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  • Talos Energy, a leading offshore exploration and production company, has recently announced its strategic acquisition of QuarterNorth Energy, a privately-held U.S. Gulf of Mexico operator with ownership in several prolific fields.
  • – The deal, valued at $1.29 billion, is expected to close by the end of the first quarter of 2024, subject to closing conditions and regulatory approvals.
  • – The acquisition will add production of approximately 30 thousand barrels of oil equivalent per day (MBoe/d) expected for the full year 2024, averaging about 75% oil from approximately 95% operated assets.
  • – The acquisition will add proved reserves of approximately 69 million barrels of oil equivalent (MMBoe) with a PV-10 of $1.7 billion.
  • – The acquisition will be accretive to key financial metrics, including Cash Flow Per Share, Free Cash Flow Per Share, and Net Asset Value Per Share.
  • – The acquisition will improve balance sheet strength with expected year-end 2024 leverage ratio of 1.0x or less.
  • – The acquisition will generate annual run-rate synergies of approximately $50 million by year-end 2024.

Talos President and Chief Executive Officer Timothy S. Duncan commented: “Today’s announcement marks one of Talos’s most significant milestones as we build a large-scale offshore exploration and production company. The addition of QuarterNorth’s overlapping deepwater portfolio with valuable operated infrastructure will increase Talos’s operational breadth and production profile while enhancing our margins and cash flow. This Transaction aligns with Talos’s overall strategy of leveraging existing infrastructure and complementary acreage to accelerate shareholder value creation. The pro forma footprint in the U.S. Gulf of Mexico should allow us to capture meaningful operating synergies. The expected financing structure of the Transaction accelerates de-leveraging, immediately improves our credit profile, is accretive on key metrics, and positions us to consider additional capital return initiatives following deleveraging in the near term.

QuarterNorth Energy is a private company founded in 2018 by a group of experienced offshore executives and backed by private equity firm Riverstone Holdings LLC. QuarterNorth has a portfolio of high-quality deepwater assets in the U.S. Gulf of Mexico, including ownership in the *Phoenix* field (formerly known as *Typhoon*), the *Borbon* field, the *Tornado* field, and the *Green Canyon* block 21. QuarterNorth also has exploration prospects in the *Mississippi Canyon* area and the *Walker Ridge* area.

Talos Energy is a public company listed on the New York Stock Exchange under the ticker symbol TALO. Talos was formed in 2012 by the merger of Phoenix Exploration Company and Gryphon Exploration Company, and later acquired Stone Energy Corporation in 2018. Talos has a diversified portfolio of offshore assets in the U.S. Gulf of Mexico and offshore Mexico, including ownership in the *Zama* discovery, one of the largest oil discoveries in Mexico’s history. Talos also has exploration prospects in the *Perdido Fold Belt*, the *Salina Basin*, and the *Sureste Basin*.

The acquisition of QuarterNorth Energy will create a premier offshore company with enhanced scale, diversification, and growth potential. The combined company will have a strong balance sheet, robust cash flow generation, and attractive development opportunities.

The acquisition will create career opportunities for both Talos and QuarterNorth employees, as well as new hires. Talos offers competitive benefits, flexible work schedules, and opportuniti