United States securities and exchange commission logo
December 15, 2022
Timothy S. Duncan
President, Chief Executive Officer and Director
Talos Energy Inc.
333 Clay Street, Suite 3300
Houston, Texas 77002
Re: Talos Energy Inc.
Amendment No. 1 to
Registration Statement on Form S-4
Filed December 5,
2022
File No. 333-268036
Dear Timothy S. Duncan:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
November 22, 2022 letter.
Amendment No. 1 to Registration Statement on Form S-4
Unaudited Pro Forma Condensed Combined Financial Statements
Note 3 - Transaction Accounting Adjustments, page 150
1. We note the description
of the inputs to the valuation of oil and gas properties added in
response to prior
comment 12. Please further expand this disclosure to more clearly
describe the
qualitative factors that resulted in the pro forma adjustments to Proved
properties and Unproved
properties, not subject to amortization.
2. Your response to prior
comment 13 states that you calculated current taxable income on a
combined basis and
compared the combined income tax income to the net operating losses
available to be
utilized for the periods ended December 31, 2021 and September 30, 2022.
Timothy S. Duncan
FirstName LastName Timothy S. Duncan
Talos Energy Inc.
Comapany15,
December NameTalos
2022 Energy Inc.
December
Page 2 15, 2022 Page 2
FirstName LastName
Please clarify for us how offsetting post-combination taxable income
with available
federal net operating losses is consistent with Rules 11-02(a)(6)(i)
and (b)(5) of
Regulation S-X.
Material U.S. Federal Income Tax Considerations of the Mergers, page 156
3. We note your disclosure here, and in the Exhibit 8.1 Form of Opinion
of Davis Polk, that
Davis Polk's opinion will opine that the First Merger and the Second
Merger, taken
together as an integrated transaction, will "more likely than not"
qualify for U.S. federal
income tax purposes as a reorganization within the meaning of
Section 368(a) of the
Internal Revenue Code of 1986, as amended. Please revise to explain
why counsel cannot
give a will opinion and to describe the degree of uncertainty in
the opinion. Please also
provide risk factor and/or other appropriate disclosure setting forth
the risks of uncertain
tax treatment to investors. See Section III.C.4 of Staff Legal
Bulletin No. 19 (Oct. 14,
2011).
Information About EnVen
Oil, Natural Gas and NGL Reserves
Proved Reserves, page 192
4. We have read your response to prior comment 16 and note the revisions
to your
disclosure. Please tell us the basis for the presentation of the
present value of future net
revenues from production handing agreements discounted at 10% or
revise to remove it.
This comment also applies to the similar information in the reserve
report filed as Exhibit
99.8.
Also, disclosure under the section PV-10 on page 195 of your
amendment appears to
indicate EnVen s proved reserve PV-10 values are inclusive of cash
flows from the future
net revenues related to third-party production handling agreements,
discounted at 10%.
Please revise your disclosure to resolve the inconsistency with other
revisions to your
disclosure.
General
5. We note your revised disclosure throughout your registration statement
in response to
prior comment 15. In various place, such as page ii, v, xxvii, 4, 17,
135, 163, 178 and your
form of preliminary proxy card in Annex L, you disclose that you are
asking shareholders
to approve Proposal 2.D clarifying that the exclusive forum provision
in the A&R Charter
will not apply to suits brought to enforce any liability or duty
created by the Securities
Act, the Exchange Act or other claim for which the federal courts have
exclusive
jurisdiction. However, in other sections, such as your risk factor on
page 41 and Article
XII of your Form of A&R Charter in Annex G, you revised to provide
that the federal
district courts of the United States will be the exclusive forum for
claims arising under the
federal securities laws of the United States, including without
limitation under the
Securities Act of 1933. Article XII was also revised to disclose that
"[n]otwithstanding the
Timothy S. Duncan
Talos Energy Inc.
December 15, 2022
Page 3
foregoing" your exclusive forum provision shall not apply to claims
seeking to enforce
any liability or duty created by the Exchange Act of 1934. Please revise
throughout your
filing to consistently disclose the application of your provisions to
actions arising
under the Securities Act or Exchange Act, including clarifying the change
shareholders
are being asked to approve. If your A&R Charter will apply to claims
under the Securities
Act or Exchange Act, please also state that there is uncertainty as to
whether a court
would enforce such provision. If the provision applies to Securities Act
claims, please also
state that investors cannot waive compliance with the federal securities
laws and the rules
and regulations thereunder. In that regard, we note that Section 22 of
the Securities Act
creates concurrent jurisdiction for federal and state courts over all
suits brought to enforce
any duty or liability created by the Securities Act or the rules.
For questions regarding comments on engineering matters, you may
contact John
Hodgin, Petroleum Engineer, at (202) 551-3699. You may contact Jennifer
O'Brien, Staff
Accountant, at (202) 551-3721 or Ethan Horowitz, Accounting Branch Chief, at
(202) 551-3311
if you have questions regarding comments on the financial statements and
related matters. Please
contact Anuja A. Majmudar, Attorney-Adviser, at (202) 551-3844 or Kevin
Dougherty,
Attorney-Adviser, at (202) 551-3271 with any other questions.
Sincerely,
FirstName LastName Timothy S. Duncan
Division of
Corporation Finance
Comapany NameTalos Energy Inc.
Office of Energy &
Transportation
December 15, 2022 Page 3
cc: Jackson O' Maley
FirstName LastName