1 2025, the total LOE, including workover, maintenance, and insurance costs, was $14.08 per Boe. Automation plays a key role in reducing human exposure to risk. The result is a safety record that significantly outperforms the industry: Talos maintained a Total Recordable Incident Rate (TRIR) that was 30% lower than the Gulf of America industry average in 2024, the latest comparative data available. That's a clear win-win for shareholders and personnel.

Metric	Value (2025 Fiscal Year)	Technological Impact
Q1 2025 Lease Operating Expense (LOE)	$14.08 per Boe	Automation and operational efficiency
2025 Free Cash Flow Enhancements Realized	Approximately $40 million	Optimal Performance Plan and process automation
Total Recordable Incident Rate (TRIR)	30% lower than GOM industry average (2024)	Increased automation and remote monitoring
Daenerys Project Cost Performance	$16 million under budget	Advanced seismic imaging and efficient drilling

Cybersecurity risks are rising, especially for interconnected offshore and onshore control systems.

The increasing interconnectivity of Talos Energy's offshore Operational Technology (OT) systems-things like platform control systems, safety valves, and remote sensors-with onshore networks creates a growing cybersecurity risk. As the industry undergoes digital transformation, connecting older, often less secure legacy systems to online networks expands the attack surface. A failure in a Surface-Controlled Subsurface Safety Valve (SCSSV), like the one that temporarily shut in the Sunspear production in July 2025, highlights the risk of system failures, even if the root cause isn't cyber-related.

To mitigate this systemic risk, Talos uses the National Institute of Standards and Technology (NIST) Cybersecurity Framework to guide its program. They also leverage a best-in-class Managed Detection and Response (MDR) partner. This external partnership ensures 24/7 coverage and advanced threat detection capabilities, which is crucial because a cyber-attack on a control system could lead to significant production downtime, environmental damage, and financial losses.

Talos Energy Inc. (TALO) - PESTLE Analysis: Legal factors

Complex, multi-jurisdictional permitting processes for CCS storage sites create significant lead times.

You might think the Carbon Capture and Storage (CCS) business is a clear path to green revenue, but the legal reality is a permitting nightmare, which is why Talos Energy Inc. made a smart exit. The company sold its entire CCS subsidiary, Talos Low Carbon Solutions LLC, to TotalEnergies in March 2024, realizing a strong financial return of approximately $148 million. This move effectively transferred the primary legal and regulatory burden to the new owner.

Still, the underlying legal bottleneck for the entire industry, and for any future Talos Energy Inc. involvement, is the U.S. Environmental Protection Agency's (EPA) Class VI well permitting process for geologic sequestration. The EPA aims for a 24-month review period from a complete application to a final permit decision, but the reality is often longer. As of September 2025, the EPA has only issued 11 final Class VI permits nationwide. This slow pace is a massive legal risk that delays cash flow for all Gulf Coast CCS projects, including the ones Talos Energy Inc. pioneered in Louisiana and Texas.

Evolving federal and state regulations on methane emissions and flaring directly impact GOM operations.

The regulatory environment for Gulf of Mexico (GOM) operations is constantly tightening, driven by federal agencies like the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE). These rules focus heavily on reducing methane emissions and flaring, which directly impacts your operating costs and license to operate.

Talos Energy Inc. has been proactive here, turning a legal risk into a competitive advantage. They have already achieved their 2030 goal for greenhouse gas (GHG) reduction, reaching their 15% Absolute GHG Emissions Reduction Target ahead of schedule. More specifically, the company reported a 38% reduction in Methane Emissions from its 2022 baseline as of the 2025 Sustainability Report. This performance helps shield them from potential fines and the capital expenditure needed for immediate compliance with new, stricter rules that other operators might face.

Here's the quick math on their environmental performance:

• Absolute GHG Reduction Target (15%): Achieved (Ahead of 2030 schedule)
• Methane Emission Reduction: 38% (Since 2022 baseline)

Litigation risk related to historical GOM asset decommissioning liabilities remains a long-term balance sheet concern.

The legacy costs of GOM operations-plugging wells and removing platforms (decommissioning)-are a persistent legal and financial anchor. Regulators hold current and former operators jointly and severally liable, meaning Talos Energy Inc. can be on the hook for assets they no longer own if a previous partner goes bankrupt. This is a defintely long-term balance sheet drain.

The financial impact is concrete and ongoing. For the first nine months of the 2025 fiscal year (Q1 and Q3 combined), Talos Energy Inc. spent $62.4 million on plugging and abandonment (P&A) and settled decommissioning obligations. This is cash that can't be used for exploration or shareholder returns. Plus, the offshore surety bond market has seen a structural shift, with tightening conditions and supply-side constraints, making it more expensive and difficult to secure the financial assurance required by regulators for these liabilities.

The table below shows the recent decommissioning-related spending:

Period (2025 Fiscal Year)	P&A and Settled Decommissioning Obligations (Capital Expenditures)
Q1 2025	$10.0 million
Q3 2025	$52.4 million
Total Q1 & Q3 2025	$62.4 million (Nine-month cash outflow proxy)
Full Year 2024	$114.2 million

Clarity on ownership and liability for sequestered $\text{CO}_2$ is still being established in state laws.

The legal framework for Carbon Capture and Sequestration (CCS) is still immature, especially concerning the long-term liability for the stored $\text{CO}_2$. Who owns the subsurface pore space? More critically, who is legally responsible if $\text{CO}_2$ leaks 50 years after a project closes? The industry needs a clear legal path for transferring long-term stewardship and liability to a government entity, typically the state.

This lack of clarity was a major systemic risk that Talos Energy Inc. effectively exited by selling its CCS assets. While Louisiana gained Class VI primacy in 2023, and Texas's final primacy decision is a key event in 2025, the state laws governing the long-term liability transfer remain in development. Until this post-closure liability is definitively addressed in state laws, it remains a significant legal overhang that complicates project financing and valuation for any company engaging in CCS, including the new owners of Talos Energy Inc.'s former projects.

Talos Energy Inc. (TALO) - PESTLE Analysis: Environmental factors

Hurricane and severe weather frequency in the GOM necessitates higher insurance premiums and operational downtime

You cannot talk about Gulf of Mexico (GOM) operations without talking about hurricanes; they are a direct, material cost driver. The 2025 Atlantic hurricane season is projected to be significantly active, with the National Oceanic and Atmospheric Administration (NOAA) forecasting a 60% chance of an above-normal season. This includes a projection of up to 19 named storms, with 3 to 5 potentially becoming Category 3 or higher major hurricanes. The risk is amplified by GOM sea surface temperatures running nearly 2°F above historical averages, which fuels rapid storm intensification. This is a simple, unavoidable reality of offshore energy.

This escalating risk directly impacts your bottom line through insurance and operational losses. For the first half of 2025, total global economic losses from natural catastrophes rose to $162 billion, with the U.S. alone accounting for a staggering $126 billion of that total. For Talos Energy, this exposure is encapsulated in the Lease Operating Expenses (LOE). For the second quarter of 2025, the Company's Total LOE, which includes maintenance and insurance costs, was $137.0 million, or $16.12 per Boe (Barrel of Oil Equivalent). A single major storm can force days of downtime, with high-impact scenarios in the U.S. GOM capable of causing monthly crude oil outages of up to 1.5 million barrels per day (MMb/d).

Increased regulatory focus on biodiversity protection in deepwater drilling areas

The regulatory environment, particularly from the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE), is tightening its focus on protecting the deepwater ecosystem. This isn't just about preventing a major spill; it's about minimizing the footprint of every operation. While the primary focus remains on well control and safety, the regulatory burden has broadened to include cultural and environmental resource protection.

A recent example of this heightened scrutiny is the September 2024 rule requiring all new Outer Continental Shelf (OCS) leaseholders to submit an archaeological report before drilling or laying pipelines. Although this rule is currently under Congressional review, it signals a clear trend toward pre-emptive, costly surveys to protect non-hydrocarbon resources, which often overlaps with biodiversity concerns. This means more time, more studies, and higher pre-drill capital expenditures.

The CCS business line is a direct response to the global mandate for net-zero carbon emissions by 2050

Talos Energy's initial foray into Carbon Capture and Storage (CCS) was a direct, strategic response to the global mandate for net-zero carbon emissions by 2050, demonstrating a clear path to managing climate-related risk. While the Company successfully monetized its CCS assets, the strategic value creation and internal performance remain critical environmental factors.

The Company sold its entire Talos Low Carbon Solutions business to TotalEnergies for $148 million in March 2024. This move allowed Talos to realize value while maintaining a strong internal focus on emissions reduction within its core exploration and production (E&P) business. The results speak for themselves, showing a commitment that goes beyond the CCS sale:

• Achieved its 15% Absolute GHG Emissions Reduction Target well ahead of the original 2030 schedule.
• Reduced Methane Emission by 38% since the 2022 baseline.
• Maintained an A rating in the MSCI ESG Ratings assessment since 2023.

Spill containment and response capabilities are subject to rigorous, unyielding government audits

The post-Deepwater Horizon era means your spill response capabilities are under constant, unyielding government scrutiny, primarily by BSEE. Your Oil Spill Response Plan (OSRP) must not only be approved but must also be proven effective through regular, unannounced drills and audits. Honestly, this is a non-negotiable cost of doing business in the GOM.

Talos Energy has successfully navigated this environment, a key operational strength that mitigates reputation and regulatory risk. The Company's performance metrics highlight its commitment to operational integrity:

Metric	2024 Performance (Reported Aug 2025)	Significance
Hydrocarbon Releases (greater than 1 barrel)	Zero for six consecutive years	Eliminates major reportable spill risk exposure.
Total Recordable Incident Rate (TRIR)	30% lower than the Gulf of America industry average	Demonstrates superior safety and environmental management systems (SEMS).
INC to Component Ratio (2022 Data)	0.008 (60% better than GOM average)	Low rate of BSEE-issued Incidents of Noncompliance during inspections.
Plugging & Abandonment (P&A) Budget	$100.0 million to $120.0 million for full-year 2025	Commitment to managing long-term decommissioning liabilities.

The capital expenditure for plugging and abandonment (P&A) and settled decommissioning obligations for the first quarter of 2025 alone was $10.0 million, showing the continuous, tangible cost of managing environmental liabilities. Finance: draft a sensitivity analysis on Q4 2025 LOE based on a 14-day hurricane-related shut-in by next Tuesday.