8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 27, 2020

Talos Energy Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-38497	82-3532642
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
333 Clay Street, Suite 3300 Houston, Texas		77002
(Address of principal executive offices)		(Zip Code)

(713) 328-3000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock	TALO	NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 1.01. Entry into a Material Definitive Agreement.

Registration Rights Agreement Amendment

In connection with the closing of the Acquisitions (as defined below) on February 28, 2020 (the “Closing”), and pursuant to the Purchase Agreements, as amended (as defined below), Talos Energy Inc., a Delaware corporation (the “Company”) and ILX Holdings, LLC, a Delaware limited liability company (“ILX Holdings”), ILX Holdings II, LLC, a Delaware limited liability company (“ILX Holdings II”), ILX Holdings III LLC, a Delaware limited liability company (“ILX Holdings III”) and Riverstone V Castex 2014 Holdings, L.P., a Delaware limited partnership and designee of Castex Energy 2014, LLC, a Delaware limited liability company (“Castex 2014,” and together with ILX Holdings, ILX Holdings II and ILX Holdings III, the “Riverstone Sellers”), among others, entered into an amendment (the “Registration Rights Agreement Amendment”) to the Registration Rights Agreement, dated as of May 10, 2018 (the “Original Registration Rights Agreement,” and as amended from time to time, the “Registration Rights Agreement”), by and between the Company and certain holders of the Company’s common stock, par value $0.01 per share (“Common Stock”), party thereto. The Registration Rights Agreement Amendment adds each of the Riverstone Sellers (or one or more of its designated affiliates) as parties to the Registration Rights Agreement and provides such parties with customary registration rights with respect to the Company’s Preferred Shares (as defined below) issued to the Riverstone Sellers at the Closing.

The foregoing description of the Registration Rights Agreement Amendment is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement Amendment, a copy of which is filed as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 2.01. Completion of Acquisition or Disposition of Assets.

At the Closing, the Company consummated a previously announced acquisition of the outstanding limited liability company interests in certain wholly owned subsidiaries (the “Acquisitions”) of each of the Riverstone Sellers and Castex Energy 2016, L.P., a Delaware limited partnership (“Castex 2016,” and together with the Riverstone Sellers, the “Sellers”) pursuant to separate Purchase and Sale Agreements, dated as of December 10, 2019, between the Company, Talos Production Inc., a Delaware corporation (“Talos Production”) and each of the Sellers (as amended from time to time, the “Purchase Agreements”) for aggregate consideration consisting of the following, subject to certain negotiated adjustments: (i) an aggregate amount of cash from Talos Production equal to $385 million and (ii) an aggregate 110,000 shares (the “Preferred Shares”) of a series of the Company’s preferred stock, par value $0.01 per share, designated as “Series A Convertible Preferred Stock,” the terms of which are set forth in the Certificate of Designation of Preferences, Rights and Limitations related thereto (the “Certificate of Designation”). Each Preferred Share will automatically convert (the “Conversion”) into 100 shares of Common Stock (subject to adjustments) immediately following the expiration of the 20 calendar day period commencing on the stated date of distribution to the Company’s stockholders of a definitive Information Statement on Schedule 14C relating to such Conversion.

On December 10, 2019, Talos Production deposited in escrow an amount in cash equal to five percent of the Unadjusted Purchase Price (as defined in the applicable Purchase Agreement) under each Purchase Agreement that was applied at Closing towards the cash component of the purchase price under each Purchase Agreement. The Purchase Agreements have an effective time of 12:00 a.m., Central Time, on July 1, 2019.

Relationships

As of February 24, 2020, (i) certain entities controlled by or affiliated with Riverstone Energy Partners V, L.P. (collectively, the “Riverstone Funds”), an affiliate of Riverstone Holdings LLC, beneficially owned and possessed voting power over approximately 27.5% of the issued and outstanding Common Stock and (ii) certain funds and other alternative investment vehicles managed by Apollo Management VII, L.P. and Apollo Commodities Management, L.P., with respect to Series I (collectively, the “Apollo Funds”) beneficially owned and possessed voting power over approximately 35.4% of the issued and outstanding Common Stock. Pursuant to the Company’s Stockholders’ Agreement, dated as of May 10, 2018, as amended from time to time (the “Stockholders’ Agreement”), (i) the Riverstone Funds currently have the right to designate two persons for nomination by the board of directors of the Company (the “Board”) for

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election to the Board (a “Riverstone Director”), (ii) the Apollo Funds currently have the right to designate two persons for nomination by the Board for election to the Board (an “Apollo Director”) and (iii) the Apollo Funds and the Riverstone Funds currently have the collective right to designate two additional persons for nomination by the Board for election to the Board (a “Joint Director”). Two Riverstone Directors, two Apollo Directors and one Joint Director currently serve on the Board pursuant to the Stockholders’ Agreement.

Item 3.03. Material Modification to Rights of Security Holders.

Certificate of Designation

On February 27, 2020, in contemplation of the Closing, the Company adopted the Certificate of Designation to provide for the issuance of 110,000 Preferred Shares. On the terms and subject to the conditions set forth in the Certificate of Designation, each share of Series A Convertible Preferred Stock will automatically convert into 100 shares (subject to adjustments) of Common Stock immediately following the expiration of 20 calendar day period commencing on the stated date of distribution to the Company’s stockholders of a definitive Information Statement on Schedule 14C relating to the Conversion. The Series A Convertible Preferred Stock will have no voting rights, except as otherwise expressly required by law, and the consent of the holders thereof shall not be required for the taking of any corporate action, except for any voting rights (including with respect to corporate action) required by the General Corporation Law of the State of Delaware or the Company’s Amended and Restated Certificate of Incorporation; provided, however, the holders of Series A Convertible Preferred Stock will have the right to vote as a class on any increase or decrease in the authorized shares of Series A Convertible Preferred Stock.

The foregoing description of the Certificate of Designation is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth in Item 3.03 above is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure

On March 2, 2020, the Company announced the Closing of the Acquisitions. A copy of the press release is furnished as Exhibit 99.1 hereto.

The information contained in this Current Report on Form 8-K under Item 7.01, including the accompanying Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this Current Report on Form 8-K under Item 7.01, including the accompanying Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The financial statements required by this Item 9.01 will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The pro forma financial statements required by this Item 9.01 will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

(d) Exhibits.

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Exhibit Number	Description of Exhibit
2.1#	Purchase and Sale Agreement, dated as of December  10, 2019, by and among Talos Energy Inc., Talos Production Inc. and ILX Holdings, LLC (incorporated by reference to Exhibit 2.1 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on December 16, 2019).
2.2	First Amendment to Purchase and Sale Agreement, dated as of February  24, 2020, by and among Talos Energy Inc., Talos Production Inc. and ILX Holdings, LLC (incorporated by reference to Exhibit 2.2 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on February 25, 2020).
2.3#	Purchase and Sale Agreement, dated as of December  10, 2019, by and among Talos Energy Inc., Talos Production Inc. and ILX Holdings II, LLC (incorporated by reference to Exhibit 2.2 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on December 16, 2019).
2.4	First Amendment to Purchase and Sale Agreement, dated as of February  24, 2020, by and among Talos Energy Inc., Talos Production Inc. and ILX Holdings II, LLC (incorporated by reference to Exhibit 2.4 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on February 25, 2020).
2.5#	Purchase and Sale Agreement, dated as of December  10, 2019, by and among Talos Energy Inc., Talos Production Inc. and ILX Holdings III, LLC (incorporated by reference to Exhibit 2.3 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on December 16, 2019).
2.6	First Amendment to Purchase and Sale Agreement, dated as of February  24, 2020, by and among Talos Energy Inc., Talos Production Inc. and ILX Holdings III, LLC (incorporated by reference to Exhibit 2.6 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on February 25, 2020).
2.7#	Purchase and Sale Agreement, dated as of December  10, 2019, by and among Talos Energy Inc., Talos Production Inc. and Castex Energy 2014, LLC (incorporated by reference to Exhibit 2.4 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on December 16, 2019).
2.8	First Amendment to Purchase and Sale Agreement, dated as of February  24, 2020, by and among Talos Energy Inc., Talos Production Inc. and Castex Energy 2014, LLC (incorporated by reference to Exhibit 2.8 to Talos Energy Inc.’s Form 8-K (File No. 001-38497) filed with the SEC on February 25, 2020).
2.9#	Purchase and Sale Agreement, dated as of December  10, 2019, by and among Talos Energy Inc., Talos Production Inc. and Castex Energy 2016, L.P. (incorporated by reference to Exhibit 2.5 to Talos Energy Inc.’s Form 8-K (File. No. 001-38497) filed with the SEC on December 16, 2019).
3.1*	Certificate of Designation of Preferences, Rights and Limitations, dated as of February 27, 2020.
4.1	Registration Rights Agreement, dated as of May  10, 2018, by and among Talos Energy Inc. and each of the other parties set forth on the signature pages thereto (incorporated by reference to Exhibit 4.2 to Talos Energy Inc.’s Form 8-K 12B (File No. 001-38497) filed with the SEC on May 16, 2018).
4.2*	Amendment No. 1 to Registration Rights Agreement, dated as of February 28, 2020, by and among Talos Energy Inc. and each of the other parties set forth on the signature pages thereto.
99.1*	Press Release dated March 2, 2020.

* Filed herewith.

# Certain schedules, annexes or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, but will be furnished supplementally to the SEC upon request.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 2, 2020

TALOS ENERGY INC.
By:	/s/ William S. Moss III
Name:	William S. Moss III
Title:	Executive Vice President, General Counsel and Secretary

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EX-3.1

Exhibit 3.1

CERTIFICATE OF DESIGNATION

OF

SERIES A CONVERTIBLE PREFERRED STOCK

OF

TALOS ENERGY INC.

The undersigned, William S. Moss III, Senior Vice President, General Counsel and Secretary of Talos Energy Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:

1. Pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board”) by the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”), the Board is authorized to provide for the issuance of up to 30,000,000 shares of preferred stock of the Corporation, par value of $.01 per share (the “Preferred Stock”), of which none are presently issued and outstanding, by filing a certificate of the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, pursuant to the applicable provisions of the DGCL, as are stated and expressed in the resolution or resolutions providing for the issuance thereof adopted by the Board.

2. Pursuant to Section 151 of the DGCL and the authority expressly vested by the Certificate, the following resolutions were duly adopted by the Board on February 19, 2020:

WHEREAS, the Certificate provides for the issuance from time to time of Preferred Stock in one or more series;

WHEREAS, the Board is authorized to fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, pursuant to the applicable provisions of the DGCL; and

WHEREAS, it is the desire of the Board, pursuant to its authority as aforesaid, to create, provide for the issuance of, fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions of, if any, and fix other matters relating to, a series of the Preferred Stock designated as “Series A Convertible Preferred Stock,” which shall consist of 110,000 shares, par value of $.01 per share.

NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby create and provide for the issuance of a series of Series A Convertible Preferred Stock and does hereby fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, and other matters relating to the shares of Series A Convertible Preferred Stock as follows:

Section 1. Liquidation.

(a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation and payment or setting aside for payment of any preferential amount due to the holders of any other class or series of stock, the holders of the Series A Convertible Preferred Stock shall be entitled to receive a payment of $.01 per share of Series A Convertible Preferred Stock in preference (the “Liquidation Preference”) to the holders of, and before any payment or distribution is made on, any stock ranking junior to the Series A Convertible Preferred Stock, including, without limitation, on the Corporation’s common stock, par value of $.01 per share (the “Common Stock”). Following the payment of the Liquidation Preference, the holders of the Series A Convertible Preferred Stock shall be entitled to receive the amount that such holders would have been entitled to receive if the Series A Convertible Preferred Stock were fully converted (disregarding for such purpose any conversion limitations hereunder) to Common Stock at the Conversion Ratio (as defined below), which amounts shall be paid pari passu with all holders of Common Stock.

(b) In the event the assets of the Corporation available for distribution to the holders of shares of Series A Convertible Preferred Stock upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to Section 1(a), proportionate distributable amounts shall be paid on account of the shares of Series A Convertible Preferred Stock, equally and ratably, in proportion to the full distributable amounts for which holders of Series A Convertible Preferred Stock and of any stock that ranks on parity with the Series A Convertible Preferred Stock are entitled upon such liquidation, dissolution or winding up.

(c) Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy or insolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Board.

Section 2. Voting. Except as otherwise expressly required by law, the holders of Series A Convertible Preferred Stock shall have no voting rights, including the right to elect any directors, and their consent shall not be required for taking any corporate action, except for any voting rights (including with respect to corporate actions) required by the DGCL or the Certificate. For the avoidance of doubt, the holders of Series A Convertible Preferred Stock shall have the right to vote as a class on any increase or decrease in the authorized shares of Series A Convertible Preferred Stock.

Section 3. Automatic Conversion. Each share of Series A Convertible Preferred Stock shall automatically, and without any further action on the part of the holder thereof, convert into a number of shares of Common Stock equal to the Conversion Ratio immediately following the expiration of the 20 calendar day period commencing on the stated date of distribution to the Corporation’s stockholders in accordance with Rule 14c-2 of Regulation 14C promulgated under the Securities Exchange Act of 1934, as amended, of a definitive Information Statement on Schedule 14C filed by the Corporation with the Securities and Exchange Commission relating to the conversion of the Series A Convertible Preferred Stock.

Section 4. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Convertible Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Conversion Ratio multiplied by the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged; provided, however, that in connection with any merger, combination or other transaction contemplated by this Section 4 solely among or between the Corporation and one or more subsidiaries of the Corporation, each share of Series A Convertible Preferred Stock shall be exchanged for a share of senior preferred stock in the ultimate surviving parent entity in such transaction, having substantially the same designations, relative rights and preferences as the Series A Convertible Preferred Stock.

Section 5. Other Provisions.

(a) Best Efforts. The Corporation shall use its best efforts to effect the automatic conversion as provided in Section 3 above.

(b) Record Holders. The Corporation and its transfer agent, if any, for the Series A Convertible Preferred Stock may deem and treat the record holder of any shares of Series A Convertible Preferred Stock as reflected on the books and records of the Corporation as the sole, true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.

(c) Reservation and Authorization of Common Stock. The Corporation covenants that, so long as any shares of Series A Convertible Preferred Stock remain outstanding, the Corporation will at all times reserve and keep available, from its authorized and unissued Common Stock solely for issuance and delivery upon the conversion of the shares of Series A Convertible Preferred Stock and free of preemptive rights, such number of shares of Common Stock as from time to time shall be issuable upon the conversion in full of all outstanding shares of Series Convertible

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Preferred Stock. The Corporation further covenants that it shall, from time to time, take all steps necessary to increase the authorized number of shares of its Common Stock if at any time the authorized number of shares of Common Stock remaining unissued would otherwise be insufficient to allow delivery of all of the shares of Common Stock when deliverable upon the conversion in full of all outstanding shares of Series A Convertible Preferred Stock. The Corporation covenants that all shares of Common Stock will, at all times that shares of Series A Convertible Preferred Stock are convertible, be duly approved for listing subject to official notice of issuance on each securities exchange, if any, on which the Common Stock is then listed.

(d) Fractional Shares. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of the Series A Convertible Preferred Stock. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any shares of the Series A Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fractional interest of the then current market price of Common Stock.

Section 6. Restriction and Limitations. Except as required by law so long as any shares of Series A Convertible Preferred Stock remain outstanding, the Corporation shall not, without the written consent of the holders of at least a majority of the then outstanding shares of the Series A Convertible Preferred Stock, take any action which would adversely and materially affect any of the preferences, limitations or relative rights of the holders of Series A Convertible Preferred Stock.

Section 7. Dividends and Stock Splits.

(a) The holders of the Series A Convertible Preferred Stock shall be entitled to receive, with respect to any distribution of cash or other property made to holders of Common Stock, the amount that such holders of Series A Convertible Preferred Stock would have been entitled to receive if the Series A Convertible Preferred Stock were fully converted (disregarding for such purpose any conversion limitations hereunder) to Common Stock at the Conversion Ratio on the record date for such distribution.

(b) If the Corporation, at any time while shares of the Series A Convertible Preferred Stock are outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock or Common Stock equivalents, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the number of shares of Common Stock issuable upon conversion in Section 3, which is initially 100 (as it may be adjusted in accordance with this paragraph, the “Conversion Ratio”) shall be modified by multiplying the Conversion Ratio by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately after such event, and of which the denominator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event. Any adjustment made pursuant to this Section 7 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. Successive adjustments in the Conversion Ratio shall be made whenever any event specified above shall occur.

RESOLVED, FURTHER, that the Chief Executive Officer, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations (this “Certificate of Designation”) in accordance with the foregoing resolutions and the applicable provisions of the DGCL.

*********************

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IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation this 27th day of February, 2020.

/s/ William S. Moss III
Name:	William S. Moss III
Title:	Senior Vice President, General Counsel and Secretary

SIGNATURE PAGE TO

CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS

EX-4.2

Exhibit 4.2

AMENDMENT NO. 1 TO

REGISTRATION RIGHTS AGREEMENT

THIS AMENDMENT NO. 1 (this “Amendment”) to the Registration Rights Agreement (the “Original Agreement”), dated as of May 10, 2018, by and between Talos Energy Inc., a Delaware corporation (the “Company”), and each of the other parties set forth on the signature pages to the Original Agreement (the “Original Holders”), is entered into as of February 28, 2020, by and between the Company and each of the other parties set forth on the signature pages hereto. The Company and the other parties hereto are sometimes collectively referred to in this Amendment as the “Parties” and each is sometimes referred to herein as a “Party.” Capitalized terms used in this Amendment but not defined herein have the meanings assigned to such terms in the Original Agreement.

WHEREAS, the Company and the Original Holders entered into the Original Agreement on May 10, 2018, pursuant to which, among other things, the Company granted certain registration rights to the Original Holders;

WHEREAS, the Original Agreement may be amended by a written amendment signed by the Company and the Holders of a majority of the then outstanding Registrable Securities, provided that no such amendment shall materially and adversely affect the rights of any Holder thereunder without the consent of such Holder; and

WHEREAS, in consideration of the mutual benefits to be derived from the Acquisitions (as defined herein) and this Amendment, the Company and the Parties hereto desire to enter into this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the Parties hereby agree as follows:

ARTICLE I

AMENDMENTS

Section 1.01. Definitions.

(a) Additional Definitions. The following terms are hereby added to the definitions included in Section 1.01 of the Original Agreement:

“Acquisitions” means the transactions contemplated by the (i) Purchase and Sale Agreement, dated as of December 10, 2019, as amended on February 24, 2020, by and among the Company, Talos Production and ILX Holdings, LLC, a Delaware limited liability company, (ii) Purchase and Sale Agreement, dated as of December 10, 2019, as amended on February 24, 2020, by and among the Company, Talos Production and ILX Holdings II, LLC, a Delaware limited liability company, (iii) Purchase and Sale Agreement, dated as of December 10, 2019, as amended on February 24, 2020, by and among the Company, Talos Production and ILX Holdings III LLC, a Delaware limited liability company and (iv) Purchase and Sale Agreement, dated as of December 10, 2019, as amended on February 24, 2020, by and among the Company, Talos Production and Castex Energy 2014, LLC, a Delaware limited liability company, collectively, including in each case the issuance of Series A Preferred Stock to any New Riverstone Entity as set forth in any such agreement, as amended.

“New Riverstone Entities” means ILX Holdings, LLC, a Delaware limited liability company, ILX Holdings II, LLC, a Delaware limited liability company, ILX Holdings III LLC, a Delaware limited liability company, Riverstone V Castex 2014 Holdings, L.P., a Delaware limited partnership, and REL US Partnership, LLC, a Delaware limited liability company.

“Series A Preferred Stock” means the Series A Convertible Preferred Stock of the Company, par value $0.01 per share.

“Talos Production” means Talos Production Inc., a Delaware corporation.

(b) Revised Definitions. The following terms defined in the Original Agreement are hereby replaced with the following:

“Agreement” means the Registration Rights Agreement, dated as of May 10, 2018, between the Company and each of the other Parties set forth on the signature pages thereto, as amended by the Amendment No. 1 to Registration Rights Agreement, dated as of February 28, 2020, and as further amended or otherwise modified from time to time.

“Registrable Securities” means (i) any Common Stock held by any of the Principal Holders and the Legacy Holders or any of their respective Affiliates as of May 10, 2018 (after giving effect to the consummation of the Transactions), (ii) any Common Stock issuable with respect to any Series A Preferred Stock held by any of the New Riverstone Entities as of February 28, 2020 that was issued in connection with the consummation of any of the Acquisitions, (iii) any Common Stock of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization and (iv) any Series A Preferred Stock held by any of the New Riverstone Entities as of February 28, 2020 that was issued in connection with the consummation of any of the Acquisitions, which Registrable Securities are subject to the rights provided herein until such rights terminate pursuant to the provisions hereof. For the avoidance of doubt, any Person that is (or whose Registrable Securities are) managed by a Legacy Holder or by the same investment manager as a Legacy Holder shall be considered an Affiliate of such Legacy Holder for purposes of the definition of “Registrable Securities” in this Agreement.

“Riverstone Entities” means, collectively, Riverstone Talos Energy Equityco LLC, a Delaware limited liability company, Riverstone Talos Energy Debtco LLC, a Delaware limited liability company, Riverstone V FT Corp Holdings, L.P., a Delaware limited partnership, and the New Riverstone Entities.

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Section 1.02. Registrable Securities. The following sentence is hereby added to the end of Section 1.02 of the Original Agreement:

“For purposes of calculating any amount or percentage of Registrable Securities pursuant to this Agreement, the term Registrable Securities shall include only the Registrable Securities contemplated by clauses (i), (ii) and (iii) of the definition of Registrable Securities included in Section 1.01 of this Agreement; provided, however, that for purposes of calculating any amount or percentage of Registrable Securities “then outstanding,” such calculation shall give effect to the issuance of Common Stock upon conversion of the shares of Series A Preferred Stock as if all shares of Series A Preferred Stock had been converted to Common Stock immediately prior to such calculation.”

Section 1.03. Registration Rights.

(a) Section 2.01 of the Original Agreement is hereby replaced in its entirety as follows:

“Section 2.01. Demand Registration. Upon the written request (a “Notice”) by a Principal Holder, Legacy Holder or any other Holder owning or controlling at least five percent (5%) of the then outstanding Registrable Securities (subject to adjustment pursuant to Section 3.04), the Company shall file with the Commission, as soon as reasonably practicable, but in no event more than 30 days following the receipt of the Notice, a registration statement (each, a “Registration Statement”) under the Securities Act providing for the resale of the Registrable Securities (which may, at the option of the Holders giving such Notice, be a registration statement under the Securities Act that provides for the resale of the Registrable Securities pursuant to Rule 415 from time to time by the Holders (a “Shelf Registration Statement”)). The Company shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the initial filing of the Registration Statement. Any Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders of any and all Registrable Securities covered by such Registration Statement. To the extent the initial Registration Statement is not made on Form S-3, the Company shall, upon becoming eligible to file a registration statement on Form S-3, prepare and file a new Registration Statement on Form S-3 to replace the initial Registration Statement and use its best efforts to cause such subsequent Registration Statement to be declared effective by the Commission as soon as reasonably practicable thereafter. The Company shall use its commercially reasonable efforts to cause each Registration Statement filed pursuant to this Section 2.01 to be continuously effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Registrable Securities by the Holders until all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”). Each Registration Statement when effective (and the documents incorporated therein by reference) shall comply as to form in all material respects with all applicable requirements of the Securities Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Each Holder shall be limited to two demand registrations under this Section 2.01 in any twelve-month period (provided, however, that there shall be no limit on the number of Shelf Registration Statements that may be required by the Holders hereunder), and the Company shall not be obligated to file more than one Registration Statement within 120 days after the effective date of any Registration Statement filed by the Company.”

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(b) Section 2.11 of the Original Agreement is hereby replaced in its entirety as follows:

“Section 2.11.Restrictions on Public Sale by Holders of Registrable Securities. Each Holder agrees to enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of the Registrable Securities during the 90 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Commission with respect to the pricing of an Underwritten Offering, provided that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Company or the officers, directors or any other stockholder of the Company on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.11 shall not apply to (x) any Holder who does not have the right to participate in an Underwritten Offering pursuant to Section 2.03 (or any Holder who has irrevocably waived its right to participate in, or receive notice of, such an Underwritten Offering prior to any notice of such an Underwritten Offering), (y) any Holder whose Registrable Securities are not included in an Underwritten Offering after such Holder makes a request to participate in such Underwritten Offering in accordance with the terms of Section 2.03(b) and (z) any Registrable Securities that are included in such Underwritten Offering by such Holder.”

Section 1.04. Miscellaneous. Section 3.01(f) of the Original Agreement is hereby replaced in its entirety as follows:

“(d) if to MacKay:

c/o MacKay Shields LLC.

1345 Avenue of the Americas

New York, NY 10105

Attn: Dohyun Cha (except for notices pursuant to Section 2.03)

Dohyun.cha@mackayshields.com

with a copy to:

Attn: Young Lee

Young.lee@mackayshields.com”

ARTICLE II

MISCELLANEOUS

Section 2.01. Amendment. No amendment of this Amendment shall be valid unless such amendment is made in accordance with Section 3.11 of the Original Agreement.

Section 2.02. Counterparts. This Amendment may be executed in any number of counterparts with the same effect as if all Parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. The delivery of an executed counterpart copy of this Amendment by facsimile or electronic transmission in PDF format shall be deemed to be the equivalent of delivery of the originally executed copy thereof.

Section 2.03. Headings. The headings in this Amendment are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

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Section 2.04. Governing Law. The laws of the State of New York shall govern this Amendment.

Section 2.05. Severability of Provisions. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

Section 2.06. Effect of the Amendment. Except as amended by this Amendment, all other terms of the Original Agreement shall continue in full force and effect and remain unchanged and are hereby confirmed in all respects by each Party.

[Signature pages follow]

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IN WITNESS WHEREOF, the Parties hereto execute this Amendment, effective as of the date first above written.

TALOS ENERGY INC.
By:	/s/ Timothy S. Duncan
Name:	Timothy S. Duncan
Title:	President and Chief Executive Officer

SIGNATURE PAGE

TO

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT

AP TALOS ENERGY LLC
a Delaware limited liability company
By:	/s/ Laurie D. Medley
	Name: Laurie D. Medley
	Title:   Vice President

AP TALOS ENERGY DEBTCO LLC
a Delaware limited liability company
By:	/s/ Laurie D. Medley
	Name: Laurie D. Medley
	Title:   Vice President

SIGNATURE PAGE

TO

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT

RIVERSTONE TALOS ENERGY EQUITYCO LLC
a Delaware limited liability company
By:	/s/ Peter Haskopoulos
Name:	Peter Haskopoulos
Title:	Managing Director

RIVERSTONE TALOS ENERGY DEBTCO LLC
a Delaware limited liability company
By:	/s/ Peter Haskopoulos
Name:	Peter Haskopoulos
Title:	Managing Director

RIVERSTONE V FT CORP HOLDINGS, L.P.
a Delaware limited partnership
By:	Riverstone Energy Partners V, L.P.,
	its general partner
By:	Riverstone Energy GP V, LLC
	its general partner

By:	/s/ Peter Haskopoulos
Name:	Peter Haskopoulos
Title:	Managing Director

SIGNATURE PAGE

TO

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT

MACKAY SHIELDS LLC, as investment manager on behalf of certain of its clients
By:	/s/ Young Lee
Name:	Young Lee
Title:	Senior Managing Director

SIGNATURE PAGE

TO

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT

ILX HOLDINGS, LLC
a Delaware limited liability company
By:	/s/ Peter Haskopoulos
Name:	Peter Haskopoulos
Title:	Managing Director

ILX HOLDINGS II, LLC
a Delaware limited liability company
By:	/s/ Peter Haskopoulos
	Name: Peter Haskopoulos
	Title:   Managing Director

ILX HOLDINGS III LLC
a Delaware limited liability company
By:	/s/ Peter Haskopoulos
	Name: Peter Haskopoulos
	Title:   Managing Director

RIVERSTONE V CASTEX 2014 HOLDINGS, L.P.,
a Delaware limited partnership

By: RIVERSTONE V REL HOLDINGS GP, LLC,
its general partner

By:	/s/ Peter Haskopoulos
Name:	Peter Haskopoulos
Title:	Managing Director

REL US PARTNERSHIP, LLC
a Delaware limited liability company
By:	/s/ Peter Haskopoulos
Name:	Peter Haskopoulos
Title:	Managing Director

SIGNATURE PAGE

TO

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT

EX-99.1

Exhibit 99.1

TALOS ENERGY ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED ACQUISITIONS AND ASSOCIATED BORROWING BASE INCREASE

Houston, March 2, 2020 – Talos Energy Inc. (“Talos” or the “Company”) (NYSE: TALO) today announced the closing of the acquisition of affiliates of ILX Holdings, among other entities (the “Acquired Assets,” the “Acquisition,” or the “Transaction”), on February 28, 2020. The Transaction was previously announced on December 10, 2019. Concurrently with the closing of the Transaction, Talos also closed on the increase of its borrowing base to $1,150.0 million.

After taking into account customary closing adjustments based on an effective date of July 1, 2019, total cash consideration paid by Talos was reduced from $385.0 million to $291.7 million, as the Acquired Assets generated approximately $100.0 million of free cash flow in the eight-month period since effective date, partially offset by a small working capital position acquired in conjunction with one of the assets. The cash consideration was funded primarily through the Company’s revolving credit facility and cash on hand. In addition to the cash consideration, the Company delivered 110,000 shares of Series A Convertible Preferred Stock to certain of the sellers. The preferred shares will automatically convert into 11.0 million common shares on the 20^th day following the mailing to investors of the Company’s definitive information statement on Schedule 14C related to the Transaction.

Concurrently with the closing of the Transaction, the borrowing base under Talos’s credit facility was upsized from $950.0 million to $1,150.0 million, effective immediately. Pro forma for the closings, Talos had approximately $600 million of available liquidity. Talos expects to use free cash flow anticipated in 2020 to pay down a portion of the borrowings under the credit facility, even at the current commodity price environment.

The Acquired Assets’ average production in the fourth quarter of 2019, after accounting for certain downtime, was 18.7 thousand barrels of oil equivalent per day (“MBoe/d”). The Company is currently drilling the Claiborne #3 well and first production is expected at the end of the second quarter of 2020. Also included in the Transaction are over 700,000 gross acres, of which 480,000 are primary term.

President and Chief Executive Officer Timothy S. Duncan commented, “We are excited to have closed this Transaction of high quality, free cash flow generating assets. This Acquisition is consistent with Talos’s strategy of acquiring high-margin, oil-weighted assets with significant drilling upside in our core areas. We believe the additional scale and diversity will allow Talos to be even more resilient to commodity price volatility, further allowing us to continue to generate free cash flow in the current commodity environment. Talos is also better positioned to high-grade our drilling inventory, as we continue to pursue our infrastructure-led drilling and measured investment in high-impact exploration. We will continue to be prepared to opportunistically make accretive acquisitions that will make Talos a stronger company and allow us to continue to strengthen our financial position.”

ANALYST & INVESTOR EVENT AND YEAR-END 2019 EARNINGS CALL

Talos will release fourth quarter and full-year 2019 results for the period ended December 31, 2019 on Wednesday, March 11, 2020 after the U.S. financial market closes. The Company will host an earnings conference call, which will be broadcast live over the internet, on Thursday, March 12, 2020 at 10:00 AM Eastern Time.

Listeners can access the earnings conference call live over the Internet through a webcast link on the Company’s website at: https://www.talosenergy.com/investors. Alternatively, the conference call can be accessed by dialing 1-888-348-8927 (U.S. toll-free), 1-855-669-9657 (Canada toll-free) or 1-412-902-4263 (International). Please dial in approximately 10 minutes before the teleconference is scheduled to begin and ask to be joined into the Talos Energy call. A replay of the call will be available one hour after the conclusion of the conference through March 19, 2020 and can be accessed by dialing 1-877-344-7529 and using access code 10139354.

TALOS ENERGY INC. 333 Clay St., Suite 3300, Houston, TX 77002

Additionally, Talos will host its first-ever analyst and investor event on Thursday, March 12, 2020 at 2:00 PM Eastern Time, during which members of Talos’s management team will discuss the Company’s strategic and execution milestones, assets, portfolio and future outlook for the business, among other topics.

Institutional investors and analysts interested in attending the event should contact Rose & Company at 1-212-517-0810 or by email at talos@roseandco.com. A live webcast of the analyst and investor event and accompanying presentation materials will be available on the Company’s website at https://www.talosenergy.com/investors. Please allow extra time prior to the webcast to visit the website and download any software that may be needed to listen to the live webcast. A replay of the webcast will also be available on the Company’s website following the event.

ABOUT TALOS ENERGY

Talos Energy (NYSE: TALO) is a technically driven independent exploration and production company focused on safely and efficiently maximizing cash-flows and long-term value through our operations, currently in the United States Gulf of Mexico and offshore Mexico. As one of the US Gulf’s largest public independent producers, we leverage decades of geology, geophysics and offshore operations expertise towards the acquisition, exploration, exploitation and development of assets in key geological trends that are present in many offshore basins around the world. Our activities in offshore Mexico provide high impact exploration opportunities in an oil rich emerging basin. For more information, visit www.talosenergy.com.

INVESTOR RELATIONS CONTACT

Sergio Maiworm

+1.713.328.3008

investor@talosenergy.com

TALOS ENERGY INC. 333 Clay St., Suite 3300, Houston, TX 77002

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this communication, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, access to or downtime at third-party infrastructure, potential adverse reactions or changes to business or employee relationships, competitive responses, generally, including those discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission.

Should one or more of these risks occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, to reflect events or circumstances after the date of this communication.

Estimates for our future production volumes are based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and gas will continue at levels that allow for economic production of these products. The production, transportation and marketing of oil and gas are subject to disruption due to transportation and processing availability, mechanical failure, human error, hurricanes and numerous other factors. Our estimates are based on certain other assumptions, such as well performance, which may vary significantly from those assumed. Therefore, we can give no assurance that our future production volumes will be as estimated.

TALOS ENERGY INC. 333 Clay St., Suite 3300, Houston, TX 77002