Talos Energy — Earnings Call Q3 2026

Operator: Good morning, ladies and gentlemen, and welcome to the Talos Energy Third Quarter 26 Earnings Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Wednesday, November 4, 2026. I would now like to turn the conference over to Kyle Sahni, Manager, Investor Relations. Please go ahead, sir. Kyle Sahni: Thank you, operator. Good morning, everyone, and welcome to our third quarter 2026 Earnings Conference Call. Joining me today to discuss our results are Paul R. A. Goodfellow, President and Chief Executive Officer Zachary Dailey, Executive Vice President and Chief Financial Officer and William R. Langin, executive vice president, exploration and development. Please refer to our third quarter 2026 earnings presentation that is available on our website under the Investor Relations section for a more detailed look at our results and operations. Before we start, I would like to remind you that our remarks will include forward-looking statements subject to various cautionary statements identified in our presentation and earnings release. Actual results may differ materially from those contemplated by the company. Factors that could cause these results to differ materially are set forth in yesterday's press release and our Form 10 ks for the period ending 12/31/2025, filed with the SEC. Forward-looking statements are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. During this call, we may present GAAP and non GAAP financial measures. A reconciliation of certain non GAAP to GAAP measures is included in yesterday's press release, which was furnished with our Form 8 filed with the SEC and is available on our website. And now I would like to turn the call over to Paul. Paul R. A. Goodfellow: Thanks, Kyle, and good morning to everyone joining us on the call today. As always, I want to start by thanking our employees for their continued commitment to safety and environmental stewardship. The results Zachary and I will discuss today are a direct reflection of the talent, drive and relentless focus on execution across the Talos team. The third quarter continued to demonstrate the strength of the business we are building. We delivered another quarter of consistent execution from the base business completed our Gulf of Mexico bolt on acquisition while keeping leverage at 0.6x raised full year production guidance and significantly expanded our portfolio of development and exploration opportunities. Taken together, these results reflect continued progress across all 3 pillars of our strategy and further strengthen the foundation to be a leading pure play offshore E&P. I want to begin, as I always do, with the base business, which continues to provide the foundation for everything we do. Oil production averaged approximately 69 thousand barrels per day and total production averaged approximately 92 thousand barrels of oil equivalent per day. Both exceeding guidance. That was driven by strong base business performance the absence of storm related downtime, and an initial contribution from the Gulf of Mexico acquired asset following closing on September 22. Importantly, even after adjusting for weather, and excluding the acquisition contribution, production was at the high end of our guidance range. That clearly signals the underlying strength of the business. Those operational results combined with premium oil realization translated into strong adjusted free cash flow of $186 million and support another increase to our full year 2026 production guidance. Zachary will walk through the details later in the call. These results also reflect our optimal performance plan, and I am pleased to report that we have delivered on our full year $100 million target by the end of the third quarter. We expect these business improvements to be lasting and carry into next year and beyond. They have been broad based across the organization spanning margin enhancement capital efficiency, commercial opportunities and organizational improvements. Delivering the target does not change our focus. Continuous improvement is embedded in how we operate and we will keep looking for opportunities to improve production and uptime spend capital more efficiently and reduce costs across the portfolio. This is exactly what we mean when we talk about improving the business every day. I am incredibly proud of what the team has accomplished this year, These results were delivered because our teams choose excellence each and every day. We saw that again in early October ahead of Hurricane Ian, Our priority was the safety of our offshore personnel and protecting the environment which meant shutting in production and evacuating our platforms. I want to thank our operations team for their commitment to living our values. Once it was safe to return, we confirm that there was no damage to our facility and shifted our focus to restoring production. The increased full year guidance Zachary will discuss includes the fourth quarter hurricane impact of approximately 7 thousand barrels of oil equivalent per day which was within the weather allowance incorporated into our full year plan and guidance. In addition to the outstanding performance in production operations, Talos continues to distinguish itself through best in class execution. And we advanced several important projects during the quarter. That execution starts with drilling. When we benchmark our recent operated wells, including Dorado, Sunspear, Katmai West #2, and CPN, they all rank in the top quartile of Gulf of Mexico industry performance. And the recent Dorado appraisal well drilled to a total vertical depth of nearly 29.5 thousand feet ranked to the top decile. Full credit goes to our drilling team. Drilling and completing faster and more efficiently translates directly into lower well costs and better returns. And is a clear example of what we mean when described Talos as a technically differentiated offshore operator. At CPN, we achieved first oil in September as planned, and the well is performing in line with expectations. CPN is an operated infrastructure led tieback to Na Kika and is a good example of the type of high return short cycle opportunity that underpins our development program. At Brutus, we commenced the development program during the third quarter with operations from the platform based rig. Our team has optimized the plan to incorporate batch drilling and completions which we believe improves execution efficiency and project returns. The program has also expanded from 4 to 5 wells with the addition of another sidetrack opportunity. We expect first oil beginning in the second quarter of 27 with production phased in through the fourth quarter as the wells come online. At Monument, the first development well, TD would in June and found approximately 250 feet of net oil pay in line with predrill expectations. And the second well spud in early September following the operator's rig deployment to 1 of its own fields. First oil is now expected in the first quarter of 27, and our view of the project economics is unchanged. Now let me turn to Dorado. We spud the appraisal well in early July and drilled to target depth in late August, and met our appraisal objectives. The well tested the northern portion of the prospect and encountered oil pay in multiple sands. We collected samples that are undergoing testing to further assess the and fluid properties. Dorado is a multiyear appraisal program. The additional appraisal activity is needed to better understand the reservoir. As planned, the next step in the program is an appraisal sidetrack in 2027. Together, the data from this year as well and next year's side will help inform the path forward. In parallel, our teams continue to evaluate a range of development concepts, from a tieback to existing infrastructure to a stand alone host. We are also building out a broader opportunity set around Dorado, In late 27, or early 28, we expect to drill an exploration well target a prospect we acquired in the December 2025 BSEE GoM Lease Sale. If successful, it has the potential to be codeveloped with Dorado. Turning to the Gulf of Mexico bolt on acquisition. On September 22, we closed the transaction alongside our partner Ridgewood, This added a 50% working interest and operatorship in the Coulomb field, along with a 25% non-operated working interest in the BP operated Na Kika platform of 4 associated fields. The final net cash purchase price $420 million less than our original expectations. Integration is well underway, and we are pleased with how the assets are performing today. The acquisition has high quality, oil weighted production that enhances our scale, margins, and free cash flow generation while providing infrastructure led growth opportunities that leverage our core strengths. I also want to spend a moment on why we believe the value of this acquisition extends well beyond the acquired reserves. Talos has a proven track record of acquiring midlife assets and extending field life. As an example, across Ram Powell, Pompano, and Brutus, cumulative production since acquisition combined with the remaining 2p reserves at year end 2025 represents more than a 40% uplift relative to the 2 p reserves at the time of acquisition. That uplift came from extending field life and identifying additional resources through infrastructure led opportunity. We intend to apply that same playbook to the acquired assets here. We have already identified multiple development and infrastructure led exploration opportunities, including the operated Coulomb development well which we expect to compete for capital in 2027. Beyond the Gulf of Mexico, we continue to progress our newest exploration and development opportunities. In Mexico, we continue to work with the operator to advance Zama towards their expected FID in 2027 while also progressing our new opportunity in Block 29. In Block 29, we are progressing the scenario approval required to close the in transaction for that block while working with Repsol towards FID in 2027. With 2 oil discoveries holding more than 200 million barrels of oil equivalent, of gross recoverable resource, a similar exploration potential on the block this remains a development led opportunity with meaningful upside. And we continue to work with Repsol to plan an exploration well late in next year. In Honduras, we commenced the first ever 3D seismic program across a portion of the deepwater acreage in October. Less than 3 months after signing the agreements. This initial deepwater 3D program has now been completed and we expect the first process data in the early part of 27. The broader position is equivalent to roughly 700 Gulf of Mexico blocks with the existing Main Cape oil discovery validating a working petroleum in this large underexplored basin. While these opportunities are at different stages of maturity, that is by design. Our portfolio now spans a strong base business in the Gulf of Mexico combined with pre FID development of longer cycle exploration. The speed with which our teams and partners are moving them forward continues to be a key differentiator for us here at Talos. The common theme across the quarter is disciplined execution. We delivered strong operational and financial performance from the base business closed an acquisition that increases our deepwater scale, completed the non core gas weighted shelf divestment and advanced a deeper portfolio of development, appraisal, and exploration opportunities. We carry significant momentum through year end and into 2027. With that, I will now turn the call over to Zachary to discuss our financial results updated guidance balance sheet and capital allocation in greater detail, as well as some early thoughts on 2027. Zachary Dailey: Thanks, Paul. This morning, I will focus on 3 key takeaways. Strong free cash flow generation in the third quarter, supported by premium oil realizations, increased full year production guidance pro forma for the acquisition, and a resilient balance sheet that supports our unchanged capital allocation framework. I will then close with a few early thoughts on 2027. Starting with the quarter, the disciplined operational execution Paul just discussed translated directly into strong financial results. We generated adjusted EBITDA of approximately $406 million and adjusted free cash flow of approximately $186 million, driven by production that exceeded guidance, and premium oil realizations of approximately $1.60 per barrel above w That combination supported adjusted EBITDA margins of $52 per BOE excluding hedges, which continue to rank in the top decile of the E&P sector. At the same time, lease operating expenses $60.74 per BOE remain below the Gulf of Mexico peer average reinforcing our advantaged cost structure. On the heels of a strong first 9 months, we are increasing our full year 2026 production guidance to 68 thousand to 70 thousand barrels of oil per day and 92.5 thousand to 94.5 thousand BOE per day. At the midpoint, that represents an increase of approximately 8% for oil production relative to our original guidance. This updated annual outlook includes the closed Gulf of Mexico acquisition and the impact of Hurricane Ian in early October. And as a reminder, it also reflects the closed non core shelf divestment. Our base business continues to outperform and the Gulf of Mexico acquisition builds on that. For 2026 capital expenditures, we lowered the midpoint of guidance while increasing guidance for P&A. Leaving combined capital and P&A spend unchanged from our original guidance. Guidance. The P&A increase reflects a sizable project that was completed ahead of schedule, which allowed us to accelerate additional activity into the fourth quarter. As we have discussed previously, we focus on executing P&A activity in the most efficient manner rather than simply managing to an annual budget. Updated cost guidance is detailed in our earnings presentation. Now turning to the balance sheet. We ended the third quarter with approximately $410 million of cash, an undrawn credit facility, approximately $1.1 billion of liquidity resulting in a leverage ratio of 0.6x. In conjunction with closing the acquisition, our borrowing base increased to $850 million and we have no debt maturities until the next decade. Importantly, we funded the bolt on's final net cash purchase price of $420 million while keeping the credit facility undrawn reflecting the financial flexibility we built through the capital markets transactions completed earlier this year alongside the strong operational performance and free cash flow generation of the business. We continue to expect year-end 2027 leverage to be well below 1.0x consistent with our long term leverage target. Our capital allocation framework remains unchanged. We continue to expect to return up to 50% of annual free cash flow to shareholders through share repurchases while also investing in high return projects, maintaining balance sheet strength, and pursuing selective accretive growth. During the third quarter, we repurchased 1.4 million shares for $24 million intentionally structured the return framework as up to 50% to preserve flexibility to pursue accretive opportunities such as the acquisition we just closed. Since announcing the framework in the second quarter of 2025, we have returned approximately $160 million to shareholders by repurchasing 14.5 million shares at an average price of $11 per share. This has reduced our outstanding share count by 8% over that time period. That track record demonstrates the value of consistently buying back shares at attractive levels, and we have approximately $176 million remaining under our authorization. Before we open the line for questions, I want to share a few early thoughts on 2027. As we build the business plan, our objective is to adhere to the 3 principles of our strategy, including further strengthening the depth and longevity of our portfolio while maintaining a low WTI free cash flow breakeven. We are working through our budgeting process now and expect to provide a full 2027 outlook in February but we already have visibility into several important activities next year. We will enter 2027 with a higher production base from the recently completed acquisition, and expect first oil from Monument in Q1 and Brutus beginning in Q2. As previously discussed, in July, we for our drilling program beginning in mid 27 at an attractive day rate. We expect the Coulomb development well, which was acquired from Shell, to compete for capital alongside additional appraisal and exploration activity around Dorado. We also expect to continue advancing Block 29 towards Block 29 toward the end of the year. Overall, we have a deeper portfolio of development, appraisal, and exploration opportunities than Talos has ever had. And we will remain disciplined in how we pace activity and allocate capital across it. Bottom line, we generated meaningful free cash flow in Q3, completed an acquisition that increases our deepwater scale, resumed share repurchases, increased full year production guidance while keeping total capital spend unchanged, we maintained a strong balance sheet. These results reflect the strength of the underlying business, disciplined execution across the organization, and the financial flexibility to pursue our strategic priorities while continuing to create long term shareholder value. With that, we will open the line for Q&A. Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. Star followed by number 1 on your telephone keypad. We ask analysts to limit themselves to 1 question and a follow-up. And if your question has been answered, you would like to withdraw from the queue, please press star, follow-up number 2. And if you are using a speakerphone, please lift your handset before pressing any keys. 1 moment, please overcompile the roster. Your first question comes from John Cavanagh with Goldman Sachs. Please go ahead. Jerry Ciche: Good morning, and thank you for taking my question. Can you talk through what has been, like, what it has been like working with Repsol and how you are seeing the path toward FID for the offshore Mexico farm-in 2027? Paul R. A. Goodfellow: Yes. Thanks, John. I mean, look, we have had a very constructive relationship with the Repsol team both through, you know, the early and when we were talking about the deal. And then now as we are going through the process of closing it, as I mentioned, still have to go through the regulatory process to get ourselves on the license, and that is progressing as planned. But working with Repsol at a technical level is incredibly supportive. I think we bring skills that are complementary of each other, and we are now sort of going through the concept select process that will take us into, you know, a decision on the concept and then feed with a target of looking at FID in the second half of 27. So, yeah, I think, yeah, bottom line, incredibly constructive. Relationship, and we are very happy to have Repsol as a partner. Jerry Ciche: Thank you. And for my follow-up, can you discuss the puts and takes in the full year total CapEx guidance? CapEx trended lower while PA expenditures ticked up. what is driving that dynamic, and how should we think about the right run rate for capital intensity? For the pro forma business? Paul R. A. Goodfellow: Yeah. Let me maybe start and then, Zachary, please add any comments that you have. I mean, look. I think the capital forecast that we put out really is driven by a couple of things. 1 is the great performance in the base business that we have in terms of. You think about drilling at Dorado, you think about the drilling and execution completion at CPN and other projects that we have delivered at an operated base. And also then for the timing of the nonoperated projects such as the monument developments where, you know, there was a sort of unexpected gap for us put into that project, which is slightly phased out a little bit of the CapEx. But I would say the biggest sort of element of the capital forecast at the moment is sort of driven by the great performance of the operated part of the business. That translates into the P&A side as well where we look to be good stewards of the resources that we have, build a plan in terms of a multiyear plan of how we need to think about abandoning and decommission the liabilities that we have. And then we sort of work that with the same diligence that we work our opportunities. Of course, we also have interest in nonoperated fields, and there are a couple of those that came into the plant late in the year, and those have been executed very well, which has just meant a slight shift in pulling forward some of the P&A type of opportunity. But as a run rate basis, I would think the, you know, the level that we are at now is a reasonable number to think about at a P&A level going forward. Let's say, sort of a ratable deliverable type of activity set, you know, and in terms of the CapEx side, as Zachary mentioned, we are still in the process of working through the budget. But I hope we have given you a bit of insight into some of those building blocks in terms of the continuation, of course, of Monument with first oil in 2027. A slightly expanded project set at Brutus, given identification of further opportunities there, and then advancing Block 29 both on the development side and the exploration side, and clearly we will sort of come out with guidance early in the New Year as we usually do. Great. Thank you so much. Thanks, John. Operator: Thank you. Your next question comes from Ajay Bakshani with BMO Capital Markets. Please go ahead. Ajay Bakshani: Hi, guys. Good morning, and thanks for taking our question. On Dorado, mentioned in the script, the appraisal will encountered oil pay in multiple sands. Can you also comment on reservoir quality and how compared to predrill expectations? And I believe the discovery well found pay in 3 separate zones. But you are also testing additional perspective interval. Were there are there any key takeaways here? Paul R. A. Goodfellow: I think as we said, Ajay, you know, so the work around flu samples flu quality is ongoing, and so it is too early to for us to share any in insight on that. We are extremely pleased with obviously, the performance of the well in terms of getting it down to TD. The quality of the data, that we retrieved from the well, and the fact that, you know, we sort of delivered against all the well met the expectations that we had from a predrill perspective relative to the hydrocarbon zones that we encountered. Ajay Bakshani: Thank you. And for my follow-up mentioned in your opening remarks and in the deck about success you had across Brown Powell, Pompano, and Brutus assets and terms of increasing 2P reserves? That you have closed the Shell deal. What were your initial impressions of the asset and not to pin you down, but directionally, do you feel like this could also have a 40% plus uplift potential? Paul R. A. Goodfellow: We are really pleased with the Na Kika and Coolum asset that we have managed to bring into the portfolio with Ridgewood as our partner. 1 of the underlying basis for that from our perspective was exactly your question, which is we believe that we can take midlife assets such as this, identify opportunities in the neighborhood extend the life, and increase the ultimate recovery through the facilities. And that was, you know, 1 of our basis for the value that we saw in Na Kika. We would expect to continue down that path as we have done with other assets that we bought into portfolio. And I think you see us starting to act on that immediately with this Na Kika Central Graben well being brought forward to sort of compete for capital as we think about our overall plan and budget for 2027 and beyond. And so, yes, it is too early to pin me down in terms of a prediction on, you know, what the ultimate uplift will be, but I would say the, you know, the basis and the foundation of why we like to take assets like this and why we think Talos is a sort of differentiated developer for midlife assets is just that, that we can see opportunities We can develop those on a short cycle low cost to create optimum value and therefore extend the life of the asset. And, clearly, we will work with the operator and partner BP in terms of doing that. Great. Thank you. Operator: Your next question comes from Paul Diamond with Citi. Please go ahead. Paul Diamond: Thank you. Good morning, all. Thanks for taking the call. I am talking about your capital return framework. I know you guys have the up to 50% target for share buybacks but I guess leverage approaching a half turn, can you talk about any potential shift in use case of those future cash flows? Is how you guys are thinking about that in a longer term basis? Paul R. A. Goodfellow: Yeah. Let me ask Zachary to comment on that. Zachary? Zachary Dailey: Yeah. Thanks, Paul. Good morning. Appreciate the question. First and foremost, the strategy is unchanged. As we have discussed in our pre our remarks and the disciplined capital framework that underpins that strategy is unchanged. So the short answer is no change to it. And the longer answer is we have got lots of options here. We did go back in the in Q3 with buybacks ahead of closing the acquisition and funding the $420 million purchase price, which we are able to do without touching the revolver. So all 4 of the financial framework elements are extremely important to us, and they are not mutually exclusive. So we wanna maintain a strong balance sheet. We wanna return cash to shareholders. We wanna invest in the business, and we want to be able to go out and bring accretive acquisitions into the portfolio, which is what we just did. Paul Diamond: Got it. Understood. And then just a bit of a nuance in Honduras. I guess, what are the logistical steps needed for closing the remaining 35% working interest? Is it like, paperwork for government approval, or is there anything operational there? Paul R. A. Goodfellow: Yeah. Let me ask Bill Langan to share a few comments on that, Paul. Bill? William R. Langin: Yeah. Thanks. So the government has approved the remaining 35% and they are going through their process called Gazetto, which is essentially just pushing the paperwork through their own system. So there is no remaining significant hurdles to that. it is it is just finalizing their process. Paul Diamond: Got it. Understood. Appreciate the clarity over there. Paul R. A. Goodfellow: Thanks, Paul. Thank you. Operator: Your next question comes from Timothy Rezvan with KeyBanc. Please go ahead. John: Good morning. This is John on for Timothy Rezvan. Thank you for taking our questions. You alluded to this a little bit, but if I could take a different angle to what, you are generating strong free cash flow. And projects like Block 29 and Dorado could need meaningful capital over the next few years So how are you just thinking about uses of that cash today keeping that in mind. Would you build cash ahead of those commitments? Or would you put more work now Yeah. Paul R. A. Goodfellow: Hi, John. Look. I think Zachary's already sort of answered that question, which is we have a financial framework for that reason, and all 4 elements of that need to work in supportive conjunction of each other and whether that is investing in the base business thinking about cash return to shareholders up to 50%, maintaining the balance of all the leverage on the balance sheet, and then working for accretive portfolio expansion that can either be through inorganic or organic means. We have to work those 4 in parallel, and that is exactly what we have been doing and we will be doing. And now we also have to do that against the macro that we see going forward and against, you know, the reality of the environment in which we find ourselves today. Now what we do know, of course, is that we hope that Block 29 stays on the timeline that we have laid out. You know, as we mentioned, Dorado will need further appraisal. Both for the discovery that we have. And then in addition, we are building let's say, an inventory within the neighborhood, and so you will see us look at potentially further exploration well in that area towards the end of next year or the early part of 2028. And so we will sort of weigh those up to determine at any given point in time what the, you know, what the sort of the best balance in that frame framework is. But, clearly, when we know we are on a path and come to that decision of taking FID, then will then determine a certain amount of capital that needs to be allocated. The follow-up view then, and maybe Zachary can offer a few thoughts on this, is you know, the source of that capital, is it from the cash that we have generated? Is it from sort of the balance sheet strength etcetera? But that will really be taken, you know, much sooner to that. Decision point. Now, Zachary, anything to add? Zachary Dailey: Yeah. I mean, John, I just add to that. The first element of the cap. Of the financial framework that underpins strategy is and being able to invest in the business. And whether it is Dorado, or Block 29, or CPN, or the Coolum prospect that is part of the Shell acquisition we want to have the flexibility on the balance sheet to make those wise investments. that is that is very helpful. John: I appreciate that. Just as my just to hit on Dorado again as you weigh a tie back against a stand alone host, what are what are the key milestones, that looking for here? And just first oil before 2029 realistic under either of those paths? Paul R. A. Goodfellow: Look. I think any decision like this is a trade off between well, it is a value based decision at the end of the day. So which solution gives us the best value? And that comes from weighing off the capital intensity of the decision, the sort of recovery of the resource, and then the cyclist or the cycle time in terms of delivering that. And that is why we are going through the work we are going through at the moment in terms of further testing and evaluation of fluid properties, why we will do a sidetrack of 1 of the existing wells most likely into the most southern part of the field next year. And from there, we will then determine, you know, that sort of trade off and look. The balance that we have to keep here, of course, is we do not want to overappraise and destroy value by driving the uncertainty range down to such a narrow point that we have spent too much to get to the decision. But conversely, we do not want to underappraise where we have too wide uncertainty range. And I think you have seen in the deepwater, sort of many examples of where under appraisal has led to value destruction. So the technical sort of rigor that we bring to this. That we bring to all our work will. Can continue. Now in terms of, you know, could there be first order in 2029? Yeah. I mean, I think that is a highly unlikely outcome. Not impossible. Yeah. But that would certainly be in a tieback solution only. Thanks, John. Great. John: I appreciate the detailed response. I will leave it there. Thanks for the time. Paul R. A. Goodfellow: Thank you. Thanks, John. Operator: Thank you. Your next question comes from Nathaniel Pendleton with Texas Capital. Please go ahead. Nathaniel Pendleton: Good morning and congrats on the strong quarter. I kinda wanna stay on the sidetrack at Dorado just for a moment. Can you talk about what that next sidetrack is really trying to resolve and could development of the Dorado project really be contingent on that other prospect that you mentioned in your prepared remarks? Paul R. A. Goodfellow: Bill, why do not you share a few thoughts on that, please? William R. Langin: Sure. I think if Paul mentioned before, our path forward for development at Dorado will be driven by what is the highest value for that project. And the sidetrack at Dorado will look at the further extent of both the reservoir and fluid properties in an area that we have not yet seen. And then very shortly after when we test an adjacent prospect, we will look at the various options from accelerating 1 versus codevelopment and how do we create the most value for what we have invested. So that. As we gather those data, we will we will make the highest value decision. Nathaniel Pendleton: Understood. Thanks for that. And then switching over to. Really on Slide 10, of your deck, it highlights the drilling performance there. Can you talk about what are the drivers behind that? And how are you able to achieve these really consistently superior results? Paul R. A. Goodfellow: Great people working against the set process. Thinking about what the uncertainties, having mitigations in place, and working with a set of service partners, especially the Rig, the West Vela in this case, where they create a common team with a common outcome, which is first and foremost, safe environmentally solid performance but always thinking about how can we learn and how can we perform each and every day. So it really does come down to the quality of the people across the waterfront, whether it is our own internal Talos drilling team or completions team, but equally working with great service providers that share that outcome of striving for perfection each and every day. Understood. Thanks for taking my questions. Thanks, Nate. Thank you. Operator: Next question comes from Michael Scialla with Stephens. Please go ahead. Michael Scialla: Good morning. Zachary, reading into your comments on 2020 I wanted to see if it was fair to assume that we should anticipate some sequential production growth, maybe slight growth with a full quarter of the Shell assets in the first quarter and then maybe some continued production growth in second quarter with Monument and Brutus coming online. And then in terms of CapEx, it seems like it should be second-half weighted with the. when you get the West Vela? Is that am I reading too much into that, or does that sound recent? Zachary Dailey: Possibly, Michael. it is probably a little too early to get to get extremely specific on 2027 on a on a quarter basis yet. We will come out with more information in February when we announce the plan. But, you know, just a couple points. To be clear, Q4 26, this quarter we are in now will be the first full quarter of having the Shell assets under the under the hood. And then you are correct to hear our comments that Monument First oil is expected in Q1 and the Brutus program has been expanded. With the addition of 1 more well. So that will come online over the course of next year. And beyond that, you know, we will we will provide more detail in February. Michael Scialla: Fair enough. Thanks. I wanted to ask on the prospect near Dorado. Is that another 4-way structure below salt? Or is so similar to Dorado, or does it look different? William R. Langin: We picked up a few different prospects that are in the neighborhood, and we are going through our final interpretation and portfolio ranking now. And that prospect will likely be drilled on the second half of that Vela sequence. We have time to make that final decision, which will also need to work with our partners and ultimately making that final selection. So we. We have got a couple options, 1 is sub-salt, 1 not sub-salt. Got it. Michael Scialla: Thank you. Operator: Thank you. Your next question comes from Analyst (Leo Mariani)with ROTH Capital. Please go ahead. Leo Mariani: Hi, guys. Just wanted to get a high level look on Dorado here. Obviously, you have got 2 wells down. Do you feel comfortable? This is a commercial oil development at this point, and now it is just a matter of how you kinda size this, which I guess is the point of the next appraisal well? Paul R. A. Goodfellow: Yeah. Hey, Leo. I mean, look, I think as we said in the comments and sort of the questions, this morning, there is still data that we need to get. We are in the process of doing that. Once we have done that, then we will be able to be more sort of definitive in terms of what the optimum value path forward is. And I think as Bill mentioned and I myself, you know, do think at the moment that the first step in that is this side track from 1 of the existing wells, which, of course, will be much, much lower cost than the 2 wells that we have done so far even though those were executed know, incredibly well as we showed by the benchmark data, but we think that will be the next step in terms of coming out with what we think the best value solution is for Dorado. Leo Mariani: Okay. And you are going to use the West Bella rig for that I guess, sometime in the second half of 27. So it sounds like that is kind of a ways away before you guys give us some more details. Paul R. A. Goodfellow: It is. So we have contracted the West Vela rig for a year plus some options that will start around the middle of the year dependent on when it is released from the current operator. And as Zachary has mentioned, you know, we are going through the process at the moment of how we build the details of architecture of the plan. And timing of, you know, any subsequent activity at Dorado will be a component of that discussion. Yeah. Leo Mariani: And then just on the M and A front, obviously, guys were successful in getting a deal, which you closed recently. How are you seeing the environment out there? Are there deals kind of in the market that you guys are currently considering? Paul R. A. Goodfellow: I am not gonna comment on any specific deal there. I mean, look, we remain active within the frame of the strategy that we have laid out. I think you have seen us sort of act across all 3 pillars of the strategy within a financial framework. And we will continue to do that as opportunities either are bought to the market in terms of companies looking to divest or partner or opportunities that we can sort of broker and identify ourselves And I think through 2026, you have seen us acting both of those lanes and it is reasonable to expect that we will continue to act in both of those lanes as we go forward into 2027. Alright. Thanks. Thank you, Leo. Operator: Thank you. There are no further questions at this time. I will turn it back to Mr. Paul R. A. Goodfellow for some closing remarks. Paul R. A. Goodfellow: Thank you, operator, and thank you all for joining today and for your interest in Talos. To close, third quarter demonstrated the strength of our base business, the quality of our team and the depth of our portfolio. We delivered our full year optimal performance plan target by the end of the third quarter, completed our Gulf of Mexico bolt on acquisition, and advanced a deeper portfolio of development and exploration opportunities across 3 offshore basins, all while maintaining the discipline that underpins capital allocation framework. We head into 2027 with greater scale, a high-quality, oil-weighted portfolio, a strong balance sheet, and a clear path to continue building the foundation to be a leading pure play offshore E&P. We look forward to updating you on our progress in the quarters ahead. Thank you all. Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.