Employee Benefits Plans and Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-based Payment Arrangement [Abstract]

Summary of Restricted Stock Units Activity

The following table summarizes RSU activity under the Talos Energy Inc. 2021 Long Term Incentive Plan (the “2021 LTIP”) for the six months ended June 30, 2022:

	RSUs			Weighted Average Grant Date Fair Value
Unvested RSUs at December 31, 2021		1,983,199		$	13.02
Granted		2,206,473		$	12.96
Vested		(931,994	)	$	14.07
Forfeited		(54,968	)	$	14.20
Unvested RSUs at June 30, 2022(1)		3,202,710		$	12.65

As of June 30, 2022, 23,708 of the unvested RSUs were accounted for as liability awards in “Accrued liabilities” on the Condensed Consolidated Balance Sheet.

Summary of Performance Share Units Activity

The following table summarizes PSU activity under the 2021 LTIP for the six months ended June 30, 2022:

	PSUs			Weighted Average Grant Date Fair Value
Unvested PSUs at December 31, 2021		1,015,459		$	16.41
Granted(1)		591,062		$	23.59
Forfeited		(16,486	)	$	17.48
Cancelled		(975,564	)	$	16.42
Unvested PSUs at June 30, 2022		614,471		$	23.27

(1)There were 295,531 PSUs granted that are eligible to vest based on continued employment and the Company’s annualized absolute total shareholder return (“TSR”) over a three-year performance period. An additional 295,531 PSUs were granted and are eligible to vest based on continued employment and the Company’s return (“PVI”) on the wells included in the 2022 drill program over a three-year performance period. The actual number of PSUs earned ranges between 0% and 200% depending on actual performance over the performance period. For the PVI PSUs, the Company recognizes compensation cost if and when the Company concludes that it is probable that the performance condition will be achieved. The Company reassesses the probability of achieving the performance conditions at each reporting date.

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

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

	Grant Date
	March 5, 2022
Expected term (in years)		2.8
Expected volatility		82.2	%
Risk-free interest rate		1.6	%
Dividend yield		—	%
Fair value (in thousands)	$	8,668

Schedule of Recognized Share Based Compensation Expense, Net

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Share-based compensation costs	$	7,319	$	5,626	$	12,971	$	10,541
Less: Amounts capitalized to oil and gas properties		3,270		2,609		5,604		4,860
Total share-based compensation expense	$	4,049	$	3,017	$	7,367	$	5,681