Talos Energy Announces 50% Farm-Out in Block 29; Credit Deal Amended

What Happened

• Talos Energy Inc. announced that a wholly owned subsidiary entered a Farm‑Out Agreement with Repsol Exploración México S.A. de C.V. to acquire a 50% participating interest in Block 29 offshore Mexico (the Block 29 Project). Talos filed a press release on July 27, 2026 disclosing the transaction.
• Contemporaneous with the farm‑out, on July 22, 2026 Talos, its subsidiary Talos Production Inc. and certain other subsidiaries entered into a Second Amendment to their Amended and Restated Credit Agreement. The Second Amendment adjusts project‑financing capacity and a leverage metric specifically for the Block 29 Entity.

Key Details

• Farm‑Out: subsidiary to acquire 50% participating interest in Block 29, operated by Repsol (press release dated July 27, 2026; Exhibit 99.1 filed).
• Credit Amendment (dated July 22, 2026; Exhibit 10.1 filed):
  • Increases project‑financing capacity for restricted foreign subsidiaries by $50 million to a total of $350 million for financing Mexican assets; this indebtedness is excluded from Consolidated Total Debt.
  • The incremental $50 million must be incurred by the Block 29 Entity and is non‑recourse to Talos, Talos Production and other restricted subsidiaries.
  • Raises the maximum Consolidated Total Debt to EBITDAX ratio for making certain investments without regard to Available Free Cash Flow from 1.25 to 1.50, but only for investments in the Block 29 Entity through December 31, 2027 for development, construction, expansion or improvement of the Block 29 Project.

Why It Matters

• These filings show Talos has structured both the asset acquisition (50% of Block 29) and tailored its credit facility to enable project‑level financing while limiting parent recourse. The $50 million incremental, non‑recourse financing capacity and temporary relaxation of a debt/EBITDAX metric are designed to facilitate funding the Block 29 development without immediately affecting consolidated leverage metrics.
• For investors, the amendments clarify how Talos plans to finance the Block 29 Project and the extent to which financing obligations will be ring‑fenced at the project level. The company filed the Second Amendment and press release as exhibits to the 8‑K (Exhibits 10.1 and 99.1).