Talos Energy (TALO) FY2025 10-K Risk Factors: 47 New, 47 Dropped

What the changes say

Concentration in the Gulf of Mexico exposes Talos to regional weather, infrastructure, and regulatory shocks.

What changed since the prior 10-K

New

NewRisks Related to our Business and the Oil and Natural Gas Industry
Among the most significant variable factors impacting our business and financial condition are the sales prices for crude oil and natural gas that we produce
Crude oil and natural gas sales prices are volatile and depend on numerous unpredictable global, domestic, and geopolitical factors.
NewRisks Related to our Business and the Oil and Natural Gas Industry
global economic conditions
WTI crude traded between $57.97 and $75.74 per Bbl and Henry Hub gas between $2.91 and $4.26 per MMBtu in 2025.
NewRisks Related to our Business and the Oil and Natural Gas Industry
Low prices could make a portion of our proved reserves uneconomic, which in turn could lead to the removal of certain of our year-end reported proved oil reserves in future periods. These reserve reductions could be significant
Low commodity prices could make proved reserves uneconomic, reduce borrowing capacity, and impair share repurchases and liquidity.
NewRisks Related to our Business and the Oil and Natural Gas Industry
If we are unable to replace oil and natural gas reserves, we may not be able to sustain or grow our business
Failure to replace declining reserves through exploration and development could prevent sustaining or growing the business over the long term.
NewRisks Related to our Business and the Oil and Natural Gas Industry
Our current operations are primarily concentrated in a single geographic region, making us vulnerable to regional risks
Operations are primarily concentrated in the Gulf of America, creating disproportionate exposure to regional disasters, regulations, and infrastructure limits.
NewRisks Related to our Business and the Oil and Natural Gas Industry
changes in laws, regulations, administration policies or court-ordered requirements that restrict or delay offshore leasing, permitting, site development or operation in federal waters where we operate
Changes in laws or policies restricting offshore leasing and permitting in federal waters could harm operations.
NewRisks Related to our Business and the Oil and Natural Gas Industry
Mexico and Canada: Political transitions following elections in 2024–2025 and continuing tension could lead to policy shifts or trade restrictions with the United States that affect the energy industry and broader economy
Political transitions in Mexico and Canada, and conflicts involving Russia, Ukraine, Israel, and the Middle East, create supply and price risks.
NewRisks Related to our Business and the Oil and Natural Gas Industry
Venezuela: Recent U.S. intervention in Venezuela could result in associated repercussions to supply of and demand for oil and natural gas and the economy generally
U.S. intervention in Venezuela could impact global oil and gas supply, demand, and economic stability.
NewRisks Related to our Business and the Oil and Natural Gas Industry
We risk losing leases if we cannot drill before such leases expire
Undeveloped net acreage of 46% as of December 31, 2025, risks expiration if low prices prevent timely drilling.
NewRisks Related to our Business and the Oil and Natural Gas Industry
We depend on infrastructure to market and deliver our production
Inadequate capacity or shutdowns of pipelines, gathering systems, and processing facilities could force well shut-ins.
NewRisks Related to our Business and the Oil and Natural Gas Industry
Inflation and interest rate changes could increase our costs
U.S. inflation ended 2025 at 2.7% and the Federal Reserve lowered the federal funds rate to 3.50%–3.75%, driving cost uncertainties.
NewRisks Related to our Business and the Oil and Natural Gas Industry
We may not be able to obtain sufficient surety bonds on reasonably acceptable terms to conduct our business
A shrinking offshore surety bond market requires collateral arrangements through 2031, limiting bonding capacity and increasing operational costs.
NewRisks Related to our Business and the Oil and Natural Gas Industry
Technology and cybersecurity threats could disrupt our operations and cause reputational and financial harm to our business
NewRisks Related to our Business and the Oil and Natural Gas Industry
We have limited control over the activities on properties we do not operate
NewRisks Related to our Business and the Oil and Natural Gas Industry
Compliance with environmental laws, including legal requirements related to marine life and endangered and threatened species, could increase our costs and limit operations
NewRisks Related to our Business and the Oil and Natural Gas Industry
Regulatory changes could restrict, delay or prohibit oil and natural gas exploration, development and production activities or access to leases, which could have a material adverse effect on our business, financial condition or results of operations
NewRisks Related to our Business and the Oil and Natural Gas Industry
Production shut-ins could increase costs and reduce future production
NewRisks Related to our Business and the Oil and Natural Gas Industry
Severe weather or public health events could disrupt production and reduce revenues
NewRisks Related to our Business and the Oil and Natural Gas Industry
We may also be liable for damages from an event relating to a project in which we own a non-operating working interest and over which we have limited control. Any event resulting in a significant interruption to our business, whether covered by insurance or not, could severely impact our financial position
NewRisks Related to our Business and the Oil and Natural Gas Industry
Our strategy emphasizes Deepwater exploration and development, which involves significantly higher operational and financial risks than operations in shallower waters. Deepwater activities in the Gulf of America are complex, capital‑intensive, and subject to a wide range of uncertainties
NewRisks Related to our Business and the Oil and Natural Gas Industry
In addition, fluctuations in oil and natural gas prices affect both the demand for and cost of drilling rigs, equipment, and related services, which may further increase the overall cost and risk of Deepwater projects
NewRisks Related to our Business and the Oil and Natural Gas Industry
Intense industry competition could limit our growth and increase costs
NewRisks Related to our Business and the Oil and Natural Gas Industry
The loss of a significant customer could materially reduce our revenue and materially adversely affect our business
NewRisks Related to our Business and the Oil and Natural Gas Industry
We rely on skilled and experienced personnel, and shortages in such personnel, higher labor costs or the loss of key management could adversely affect our ability to operate
NewRisks Related to our Business and the Oil and Natural Gas Industry
We have various contractual commitments. Our failure to satisfy these commitments could adversely affect our results of operations and financial position
NewRisks Related to our Business and the Oil and Natural Gas Industry
We have operations in multiple jurisdictions and our tax obligations and related filings are complex. In addition, changes in tax laws or their interpretation could increase our tax obligations and reduce after-tax profitability
NewRisks Related to our Business and the Oil and Natural Gas Industry
Our Mexican operations are subject to evolving regulatory and environmental requirements that could increase costs and create compliance risks
NewRisks Related to our Business and the Oil and Natural Gas Industry
See Part I, Items 1 and 2. Business and Properties — Government Regulation for additional disclosure relating to the legal requirements imposed by Mexican regulatory bodies to which we may be subject in the pursuit of our operations conducted through our equity method investment
NewRisks Related to our Business and the Oil and Natural Gas Industry
Seismic data interpretation does not guarantee the presence of commercially viable hydrocarbons
NewRisks Related to our Business and the Oil and Natural Gas Industry
Violation of anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, could result in severe penalties and loss of key contracts
NewRisks Related to our Business and the Oil and Natural Gas Industry
Our business faces risks related to climate change concerns that could increase our operating costs, restrict where we can operate, and reduce demand for the crude oil and natural gas that we produce
NewRisks Related to our Business and the Oil and Natural Gas Industry
These legislative and regulatory changes could ultimately decrease demand for crude oil and natural gas, increase our compliance and operating costs and consequently adversely affect our business
NewRisks Related to our Business and the Oil and Natural Gas Industry
Evolving expectations, regulations and related scrutiny regarding environmental, social and governance matters could impact our business and stock price
NewRisks Related to our Business and the Oil and Natural Gas Industry
Changes in U.S. trade policy, including tariffs or other restrictions, could increase costs and adversely affect our business
NewRisks Related to our Business and the Oil and Natural Gas Industry
We may not realize expected benefits from future acquisitions, and integration challenges could harm our business
NewRisks Related to our Business and the Oil and Natural Gas Industry
Litigation outcomes could materially affect our financial condition
NewRisks Related to our Business and the Oil and Natural Gas Industry
Lower oil and natural gas prices and other factors have resulted in, and may in the future result in additional, ceiling test impairments and other impairments of our asset carrying values
NewRisks Related to our Business and the Oil and Natural Gas Industry
A prolonged government shutdown or lapse in federal appropriations could disrupt our offshore operations and delay required regulatory approvals
NewRisks Related to our Capital Structure and Ownership of our Common Stock
Our debt level and related covenants in our current or future credit agreement and indentures could restrict our operations, and failure to comply with the covenants could result in accelerated payment obligations
NewRisks Related to our Capital Structure and Ownership of our Common Stock
place us at a competitive disadvantage against other less leveraged competitors
NewRisks Related to our Capital Structure and Ownership of our Common Stock
The Carlos Slim family’s significant ownership and voting power may create conflicts of interest and influence shareholder votes and major strategic decisions
NewRisks Related to our Capital Structure and Ownership of our Common Stock
A financial crisis or disruption in credit markets could limit our access to funding and adversely impact our ability to do business
NewRisks Related to our Capital Structure and Ownership of our Common Stock
As a holding company, we depend on distributions from Talos Production Inc. and our subsidiaries to meet our obligations
NewRisks Related to our Capital Structure and Ownership of our Common Stock
Our charter allows certain directors and stockholders to pursue business opportunities that may not be offered to us
NewRisks Related to our Capital Structure and Ownership of our Common Stock
Our charter includes exclusive forum provisions that may limit stockholder’s ability to choose a judicial forum for disputes
NewRisks Related to our Capital Structure and Ownership of our Common Stock
Future sales, or the perception of future sales, of our stock could lower our share price and dilute the holdings of our existing stockholders
NewRisks Related to our Capital Structure and Ownership of our Common Stock
Stockholder activism could disrupt our business and harm our stock price

Dropped

DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Oil and natural gas prices are volatile. Stagnation or declines in commodity prices may adversely affect our financial condition and results of operations, cash flows, access to the capital markets and available borrowings under our Bank Credit Facility and our ability to grow
Commodity price volatility affects financial condition, cash flows, and bank credit facility borrowings.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
overall economic conditions worldwide
Worldwide economic conditions make future commodity price movements difficult to predict.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our production, revenue and cash flow from operating activities are derived from assets that are concentrated in a single geographic region, making us vulnerable to risks associated with operating in one geographic area
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Production periods or relatively short reserve lives for U.S. Gulf of America properties may subject us to higher reserve replacement needs and may impair our ability to reduce production during periods of low oil and natural gas prices
Concentration of assets in the U.S. Gulf of Mexico and Mexico shallow waters creates regional risk exposure.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
On February 24, 2022, Russian military forces invaded Ukraine. We expect the ongoing war to prolong disruptions in the region
Short reserve lives for Gulf properties require high reserve replacement needs.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets and bans on various Russian imports
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Any of the above-mentioned factors could affect our business, financial condition and results of operations
The Russian invasion of Ukraine prolongs regional disruptions and triggers international sanctions.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Recent and pending management changes could disrupt our operations and impair our ability to attract and retain key personnel
Russian countermeasures and currency controls restrict foreign currency outflow and trade.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
The marketability of our production depends mostly upon the availability, proximity and capacity of oil and natural gas gathering systems, pipelines and processing facilities
Middle East hostilities and the Israel-Hamas conflict create regional instability and price volatility.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Inflationary issues and associated changes in monetary policy may result in increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise
Recent and pending management changes could disrupt operations and key personnel retention.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We may be unable to provide the financial assurances in sufficient amounts or on reasonably acceptable terms to comply with regulatory requirements, or otherwise, in order to conduct our business in the OCS
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our business could be negatively affected by security threats, including cybersecurity threats, terrorist attacks and other disruptions
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We may not be in a position to control the timing of development efforts, associated costs or the rate of production of the reserves from our non-operated properties
Marketability of production depends on proximity and capacity of gathering systems and pipelines.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
the timing and cost of P&A operations
Inflationary issues and monetary policy changes increase costs of goods, services, and personnel.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
drill more wells or build more facilities on a project than we can afford, whether on a cash basis or through financing, which may limit our participation in those projects or limit the percentage of our revenues from those projects
Inability to provide financial assurances to comply with BOEM regulatory requirements in the OCS.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
we are unable to market our production in a manner contemplated when entering into the hedge contract
Security threats including cybersecurity risks, terrorist attacks, and physical infrastructure disruptions.
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our operations may incur substantial liabilities to comply with environmental laws and regulations as well as legal requirements applicable to marine life and endangered and threatened species
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our ability to obtain permits and governmental approvals for our U.S. Gulf of America operations may be delayed by the court-mandated vacatur of the National Marine Fisheries Services’ Gulf of America Biological Opinion if NMFS is unable to publish a revised biological opinion by the vacatur date
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our oil and gas operations are subject to various international, foreign and U.S. federal, state and local governmental regulations that materially affect our operations
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
If we are forced to shut-in production, we will likely incur greater costs to bring the associated production back online, and will be unable to predict the production levels of such wells once brought back online
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We may experience significant shut-ins and losses of production due to the effects of events outside of our control, including tropical storms, winter storms and hurricanes in the U.S. Gulf of America and in the shallow waters off the coast of Mexico and epidemics, outbreaks or other public health events
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We conduct exploration, development and production operations primarily on the deep Shelf and in the Deepwater of the Gulf of America, which present numerous risks
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
shortages or delays in the delivery of equipment
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Competition within our industry may adversely affect our operations. Many of our competitors are larger and have more available financial resources
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
The loss of our larger customers could materially reduce our revenue and materially adversely affect our business, financial condition and results of operations
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
The loss of key personnel could adversely affect our ability to operate
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We have entered into certain agreements which contain minimum volume commitments. Any failure by us to satisfy these commitments could lead to contractual penalties that could adversely affect our results of operations and financial position
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our Mexican operations are subject to certain offshore regulatory and environmental laws and regulations promulgated by Mexico
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Three-dimensional seismic interpretation does not guarantee that hydrocarbons are present or if present, produce in economic quantities
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We are subject to the U.S. Foreign Corrupt Practices Act and may be exposed to liabilities thereunder
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Our operations are subject to various risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur and reduce demand for the crude oil and natural gas that we produce
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Any increased attention to environmental, social and governance matters may impact our business
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
We are upgrading our accounting system to a more recent version and, if this upgraded version proves ineffective or we experience difficulties with the migration, we may be unable to timely or accurately prepare financial reports
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition and operating results
DroppedRisks Related to our Business and the Oil and Natural Gas Industry
Management, under the oversight of our Audit Committee, took steps to fully remediate the material weaknesses as described more fully in Part II, Item 9A. Controls and Procedures of this Annual Report
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
See Part IV, Item 15. Exhibits and Financial Statement Schedules — Note 8 — Debt for additional information on the issuance of the Senior Notes
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
As of February 19, 2025, Control Empresarial, an entity controlled by the family of Carlos Slim Helú (collectively, the “Slim Family”) beneficially owned and possessed voting power of approximately 24.2% of our outstanding common stock
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
Among other things, the Slim Family’s concentration of voting power could influence a sale of our company. This concentration of voting power could discourage a potential investor from seeking to acquire our common stock and, as a result, might harm the market price of our common stock
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
A financial crisis may impact our business and financial condition and may adversely impact our ability to obtain funding under our Bank Credit Facility or in the capital markets
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
our ability to borrow under our Bank Credit Facility
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
We may not realize the anticipated benefits from our current assets and future acquisitions, and we may be unable to successfully integrate future acquisitions
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
incurring potential environmental or regulatory liabilities and title problems
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
Resolution of litigation could materially affect our financial position and results of operations
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
The corporate opportunity provisions in our Second Amended and Restated Certificate of Incorporation could enable others to benefit from corporate opportunities that might not otherwise be available to us
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
These provisions create the possibility that a corporate opportunity that would otherwise be available to us may be used for the benefit of others
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price for our common stock to decline
DroppedRisks Related to our Capital Structure and Ownership of our Common Stock
Actions of any activist stockholders or others could materially and adversely affect our business, results of operations and stock price

Reworded

97% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Global geopolitical tensions may increase volatility in oil, gas and NGL prices and could adversely affect our business
Updated to specifically note that oil and gas activities are affected by energy policies, expropriation, sanctions, piracy, and armed conflicts.
Was: Global geopolitical tensions may create heightened volatility in oil, gas and NGL prices and could adversely affect our business, financial condition and results of operations
97% rewrittenRisks Related to our Capital Structure and Ownership of our Common Stock
We require substantial capital to fund our operations and replace our production and may not be able to obtain financing on acceptable terms
Updated credit facility reference from Bank Credit Facility to A&R Credit Agreement and added asset sales or debt/equity raising risks.
Was: We require substantial capital expenditures to conduct our operations and replace our production, and we may be unable to obtain needed financing on satisfactory terms necessary to fund our planned capital expenditures
94% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Acquisitions and current assets expose us to potentially significant liabilities, including abandonment obligations
Added specific risks of acquiring properties on an as-is basis with limited contractual protections and unknown environmental or tax claims.
Was: Our current assets and future acquisitions expose us to potentially significant liabilities, including P&A liabilities
92% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Our actual production could differ materially from our forecasts
Expanded production forecast risks to include unanticipated regulatory, legal, and out-of-budget weather impacts.
90% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Our actual recovery of reserves may differ substantially from our proved reserve estimates
Added that reserve estimates can be affected by production from adjacent properties operated by third parties.
Was: Our actual recovery of reserves may substantially differ from our proved reserve estimates
89% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Hedging transactions may limit our potential gains and expose us to other risks
Expanded hedging risks to include potential financial loss from widening price differentials, counterparty defaults, and shut-in production.
Was: Hedging transactions may limit our potential gains
87% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
We previously identified material weaknesses in our internal control over financial reporting that could have, had they not been remediated, resulted in material misstatements in our financial statements and caused us to fail to meet our reporting and financial obligations
Noted that identified material weaknesses from September 2024 were fully remediated under Audit Committee oversight.
84% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Our future asset retirement obligations, including plugging and abandonment expenditures and decommissioning costs, are difficult to predict, may vary significantly from period to period and could materially adversely affect our current and future financial results
Added specific 2025 figures: short-term ARO of $112.5 million and long-term ARO of $1,219.6 million.
Was: Our estimates of future asset retirement obligations may vary significantly from period to period and unanticipated decommissioning costs could materially adversely affect our current and future financial position and results of operations
83% rewrittenRisks Related to our Capital Structure and Ownership of our Common Stock
entering into certain transactions with affiliates
Was: entering into transactions with affiliates
83% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
our actual operating costs in producing oil and natural gas
76% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Future exploration and drilling results are uncertain and involve substantial costs
72% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
We are not insured against all of the operating risks to which our business is exposed
59% rewrittenRisks Related to our Business and the Oil and Natural Gas Industry
Our future tax liabilities may be greater than expected if our ability to use our net operating loss (“NOL”) and interest expense carryforwards are limited, which may adversely affect our results of operations and cash flows
Was: Our future tax liabilities may be greater than expected if our net operating loss (“NOL”) and interest expense carryforwards are limited

All 60 risk factors

Headings as the filing states them, in filing order.

Risks Related to our Business and the Oil and Natural Gas Industry

01Among the most significant variable factors impacting our business and financial condition are the sales prices for crude oil and natural gas that we produceNew
02global economic conditionsNew
03Low prices could make a portion of our proved reserves uneconomic, which in turn could lead to the removal of certain of our year-end reported proved oil reserves in future periods. These reserve reductions could be significantNew
04If we are unable to replace oil and natural gas reserves, we may not be able to sustain or grow our businessNew
05Future exploration and drilling results are uncertain and involve substantial costs76% rewritten
06Our current operations are primarily concentrated in a single geographic region, making us vulnerable to regional risksNew
07changes in laws, regulations, administration policies or court-ordered requirements that restrict or delay offshore leasing, permitting, site development or operation in federal waters where we operateNew
08Global geopolitical tensions may increase volatility in oil, gas and NGL prices and could adversely affect our business97% rewritten
09Mexico and Canada: Political transitions following elections in 2024–2025 and continuing tension could lead to policy shifts or trade restrictions with the United States that affect the energy industry and broader economyNew
10Venezuela: Recent U.S. intervention in Venezuela could result in associated repercussions to supply of and demand for oil and natural gas and the economy generallyNew
11Our actual recovery of reserves may differ substantially from our proved reserve estimates90% rewritten
12our actual operating costs in producing oil and natural gas83% rewritten
13Our future asset retirement obligations, including plugging and abandonment expenditures and decommissioning costs, are difficult to predict, may vary significantly from period to period and could materially adversely affect our current and future financial results84% rewritten
14We risk losing leases if we cannot drill before such leases expireNew
15We depend on infrastructure to market and deliver our productionNew
16Inflation and interest rate changes could increase our costsNew
17We may not be able to obtain sufficient surety bonds on reasonably acceptable terms to conduct our businessNew
18Technology and cybersecurity threats could disrupt our operations and cause reputational and financial harm to our businessNew
19We have limited control over the activities on properties we do not operateNew
20Hedging transactions may limit our potential gains and expose us to other risks89% rewritten
21Compliance with environmental laws, including legal requirements related to marine life and endangered and threatened species, could increase our costs and limit operationsNew
22Regulatory changes could restrict, delay or prohibit oil and natural gas exploration, development and production activities or access to leases, which could have a material adverse effect on our business, financial condition or results of operationsNew
23Production shut-ins could increase costs and reduce future productionNew
24Severe weather or public health events could disrupt production and reduce revenuesNew
25We are not insured against all of the operating risks to which our business is exposed72% rewritten
26We may also be liable for damages from an event relating to a project in which we own a non-operating working interest and over which we have limited control. Any event resulting in a significant interruption to our business, whether covered by insurance or not, could severely impact our financial positionNew
27Our actual production could differ materially from our forecasts92% rewritten
28Our strategy emphasizes Deepwater exploration and development, which involves significantly higher operational and financial risks than operations in shallower waters. Deepwater activities in the Gulf of America are complex, capital‑intensive, and subject to a wide range of uncertaintiesNew
29In addition, fluctuations in oil and natural gas prices affect both the demand for and cost of drilling rigs, equipment, and related services, which may further increase the overall cost and risk of Deepwater projectsNew
30Intense industry competition could limit our growth and increase costsNew
31The loss of a significant customer could materially reduce our revenue and materially adversely affect our businessNew
32We rely on skilled and experienced personnel, and shortages in such personnel, higher labor costs or the loss of key management could adversely affect our ability to operateNew
33We have various contractual commitments. Our failure to satisfy these commitments could adversely affect our results of operations and financial positionNew
34We have operations in multiple jurisdictions and our tax obligations and related filings are complex. In addition, changes in tax laws or their interpretation could increase our tax obligations and reduce after-tax profitabilityNew
35Our future tax liabilities may be greater than expected if our ability to use our net operating loss (“NOL”) and interest expense carryforwards are limited, which may adversely affect our results of operations and cash flows59% rewritten
36Our Mexican operations are subject to evolving regulatory and environmental requirements that could increase costs and create compliance risksNew
37See Part I, Items 1 and 2. Business and Properties — Government Regulation for additional disclosure relating to the legal requirements imposed by Mexican regulatory bodies to which we may be subject in the pursuit of our operations conducted through our equity method investmentNew
38Seismic data interpretation does not guarantee the presence of commercially viable hydrocarbonsNew
39Violation of anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, could result in severe penalties and loss of key contractsNew
40Our business faces risks related to climate change concerns that could increase our operating costs, restrict where we can operate, and reduce demand for the crude oil and natural gas that we produceNew
41These legislative and regulatory changes could ultimately decrease demand for crude oil and natural gas, increase our compliance and operating costs and consequently adversely affect our businessNew
42Evolving expectations, regulations and related scrutiny regarding environmental, social and governance matters could impact our business and stock priceNew
43Changes in U.S. trade policy, including tariffs or other restrictions, could increase costs and adversely affect our businessNew
44We may not realize expected benefits from future acquisitions, and integration challenges could harm our businessNew
45Acquisitions and current assets expose us to potentially significant liabilities, including abandonment obligations94% rewritten
46Litigation outcomes could materially affect our financial conditionNew
47Lower oil and natural gas prices and other factors have resulted in, and may in the future result in additional, ceiling test impairments and other impairments of our asset carrying valuesNew
48A prolonged government shutdown or lapse in federal appropriations could disrupt our offshore operations and delay required regulatory approvalsNew
49We previously identified material weaknesses in our internal control over financial reporting that could have, had they not been remediated, resulted in material misstatements in our financial statements and caused us to fail to meet our reporting and financial obligations87% rewritten

Risks Related to our Capital Structure and Ownership of our Common Stock

50Our debt level and related covenants in our current or future credit agreement and indentures could restrict our operations, and failure to comply with the covenants could result in accelerated payment obligationsNew
51entering into certain transactions with affiliates83% rewritten
52place us at a competitive disadvantage against other less leveraged competitorsNew
53The Carlos Slim family’s significant ownership and voting power may create conflicts of interest and influence shareholder votes and major strategic decisionsNew
54A financial crisis or disruption in credit markets could limit our access to funding and adversely impact our ability to do businessNew
55We require substantial capital to fund our operations and replace our production and may not be able to obtain financing on acceptable terms97% rewritten
56As a holding company, we depend on distributions from Talos Production Inc. and our subsidiaries to meet our obligationsNew
57Our charter allows certain directors and stockholders to pursue business opportunities that may not be offered to usNew
58Our charter includes exclusive forum provisions that may limit stockholder’s ability to choose a judicial forum for disputesNew
59Future sales, or the perception of future sales, of our stock could lower our share price and dilute the holdings of our existing stockholdersNew
60Stockholder activism could disrupt our business and harm our stock priceNew

Other Talos Energy 10-Ks

FY2024 10-K risk factors
60 risks
Volatility in oil and natural gas prices directly impacts operational growth, cash flow, and credit facility borrowings. Geographic concentration in the U.S. Gulf of America and Mexico increases vulnerability to regional disruptions. Operations depend heavily on non-operated assets like the Zama Field, limiting direct operational control.
Filed Feb 27, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.