Condensed Consolidating Financial Information

6 Months Ended

12 Months Ended

Jun. 30, 2018

Dec. 31, 2017

Condensed Consolidating Financial Information

Note 12—Condensed Consolidating Financial Information

Talos owns no operating assets and has no operations independent of its subsidiaries and owns 100% of the Talos Issuers. The Talos Issuers issued 11.00% Senior Secured Notes on May 10, 2018, which are fully and unconditionally guaranteed, jointly and severally, by Talos and certain 100% owned subsidiaries (“Guarantors”) on a senior secured basis. Certain of the Company’s subsidiaries which are accounted for on a consolidated basis do not guarantee the 11.00% Senior Secured Notes (“Non-Guarantors”).

The following condensed consolidating financial information presents the financial information of the Company on an unconsolidated stand-alone basis and its combined subsidiary issuers, combined guarantor and combined non-guarantor subsidiaries as of and for the periods indicated. As described in Note 1 – Formation and Basis of Presentation, the Company retrospectively adjusted its consolidated equity to reflect the legal capital of Talos for all periods presented. Such financial information may not necessarily be indicative of the Company’s results of operations, cash flows, or financial position had these subsidiaries operated as independent entities.

TALOS ENERGY INC.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2018

(In thousands)

(Unaudited)

	Talos		Talos Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	35,385		$	40,940		$	2,535		$	—		$	78,860
Restricted cash		—		—			1,244			—			—			1,244
Accounts receivable, net
Trade, net		—		—			100,824			—			—			100,824
Joint interest, net		—		—			6,638			1,756			—			8,394
Other		—		—			832			6,259			—			7,091
Assets from price risk management activities		—		478			21			—			—			499
Prepaid assets		—		—			51,672			26			—			51,698
Income tax receivable		—		—			16,212			—			—			16,212
Other current assets		—		—			3,910			—			—			3,910
Total current assets		—		35,863			222,293			10,576			—			268,732
Property and equipment:
Proved properties		—		—			3,412,875			—			—			3,412,875
Unproved properties, not subject to amortization		—		—			70,590			33,246			—			103,836
Other property and equipment		—		27,293			1,580			11			—			28,884
Total property and equipment		—		27,293			3,485,045			33,257			—			3,545,595
Accumulated depreciation, depletion and amortization		—		(7,080	)		(1,540,566	)		(10	)		—			(1,547,656	)
Total property and equipment, net		—		20,213			1,944,479			33,247			—			1,997,939
Other long-term assets:
Assets from price risk management activities		—		234			—			—			—			234
Other well equipment inventory		—		—			9,021			—			—			9,021
Investments in subsidiaries		685,845		1,440,601			—			—			(2,126,446	)		—
Other assets		—		364			7,712			67			—			8,143
Total assets	$	685,845	$	1,497,275		$	2,183,505		$	43,890		$	(2,126,446	)	$	2,284,069
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—	$	9,894		$	28,728		$	109		$	—		$	38,731
Accrued liabilities		—		4,235			150,206			1,461			—			155,902
Accrued royalties		—		—			28,508			—			—			28,508
Current portion of long-term debt		—		434			—			—			—			434
Current portion of asset retirement obligations		—		—			94,334			—			—			94,334
Liabilities from price risk management activities		—		141,118			13,604			—			—			154,722
Accrued interest payable		—		7,064			390			—			—			7,454
Other current liabilities		—		—			15,541			—			—			15,541
Total current liabilities		—		162,745			331,311			1,570			—			495,626
Long-term debt, net of discount and deferred financing costs		—		621,908			6,060			—			—			627,968
Asset retirement obligations		—		—			320,044			—			—			320,044
Liabilities from price risk management activities		—		26,777			4,989			—			—			31,766
Other long-term liabilities		—		—			122,820			—			—			122,820
Total liabilities		—		811,430			785,224			1,570			—			1,598,224
Commitments and Contingencies (Note 10)
Stockholders’ equity (deficit)		685,845		685,845			1,398,281			42,320			(2,126,446	)		685,845
	$	685,845	$	1,497,275		$	2,183,505		$	43,890		$	(2,126,446	)	$	2,284,069

TALOS ENERGY INC.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2017

(In thousands)

	Talos			Talos Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	22,315		$	7,806		$	2,070		$	—		$	32,191
Restricted cash		—			—			1,242			—			—			1,242
Accounts receivable, net
Trade, net		—			—			62,871			—			—			62,871
Joint interest, net		—			—			11,659			1,954			—			13,613
Other		—			938			5,863			5,685			—			12,486
Assets from price risk management activities		—			1,406			157			—			—			1,563
Prepaid assets		—			—			17,919			12			—			17,931
Inventory		—			—			840			—			—			840
Other current assets		—			—			2,148			—			—			2,148
Total current assets		—			24,659			110,505			9,721			—			144,885
Property and equipment:
Proved properties		—			—			2,440,811			—			—			2,440,811
Unproved properties, not subject to amortization		—			—			41,259			30,743			—			72,002
Other property and equipment		—			7,266			1,580			11			—			8,857
Total property and equipment		—			7,266			2,483,650			30,754			—			2,521,670
Accumulated depreciation, depletion and amortization		—			(6,355	)		(1,424,527	)		(8	)		—			(1,430,890	)
Total property and equipment, net		—			911			1,059,123			30,746			—			1,090,780
Other long-term assets:
Assets from price risk management activities		—			345			—			—			—			345
Other well equipment inventory		—			—			2,577			—			—			2,577
Investments in subsidiaries		(54,087	)		697,663			—			—			(643,576	)		—
Other assets		—			364			326			16			—			706
Total assets	$	(54,087	)	$	723,942		$	1,172,531		$	40,483		$	(643,576	)	$	1,239,293
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—		$	1,124		$	70,458		$	1,099		$	—		$	72,681
Accrued liabilities		—			6,516			80,464			993			—			87,973
Accrued royalties		—			—			24,208			—			—			24,208
Current portion of long-term debt		—			24,977			—			—			—			24,977
Current portion of asset retirement obligations		—			—			39,741			—			—			39,741
Liabilities from price risk management activities		—			46,580			3,377			—			—			49,957
Accrued interest payable		—			8,742			—			—			—			8,742
Other current liabilities		—			—			15,188			—			—			15,188
Total current liabilities		—			87,939			233,436			2,092			—			323,467
Long-term debt, net of discount and deferred financing costs		—			672,581			—			—			—			672,581
Asset retirement obligations		—			—			174,992			—			—			174,992
Liabilities from price risk management activities		—			17,509			1,272			—			—			18,781
Other long-term liabilities		—			—			103,559			—			—			103,559
Total liabilities		—			778,029			513,259			2,092			—			1,293,380
Commitments and Contingencies (Note 10)
Stockholders’ equity (deficit)		(54,087	)		(54,087	)		659,272			38,391			(643,576	)		(54,087	)
	$	(54,087	)	$	723,942		$	1,172,531		$	40,483		$	(643,576	)	$	1,239,293

TALOS ENERGY INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2018

(In thousands)

(Unaudited)

	Talos			Talos Issuers			Guarantors			Non- Guarantors			Elimination		Consolidated
Revenues:
Oil revenue	$	—		$	—		$	180,161		$	—		$	—	$	180,161
Natural gas revenue		—			—			16,448			—			—		16,448
NGL revenue		—			—			7,297			—			—		7,297
Total revenue		—			—			203,906			—			—		203,906
Operating expenses:
Direct lease operating expense		—			—			34,060			—			—		34,060
Insurance		—			—			4,259			—			—		4,259
Production taxes		—			—			564			—			—		564
Total lease operating expense		—			—			38,883			—			—		38,883
Workover and maintenance expense		—			—			17,714			—			—		17,714
Depreciation, depletion and amortization		—			384			67,341			1			—		67,726
Accretion expense		—			—			9,492			—			—		9,492
General and administrative expense		—			13,804			16,854			222			—		30,880
Total operating expenses		—			14,188			150,284			223			—		164,695
Operating income (loss)		—			(14,188	)		53,622			(223	)		—		39,211
Interest expense		—			(14,399	)		(6,891	)		(388	)		—		(21,678	)
Price risk management activities expense		—			(89,970	)		(1,206	)		—			—		(91,176	)
Other income (expense)		—			(1,358	)		132			(43	)		—		(1,269	)
Equity earnings from subsidiaries		(74,912	)		45,003			—			—			29,909		—
Net income (loss)	$	(74,912	)	$	(74,912	)	$	45,657		$	(654	)	$	29,909	$	(74,912	)

TALOS ENERGY INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(In thousands)

(Unaudited)

	Talos			Talos Issuers			Guarantors			Non- Guarantors			Elimination		Consolidated
Revenues:
Oil revenue	$	—		$	—		$	307,854		$	—		$	—	$	307,854
Natural gas revenue		—			—			29,171			—			—		29,171
NGL revenue		—			—			12,731			—			—		12,731
Total revenue		—			—			349,756			—			—		349,756
Operating expenses:
Direct lease operating expense		—			—			58,975			—			—		58,975
Insurance		—			—			6,934			—			—		6,934
Production taxes		—			—			955			—			—		955
Total lease operating expense		—			—			66,864			—			—		66,864
Workover and maintenance expense		—			—			24,619			—			—		24,619
Depreciation, depletion and amortization		—			725			116,039			2			—		116,766
Accretion expense		—			—			14,252			—			—		14,252
General and administrative expense		—			18,398			20,567			495			—		39,460
Total operating expenses		—			19,123			242,341			497			—		261,961
Operating income (loss)		—			(19,123	)		107,415			(497	)		—		87,795
Interest expense		—			(26,627	)		(13,957	)		(836	)		—		(41,420	)
Price risk management activities expense		—			(139,217	)		(3,935	)		—			—		(143,152	)
Other income (expense)		—			(1,208	)		85			45			—		(1,078	)
Equity earnings from subsidiaries		(97,855	)		88,320			—			—			9,535		—
Net income (loss)	$	(97,855	)	$	(97,855	)	$	89,608		$	(1,288	)	$	9,535	$	(97,855	)

TALOS ENERGY INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2017

(In thousands)

(Unaudited)

	Talos		Talos Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Revenues:
Oil revenue	$	—	$	—		$	78,719		$	—		$	—		$	78,719
Natural gas revenue		—		—			12,888			—			—			12,888
NGL revenue		—		—			3,436			—			—			3,436
Other		—		—			383			—			—			383
Total revenue		—		—			95,426			—			—			95,426
Operating expenses:
Direct lease operating expense		—		—			28,871			—			—			28,871
Insurance		—		—			2,688			—			—			2,688
Production taxes		—		—			380			—			—			380
Total lease operating expense		—		—			31,939			—			—			31,939
Workover and maintenance expense		—		—			8,225			—			—			8,225
Depreciation, depletion and amortization		—		353			35,803			1			—			36,157
Accretion expense		—		—			5,321			—			—			5,321
General and administrative expense		—		3,775			3,531			164			—			7,470
Total operating expenses		—		4,128			84,819			165			—			89,112
Operating income (loss)		—		(4,128	)		10,607			(165	)		—			6,314
Interest expense		—		(11,487	)		(7,695	)		(1,623	)		—			(20,805	)
Price risk management activities income		—		36,040			2,955			—			—			38,995
Other income (expense)		—		150			(87	)		40			—			103
Equity earnings from subsidiaries		24,607		4,032			—			—			(28,639	)		—
Net income (loss)	$	24,607	$	24,607		$	5,780		$	(1,748	)	$	(28,639	)	$	24,607

TALOS ENERGY INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

(In thousands)

(Unaudited)

	Talos		Talos Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Revenues:
Oil revenue	$	—	$	—		$	162,487		$	—		$	—		$	162,487
Natural gas revenue		—		—			26,062			—			—			26,062
NGL revenue		—		—			7,069			—			—			7,069
Other		—		—			1,632			—			—			1,632
Total revenue		—		—			197,250			—			—			197,250
Operating expenses:
Direct lease operating expense		—		—			56,735			—			—			56,735
Insurance		—		—			5,409			—			—			5,409
Production taxes		—		—			645			—			—			645
Total lease operating expense		—		—			62,789			—			—			62,789
Workover and maintenance expense		—		—			17,047			—			—			17,047
Depreciation, depletion and amortization		—		722			75,364			2			—			76,088
Accretion expense		—		—			10,509			—			—			10,509
General and administrative expense		—		10,166			6,621			429			—			17,216
Total operating expenses		—		10,888			172,330			431			—			183,649
Operating income (loss)		—		(10,888	)		24,920			(431	)		—			13,601
Interest expense		—		(23,501	)		(14,723	)		(1,353	)		—			(39,577	)
Price risk management activities expense		—		81,541			3,347			—			—			84,888
Other income (expense)		—		300			(162	)		19			—			157
Equity earnings from subsidiaries		59,069		11,617			—			—			(70,686	)		—
Net income (loss)	$	59,069	$	59,069		$	13,382		$	(1,765	)	$	(70,686	)	$	59,069

TALOS ENERGY INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(In thousands)

(Unaudited)

	Talos		Talos Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	—	$	(54,941	)	$	160,304		$	1,748		$	—		$	107,111
Cash flows from investing activities:
Exploration, development, and other capital expenditures		—		(20,027	)		(117,667	)		(3,274	)		—			(140,968	)
Cash paid for acquisitions, net of cash acquired		—		—			293,001			—			—			293,001
Investments in subsidiaries		—		(384,089	)		—			—			384,089			—
Distributions from subsidiaries		—		677,573			9			—			(677,582	)		—
Net cash provided by (used in) investing activities		—		273,457			175,343			(3,274	)		(293,493	)		152,033
Cash flows from financing activities:
Redemption of 2018 Senior Notes		—		(24,977	)		(69	)		—			—			(25,046	)
Proceeds from Bank Credit Facility		—		294,000			—			—			—			294,000
Repayment of Bank Credit Facility		—		(54,000	)		—			—			—			(54,000	)
Repayment of Old Bank Credit Facility		—		(403,000	)		—						—			(403,000	)
Deferred financing costs		—		(17,469	)		—			—			—			(17,469	)
Payments of capital lease		—		—			(6,958	)		—			—			(6,958	)
Capital contributions		—		—			382,089			2,000			(384,089	)		—
Distributions to subsidiary issuer		—		—			(677,573	)		(9	)		677,582			—
Net cash provided by (used in) financing activities		—		(205,446	)		(302,511	)		1,991			293,493			(212,473	)
Net increase (decrease) in cash, cash equivalents and restricted cash		—		13,070			33,136			465			—			46,671
Cash, cash equivalents and restricted cash:
Balance, beginning of period		—		22,315			9,048			2,070			—			33,433
Balance, end of period	$	—	$	35,385		$	42,184		$	2,535		$	—		$	80,104

TALOS ENERGY INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

(In thousands)

(Unaudited)

	Talos		Talos Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	—	$	(16,268	)	$	84,651		$	16,880		$	—		$	85,263
Cash flows from investing activities:
Exploration, development, and other capital expenditures		—		(73	)		(54,770	)		(7,692	)		—			(62,535	)
Cash paid for acquisitions, net of cash acquired		—		—			(2,244	)		—			—			(2,244	)
Investments in subsidiaries		—		(287,689	)		—			—			287,689			—
Distributions from subsidiaries		—		292,580			1,527			—			(294,107	)		—
Net cash provided by (used in) investing activities		—		4,818			(55,487	)		(7,692	)		(6,418	)		(64,779	)
Cash flows from financing activities:
Redemption of 2018 Senior Notes		—		(1,000	)		—			—			—			(1,000	)
Proceeds from Bank Credit Facility		—		10,000			—			—			—			10,000
Repayment of Bank Credit Facility		—		(15,000	)		—			—			—			(15,000	)
Payments of capital lease		—		—			(5,870	)		—			—			(5,870	)
Capital contributions		—		—			279,689			8,000			(287,689	)		—
Distributions to subsidiaries		—		—			(292,580	)		(1,527	)		294,107			—
Net cash provided by (used in) financing activities		—		(6,000	)		(18,761	)		6,473			6,418			(11,870	)
Net increase (decrease) in cash, cash equivalents and restricted cash		—		(17,450	)		10,403			15,661			—			8,614
Cash, cash equivalents and restricted cash:
Balance, beginning of period		—		24,349			6,752			2,332			—			33,433
Balance, end of period	$	—	$	6,899		$	17,155		$	17,993		$	—		$	42,047

Note 11—Condensed Consolidating Financial Information

Talos Energy Inc. (“Parent”) owns no operating assets and has no operations independent of its subsidiaries. Talos Production LLC and Talos Production Finance Inc. (“Subsidiary Issuers”) are 100% owned by the Parent. The Subsidiary Issuers issued 11.00% Second-Priority Senior Secured Notes (“11.00% Notes”) on May 10, 2018, which are fully and unconditionally guaranteed, jointly and severally, by the Parent and certain 100% owned subsidiaries (“Guarantors”) on a senior secured basis. Certain of the Company’s subsidiaries which are accounted for on a consolidated basis do not guarantee the 11.00% Notes (“Non-Guarantors”).

The following condensed consolidating financial information presents the financial information of the Company on an unconsolidated stand-alone basis and its combined subsidiary issuers, combined guarantor and combined non-guarantor subsidiaries as of and for the periods indicated. As described in Note 15 – Subsequent Change in Reporting Entity and Financial Statement Presentation, the Company retrospectively adjusted its consolidated equity to reflect the legal capital of Talos Energy Inc. for all periods presented. Such financial information may not necessarily be indicative of the Company’s results of operations, cash flows, or financial position had these subsidiaries operated as independent entities.

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2017

(In thousands)

	Parent			Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	22,315		$	7,806		$	2,070		$	—		$	32,191
Restricted cash		—			—			1,242			—			—			1,242
Accounts receivable, net
Trade, net		—			—			62,871			—			—			62,871
Joint interest, net		—			—			11,659			1,954			—			13,613
Other		—			938			5,863			5,685			—			12,486
Assets from price risk management activities		—			1,406			157			—			—			1,563
Prepaid assets		—			—			17,919			12			—			17,931
Inventory		—			—			840			—			—			840
Other current assets		—			—			2,148			—			—			2,148
Total current assets		—			24,659			110,505			9,721			—			144,885
Property and equipment:
Proved properties		—			—			2,440,811			—			—			2,440,811
Unproved properties, not subject to amortization		—			—			41,259			30,743			—			72,002
Other property and equipment		—			7,266			1,580			11			—			8,857
Total property and equipment		—			7,266			2,483,650			30,754			—			2,521,670
Accumulated depreciation, depletion and amortization		—			(6,355	)		(1,424,527	)		(8	)		—			(1,430,890	)
Total property and equipment, net		—			911			1,059,123			30,746			—			1,090,780
Other long-term assets:
Assets from price risk management activities		—			345			—			—			—			345
Other well equipment inventory		—			—			2,577			—			—			2,577
Investments in subsidiaries		(54,087	)		697,663			—			—			(643,576	)		—
Other assets		—			364			326			16			—			706
Total assets	$	(54,087	)	$	723,942		$	1,172,531		$	40,483		$	(643,576	)	$	1,239,293
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—		$	1,124		$	70,458		$	1,099		$	—		$	72,681
Accrued liabilities		—			6,516			80,464			993			—			87,973
Accrued royalties		—			—			24,208			—			—			24,208
Current portion of long-term debt		—			24,977			—			—			—			24,977
Current portion of asset retirement obligations		—			—			39,741			—			—			39,741
Liabilities from price risk management activities		—			46,580			3,377			—			—			49,957
Accrued interest payable		—			8,742			—			—			—			8,742
Other current liabilities		—			—			15,188			—			—			15,188
Total current liabilities		—			87,939			233,436			2,092			—			323,467
Long-term debt, net of discount and deferred financing costs		—			672,581			—			—			—			672,581
Asset retirement obligations		—			—			174,992			—			—			174,992
Liabilities from price risk management activities		—			17,509			1,272			—			—			18,781
Other long-term liabilities		—			—			103,559			—			—			103,559
Total liabilities		—			778,029			513,259			2,092			—			1,293,380
Commitments and Contingencies (Note 10)
Stockholders’ equity (deficit)		(54,087	)		(54,087	)		659,272			38,391			(643,576	)		(54,087	)
	$	(54,087	)	$	723,942		$	1,172,531		$	40,483		$	(643,576	)	$	1,239,293

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2016

(In thousands)

	Parent		Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	24,349		$	5,550		$	2,332		$	—		$	32,231
Restricted cash		—		—			1,202			—			—			1,202
Accounts receivable, net
Trade, net		—		—			52,764			—			—			52,764
Joint interest, net		—		—			7,569			7,104			—			14,673
Other		—		9,476			531			2,393			—			12,400
Assets from price risk management activities		—		20,176			—			—			—			20,176
Prepaid assets		—		—			18,411			9			—			18,420
Inventory		—		—			1,093			—			—			1,093
Other current assets		—		—			2,492			—			—			2,492
Total current assets		—		54,001			89,612			11,838			—			155,451
Property and equipment:
Proved properties		—		—			2,235,835			—			—			2,235,835
Unproved properties, not subject to amortization		—		—			64,949			7,411			—			72,360
Other property and equipment		—		7,007			1,513			11			—			8,531
Total property and equipment		—		7,007			2,302,297			7,422			—			2,316,726
Accumulated depreciation, depletion and amortization		—		(4,954	)		(1,268,580	)		(4	)		—			(1,273,538	)
Total property and equipment, net		—		2,053			1,033,717			7,418			—			1,043,188
Other long-term assets:
Assets from price risk management activities		—		293			—			—			—			293
Other well equipment inventory		—		—			12,744			—			—			12,744
Investments in subsidiaries		6,986		700,385			—			—			(707,371	)		—
Other assets		—		48			574			—			—			622
Total assets	$	6,986	$	756,780		$	1,136,647		$	19,256		$	(707,371	)	$	1,212,298
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—	$	133		$	27,570		$	3,527		$	—		$	31,230
Accrued liabilities		—		1,208			48,318			390			—			49,916
Accrued royalties		—		—			23,293			—			—			23,293
Current portion of asset retirement obligations		—		—			33,556			—			—			33,556
Liabilities from price risk management activities		—		27,147			—			—			—			27,147
Accrued interest payable		—		11,376			—			—			—			11,376
Other current liabilities		—		—			14,666			—			—			14,666
Total current liabilities		—		39,864			147,403			3,917			—			191,184
Long-term debt, net of discount and deferred financing costs		—		701,175			—			—			—			701,175
Asset retirement obligations		—		—			186,493			—			—			186,493
Liabilities from price risk management activities		—		8,755			—			—			—			8,755
Other long-term liabilities		—		—			117,705			—			—			117,705
Total liabilities		—		749,794			451,601			3,917			—			1,205,312
Commitments and Contingencies (Note 10)
Stockholders’ equity (deficit)		6,986		6,986			685,046			15,339			(707,371	)		6,986
	$	6,986	$	756,780		$	1,136,647		$	19,256		$	(707,371	)	$	1,212,298

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2017

(In thousands)

	Parent			Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination		Consolidated
Revenues:
Oil revenue	$	—		$	—		$	344,781		$	—		$	—	$	344,781
Natural gas revenue		—			—			48,886			—			—		48,886
NGL revenue		—			—			16,658			—			—		16,658
Other		—			—			2,503			—			—		2,503
Total revenue		—			—			412,828			—			—		412,828
Operating expenses:
Direct lease operating expense		—			—			109,180			—			—		109,180
Insurance		—			—			10,743			—			—		10,743
Production taxes		—			—			1,460			—			—		1,460
Total lease operating expense		—			—			121,383			—			—		121,383
Workover and maintenance expense		—			—			32,825			—			—		32,825
Depreciation, depletion and amortization		—			1,401			155,947			4			—		157,352
Accretion expense		—			—			19,295			—			—		19,295
General and administrative expense		—			21,882			14,172			619			—		36,673
Total operating expenses		—			23,283			343,622			623			—		367,528
Operating income (loss)		—			(23,283	)		69,206			(623	)		—		45,300
Interest expense		—			(48,236	)		(30,252	)		(2,446	)		—		(80,934	)
Price risk management activities expense		—			(22,998	)		(4,565	)		—			—		(27,563	)
Other income (expense)		—			600			(333	)		62			—		329
Equity earnings from subsidiaries		(62,868	)		31,049			—			—			31,819		—
Net income (loss)	$	(62,868	)	$	(62,868	)	$	34,056		$	(3,007	)	$	31,819	$	(62,868	)

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

(In thousands)

	Parent			Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination		Consolidated
Revenues:
Oil revenue	$	—		$	—		$	197,583		$	—		$	—	$	197,583
Natural gas revenue		—			—			42,705			—			—		42,705
NGL revenue		—			—			9,532			—			—		9,532
Other		—			—			8,934			—			—		8,934
Total revenue		—			—			258,754			—			—		258,754
Operating expenses:
Direct lease operating expense		—			—			124,360			—			—		124,360
Insurance		—			—			13,101			—			—		13,101
Production taxes		—			—			1,958			—			—		1,958
Total lease operating expense		—			—			139,419			—			—		139,419
Workover and maintenance expense		—			—			24,810			—			—		24,810
Depreciation, depletion and amortization		—			1,553			123,132			4			—		124,689
Accretion expense		—			—			21,829			—			—		21,829
General and administrative expense		—			13,204			15,044			438			—		28,686
Total operating expenses		—			14,757			324,234			442			—		339,433
Operating loss		—			(14,757	)		(65,480	)		(442	)		—		(80,679	)
Interest expense		—			(47,291	)		(19,680	)		(3,444	)		—		(70,415	)
Price risk management activities expense		—			(57,398	)		—			—			—		(57,398	)
Other income (expense)		—			—			430			(25	)		—		405
Equity earnings from subsidiaries		(208,087	)		(88,641	)		—			—			296,728		—
Net income (loss)	$	(208,087	)	$	(208,087	)	$	(84,730	)	$	(3,911	)	$	296,728	$	(208,087	)

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(In thousands)

	Parent			Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination		Consolidated
Revenues:
Oil revenue	$	—		$	—		$	244,167		$	—		$	—	$	244,167
Natural gas revenue		—			—			55,026			—			—		55,026
NGL revenue		—			—			10,523			—			—		10,523
Other		—			—			5,890			—			—		5,890
Total revenue		—			—			315,606			—			—		315,606
Operating expenses:
Direct lease operating expense		—			—			171,095			—			—		171,095
Insurance		—			—			17,965			—			—		17,965
Production taxes		—			—			3,311			—			—		3,311
Total lease operating expense		—			—			192,371			—			—		192,371
Workover and maintenance expense		—			—			29,752			—			—		29,752
Depreciation, depletion and amortization		—			1,528			211,161			—			—		212,689
Write-down of oil and natural gas properties		—			—			603,388			—			—		603,388
Accretion expense		—			—			19,395			—			—		19,395
General and administrative expense		—			19,630			14,541			1,491			—		35,662
Total operating expenses		—			21,158			1,070,608			1,491			—		1,093,257
Operating loss		—			(21,158	)		(755,002	)		(1,491	)		—		(777,651	)
Interest expense		—			(46,235	)		(4,080	)		(1,229	)		—		(51,544	)
Price risk management activities income		—			182,196			—			—			—		182,196
Other income		—			129			176			9			—		314
Equity earnings from subsidiaries		(646,685	)		(761,617	)		—			—			1,408,302		—
Net income (loss)	$	(646,685	)	$	(646,685	)	$	(758,906	)	$	(2,711	)	$	1,408,302	$	(646,685	)

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2017

(In thousands)

	Parent		Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	—	$	(30,245	)	$	204,419		$	1,879		$	—		$	176,053
Cash flows from investing activities:
Exploration, development, and other capital expenditures		—		(260	)		(132,317	)		(22,600	)		—			(155,177	)
Cash paid for acquisitions, net of cash acquired		—		—			(2,464	)		—			—			(2,464	)
Investments in subsidiaries		—		(577,055	)		—			—			577,055			—
Distributions from subsidiaries		—		611,526			6,041			—			(617,567	)		—
Net cash provided by (used in) investing activities		—		34,211			(128,740	)		(22,600	)		(40,512	)		(157,641	)
Cash flows from financing activities:
Redemption of 2018 Senior Notes		—		(1,000	)		—			—			—			(1,000	)
Proceeds from Bank Credit Facility		—		10,000			—			—			—			10,000
Repayment of Bank Credit Facility		—		(15,000	)		—			—			—			(15,000	)
Payments of capital lease		—		—			(12,412	)		—			—			(12,412	)
Capital contributions		—		—			550,555			26,500			(577,055	)		—
Distributions to subsidiaries		—		—			(611,526	)		(6,041	)		617,567			—
Net cash provided by (used in) financing activities		—		(6,000	)		(73,383	)		20,459			40,512			(18,412	)
Net increase (decrease) in cash, cash equivalents and restricted cash		—		(2,034	)		2,296			(262	)		—			—
Cash, cash equivalents and restricted cash:
Balance, beginning of period		—		24,349			6,752			2,332			—			33,433
Balance, end of period	$	—	$	22,315		$	9,048		$	2,070		$	—		$	33,433

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2016

(In thousands)

	Parent			Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	—		$	124,698		$	(2,806	)	$	(5,769	)	$	—		$	116,123
Cash flows from investing activities:
Exploration, development, and other capital expenditures		—			(301	)		(106,647	)		(6,084	)		—			(113,032	)
Cash paid for acquisitions, net of cash acquired		—			—			(85,886	)		—			—			(85,886	)
Investments in subsidiaries		(91,891	)		(524,192	)		—			—			616,083			—
Distributions from subsidiaries		—			411,074			—			—			(411,074	)		—
Net cash provided by (used in) investing activities		(91,891	)		(113,419	)		(192,533	)		(6,084	)		205,009			(198,918	)
Cash flows from financing activities:
Proceeds from Bank Credit Facility		—			15,000			—			—			—			15,000
Repayment of Bank Credit Facility		—			(10,000	)		—			—			—			(10,000	)
Payments of capital lease		—			—			(5,267	)		—			—			(5,267	)
Capital contributions		—			—			599,630			16,453			(616,083	)		—
Distributions to subsidiaries		—			—			(408,050	)		(3,024	)		411,074			—
Contributions from Sponsors		93,750			—			—			—			—			93,750
Distributions to Sponsors		(1,859	)		—			—			—			—			(1,859	)
Net cash provided by (used in) financing activities		91,891			5,000			186,313			13,429			(205,009	)		91,624
Net increase (decrease) in cash, cash equivalents and restricted cash		—			16,279			(9,026	)		1,576			—			8,829
Cash, cash equivalents and restricted cash:
Balance, beginning of period		—			8,070			15,778			756			—			24,604
Balance, end of period	$	—		$	24,349		$	6,752		$	2,332		$	—		$	33,433

TALOS ENERGY INC.

(FORMERLY KNOWN AS TALOS ENERGY LLC)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015

(In thousands)

	Parent			Subsidiary Issuers			Guarantors			Non- Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	—		$	81,598		$	55,946		$	822		$	—		$	138,366
Cash flows from investing activities:
Exploration, development, and other capital expenditures		—			(2,380	)		(242,203	)		(1,133	)		—			(245,716	)
Cash paid for acquisitions, net of cash acquired		—			—			(39,423	)		—			—			(39,423	)
Investments in subsidiaries		(73,500	)		(579,822	)		—			—			653,322			—
Distributions from subsidiaries		—			300,891			—			—			(300,891	)		—
Net cash provided by (used in) investing activities		(73,500	)		(281,311	)		(281,626	)		(1,133	)		352,431			(285,139	)
Cash flows from financing activities:
Proceeds from Bank Credit Facility		—			120,000			—			—			—			120,000
Repayment of Bank Credit Facility		—			(30,000	)		—			—			—			(30,000	)
Repayment of GCER Bank Credit Facility		—			—			(55,000	)		—			—			(55,000	)
Deferred financing costs		—			(269	)		—			—			—			(269	)
Capital contributions		—			73,500			578,643			1,179			(653,322	)		—
Distributions to subsidiaries		—			—			(300,779	)		(112	)		300,891			—
Contributions from Sponsors		75,000			—			—			—			—			75,000
Distributions to Sponsors		(1,500	)		—			—			—			—			(1,500	)
Net cash provided by (used in) financing activities		73,500			163,231			222,864			1,067			(352,431	)		108,231
Net increase (decrease) in cash, cash equivalents and restricted cash		—			(36,482	)		(2,816	)		756			—			(38,542	)
Cash, cash equivalents and restricted cash
Balance, beginning of period		—			44,552			18,594			—			—			63,146
Balance, end of period	$	—		$	8,070		$	15,778		$	756		$	—		$	24,604