Acquisitions qualifying as an asset acquisition requires, among other items, that the cost of the assets acquired and liabilities assumed to be recognized on the Consolidated Balance Sheets by allocating the asset cost on a relative fair value basis. The fair value measurements of the oil and natural gas properties acquired and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates by the Company’s management at the time of the valuation. Transaction costs incurred on an asset acquisition are capitalized as a component of the assets acquired and any contingent consideration is recognized as the contingency is resolved.

Acquisition of LLOG Properties — On November 16, 2020, the Company completed the acquisition of select oil and natural gas assets from LLOG Exploration & Production Company, L.L.C. with an effective date of August 1, 2020 (the “LLOG Acquisition”). The oil and natural gas assets consist of interests in the Mississippi Canyon core area. The LLOG Acquisition was consummated pursuant to a Purchase and Sale Agreement executed on November 16, 2020 for $13.2 million in cash, inclusive of customary closing adjustments and $0.2 million of transaction related expenses.

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on November 16, 2020 (in thousands):

Property and equipment	$	17,421
Asset retirement obligations		(4,234	)
Allocated purchase price	$	13,187

Acquisition of Castex Energy 2005 — On August 5, 2020, the Company completed the acquisition of select oil and natural gas assets from affiliates of Castex Energy 2005 Holdco, LLC with an effective date of April 1, 2020 (the “Castex Energy 2005 Acquisition”). The oil and natural gas assets consist of interests in 16 properties in the U.S. Gulf of Mexico Shelf and Gulf Coast core area. The Castex Energy 2005 Acquisition was consummated pursuant to a Purchase and Sale Agreement dated June 19, 2020 for consideration consisting of (i) $6.5 million in cash, (ii) 4.6 million shares of the Company’s common stock and (iii) $1.4 million in transaction related expenses, inclusive of customary closing adjustments.

The following table summarizes the purchase price, inclusive of customary closing adjustments (in thousands except share and per share data):

Talos common stock		4,602,460
Talos common stock price per share⁽¹⁾	$	7.69
Talos common stock value	$	35,393

Cash consideration	$	6,500
Transaction cost	$	1,413

Total purchase price	$	43,306

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on August 5, 2020 (in thousands):

Property and equipment	$	46,626
Asset retirement obligations		(3,320	)
Allocated purchase price	$	43,306

Acquisition of Gunflint Field — On January 11, 2019, the Company completed the acquisition of an approximate 9.6% non-operated working interest in the Gunflint Field located in the Mississippi Canyon area (the “Gunflint Acquisition”) from Samson Offshore Mapleleaf, LLC for $29.6 million ($27.9 million after customary purchase price adjustments).

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

Acquisition of Whistler Energy II, LLC — On August 31, 2018, the Company completed the acquisition of all the issued and outstanding membership interests of Whistler Energy II, LLC (“Whistler”) from Whistler Energy II Holdco, LLC, an affiliate of the Apollo Funds (the “Whistler Acquisition”), for $52.6 million ($14.8 million, net of $37.8 million of cash acquired). The $37.8 million of cash acquired consists of $30.8 million of cash collateral posted by Whistler and released by third party surety companies at closing and $7.0 million of cash on hand for working capital purposes. Through the acquisition, the Company acquired and assumed all of Whistler’s oil and natural gas assets and the associated asset retirement obligations for interests located in Green Canyon Block 18, Green Canyon Block 60 and Ewing Bank Blocks 944 and 988, including a fixed production platform on Green Canyon Block 18.

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on August 31, 2018 (in thousands):

Current assets⁽¹⁾	$	45,337
Property and equipment		35,344
Other long-term assets		66
Current liabilities		(4,261	)
Asset retirement obligations		(23,862	)
Allocated purchase price	$	52,624

Acquisitions qualifying as business combinations are accounted for under the acquisition method of accounting, which requires, among other items, that assets acquired and liabilities assumed be recognized on the Consolidated Balance Sheets at their fair values as of the acquisition date. The fair value measurements of the oil and natural gas properties acquired and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation.

ILX and Castex Acquisition — On February 28, 2020, the Company acquired the outstanding limited liability interests in certain wholly owned subsidiaries of ILX Holdings, LLC, ILX Holdings II, LLC, ILX Holdings III LLC and Castex Energy 2014, LLC, each a related party and an affiliate of the Riverstone Funds (the “Riverstone Sellers”), and Castex Energy 2016, LP (together with the Riverstone Sellers, the “Sellers”) with an effective date of July 1, 2019 (collectively, the “ILX and Castex Acquisition”). The ILX and Castex Acquisition was consummated pursuant to separate Purchase and Sale Agreements, dated December 10, 2019 (as amended from time to time, the “Purchase Agreements”) for aggregate consideration consisting of (i) $385.0 million in cash subject to customary closing adjustments and (ii) an aggregate 110,000 shares (the “Preferred Shares”) of a series of the Company’s preferred stock designated as “Series A Convertible Preferred Stock” which subsequently converted to 11.0 million shares of the Company’s common stock on March 30, 2020 (such common stock, the “Conversion Stock”). The cash payment and escrow deposit were funded with borrowings under the Bank Credit Facility.

The following table summarizes the purchase price (in thousands except share and per share data):

Talos Conversion Stock		11,000,000
Talos common stock price per share⁽¹⁾	$	14.20
Conversion Stock value	$	156,200

Cash consideration	$	385,000
Customary closing and post-closing adjustments		(81,878	)
Net cash consideration	$	303,122

Total purchase price	$	459,322

⁽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.

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

Current assets⁽¹⁾	$	11,060
Property and equipment		496,835
Other long-term assets		148
Current liabilities		(16,520	)
Other long-term liabilities		(32,201	)
Allocated purchase price	$	459,322

The Company incurred approximately $12.1 million of transaction related costs, of which $8.7 million and $3.4 million were recognized in the years ended December 31, 2020 and 2019, respectively. These costs have been reflected in “General and administrative expense” on the 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 year ended December 31, 2020:

	Year Ended December 31, 2020
Revenue	$	126,857
Net loss	$	(6,011	)

Pro Forma Financial Information (Unaudited) — The following supplemental pro forma financial information (in thousands, except per common share amounts), presents the consolidated results of operations for the years ended December 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.

	Year Ended December 31,
	2020			2019
Revenue	$	634,921		$	1,246,391
Net income (loss)	$	(449,988	)	$	148,091
Basic net income (loss) per common share	$	(6.48	)	$	2.27
Diluted net income (loss) per common share	$	(6.48	)	$	2.26

Combination Between Talos Energy LLC and Stone Energy Corporation — On May 10, 2018, the Company consummated the Transactions contemplated by the Transaction Agreement and Exchange Agreement, pursuant to which, among other things, Talos Energy LLC and Stone became wholly-owned subsidiaries of the Company. The combination was executed as an all-stock transaction whereby the former stakeholders of Talos Energy LLC held approximately 63% of the Company’s outstanding Common Stock and the former stockholders of Stone held approximately 37% of the Company’s outstanding Common Stock as of the Stone Closing Date.

The purchase price of $732.0 million is based on the closing price of Stone common stock and common warrants immediately prior to closing. The following table summarizes the purchase price (in thousands, except per share data):

Stone Energy common stock - issued and outstanding as of May 9, 2018		20,038
Stone Energy common stock price	$	35.49
Common stock value	$	711,149

Stone Energy common stock warrants - issued and outstanding as of May 9, 2018		3,528
Stone Energy common stock warrants price	$	5.90
Common stock warrants value	$	20,815
Total purchase price	$	731,964

During 2018, the Company incurred approximately $88.6 million of transaction related costs, of which, $32.5 million was expensed and reflected in “General and administrative expense” on the Consolidated Statements of Operations. The remaining $56.1 million was the result of (i) $9.3 million in work fees paid to holders of the 11.00% Notes reflected as a debt discount reducing “Long-term debt” on the Consolidated Balance Sheets and (ii) $46.8 million in fees for seismic use agreements for change in control provisions and reflected in “Proved properties” on the Consolidated Balance Sheets.

The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on May 10, 2018 (in thousands):

Current assets⁽¹⁾	$	372,963
Property and equipment		886,406
Other long-term assets		19,494
Current liabilities		(132,846	)
Long-term debt		(235,416	)
Other long-term liabilities		(178,637	)
Allocated purchase price	$	731,964

The follow table presents revenue and net income attributable to the assets acquired in the Stone Combination for the years ended December 31, 2020, 2019 and 2018:

	Year Ended December 31,
	2020			2019		2018
Revenue	$	187,211			414,056		332,944
Net income (loss)	$	(1,232	)		187,428		148,473

Pro Forma Financial Information (Unaudited) — The following supplemental pro forma information (in thousands, except per common share amounts), presents the consolidated results of operations for the year ended December 31, 2018 as if the Stone Combination had occurred on January 1, 2018. The unaudited pro forma information was derived from historical statements of operations of the Company and Stone and adjusted to include (i) depletion and accretion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) interest expense to reflect the debt transactions contemplated by the Exchange Agreement and (iii) general and administrative expense adjusted for transaction related costs incurred. This information does not purport to be indicative of results of operations that would have occurred had the Stone Combination occurred on January 1, 2018, nor is such information indicative of any expected future results of operations.

	Year Ended December 31, 2018
Revenue	$	1,013,184
Net income	$	274,577
Basic net income per common share	$	5.07
Diluted net income per common share	$	5.07