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Employee Benefits Plans and Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

The following table summarizes severance accrual activity in connection the EnVen Acquisition included in “Other current liabilities” and “Other long-term liabilities” on the Condensed Consolidated Balance Sheets as of September 30, 2023 (in thousands):


Severance accrual at December 31, 2022	$	—
Accrual additions		24,904
Benefit payments		(13,915	)
Severance accrual at September 30, 2023		10,989
Less: Current portion at September 30, 2023		10,842
Long-term portion at September 30, 2023	$	147

Summary of Restricted Stock Units Activity

The following table summarizes RSU activity under the Talos Energy Inc. 2021 Long Term Incentive Plan (the “2021 LTIP”) for the nine months ended September 30, 2023:


	RSUs			Weighted Average Grant Date Fair Value
Unvested RSUs at December 31, 2022		3,215,504		$	12.79
Granted		1,153,580		$	16.24
Vested		(1,644,828	)	$	12.06
Forfeited		(277,400	)	$	14.07
Unvested RSUs at September 30, 2023(1)		2,446,856		$	14.77

(1)

As of September 30, 2023, 26,975 of the unvested RSUs were accounted for as liability awards in “Accrued liabilities” on the Condensed Consolidated Balance Sheets.

Summary of Performance Share Units Activity

The following table summarizes PSU activity under the 2021 LTIP for the nine months ended September 30, 2023:


	PSUs			Weighted Average Grant Date Fair Value
Unvested PSUs at December 31, 2022		638,601		$	23.66
Granted(1)		593,472		$	18.78
Forfeited		(147,286	)	$	21.47
Unvested PSUs at September 30, 2023		1,084,787		$	21.29

(1)

There were 296,736 PSUs granted that are eligible to vest based on continued employment and the Company’s annualized absolute total shareholder return (“TSR”) over a three-year performance period. An additional 296,736 PSUs were granted and are eligible to vest based on continued employment and the Company’s return on the wells included in the 2023 drill program over a three-year performance period.

Summary of Assumptions Used to Calculate the Grant Date Fair Value of PSUs Granted

The following table summarizes the assumptions used in the Monte Carlo simulations to calculate the fair value of the absolute TSR PSUs granted at the date indicated:


	2023
	Grant			Grant
	July 1			March 5
Expected term (in years)		2.5			2.8
Expected volatility		66.2	%		73.1	%
Risk-free interest rate		4.6	%		4.5	%
Dividend yield		—	%		—	%
Fair value (in thousands)	$	173		$	6,165

Schedule of Recognized Share Based Compensation Expense, Net

The following table presents the amount of costs expensed and capitalized (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Share-based compensation costs	$	2,556	$	7,626	$	18,038	$	20,597
Less: Amounts capitalized to oil and gas properties		2,163		3,316		8,958		8,920
Total share-based compensation expense	$	393	$	4,310	$	9,080	$	11,677