Talos Energy (TALO) 8-K Regulation FD Disclosure

Exhibit 99.1

EXCERPTS FROM THE PRELIMINARY OFFERING MEMORANDUM,

DATED JANUARY 23, 2024

As used in this Exhibit 99.1, the terms “we,” “us” and “our” refer to Talos Energy Inc. and its consolidated subsidiaries, and not to QuarterNorth and its subsidiaries, unless context suggests otherwise. The term “QuarterNorth” refers to QuarterNorth Energy Inc., and the term “QuarterNorth Acquisition” refers to the transactions contemplated by the definitive agreement that we entered into on January 13, 2024 to acquire QuarterNorth. The term “EnVen Acquisition” refers to the business combination whereby, among other things, EnVen Energy Corporation merged with and into Talos Production Inc., with Talos Production Inc. surviving the merger.

Our Competitive Strengths

Oil-Weighted, Predominantly Operated Production Base. Our reserves and production are primarily oil-weighted, and we operate approximately 75% of our production for the quarter ended September 30, 2023. For the quarter ended September 30, 2023, our production was approximately 76% oil.

Non-GAAP Financial Measures

QuarterNorth Historical (in thousands)	Three Months Ended September 30, 2023
Net income (loss)	$	29,968
Interest expense		3,574
Income tax expense (benefit)		7,430
Depreciation, depletion and amortization		56,343
Accretion expense		127
EBITDA		97,442
Write-down of oil and natural gas properties		—
Transaction and other (income) expense(1)		(2,774	)
Decommissioning obligations		—
Derivative fair value (gain) loss(2)		67,347
Net cash received (paid) on settled derivative instruments(2)		(8,896	)
(Gain) loss on debt extinguishment		—
Non-cash write-down of other well equipment inventory		—
Non-cash equity-based compensation expense		—
Adjusted EBITDA	$	153,119

(1) Other income (expense) includes restructuring expenses, cost saving initiatives and other miscellaneous income and expenses that we do not view as a meaningful indicator of our operating performance. For the three months ended September 30, 2023, transaction expenses include $3.3 million in costs related to the QuarterNorth Acquisition incurred by QuarterNorth.

(2) The adjustments for the derivative fair value (gains) losses and net cash receipts (payments) on settled commodity derivative instruments have the effect of adjusting net loss for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDA on an unrealized basis during the period the derivatives settled.

Summary Reserve and Operating Data

The following tables summarize our historical and pro forma production and operating data for the periods ended on the dates indicated below.

	Historical												Pro Forma(1)
	Year Ended December 31,							Nine Months Ended September 30,					Year Ended December 31,		Nine Months Ended September 30,
	2022		2021		2020			2023			2022		2022		2023
Production Volumes:
Oil (MBbl)		14,561		16,159		13,665			13,358			11,020		29,169		19,870
Natural gas (MMcf)		32,215		32,795		28,652			19,769			24,746		49,825		29,237
NGLs (MBbl)		1,793		1,875		1,559			1,318			1,372		2,787		1,872
Total production volume (MBoe)		21,723		23,500		19,999			17,971			16,516		40,261		26,615
Average Net Daily Production Volumes:
Oil (MBbl/d)		39.9		44.3		37.3			48.9			40.4		79.9		72.8
Natural gas (MMcf/d)		88.3		89.8		78.3			72.4			90.6		136.5		107.1
NGLs (MBbl/d)		4.9		5.1		4.3			4.8			5.0		7.6		6.9
Total average net daily (MBoe/d)		59.5		64.4		54.7			65.8			60.5		110.3		97.5
Average Sales Price (excluding commodity derivatives)(2):
Oil ($/Bbl)		93.75		65.86		37.09			74.49			97.89		93.15		75.08
Natural gas ($/Mcf)		7.06		3.98		1.87			2.70			7.34		7.18		2.75
NGLs ($/Bbl)		33.20		26.54		9.90			18.56			35.88		35.89		20.71
Average realized price ($/Boe)		76.05		52.96		28.80			59.70			79.30		78.86		60.53
Revenues (in thousands):
Oil	$	1,365,148	$	1,064,161	$	506,788		$	995,081		$	1,078,800	$	2,717,174	$	1,491,839
Natural gas		227,306		130,616		53,714			53,383			181,747		357,700		80,304
NGLs		59,526		49,763		15,434			24,463			49,232		100,018		38,764
Other		—		—		—			—			—		22,787		18,005
Total revenue	$	1,651,980	$	1,244,540	$	575,936		$	1,072,927		$	1,309,779	$	3,197,679	$	1,628,912
Operating Expenses (in thousands):
Lease operating expense	$	308,092	$	283,601	$	246,564		$	286,075		$	229,156		566,920	$	426,360
Production taxes		3,488		3,363		1,054			1,813			2,670		3,488		1,813
Depreciation, depletion and amortization		414,630		395,994		364,346			480,476			295,174		917,825		656,339
Write-down of oil and natural gas properties		—		18,123		267,916			—			—		—		—
Accretion expense		55,995		58,129		49,741			63,430			42,400		95,470		74,732
General and administrative expense		99,754		78,677		79,175			121,257			70,742		221,676		190,732
Other operating (income) expense		33,902		32,037		(11,550	)		(55,172	)		12,142		40,728		(43,744	)
Total operating expenses	$	915,861	$	869,924	$	997,246		$	897,879		$	652,284	$	1,846,107	$	1,306,232

(1) The summary pro forma production and operating data gives effect to the EnVen Acquisition and the QuarterNorth Acquisition as if they had been completed on January 1, 2022.

(2) Average realized prices are net of certain gathering, transportation, quality differentials and other costs.

QuarterNorth Historical	Three Months Ended September 30, 2023
Production Volumes:
Oil (MBbl)		2,213
Natural gas (MMcf)		3,344
NGLs (MBbl)		194
Total production volume (MBoe)		2,874
Average Net Daily Production Volumes:
Oil (MBbl/d)		23.1
Natural gas (MMcf/d)		36.3
NGLs (MBbl/d)		2.1
Total average net daily (MBoe/d)		31.2
Average Sales Price (excluding commodity derivatives)(1):
Oil ($/Bbl)		83.86
Natural gas ($/Mcf)		2.95
NGLs ($/Bbl)		26.46
Average realized price ($/Boe)		67.17
Revenues (in thousands):
Oil	$	178,041
Natural gas		9,859
NGLs		5,134
Turkey revenue		63,179
Other		7,815
Total revenue	$	264,028
Operating Expenses (in thousands):
Lease operating expense	$	38,750
Decommissioning cost of goods sold		40,544
Depreciation, depletion and amortization		56,343
Accretion expense		127
General and administrative expense		11,810
Insurance expense		5,585
Other operating (income) expense		8,593
Total operating expenses	$	161,752

(1) Average realized prices are net of certain gathering, transportation, quality differentials and other costs.

Capitalization

As of September 30, 2023 and December 31, 2023, QuarterNorth had long-term debt of $185.0 million and $85.0 million, respectively, and cash on hand of $387.7 million and $394.0 million, respectively.