Key Highlights:

• Production of 56.5 thousand barrels of oil equivalent per day ("MBoe/d") net (69% oil, 78% liquids), inclusive of Hurricane Ida production deferrals of 10.0 – 11.0 MBoe/d net
• Talos was named the winning bidder and operator of the Texas General Land Office's ("GLO") Jefferson County carbon storage site, the only major offshore carbon capture and storage ("CCS") site in the United States
• Net Loss of $16.7 million, inclusive of $81.5 million in commodity hedging losses, or $0.20 Net Loss per diluted share, and Adjusted Net Loss of $3.2 million, inclusive of $71.6 million of realized hedging losses, or $0.04 Adjusted Net Loss per diluted share
• Adjusted EBITDA(1) of $131.4 million, or approximately $25 per Boe; Adjusted EBITDA excluding hedges of $203.1 million, or approximately $39 per Boe
• Capital expenditures of $86.2 million
• Free Cash Flow (before changes in working capital) of $12.8 million

President and Chief Executive Officer Timothy S. Duncan commented: 
"Following two consecutive quarters of record production, we were anticipating a very robust third quarter, including the benefit of several new wells coming online, prior to the impacts of Hurricane Ida. Despite those production deferrals, primarily caused by complications affecting downstream, third-party service providers, we still generated meaningful Adjusted EBITDA and free cash flow in the quarter, validating the operational and financial resiliency of our asset base and the success of our 2021 capital program thus far. Entering the fourth quarter with production largely restored, we still expect to meet our original free cash flow generation goals for the year, with production, expenses and capital expenditures remaining within our guidance, and look forward to entering 2022 on strong footing across our business.

During the third quarter we also made meaningful progress in our carbon capture and storage business, in which we are leveraging our Gulf Coast and shallow water expertise to become a leader in a quickly growing and important sector. We were awarded and will be the operator of what is expected to be the first-ever dedicated offshore sequestration site in the U.S., located just off the coast of Beaumont and Port Arthur, Texas, providing an avenue for the major industrial region to permanently sequester CO2 emissions. In our regional partnership with Storegga Geotechnologies we are working to assemble a portfolio of opportunities and look forward to providing market updates in the coming months. Most recently, we announced an alliance with TechnipFMC, one of the leading engineering and technology firms in our industry, which we believe further demonstrates the interest level and pace of commercial development in this quickly evolving space."

RECENT DEVELOPMENTS AND OPERATIONS UPDATE

Carbon Capture: In August, Talos, along with partner Carbonvert, Inc. ("Carbonvert"), was selected as the winning bidder for the GLO's Jefferson County carbon storage site. The successful bid makes Talos the operator of what is expected to be the first and only large-scale offshore carbon storage location in the United States, comprising over 40,000 acres in close proximity to the Beaumont and Port Arthur, Texas industrial corridor. Subsequently, on October 18, 2021, Talos announced a strategic alliance with TechnipFMC related to full project lifecycle engineering and design, leveraging TechnipFMC's extended history in subsea engineering, system integration and automation and control. The alliance builds on Talos's partnerships with Storegga Geotechnologies and Carbonvert to further advance the Company's leadership in Gulf Coast CCS project opportunities.

Pompano Rig Program: Talos recently commenced its platform rig program from the Company's Pompano facility. The Company expects to bring online 1.5 – 2.0 MBoe/d of low-risk recompletion and asset management projects in the fourth quarter of 2021, executing rapid turnaround production additions and capitalizing on favorable commodity price trends. The platform rig will remain at the Pompano facility into 2022 when the Company expects to execute development and exploitation step-out projects as part of the 2022 capital program.

Hurricane Ida: Talos experienced significant deferred production of 10.0 – 11.0 MBoe/d net for the third quarter of 2021 (compared to the Company's projections for the quarter pre-hurricane) driven by facilities shut-ins, and to a greater extent, complications affecting third-party downstream service providers such as refiners, crude oil terminals and pipelines. The Company's assets did not experience significant damage and the majority have been returned to normal operations, producing an average of approximately 66.5 MBoe/d net in the last week of September of 2021. Talos continues to expect annual production near the lower end of the previously guided annual range, and expects production for the fourth quarter of 2021 of 64.0 – 66.0 MBoe/d net. All other previously guided line items (including operating expenses, G&A and capital expenditures) remain within the existing range of guidance. Additionally, the Company still expects to generate meaningful free cash flow for the full year 2021.

Zama: Following the Company's previously-announced submission of formal Notices of Dispute to the Government of Mexico related to, among other items, operatorship of the Zama field, Talos continues to pursue a resolution with all stakeholders and continues to review all legal and commercial options.

Production for the quarter was 56.5 MBoe/d net, inclusive of Hurricane Ida production deferrals of 10.0 – 11.0 MBoe/d net.

Capital expenditures for the quarter, including plugging and abandonment activities, totaled $86.2 million.

At quarter-end the Company had approximately $375.8 million of liquidity, with $330.0 million undrawn on its credit facility and approximately $59.4 million in cash, less approximately $13.6 million in outstanding letters of credit.

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