Acquisitions (Tables)

3 Months Ended

Mar. 31, 2020

ILX and Castex

Business Acquisition [Line Items]

Summary of Purchase Price, Subject to Customary Post-Closing Adjustments

The following table summarizes the purchase price, subject to customary post-closing adjustments (in thousands except per share data):

Talos Conversion Stock		11,000
Talos common stock price per share(1)	$	14.20
Conversion Stock value	$	156,200
Cash consideration	$	385,000
Customary closing adjustments		(91,905	)
Net cash consideration paid at closing	$	293,095
Total purchase price	$	449,295

⁽¹⁾ Represents the closing price of the Company’s common stock on February 28, 2020, the date of the closing of the ILX and Castex Acquisition. The purchase price was based on the value of the Conversion Stock as the value approximates the value of the Preferred Shares as a result of the automatic conversion and dividend rights described in that certain Certificate of Designation, Preferences, Rights and Limitations.

Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed

The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on February 28, 2020 (in thousands):

	February 28, 2020
Current assets(1)	$	10,969
Property and equipment		489,796
Other long-term assets		148
Current liabilities		(7,129	)
Long-term debt		-
Other long-term liabilities		(44,489	)
Allocated purchase price	$	449,295

^{(1) Includes trade and other receivables of $8.2 million, which the Company expects all to be realizable.}

The Company incurred approximately $10.9 million of transaction related costs, of which $7.5 million was recognized in the first quarter of 2020 and $3.4 million was recognized in the fourth quarter of 2019 and reflected in general and administrative expense on the condensed consolidated statements of operations.

The following table presents revenue and net income attributable to the assets acquired in the ILX and Castex Acquisition for the three months ended March 31, 2020:

	Three Months Ended March 31, 2020
Revenue	$	13,892
Net income	$	3,209

Supplemental Proforma Information

The following supplemental pro forma financial information (in thousands, except per common share amounts), presents the condensed consolidated results of operations for the three months ended March 31, 2020 and 2019 as if the ILX and Castex Acquisition had occurred on January 1, 2019. The unaudited pro forma information was derived from historical statements of operations of the Company and the Sellers adjusted to (i) include depletion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) include interest expense to reflect borrowings under the Bank Credit Facility, (iii) eliminate the write-down of oil and natural gas properties on the assets acquired to reflect the pro-forma ceiling test calculation and (iv) include weighted average basic and diluted shares of common stock outstanding, which was calculated assuming the 11.0 million shares of Conversion Stock were issued to the Sellers. This information does not purport to be indicative of results of operations that would have occurred had the ILX and Castex Acquisition occurred on January 1, 2019, nor is such information indicative of any expected future results of operations.

	Three Months Ended March 31,
	2020		2019
Revenue	$	235,199	$	260,971
Net income (loss)	$	167,566	$	(79,448	)
Basic net income (loss) per common share	$	2.56	$	(1.22	)
Diluted net income (loss) per common share	$	2.55	$	(1.22	)

Gunflint Acquisition

Business Acquisition [Line Items]

Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on January 11, 2019 (in thousands):

Property and equipment	$	28,912
Asset retirement obligations		(996	)
Allocated purchase price	$	27,916