Filed Pursuant to Rule 424(b)(3)
Registration No. 333-222341

Stone Energy Corporation

625 E. Kaliste Saloom Road

Lafayette, Louisiana, 70508

(337) 237-0410

April 9, 2018

Dear Stone Energy Corporation Stockholders:

On behalf of the board of directors and management team of Stone Energy Corporation (“Stone Energy”), I am pleased to enclose the consent solicitation statement/prospectus relating to the combination of Stone Energy and Talos Energy LLC (“Talos Energy”). Talos Energy is controlled indirectly by entities controlled by Apollo Management VII, L.P. (“Apollo VII”), Apollo Commodities Management, L.P., with respect to Series I (“Apollo Commodities Management” and, together with Apollo VII, “Apollo Management”), and Riverstone Energy Partners V, L.P. (“Riverstone”).

As we announced on November 21, 2017, Stone Energy, certain of its subsidiaries, Talos Energy, and its indirect wholly owned subsidiary, Talos Production LLC (“Talos Production”), entered into a Transaction Agreement, dated as of November 21, 2017 (the “Transaction Agreement”). The transactions contemplated by the Transaction Agreement (the “Transactions”) include (i) the merger of an indirect, wholly owned subsidiary of Stone Energy with and into Stone Energy (the “Merger”), with Stone Energy surviving the merger as a direct wholly owned subsidiary of Sailfish Energy Holdings Corporation (“New Talos”), (ii) the contribution of 100% of the equity interests in Talos Production to New Talos in exchange for shares of New Talos common stock (the “Talos Contribution”), (iii) the contribution of $102 million in aggregate principal amount of senior unsecured notes issued by Talos Production and Talos Production Finance Inc. (“Talos Production Finance” and, together with Talos Production, the “Talos Issuers”) to New Talos by entities controlled by or affiliated with Apollo Management and Riverstone in exchange for shares of New Talos common stock (the “Sponsor Debt Exchange”), (iv) the exchange of second lien bridge loans issued by the Talos Issuers for newly issued second lien notes of the Talos Issuers (the “New Second Lien Notes”), and (v) the exchange of senior secured notes issued by Stone Energy for New Second Lien Notes.

We believe the combination of Stone Energy and Talos Energy will create a premier offshore-focused exploration and production company and provide the potential for strategic benefits.

Pursuant to the Merger, you will receive, for each share of Stone Energy common stock, one share of New Talos common stock, as described in more detail in the enclosed consent solicitation statement/prospectus under the heading “The Transaction Agreement—Surrender and Payment; Lost Certificates.” After the completion of the Transactions, holders of Stone Energy common stock immediately prior to the Merger will hold 37% of the outstanding New Talos common stock and Talos Energy stakeholders will hold 63% of the outstanding New Talos common stock. We anticipate that the New Talos common stock will be listed on the New York Stock Exchange.

Investment advisors for certain stockholders of Stone Energy, representing approximately 53% of the outstanding shares of Stone Energy common stock, have entered into voting agreements with Stone Energy and Talos Energy pursuant to which they have agreed, subject to the terms of the voting agreements, to execute and return written consents approving and adopting the Transaction Agreement, the Transactions, and any other matters necessary for the consummation of the Transactions within two business days after the registration statement of which this consent solicitation statement/prospectus forms a part becomes effective under the Securities Act of 1933, as amended. The delivery of the written consents pursuant to the voting agreements will be sufficient to adopt the Transaction Agreement and thereby approve and adopt the Transactions.

Stone Energy’s board of directors has reviewed and considered the terms of the Transaction Agreement and has unanimously determined that the Transaction Agreement and the Transactions are advisable and in the best interests of Stone Energy and its stockholders and recommends that you consent to:

We urge you to read the enclosed consent solicitation statement/prospectus, which includes important information about the Transactions. In particular, see “Risk Factors” beginning on page 36 of this consent solicitation statement/prospectus for a description of the risks that you should consider in evaluating the Transactions.

For a discussion of the U.S. federal income tax consequences of the Transactions, see “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 122 of this consent solicitation statement/prospectus.

Sincerely,

/s/ James M. Trimble

James M. Trimble

Interim Chief Executive Officer and President

Stone Energy Corporation

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the transactions described in this consent solicitation statement/prospectus or the securities to be issued pursuant to the transactions under this consent solicitation statement/prospectus or determined if this consent solicitation statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The enclosed consent solicitation statement/prospectus is dated April 9, 2018 and is first being mailed to stockholders on or about April 12, 2018.

Stone Energy Corporation

625 E. Kaliste Saloom Road

Lafayette, Louisiana 70508

(337) 237-0410

NOTICE OF SOLICITATION OF WRITTEN CONSENT

Stone Energy Corporation (“Stone Energy”) is requesting that you execute and return your written consent to:

1. Adopt the Transaction Agreement, dated as of November 21, 2017, among Stone Energy, Sailfish Energy Holdings Corporation, a direct wholly owned subsidiary of Stone Energy (“New Talos”), Sailfish Merger Sub Corporation, an indirect, wholly owned subsidiary of Stone Energy (“Merger Sub”), Talos Energy LLC (“Talos Energy”), and Talos Production LLC (“Talos Production”) (as it may be amended from time to time, the “Transaction Agreement”), and thereby approve and adopt the transactions contemplated by the Transaction Agreement (the “Transactions”), including (i) the merger of Merger Sub with and into Stone Energy (the “Merger”), with Stone Energy surviving the merger as a direct wholly owned subsidiary of New Talos, (ii) the contribution of 100% of the equity interests in Talos Production to New Talos in exchange for shares of New Talos common stock (the “Talos Contribution”), and (iii) the contribution of $102 million in aggregate principal amount of senior unsecured notes issued by Talos Production and Talos Production Finance Inc. to New Talos by entities controlled by or affiliated with Apollo Management VII, L.P., Apollo Commodities Management, L.P., with respect to Series I, and Riverstone Energy Partners V, L.P. in exchange for shares of New Talos common stock (the “Sponsor Debt Exchange”). A copy of the Transaction Agreement is attached as Annex A to the consent solicitation statement/prospectus accompanying this notice. As a result of the Transactions, including the Merger, each share of Stone Energy common stock outstanding immediately prior to the Merger will be converted as a result of the Merger into the right to receive one share of New Talos common stock.

2. Approve, on a non-binding, advisory basis, the compensation that will or may become payable to Stone Energy’s named executive officers in connection with the Transactions (the “Transaction-Related Compensation”).

3. Adopt the Talos Energy, Inc. Long Term Incentive Plan (the “New Talos LTIP”).

The board of directors of Stone Energy has fixed April 5, 2018 as the record date for the determination of the Stone Energy stockholders entitled to execute and deliver written consents with respect to the accompanying consent solicitation statement/prospectus.

The Stone Energy board of directors, by unanimous vote of the directors, determined that the Transaction Agreement and the Transactions are advisable and in the best interests of Stone Energy and its stockholders and recommends that the Stone Energy stockholders consent to:

Investment advisors for certain stockholders of Stone Energy, representing approximately 53% of the outstanding shares of Stone Energy common stock, have entered into voting agreements with Stone Energy and Talos Energy pursuant to which they have agreed, subject to the terms of the voting

agreements, to execute and return written consents approving and adopting the Transaction Agreement, the Transactions, and any other matters necessary for the consummation of the Transactions within two business days after the registration statement of which the consent solicitation statement/prospectus forms a part becomes effective under the Securities Act of 1933, as amended. The delivery of the written consents pursuant to the voting agreements will be sufficient to adopt the Transaction Agreement and thereby approve and adopt the Transactions.

By Order of the Board of Directors

/s/ Lisa S. Jaubert

Lisa S. Jaubert

Senior Vice President,

General Counsel & Corporate Secretary

Lafayette, Louisiana

April 9, 2018

ADDITIONAL INFORMATION

This consent solicitation statement/prospectus incorporates important business and financial information about Stone Energy Corporation (“Stone Energy”) from other documents that are not included in or delivered with this consent solicitation statement/prospectus. This information is available to you without charge. You can obtain copies of the documents incorporated by reference into this consent solicitation statement/prospectus through the Securities and Exchange Commission website at www.sec.gov or by requesting them in writing or by telephone from Stone Energy at the following address and telephone number:

Stone Energy Corporation

625 E. Kaliste Saloom Road

Lafayette, Louisiana, 70508

(337) 237-0410

To obtain timely delivery of documents, you must request them by April 4, 2018, which is no later than five business days before the targeted final date for the receipt of written consents.

See “Where You Can Find Additional Information” beginning on page 278 of this consent solicitation statement/prospectus.

TABLE OF CONTENTS

Annex A—Transaction Agreement

Annex B—Form of Amended and Restated Certificate of Incorporation of Sailfish Energy Holdings Corporation

Annex C—Form of Amended and Restated Bylaws of Sailfish Energy Holdings Corporation

Annex D—Support Agreement

Annex E—Form of Stockholders’ Agreement

Annex F—Form of Registration Rights Agreement

Annex G—Exchange Agreement

Annex H—Franklin Voting Agreement

Annex I—MacKay Shields Voting Agreement

Annex J—Fairness Opinion of Petrie Partners Securities, LLC

Annex K—Talos Energy, Inc. Long Term Incentive Plan

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RISK FACTORS

The Stone Energy stockholders should carefully consider the following risk factors, in addition to those risk factors discussed elsewhere in this consent solicitation statement/prospectus, before submitting their written consents.

Risk Factors Related to the Transactions

The Transactions may not be completed on the terms or timeline currently contemplated, or at all, and failure to complete the Transactions may result in material adverse consequences to Stone Energy’s business and operations.

The Transactions are subject to several closing conditions, including, among others, the following:

If any one of these conditions is not satisfied or waived, the Transactions may not be completed. There is no assurance that the Transactions will be completed on the terms or timeline currently contemplated, or at all. See the section titled “The Transaction Agreement—Conditions to Closing” beginning on page 134 of this consent solicitation statement/prospectus for a more detailed discussion.

Governmental or regulatory agencies could impose conditions on the completion of the Transactions or require changes to the terms of the Transaction Agreement or other agreements to be entered into in connection with the Transactions. Such conditions or changes could have the effect of delaying or impeding the completion of the Transactions or imposing additional costs or limitations on New Talos following the completion of the Transactions, any of which may have an adverse effect on New Talos following the completion of the Transaction. See “The Transaction Agreement—Government Approvals” beginning on page 142 of this consent solicitation statement/prospectus. If these approvals are not received, then neither Stone Energy nor Talos Energy will be obligated to complete the Transactions.

If the Stone Energy stockholders do not adopt the Transaction Agreement or if the Transactions are not completed for any other reason, Stone Energy would be subject to a number of risks, including the following:

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The occurrence of any of these events individually or in combination could have a material adverse effect on the results of operations of Stone Energy or the trading price of Stone Energy common stock. Stone Energy is also exposed to general competitive pressures and risks, which may be increased if the Transactions are not completed.

Each of Stone Energy and Talos Energy will be subject to business uncertainties and contractual restrictions while the Transactions are pending that could adversely affect each of them.

Uncertainty about the effect of the Transactions on employees and Stone Energy’s and Talos Energy’s business relationships may have an adverse effect on either or both of Stone Energy and Talos Energy, regardless of whether the Transactions are eventually completed, and, consequently, on New Talos. These uncertainties may impair Stone Energy’s and Talos Energy’s ability to attract, retain and motivate key personnel until the Transactions are completed, or the Transaction Agreement is terminated, and for a period of time thereafter, and could cause customers, suppliers and others that deal with Stone Energy or Talos Energy to seek to change existing business relationships with Stone Energy or Talos Energy or to delay or defer certain business decisions.

The pursuit of the Transactions and the preparation for the integration of Stone Energy and Talos Energy have placed, and will continue to place, a significant burden on the management and internal resources of both Stone Energy and Talos Energy. There is a significant degree of difficulty and management distraction inherent in the process of closing the Transactions and integrating Stone Energy and Talos Energy, which could cause an interruption of, or loss of momentum in, the activities of each company’s existing businesses, regardless of whether the Transactions are eventually completed. Before and immediately following Closing, the management teams of Stone Energy and Talos Energy will be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage their respective existing businesses. One potential consequence of such distractions could be the failure of management to realize other opportunities that could be beneficial to Stone Energy or Talos Energy, respectively. If Stone Energy’s or Talos Energy’s management is not able to effectively manage the process leading up to and immediately following Closing, or if any significant business activities are interrupted as a result of the integration process, the business of Stone Energy or Talos Energy could suffer.

Under the terms of the Transaction Agreement, each of Stone Energy and Talos Energy is subject to certain restrictions on the conduct of its business until the earlier of the effective time of the Merger and the termination of the Transaction Agreement, which may adversely affect its ability to execute certain of its business strategies, including the ability in certain cases to enter into contracts, acquire or dispose of assets, incur indebtedness or

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incur capital expenditures, as applicable. Such limitations could negatively affect Stone Energy’s and Talos Energy’s businesses and operations prior to the completion of the Transactions.

For a description of the restrictive covenants applicable to Stone Energy and Talos Energy, see “The Transaction Agreement—Operations of Stone Energy and the Talos Entities Pre-Closing” beginning on page 136 of this consent solicitation statement/prospectus.

The integration of Stone Energy and the Talos Entities following Closing will present challenges that may result in a decline in the anticipated benefits of the Transactions.

The Transactions involve the combination of two businesses that currently operate as independent businesses. New Talos will be required to devote management attention and resources to integrating its business practices and operations, and prior to the Transactions, management attention and resources will be required to plan for such integration. New Talos could be adversely affected by the diversion of management’s attention, the loss of key employees and skilled workers, and any delays or difficulties encountered in connection with the integration of Stone Energy and Talos Energy. If New Talos experiences difficulties with the integration process, the anticipated benefits of the Transactions may not be realized fully or at all, or may take longer to realize than expected. These integration matters could have an adverse effect on the business, results of operations, financial condition or prospects of New Talos during this transition period and for an undetermined period after completion of the Transactions.

The Transaction Agreement contains provisions that may discourage other companies from trying to acquire Stone Energy.

The Transaction Agreement contains provisions that may discourage third parties from submitting business combination proposals to Stone Energy that might result in greater value to the Stone Energy stockholders than the Transactions. The Transaction Agreement generally prohibits Stone Energy from soliciting any competing proposal. In addition, if the Transaction Agreement is terminated by Stone Energy or Talos Energy in circumstances that obligate Stone Energy to pay a termination fee and to reimburse transaction expenses to Talos Energy, Stone Energy’s financial condition may be adversely affected as a result of the payment of the termination fee and reimbursement of transaction expenses, which might deter third parties from proposing alternative business combination proposals.

The shares of New Talos common stock to be received by the Stone Energy stockholders as a result of the Transactions will have different rights from shares of Stone Energy common stock.

Following Closing, the Stone Energy stockholders will no longer be stockholders of Stone Energy but will instead be stockholders of New Talos holding New Talos common stock. There are important differences between the rights of the Stone Energy stockholders and the New Talos stockholders. For a description of different rights associated with Stone Energy common stock and New Talos common stock, see “Comparison of Stockholder Rights and Corporate Governance Matters” beginning on page 170 of this consent solicitation statement/prospectus.

No trading market currently exists for New Talos common stock.

There will not be a trading market for the New Talos common stock prior to Closing. At Closing, the New Talos common stock is expected to be listed for trading on NYSE. However, there can be no assurance that an active market for the New Talos common stock will develop after Closing, or if it develops, that such market will be sustained. In the absence of an active trading market for the New Talos common stock, investors may not be able to sell their New Talos common stock at the time that they would like to sell.

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Following the completion of the Transactions, New Talos will be controlled by entities controlled by or affiliated with Apollo Management and Riverstone. The interests of Apollo Management and Riverstone may differ from the interests of other stockholders of New Talos.

Immediately following Closing, Talos Energy stakeholders will beneficially own and possess voting power over 63% of the shares of New Talos common stock. Under the Stockholders’ Agreement, the Apollo Funds and the Riverstone Funds may acquire additional shares of New Talos common stock without the approval of the Company Independent Directors.

Through their ownership of a majority of New Talos’s voting power and the provisions set forth in the New Talos Charter, the New Talos Bylaws, and the Stockholders’ Agreement, the Apollo Funds and the Riverstone Funds will have the ability to designate and elect a majority of New Talos’s directors. As a result of the Apollo Funds’ and the Riverstone Funds’ ownership of a majority of the voting power of New Talos common stock, New Talos will be a “controlled company” as defined in NYSE listing rules and will, therefore, not be subject to NYSE requirements that would otherwise require New Talos to have (i) a majority of independent directors, (ii) a nominating committee composed solely of independent directors, (iii) director nominees selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating committee composed solely of independent directors, and (iv) the compensation of its executive officers determined by a majority of the independent directors or a compensation committee composed solely of independent directors. Under the Stockholders’ Agreement, the New Talos Board will initially have four directors not designated by the Apollo Funds and the Riverstone Funds and six directors designated by the Apollo Funds and the Riverstone Funds. For further information regarding the New Talos Board and its committees following Closing, see “Certain Agreements Related to the Transactions—Stockholders’ Agreement” beginning on page 153 of this consent solicitation statement/prospectus.

Apollo Management and Riverstone will also have control over all other matters submitted to stockholders for approval, including changes in capital structure, transactions requiring stockholder approval under Delaware law, and corporate governance, subject to the terms of the Stockholders’ Agreement that require the Apollo Funds and the Riverstone Funds to vote in a specified manner on certain actions, including their agreement to vote in favor of director nominees not designated by the Apollo Funds and the Riverstone Funds. Apollo Management and Riverstone may have different interests than other holders of New Talos common stock and may make decisions adverse to your interests.

Among other things, Apollo Management’s and Riverstone’s control could delay, defer, or prevent a sale of New Talos that New Talos’s other stockholders support, or, conversely, this control could result in the consummation of such a transaction that other stockholders do not support. This concentrated control could discourage a potential investor from seeking to acquire New Talos common stock and, as a result, might harm the market price of the New Talos common stock.

Members of Stone Energy management and the Stone Energy Board have interests in the Transactions that are different from, or in addition to, those of other Stone Energy stockholders.

In considering whether to approve the Transactions, the Stone Energy stockholders should recognize that members of Stone Energy management and the Stone Energy Board have interests in the Transactions that differ from, or are in addition to, their interests as stockholders of Stone Energy. For a description of these interests, see the section titled “Additional Interests of Stone Energy’s Directors and Executive Officers in the Transactions” beginning on page 124 of this consent solicitation statement/prospectus.

Stone Energy and New Talos will incur transaction-related and restructuring costs in connection with the Transactions and the integration of the two businesses.

Stone Energy and New Talos will incur transaction-related and restructuring costs in connection with the Transactions and New Talos will incur costs in connection with the integration of Stone Energy’s and Talos

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Energy’s businesses. Stone Energy and Talos Energy are in the early stages of assessing the magnitude of these costs and estimate $56.9 million in transaction-related costs. Stone Energy and Talos Energy are currently unable to provide estimates of restructuring and integration costs. The costs related to restructuring will be included as a liability in the purchase price allocation or expensed as incurred, depending on the nature of the restructuring activity. Moreover, many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. These expenses could, particularly in the near term, reduce the expected pre-tax synergies related to the integration of the businesses following the completion of the Transactions, and accordingly, any net synergies may not be achieved in the near term or at all. These integration expenses may result in New Talos taking significant charges against earnings following the completion of the Transactions. Some of these costs and expenses will be incurred even if the Transactions are not consummated.

The completion of the Merger and the Transactions is not conditioned on the receipt of an opinion of counsel to the effect that the Merger, the Talos Contribution, and the Sponsor Debt Exchange will qualify for the Intended Tax Treatment, and no ruling has been or will be sought from the IRS regarding the U.S. federal income tax consequences of the Merger.

It is intended that, for U.S. federal income tax purposes, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and, together with the Talos Contribution and the Sponsor Debt Exchange, as part of an exchange under Section 351 of the Code, which we refer to as the Intended Tax Treatment. However, the completion of the Merger is not conditioned on the Merger, the Talos Contribution, and the Sponsor Debt Exchange qualifying for the Intended Tax Treatment or upon the receipt of an opinion of counsel to that effect. In addition, neither Stone Energy nor Talos Energy intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the Merger, the Talos Contribution, and the Sponsor Debt Exchange. Accordingly, no assurance can be given that the Merger, the Talos Contribution, and the Sponsor Debt Exchange will qualify for the Intended Tax Treatment. Further, even if Stone Energy and Talos Energy conclude that the Merger, the Talos Contribution, and the Sponsor Debt Exchange qualify for the Intended Tax Treatment, no assurance can be given that the IRS will not challenge that conclusion or that a court would not sustain such a challenge. Each Stone Energy stockholder should read the discussion under “Material U.S. Federal Income Tax Consequences of the Merger” and should consult its own tax advisor for a full understanding of the tax consequences of the Merger to such stockholder.

The unaudited pro forma combined financial information of Stone Energy and Talos Energy in this consent solicitation statement/prospectus is not intended to reflect what actual results of operations and financial condition would have been had Stone Energy and Talos Energy been a combined company for the periods presented, and therefore these results may not be indicative of New Talos’s results of operations and financial condition.

The unaudited pro forma combined financial information presented in this consent solicitation statement/prospectus is for illustrative purposes only and is not intended to, and does not purport to, represent what New Talos’s actual results of operations or financial condition would have been if the Transactions had occurred on the relevant dates. In addition, such unaudited pro forma combined financial information is based in part on certain assumptions regarding the Transactions that New Talos, Stone Energy and Talos Energy believe are reasonable. These assumptions, however, are merely preliminary and will be updated only after Closing. The unaudited pro forma combined financial information has been prepared using the acquisition method of accounting, with Talos Energy considered the acquirer of Stone Energy. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values with any excess purchase price allocated to goodwill. The pro forma purchase price allocation was based on an estimate of the fair values of the tangible and intangible assets and liabilities of Stone Energy. In arriving at the estimated fair values, Stone Energy and Talos Energy have considered the preliminary appraisals of independent consultants, which were based on a preliminary and limited review of the assets and liabilities related to Stone Energy to be held by New Talos following the consummation of the Transactions. Following Closing, New Talos will have a one-year period to complete the purchase price

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allocation after considering the fair value of Stone Energy’s assets and liabilities at the level of detail necessary to finalize the required purchase price allocation. The final purchase price allocation may be different from that reflected in the pro forma purchase price allocation presented herein, and this difference may be material.

The unaudited pro forma combined financial information does not reflect possible adjustments related to restructuring or integration activities that have yet to be determined or certain transaction-related costs. Accordingly, the pro forma financial information included in this consent solicitation statement/prospectus does not reflect what New Talos’s results of operations or financial condition would have been had Stone Energy and Talos Energy been a combined entity during all periods presented, or what New Talos’s results of operations and financial condition will be in the future.

Completion of the Transactions may trigger change in control or other provisions in certain agreements to which Stone Energy or Talos Energy is a party.

The completion of the Transactions may trigger change in control or other provisions in certain agreements to which Stone Energy or Talos Energy is a party. If Stone Energy or Talos Energy is unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages. Even if Stone Energy or Talos Energy is able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to Stone Energy or Talos Energy.

The corporate opportunity provisions in the New Talos Charter could enable others to benefit from corporate opportunities that might otherwise be available to New Talos.

Subject to the limitations of applicable law, the New Talos Charter, among other things:

These provisions create the possibility that a corporate opportunity that would otherwise be available to New Talos may be used for the benefit of others. For a more complete description of the terms of the New Talos Charter, see “Description of New Talos Capital Stock” beginning on page 183 of this consent solicitation statement/prospectus.

The New Talos Charter will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by the New Talos stockholders, which could limit the New Talos stockholders’ ability to obtain a favorable judicial forum for disputes with New Talos or New Talos’s directors, officers, employees, or agents.

The New Talos Charter will provide that, unless New Talos consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any

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derivative action or proceeding brought on behalf of New Talos, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, agent or stockholder (including a beneficial owner of stock) of New Talos to New Talos or the New Talos stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, the New Talos Charter or the New Talos Bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants in the case. Any person or entity purchasing or otherwise acquiring any interest in any share of capital stock of New Talos will be deemed to have notice of and consent to these provisions of the New Talos Charter. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Talos or New Talos’s directors, officers, employees or agents, which may discourage such lawsuits against New Talos and such persons. Alternatively, if a court were to find these provisions of the New Talos Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, New Talos may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect New Talos’s business, financial condition, or results of operations.

Following the completion of the Transactions, the Apollo Funds and the Riverstone Funds will be prohibited from transferring shares of New Talos common stock until the first anniversary of Closing, after which, subject to restrictions, they will be permitted to transfer their shares of New Talos common stock, which could have a negative impact on New Talos’s stock price.

For 12 months following the completion of the Transactions, the Apollo Funds and the Riverstone Funds will be prohibited from transferring their shares of New Talos common stock other than to their respective affiliates, unless such transfer is approved by a majority of the Company Independent Directors. The lockup will cease to apply to 50% of the New Talos common stock that is issued to the Apollo Funds and the Riverstone Funds, respectively, at Closing on the six-month anniversary of the Closing Date and will cease to apply to an additional 25% of the New Talos common stock that is issued to the Apollo Funds and the Riverstone Funds, respectively, at Closing on the nine-month anniversary of the Closing Date. Following such 12-month lockup period, the Apollo Funds and the Riverstone Funds will be permitted, subject to restrictions explained in more detail in “Certain Agreements Related to the Transactions—Stockholders’ Agreement” beginning on page 153 of this consent solicitation statement/prospectus, to transfer shares of New Talos common stock, including in public offerings pursuant to registration rights to be granted by New Talos. Any such transfer could significantly increase the number of shares of New Talos common stock available in the market, which could cause a decrease in the price of New Talos common stock. In addition, even if the Apollo Funds or the Riverstone Funds do not transfer a large number of their shares into the market, the existence of their right to transfer a large number of shares into the market may depress the price of shares of New Talos common stock.

Additionally, pursuant to the Stockholders’ Agreement, until the first anniversary of the Closing Date, each of the Apollo Funds and the Riverstone Funds will be prohibited from transferring any shares of New Talos common stock in any transaction that would result in the transferee owning more than 35% of the outstanding shares of New Talos common stock without the prior approval of a majority of the Company Independent Directors, unless such transferee agrees in writing to be bound by substantially the same provisions as the stockholders are bound by pursuant to the Stockholders’ Agreement. Following the first anniversary of the Closing Date, the Apollo Funds and the Riverstone Funds could sell a significant percentage of the New Talos common stock to a third party that is not subject to provisions similar to the provisions in the Stockholders’ Agreement. See the section entitled “Certain Agreements Related to the Transactions—Stockholders’ Agreement” beginning on page 153 of this consent solicitation statement/prospectus.

New Talos does not have a contractual right to make indemnification claims against Talos Energy for the breach of any representations, warranties, or covenants made by Talos Energy in the Transaction Agreement.

Under the Transaction Agreement, New Talos does not have a right to make contractual claims against Talos Energy after Closing, including for a breach by Talos Energy of the representations and warranties made to

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Stone Energy or for a violation by Talos Energy of certain covenants and agreements in the Transaction Agreement.

The completion of the Transactions is not conditioned on New Talos entering into a new credit facility.

The completion of the Transactions is not conditioned on New Talos entering into a new credit facility. Although entering into a new credit facility is not a condition to closing, if a new credit facility is not available, it could cause the parties to be unable to satisfy other conditions to the closing of the Transactions, including impairing New Talos’s ability to consummate certain transactions contemplated by the Exchange Agreement, which could prevent the Transactions from closing. If a new credit facility is not available but the other conditions to the closing of the Transactions are still satisfied, Stone Energy and Talos Energy may be required to complete the Transactions anyway. If New Talos is unable to enter into a new credit facility and the Transactions are nonetheless completed, it could have a material adverse effect on the liquidity of New Talos.

Risk Factors Related to the Business of New Talos

The following are risk factors that relate to the business of the combined company, New Talos. In this section, as elsewhere in this consent solicitation statement/prospectus, unless the context requires otherwise, references to “Stone Energy” refer to Stone Energy and its consolidated subsidiaries before the completion of the Transactions, references to “New Talos” refer to New Talos and its consolidated subsidiaries following the completion of the Transactions, and references to the “Company,” “we,” “our,” or “us” refer to Stone Energy and its consolidated subsidiaries, before completion of the Transactions, or New Talos and its consolidated subsidiaries, after the completion of the Transactions, as the context requires.

Oil and natural gas prices are volatile. Significant declines in commodity prices in the future may adversely affect New Talos’s financial condition and results of operations, cash flows, access to the capital markets, and ability to grow.

New Talos’s revenues, cash flows, profitability, and future rate of growth will substantially depend upon the market prices of oil and natural gas. Prices will affect New Talos’s cash flows available for capital expenditures and its ability to access funds under its credit facility and through the capital markets. The amount available for borrowing under New Talos’s credit facility will be subject to a borrowing base, which will be determined by the lenders taking into account New Talos’s estimated proved reserves, and will be subject to periodic redeterminations based on pricing models to be determined by the lenders at such time. Oil and natural gas prices significantly declined in the second half of 2014, with sustained lower prices continuing throughout 2015, 2016 and 2017. Despite a modest recovery in late 2017, commodity prices could remain suppressed or decline further in the future, which will likely have material adverse effects on New Talos’s proved reserves and borrowing base. Further, because New Talos will use the full cost method of accounting for its oil and gas operations, it will perform a ceiling test each quarter, which will be impacted by declining prices. Significant price declines could cause New Talos to take additional ceiling test write-downs, which would be reflected as non-cash charges against current earnings. See “—Lower oil and natural gas prices and other factors in the future may result in ceiling test write-downs and other impairments of New Talos’s asset carrying values.”

In addition, significant or extended price declines may also adversely affect the amount of oil and natural gas that New Talos can produce economically. A reduction in production could result in a shortfall in New Talos’s expected cash flows and require New Talos to reduce its capital spending or borrow funds to cover any such shortfall. Any of these factors could negatively impact New Talos’s ability to replace its production and its future rate of growth.

The markets for oil and natural gas have been volatile historically and are likely to remain volatile in the future. For example, during the period January 1, 2015 through December 31, 2017, the NYMEX West Texas

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Intermediate (“WTI”) crude oil price per Bbl ranged from a low of $30.62 to a high of $59.83, and the NYMEX natural gas price per MMBtu ranged from a low of $1.71 to a high of $3.93. The high, low and average prices for NYMEX WTI and NYMEX Henry Hub are monthly contract prices. The prices New Talos will receive for its oil and natural gas will depend upon many factors beyond its control, including, among others:

These factors make it very difficult to predict future commodity price movements with any certainty. Substantially all of New Talos’s oil and natural gas sales will be made in the spot market or pursuant to contracts based on spot market prices and will not be long-term fixed price contracts. Further, oil prices and natural gas prices do not necessarily fluctuate in direct relation to each other.

New Talos will be required to meet a minimum work program expressed in work units during a four-year exploration period according to the production sharing contracts (“PSCs”) with the National Hydrocarbons Commission of Mexico (the “CNH”).

On September 4, 2015, Talos Energy, together with its consortium partners Sierra Oil & Gas S. de R.L de C.V. (“Sierra”) and Premier Oil Plc (“Premier” and, together with Talos Energy and Sierra, the “Consortium”) executed two PSCs with the CNH for the development of the Mexican acreage—one for each of Blocks 2 and 7. PSCs require that the Consortium execute a minimum work program expressed in work units during a four-year exploration period. The work units represent the performance of exploration studies and seismic and drilling activities. The aggregate value of the minimum work program under the PSCs is approximately $143 million (gross), of which Talos Energy is responsible for a pro rata portion based on its participation interest—35% in Block 7 and 45% in Block 2. In order to guarantee the execution of the minimum work program under the PSCs, the Consortium was required to post a financial guarantee to the CNH of approximately $143 million (gross), of

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which Talos Energy’s share was $48.7 million. Talos Energy satisfied its share through a performance bond. As the Consortium completes the minimum work program under the PSCs, the amount of the financial guarantee will be reduced accordingly beginning after the second anniversary of entering into the PSCs. Effective January 23, 2018, the activities already performed on Block 7 have satisfied the minimum work program on Block 7, reducing the $143 million (gross) in outstanding letters of credit by $65.7 million (gross). Activities on Block 2 are in the planning phase and the Consortium is on schedule to satisfy the minimum work program on Block 2 by September 4, 2019. If Talos Energy or the Consortium is unable to meet the minimum work program, after the completion of the Transactions, New Talos, whose principal asset will be 100% of the equity interests in Talos Production, could be liable along with the other members in the Consortium for the remaining financial guarantee, and the CNH could rescind the PSCs for a default.

New Talos’s debt level and the covenants in any future agreements governing its debt, including the credit facility and the indenture for the new second lien notes, could negatively impact its financial condition, results of operations, and business prospects. New Talos’s failure to comply with these covenants could result in the acceleration of its outstanding indebtedness.

The terms of New Talos’s agreements governing its debt could impose significant restrictions on its ability to take a number of actions that New Talos may otherwise desire to take, including:

New Talos’s level of indebtedness, and the covenants to be contained in the agreements governing its debt, including the credit facility and the indenture for the new second lien notes, could have important consequences on its operations, including:

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New Talos may be required to repay all or a portion of its debt on an accelerated basis in certain circumstances. If New Talos fails to comply with the covenants and other restrictions in the agreements governing its debt, it could lead to an event of default and the acceleration of its repayment of outstanding debt. New Talos’s ability to comply with these covenants and other restrictions may be affected by events beyond its control, including prevailing economic and financial conditions. Sustained low oil and natural gas prices will have a material and adverse effect on New Talos’s liquidity position. New Talos’s cash flow will be highly dependent on the prices it will receive for oil and natural gas, which have declined significantly since mid-2014.

New Talos will depend on its credit facility for a portion of its future capital needs. New Talos will be required to comply with certain debt covenants and ratios under its credit facility. New Talos’s borrowing base under its credit facility, which will be redetermined semi-annually, will be based on an amount established by the lenders after their evaluation of New Talos’s proved oil and natural gas reserve values. If, due to a redetermination of New Talos’s borrowing base, its outstanding credit facility borrowings plus its outstanding letters of credit exceed its redetermined borrowing base (referred to as a borrowing base deficiency), New Talos could be required to repay such borrowing base deficiency. New Talos’s credit facility is expected to allow it to cure a borrowing base deficiency through any combination of the following actions: (i) repay amounts outstanding sufficient to cure the borrowing base deficiency within 30 days after the existence of such deficiency; (ii) add additional oil and gas properties acceptable to the banks to the borrowing base and take such actions necessary to grant the banks a mortgage in such oil and gas properties within 30 days after the existence of such deficiency; (iii) pay the deficiency in four equal monthly installments with the first installment due within 30 days after the existence of such deficiency; or (iv) any combination of the above. New Talos expects that it will be required to elect one of the foregoing options within 10 days after the existence of such deficiency.

New Talos may not have sufficient funds to make such repayments. If New Talos does not repay its debt out of cash on hand, New Talos could attempt to restructure or refinance such debt, reduce or delay investments and capital expenditures, sell assets, or repay such debt with the proceeds from an equity offering. New Talos cannot assure you that it will be able to generate sufficient cash flows from operating activities to pay the interest on its debt or that future borrowings, equity financings, or proceeds from the sale of assets will be available to pay or refinance such debt. Any refinancing of indebtedness could be at higher interest rates and may require New Talos to comply with more onerous covenants, which could further restrict business operations. The terms of New Talos’s debt, including its credit facility and its indenture for the new second lien notes, may also prohibit New Talos from taking such actions. Factors that will affect New Talos’s ability to raise cash through offerings of its capital stock, a refinancing of its debt, or a sale of assets include financial market conditions and New Talos’s market value and operating performance at the time of such offerings, refinancing, or sale of assets. New Talos cannot assure you that any such offerings, restructuring, refinancing, or sale of assets will be successfully completed.

Regulatory requirements and permitting procedures imposed by the Bureau of Ocean Energy Management (“BOEM”) and the Bureau of Safety and Environmental Enforcement (“BSEE”) could significantly delay New Talos’s ability to obtain permits to drill new wells in offshore waters.

BSEE and BOEM have imposed new and more stringent permitting procedures and regulatory safety and performance requirements for new wells to be drilled in federal waters. Compliance with these added and more stringent regulatory requirements and with existing environmental and spill regulations, together with uncertainties or inconsistencies in decisions and rulings by governmental agencies and delays in the processing and approval of drilling permits and exploration, development, oil spill-response, and decommissioning plans and possible additional regulatory initiatives could result in difficult and more costly actions and adversely affect or delay new drilling and ongoing development efforts. Moreover, these governmental agencies are continuing to evaluate aspects of safety and operational performance in the Gulf of Mexico and, as a result, are continuing to develop and implement new, more restrictive requirements. For example, in April 2016, BSEE published a final rule on well control that, among other things, imposes rigorous standards relating to the design, operation, and maintenance of blow-out preventers, real-time monitoring of deepwater and high temperature, high pressure

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drilling activities, and enhanced reporting requirements. Pursuant to President Trump’s Executive Orders dated March 28, 2017, and April 28, 2017 (the “Executive Orders”), respectively, BSEE initiated a review of the well control regulations to determine whether the rules are consistent with the stated policy of encouraging energy exploration and production, while ensuring that any such activity is safe and environmentally responsible. On October 24, 2017, BSEE announced, in a report published by the Department of the Interior, that it is considering several revisions to the regulations and that it is in the process of determining the most effective way to engage stakeholders in the process.

Also, in April 2016, BOEM published a proposed rule that would update existing air emissions requirements relating to offshore oil and natural gas activity on the Outer Continental Shelf (the “OCS”). BOEM regulates these air emissions in connection with its review of exploration and development plans, rights of way and rights of use, and/or easement applications. The proposed rule would bolster existing air emissions requirements by, among other things, requiring the reporting and tracking of the emissions of all pollutants defined by the U.S. Environmental Protection Agency (the “EPA”) to affect human health and public welfare. Pursuant to the Executive Orders, BOEM is reviewing the proposed air quality rule. On October 24, 2017, the Department of the Interior announced that it is currently reviewing recommendations on how to proceed, including promulgating final rules for certain necessary provisions and issuing a new proposed rule that may withdraw certain provisions and seek additional input on others.

Compliance with new and future regulations could result in significant costs, including increased capital expenditures and operating costs, and could adversely impact New Talos’s business. Furthermore, among other adverse impacts, new regulatory requirements could delay operations, disrupt New Talos’s operations, or increase the risk of leases expiring before exploration and development efforts have been completed due to the time required to develop new technology. This would result in increased financial assurance requirements and incurrence of associated added costs, limit operational activities in certain areas, or cause New Talos to incur penalties or shut-in production at one or more of its facilities. If material spill incidents were to occur in the future, the United States or other countries where such an event may occur could elect to issue directives to temporarily cease drilling activities and, in any event, may from time to time issue further safety and environmental laws and regulations regarding offshore oil and natural gas exploration and development, any of which could have a material adverse effect on our business. We cannot predict with any certainty the full impact of any new laws or regulations on New Talos’s drilling operations or on the cost or availability of insurance to cover some or all of the risks associated with such operations.

New guidelines recently issued by BOEM related to financial assurance requirements to cover decommissioning obligations for operations on the OCS may have a material adverse effect on New Talos’s business, financial condition, or results of operations.

BOEM requires all operators in federal waters to provide financial assurances to cover the cost of plugging and abandoning wells and decommissioning offshore facilities. Historically, Stone Energy has been able to obtain an exemption from most bonding requirements based on its financial net worth. However, on March 21, 2016, Stone Energy received notice letters from BOEM stating that BOEM had determined that Stone Energy no longer qualified for a supplemental bonding waiver under the financial criteria specified in BOEM’s guidance to lessees at that time. In late March 2016, Stone Energy proposed a tailored plan to BOEM for financial assurances relating to its abandonment obligations, which provides for posting some incremental financial assurances in favor of BOEM. On May 13, 2016, Stone Energy received notice letters from BOEM rescinding its demand for supplemental bonding with the understanding that Stone Energy will continue to make progress with BOEM towards finalizing and implementing its long-term tailored plan. Currently, Stone Energy has posted an aggregate of approximately $115 million in surety bonds in favor of BOEM, third-party bonds, and letters of credit, all relating to its offshore abandonment obligations. Talos Energy has secured performance bonds for its abandonment obligations totaling approximately $239.0 million.

In July 2016, BOEM issued a new notice to lessees and operators (“NTL”), with an effective date of September 12, 2016, that augments requirements for the posting of additional financial assurance by offshore

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lessees. The NTL discontinues the policy of supplemental bonding waivers and allows for the ability to self-insure up to 10% of a company’s tangible net worth, where a company can demonstrate a certain level of financial strength.

Stone Energy received a self-insurance letter from BOEM dated September 30, 2016 stating that it was not eligible to self-insure any of its additional security obligations. Stone Energy received a proposal letter from BOEM dated October 20, 2016 indicating that additional security may be required. The September 30, 2016 self-insurance determination letter was rescinded by BOEM on March 24, 2017. Talos Production received notice from BOEM on December 29, 2016, ordering it to secure financial assurances in the form of additional security in the amount of $0.5 million. Subsequent to the December 29, 2016 order, BOEM has rescinded that order and all others sole-liability orders (i.e., orders related to properties for which there is no other current or prior owner who is liable) until further notice.

In the first quarter of 2017, BOEM announced that it would extend the implementation timeline for the new NTL by an additional six months. Furthermore, on April 28, 2017, President Trump issued an executive order directing the Secretary of the Interior to review the NTL to determine whether modifications are necessary to ensure operator compliance with lease terms while minimizing unnecessary regulatory burdens. On June 22, 2017, BOEM announced that, pending its review of the NTL, the implementation timeline would be indefinitely extended, subject to certain exceptions. At this time, it is uncertain when, or if, the new NTL will be implemented. Compliance with the NTL, or any other new rules, regulations, or legal initiatives by BOEM or other governmental authorities that impose more stringent requirements adversely affecting New Talos’s offshore activities could delay or disrupt its operations, result in increased supplemental bonding and costs, limit its activities in certain areas, cause New Talos to incur penalties or fines or to shut-in production at one or more of its facilities, or result in the suspension or cancellation of leases.

In addition, if fully implemented, the new NTL is likely to result in the loss of supplemental bonding waivers for a large number of operators on the OCS, which will in turn force these operators to seek additional surety bonds and could, consequently, challenge the surety bond market’s capacity for providing such additional financial assurance. Operators who have already leveraged their assets as a result of the declining oil market could face difficulty obtaining surety bonds because of concerns the surety companies may have about the priority of their lien on the operator’s collateral. Moreover, depressed oil prices could result in sureties seeking additional collateral to support existing bonds, such as cash or letters of credit, and New Talos cannot provide assurance that it will be able to satisfy collateral demands for future bonds to comply with supplemental bonding requirements of BOEM. If New Talos is required to provide collateral in the form of cash or letters of credit, its liquidity position could be negatively impacted and may require New Talos to seek alternative financing. To the extent New Talos is unable to secure adequate financing, it may be forced to reduce its capital expenditures. All of these factors may make it more difficult for New Talos to obtain the financial assurances required by BOEM to conduct operations on the OCS. These and other changes to BOEM bonding and financial assurance requirements could result in increased costs on New Talos’s operations and consequently have a material adverse effect on its business and results of operations.

New Talos will have a subsidiary that is subject to a plea agreement with the DOJ pursuant to which certain exploration and production activities must comply with a Safety and Environmental Compliance Program (“SECP”). Noncompliance with the SECP could result in a violation of the plea agreement and provide a basis for revocation or modification of probation.

In February 2014, Talos Energy received a grand jury subpoena from the DOJ addressing activities that occurred on the Ship Shoal 225A production platform operated by a subsidiary of Talos Energy, ERT. On November 30, 2015, ERT was charged with two violations of the Outer Continental Shelf Lands Act in connection with hot work and blowout preventer testing activities, and with two violations of the Clean Water Act for self-reported activities surrounding overboard discharge sampling and unpermitted discharges. On January 6, 2016, ERT pled guilty to these charges. On April 6, 2016, the United States District Court for the

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Eastern District of Louisiana (the “Court”) accepted ERT’s plea and sentenced ERT, consistent with the plea agreement, to pay a penalty of $4.2 million, which ERT has paid. The Court placed ERT on probation for three years. The conditions of probation include compliance with an agreed SECP, pursuant to which ERT and another subsidiary of Talos Energy, Talos Energy Offshore LLC, must implement enhanced safety and environmental compliance inspections, reviews and audits, implement a comprehensive training program, implement enhanced operational controls to better manage, detect and prevent safety and environmental violations, and preparation and implementation of schedule for decommissioning. While Talos Energy believes that it is in substantial compliance with the SECP, a failure to comply with the SECP could result in a violation of the plea agreement and provide a basis for revocation or modification of probation, which could adversely affect New Talos’s financial condition and operations.

A financial crisis may impact New Talos’s business and financial condition and may adversely impact its ability to obtain funding under its new credit facility or in the capital markets.

In the future, New Talos will use its cash flows from operating activities and borrowings under its credit facility to fund its capital expenditures and rely on the capital markets and asset monetization transactions to provide it with additional capital for large or exceptional transactions. However, New Talos may not be able to access adequate funding under its credit facility as a result of (i) a decrease in its borrowing base due to the outcome of a borrowing base redetermination or a breach or default under its credit facility, including a breach of a financial covenant or (ii) an unwillingness or inability on the part of its lending counterparties to meet their funding obligations. In addition, New Talos may face limitations on its ability to access the debt and equity capital markets and complete asset sales, an increased counterparty credit risk on its derivatives contracts, and the requirement by contractual counterparties of New Talos to post collateral guaranteeing performance.

New Talos will require substantial capital expenditures to conduct its operations and replace its production, and New Talos may be unable to obtain needed financing on satisfactory terms necessary to fund its planned capital expenditures.

New Talos will spend a substantial amount of capital for the acquisition, exploration, exploitation, development, and production of oil and natural gas reserves. New Talos will fund its capital expenditures primarily through operating cash flows, cash on hand and borrowings under its credit facility, if necessary. The actual amount and timing of New Talos’s future capital expenditures may differ materially from its estimates as a result of, among other things, oil and natural gas prices, actual drilling results, the availability of drilling rigs and other services and equipment, and regulatory, technological and competitive developments. A further reduction in commodity prices may result in a further decrease in New Talos’s actual capital expenditures, which would negatively impact its ability to grow production.

New Talos’s cash flow from operations and access to capital will be subject to a number of variables, including:

If low oil and natural gas prices, operating difficulties, declines in reserves, or other factors, many of which are beyond its control, cause New Talos’s revenues, cash flows from operating activities, and the borrowing base under its credit facility to decrease, New Talos may be limited in its ability to fund the capital necessary to complete its capital expenditure program. After utilizing its available sources of financing, New Talos may be

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forced to raise additional debt or equity proceeds to fund such capital expenditures. New Talos cannot be sure that additional debt or equity financing will be available or cash flows provided by operations will be sufficient to meet these requirements. For example, the ability of oil and gas companies to access the equity and high yield debt markets has been significantly limited since the significant decline in commodity prices since mid-2014.

New Talos’s production, revenue, and cash flow from operating activities will be derived from assets that are concentrated in a single geographic area, making New Talos vulnerable to risks associated with operating in one geographic area.

New Talos’s production, revenue, and cash flow from operating activities will be derived from assets that are concentrated in a single geographic area, the Gulf of Mexico. Unlike other entities that are geographically diversified, New Talos may not have the resources to effectively diversify its operations or benefit from the possible spreading of risks or offsetting of losses. Its lack of diversification may subject New Talos to numerous economic, competitive, and regulatory developments, any or all of which may have an adverse impact upon the particular industry in which it will operate and result in its dependency upon a single or limited number of hydrocarbon basins. In addition, the geographic concentration of New Talos’s properties in the Gulf of Mexico and the Gulf Coast will mean that some or all of the properties could be affected should the region experience:

Because all or a number of New Talos’s properties could experience many of the same conditions at the same time, these conditions may have a relatively greater impact on its results of operations than they might have on other producers who have properties over a wider geographic area.

New Talos may experience significant shut-ins and losses of production due to the effects of hurricanes in the Gulf of Mexico.

New Talos’s production will be primarily associated with its properties in the Gulf of Mexico and the Gulf Coast. Accordingly, if the level of production from these properties substantially declines, it could have a material adverse effect on New Talos’s overall production level and its revenue. New Talos will be particularly vulnerable to significant risk from hurricanes and tropical storms in the Gulf of Mexico. New Talos is unable to predict what impact future hurricanes and tropical storms might have on its future results of operations and production.

A significant portion of New Talos’s production, revenue and cash flow will be concentrated in its Phoenix Field. Because of this concentration, any production problems, impacts of adverse weather or inaccuracies in reserve estimates could have a material adverse impact on its business.

On a pro forma basis after giving effect to the Transactions, approximately 35% of New Talos’s 2017 production and 37% of its 2017 oil, natural gas, and NGL revenue was attributable to its Phoenix Field. This

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concentration in the Phoenix Field means that any impact on New Talos’s production from the Phoenix Field, whether because of mechanical problems, adverse weather, well containment activities, changes in the regulatory environment, or otherwise, could have a material effect on its business. New Talos will produce the Phoenix Field through the Helix Producer I (“HP-I”), a dynamically positioned floating production facility that is operated by Helix Energy Solutions Group, Inc. (“Helix”). The HP-I interconnects the Phoenix Field through a production buoy that can be disconnected if the HP-I cannot maintain its position on station, such as in the event of a mechanical problem with the dynamic positioning system or the approach of a hurricane. Because the HP-I may have to be disconnected from the Phoenix Field if circumstances require, New Talos’s production from the Phoenix Field may be subject to more frequent interruptions than if the Phoenix Field was produced by a more conventional platform. New Talos will also be required to disconnect and dry-dock the HP-I every two to three years for inspection as required by the United States Coast Guard, during which time it will be unable to produce the Phoenix Field. On September 10, 2016, the HP-I was disconnected from the production buoy and released for dry dock for 28 days. Upon completion of the dry dock, the HP-I remained disconnected from the buoy connecting it to the Phoenix Field due to Federal Emergency Management Agency testing of test upgrades to the power management system preventing Talos Energy from reconnecting the HP-I to the Phoenix Field for a further five days. Once the buoy was connected, Phoenix Field production remained shut-in for an additional five days to conduct buoy remediation of the swivel piping. In addition, for 25 days in March 2015, Talos Energy was required to disconnect the HP-I from the production buoy due to upgrades to the power management system of the vessel, which is an integral part of the dynamic positioning system. The upgrade work was followed by sea trials that tested the dynamic positioning system and were required by various regulatory groups, including the United States Coast Guard.

The HP-I is part of the Helix Well Containment Group (“HWCG”), which is a consortium that is available to respond to any deepwater well control event, such as the Macondo well oil spill. If such an event were to occur and the HWCG was to be utilized for well control, the HP-I, which is the vessel that would be used to respond to the deepwater well control event, would be required to disconnect from the Phoenix Field until such time as the well control event was resolved and the HP-I could return to the Phoenix Field. During such time period, New Talos would not be able to produce the Phoenix Field. In the event the HP-I has to disconnect from the Phoenix Field, New Talos’s production, revenue, and cash flow will be adversely affected, which could have a material adverse effect on its business, financial condition, results of operations, and cash flows.

In addition, all New Talos’s production from the Phoenix Field will flow through the Boxer facility operated by Shell Pipeline Company LP. To the extent Shell Pipeline Company LP temporarily shuts in their Boxer facility, whether for maintenance or otherwise, New Talos will not be able to produce the Phoenix Field during this period of time, which may have a material adverse effect on its business, financial condition, results of operations, and cash flows.

If the actual reserves associated with the Phoenix Field are less than New Talos’s estimated reserves, such a reduction of reserves could have a material adverse effect on its business, financial condition, results of operations, and cash flows.

New Talos will not be insured against all of the operating risks to which its business will be exposed.

In accordance with industry practice, New Talos will maintain insurance against some, but not all, of the operating risks to which its business will be exposed. New Talos will insure some, but not all, of its properties from operational loss-related events. New Talos will have insurance policies that will include coverage for general liability, physical damage to its oil and gas properties, operational control of well, oil pollution, construction all risk, workers’ compensation and employers’ liability, and other coverage. New Talos’s insurance coverage will include deductibles that will have to be met prior to recovery, as well as sub-limits or self-insurance. Additionally, New Talos’s insurance will be subject to exclusions and limitations, and there is no assurance that such coverage will adequately protect New Talos against liability from all potential consequences, damages or losses.

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New Talos is expected to have general liability insurance coverage with an annual aggregate limit of $250 million. New Talos will selectively purchase physical damage insurance coverage for its pipelines, platforms, facilities, and umbilicals for losses resulting from named windstorms and operational activities.

New Talos’s operational control of well coverage is expected to provide limits that will vary by well location and depth and range from a combined single limit of $25 million to $500 million per occurrence. Exploratory deepwater wells will have a coverage limit of up to $500 million per occurrence. Additionally, New Talos will maintain up to $150 million in oil pollution liability coverage. New Talos’s operational control of well and physical damage policy limits will be scaled proportionately to its working interests. New Talos’s general liability program will utilize a combination of assured’s interest and scalable limits. All of New Talos’s policies described above will be subject to deductibles, sub-limits, or self-insurance. Under its service agreements, including drilling contracts, New Talos expects to be indemnified for injuries and death of the service provider’s employees as well as contractors and subcontractors hired by the service provider.

An operational or hurricane or other adverse weather-related event may cause damage or liability in excess of New Talos’s coverage that might severely impact its financial position. New Talos may be liable for damages from an event relating to a project in which it will own a non-operating working interest. Such events may also cause a significant interruption to New Talos’s business, which might also severely impact its financial position. New Talos may experience production interruptions for which it will not have production interruption insurance.

New Talos will reevaluate the purchase of insurance, policy limits, and terms annually. Future insurance coverage for New Talos’s industry could increase in cost and may include higher deductibles or retentions. In addition, some forms of insurance may become unavailable in the future or unavailable on terms that New Talos believes will be economically acceptable. No assurance can be given that New Talos will be able to maintain insurance in the future at rates that it considers reasonable, and New Talos may elect to maintain minimal or no insurance coverage. New Talos may not be able to secure additional insurance or bonding that might be required by new governmental regulations. This may cause New Talos to restrict its operations in the Gulf of Mexico, which might severely impact its financial position. The occurrence of a significant event, not fully insured against, could have a material adverse effect on New Talos’s financial condition and results of operations.

Lower oil and natural gas prices and other factors in the future may result in ceiling test write-downs and other impairments of New Talos’s asset carrying values.

New Talos will use the full cost method of accounting for its oil and gas operations. Accordingly, New Talos will capitalize the costs to acquire, explore for and develop oil and gas properties. Under the full cost method of accounting, New Talos will compare, at the end of each financial reporting period for each cost center, the present value of estimated future net cash flows from proved reserves (based on a trailing 12-month average, hedge-adjusted commodity price and excluding cash flows related to estimated abandonment costs), to the net capitalized costs of proved oil and gas properties, net of related deferred taxes. New Talos will refer to this comparison as a ceiling test. If the net capitalized costs of proved oil and gas properties exceed the estimated discounted future net cash flows from proved reserves, New Talos will be required to write down the value of its oil and gas properties to the value of the estimated discounted future net cash flows. A write-down of oil and gas properties does not impact cash flows from operating activities, but does reduce net income. The risk that New Talos will be required to write down the carrying value of oil and gas properties increases when oil and natural gas prices are low or volatile. In addition, write-downs may occur if New Talos experiences substantial downward adjustments to its estimated proved reserves or its undeveloped property values, or if estimated future development costs increase. Volatility in commodity prices, poor conditions in the global economic markets and other factors could cause New Talos to record additional write-downs of its oil and natural gas properties and other assets in the future and incur additional charges against future earnings. Any required write-downs or impairments could materially affect the quantities and present value of New Talos’s reserves, which could adversely affect its business, results of operations and financial condition.

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New Talos’s oil and gas operations will be subject to various international and U.S. federal, state and local governmental regulations that will materially affect its operations.

New Talos’s oil and gas operations will be subject to various international and U.S. federal, state and local laws and regulations. These laws and regulations may be changed in response to economic or political conditions. Regulated matters include: permits for exploration, development and production operations; limitations on New Talos’s drilling activities in environmentally sensitive areas, such as marine habitats, and restrictions on the way New Talos can discharge materials into the environment; bonds or other financial responsibility requirements to cover drilling contingencies and well plugging and abandonment and other decommissioning costs; reports concerning operations, the spacing of wells and unitization and pooling of properties; regulations regarding the rate, terms and conditions of transportation service or the price, terms, and conditions related to the purchase and sale of oil and natural gas; and taxation. Failure to comply with these laws and regulations can result in the assessment of administrative, civil or criminal penalties, the issuance of remedial obligations and the imposition of injunctions limiting or prohibiting certain of New Talos’s operations. In addition, because New Talos will hold federal leases, the federal government will require it to comply with numerous additional regulations applicable to government contractors.

In July 2017, Talos Energy along with partners Sierra and Premier, reported the discovery of a significant reservoir of crude oil in the Sureste basin offshore Mexico through the Zama-1 well. Data from the Zama-1 well indicates that it is possible the deposit could be part of a field that extends into an exploration block in which the state operator Pemex holds exploration and development rights.

The Ministry of Energy of Mexico has published general guidelines to direct parties’ actions when a potentially shared reservoir is discovered, and has promulgated more detailed draft regulations to govern the formation of units and approval of unit operating agreements, as well as the authority to direct parties holding rights in a potentially shared reservoir to appraise and potentially form a unit for development of such reservoir. The draft regulations promulgated by the Ministry of Energy are undergoing a regulatory open comment and approval process, and no final guidance or regulations on unitization exist at this time.

Accordingly, it is not clear how the reservoir identified by Talos Energy will be developed and what unitization procedures, requirements, or guidelines will apply to such development, including what procedures will be in place for selection of an operator for any eventual unit and determination of the parties’ participating interest rights in a shared reservoir. Any unit operating agreement eventually reached by relevant parties or any unit order issued by a governmental entity in Mexico could be adverse to New Talos and affect the value that New Talos is able to recognize from the reservoir discovery, including but not limited to an agreement or unit order that would require New Talos to allow a third party to develop and produce the crude oil reservoir identified through the Zama-1 well.

In addition, the Oil Pollution Act of 1990 (“OPA”) requires operators of offshore facilities such as New Talos to prove that they have the financial capability to respond to costs that may be incurred in connection with potential oil spills. Under the OPA and other environmental statutes such as the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Resource Conservation and Recovery Act (“RCRA”) and analogous state laws, owners and operators of certain defined onshore and offshore facilities are strictly liable for spills of oil and other regulated substances, subject to certain limitations. Consequently, a substantial spill from one of New Talos’s facilities subject to laws such as the OPA, CERCLA and RCRA could require the expenditure of additional, and potentially significant, amounts of capital, or could have a material adverse effect on New Talos’s earnings, results of operations, competitive position or financial condition. New Talos cannot predict the ultimate cost of compliance with these requirements or their impact on its earnings, operations or competitive position.

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Production periods or reserve lives for Gulf of Mexico properties may subject New Talos to higher reserve replacement needs and may impair its ability to reduce production during periods of low oil and natural gas prices.

The vast majority of New Talos’s operations will be in the Gulf of Mexico. As a result, its reserve replacement needs from new prospects may be greater than those of other oil and gas companies with longer-life reserves in other producing areas. New Talos’s future oil and natural gas production will be highly dependent upon its level of success in finding or acquiring additional reserves at a unit cost that will be sustainable at prevailing commodity prices.

Exploring for, developing or acquiring reserves is capital intensive and uncertain. New Talos may not be able to economically find, develop or acquire additional reserves or make the necessary capital investments if New Talos’s cash flows from operations decline or external sources of capital become limited or unavailable. New Talos’s need to generate revenues to fund ongoing capital commitments or repay debt may limit its ability to slow or shut-in production from producing wells during periods of low prices for oil and natural gas. New Talos cannot assure you that its future exploitation, exploration, development and acquisition activities will result in additional proved reserves or that New Talos will be able to drill productive wells at acceptable costs. Further, current market conditions may adversely impact New Talos’s ability to obtain financing to fund acquisitions, and they have lowered the level of activity and depressed values in the oil and natural gas property sales market.

New Talos’s actual recovery of reserves may substantially differ from its proved reserve estimates.

Estimates of New Talos’s proved oil and natural gas reserves and the estimated future net cash flows from such reserves are based upon various assumptions, including assumptions required by the SEC relating to oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. The process of estimating oil and natural gas reserves is complex. This process requires significant decisions and assumptions in the evaluation of available geological, geophysical, engineering and economic data for each reservoir and is therefore inherently imprecise. Additionally, New Talos’s interpretations of the rules governing the estimation of proved reserves could differ from the interpretation of staff members of regulatory authorities resulting in estimates that could be challenged by these authorities.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves will most likely vary from those estimated. Any significant variance could materially affect the estimated quantities and present value of reserves. New Talos’s properties may also be susceptible to hydrocarbon drainage from production by other operators on adjacent properties. In addition, New Talos may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and natural gas prices and other factors, many of which are beyond its control.

You should not assume that any present value of future net cash flows from New Talos’s proved reserves represents the market value of its estimated oil and natural gas reserves. New Talos will base the estimated discounted future net cash flows from its proved reserves at December 31, 2017 on historical 12-month average prices and costs as of the date of the estimate. Actual future prices and costs may be materially higher or lower. Further, actual future net revenues will be affected by factors such as:

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The timing of both New Talos’s production and its incurrence of expenses in connection with the development and production of oil and natural gas properties will affect the timing of actual future net cash flows from reserves, and thus their actual present value. In addition, the 10% discount factor that New Talos will use to calculate the net present value of future net revenues and cash flows may not necessarily be the most appropriate discount factor based on its cost of capital in effect from time to time and the risks associated with its business and the oil and gas industry in general.

At December 31, 2017, approximately 38% of New Talos’s estimated proved reserves (by volume) were undeveloped and approximately 23% were non-producing. Any or all of New Talos’s proved undeveloped or proved developed non-producing reserves may not be ultimately developed or produced. Furthermore, any or all of New Talos’s undeveloped and developed non-producing reserves may not be ultimately produced during the time periods New Talos will plan or at the costs it will budget, which could result in the write-off of previously recognized reserves. Recovery of undeveloped reserves generally requires significant capital expenditures and successful drilling operations. New Talos’s reserve estimates will include the assumptions that it will incur capital expenditures to develop these undeveloped reserves and the actual costs and results associated with these properties may not be as estimated. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of New Talos’s reserves, which could adversely affect its business, results of operations and financial condition.

Three-dimensional seismic interpretation does not guarantee that hydrocarbons are present or if present will produce in economic quantities.

New Talos will rely on 3D seismic studies to assist it with assessing prospective drilling opportunities on its properties, as well as on properties that New Talos may acquire. Such seismic studies are merely an interpretive tool and do not necessarily guarantee that hydrocarbons are present or if present will produce in economic quantities, and seismic indications of hydrocarbon saturation are generally not reliable indicators of productive reservoir rock. These limitations of 3D seismic data may impact New Talos’s drilling and operational results, and consequently its financial condition.

SEC rules could limit New Talos’s ability to book additional proved undeveloped reserves in the future.

SEC rules require that, subject to limited exceptions, proved undeveloped reserves may only be booked if they relate to wells scheduled to be drilled within five years after the date of booking. This requirement may limit New Talos’s ability to book additional proved undeveloped reserves as it pursues its drilling program. Moreover, New Talos may be required to write down its proved undeveloped reserves if it does not drill those wells within the required five-year timeframe.

New Talos’s acreage will have to be drilled before lease expiration in order to hold the acreage by production. If commodity prices become depressed for an extended period of time, it might not be economical for New Talos to drill sufficient wells in order to hold acreage, which could result in the expiry of a portion of its acreage, which could have an adverse effect on its business.

Unless production is established as required by the leases covering the undeveloped acres, the leases for such acreage may expire. As of December 31, 2017, New Talos will have leases on 58,925 gross (58,824 net) acres that could potentially expire during fiscal year 2018.

New Talos’s drilling plans for areas not held by production will be subject to change based upon various factors. Many of these factors will be beyond New Talos’s control, including drilling results, oil and natural gas

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prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, gathering system and pipeline transportation constraints, and regulatory approvals. On the acreage that New Talos will not operate, New Talos will have less control over the timing of drilling, and therefore there will be additional risk of expirations occurring in those sections.

The marketability of New Talos’s production will depend mostly upon the availability, proximity, and capacity of oil and natural gas gathering systems, pipelines, and processing facilities.

The marketability of New Talos’s production will depend upon the availability, proximity, operation, and capacity of oil and natural gas gathering systems, pipelines, and processing facilities. The lack of availability or capacity of these gathering systems, pipelines, and processing facilities could result in the shut-in of producing wells or the delay or discontinuance of development plans for properties. The disruption of these gathering systems, pipelines, and processing facilities due to maintenance and/or weather could negatively impact New Talos’s ability to market and deliver its products. Federal, state, and local regulation of oil and natural gas production and transportation, general economic conditions, and changes in supply and demand could adversely affect New Talos’s ability to produce and market its oil and natural gas. If market factors changed dramatically, the financial impact on New Talos could be substantial. The availability of markets and the volatility of product prices will be beyond New Talos’s control and represents a significant risk.

New Talos’s actual production could differ materially from its forecasts.

From time to time, New Talos will provide forecasts of expected quantities of future oil and gas production. These forecasts will be based on a number of estimates, including expectations of production from existing wells. In addition, New Talos’s forecasts may assume that none of the risks associated with its oil and natural gas operations summarized in this section would occur, such as facility or equipment malfunctions, adverse weather effects, or significant declines in commodity prices or material increases in costs, which could make certain production uneconomical.

New Talos’s operations will be subject to numerous risks of oil and natural gas drilling and production activities.

Oil and gas drilling and production activities are subject to numerous risks, including the risk that no commercially productive oil or natural gas reserves will be found. The cost of drilling and completing wells is often uncertain. To the extent New Talos will drill additional wells in the Gulf of Mexico deepwater and/or in the Gulf Coast deep gas, its drilling activities will increase capital cost. In addition, the geological complexity of the areas New Talos will have oil and natural gas operations may make it more difficult for New Talos to sustain the historical rates of drilling success of Stone Energy and Talos Energy. Oil and natural gas drilling and production activities may be shortened, delayed, or cancelled as a result of a variety of factors, many of which will be beyond New Talos’s control. These factors include:

The prevailing prices of oil and natural gas also affect the cost of and the demand for drilling rigs, production equipment, and related services. New Talos cannot assure you that the wells it will drill will be productive or that New Talos will recover all or any portion of its investment. Drilling for oil and natural gas may be unprofitable. Drilling activities can result in dry wells and wells that are productive but do not produce sufficient cash flows to recoup drilling costs.

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New Talos’s industry will experience numerous operating risks.

The exploration, development and production of oil and gas properties involves a variety of operating risks, including the risk of fire, explosions, blowouts, pipe failure, abnormally pressured formations and environmental hazards. Environmental hazards include oil spills, gas leaks, pipeline ruptures or discharges of toxic gases. New Talos will also be involved in completion operations that utilize hydraulic fracturing, which may potentially present additional operational and environmental risks. Additionally, New Talos’s offshore operations will be subject to the additional hazards of marine operations, such as capsizing, collision and adverse weather and sea conditions, including the effects of hurricanes.

In addition, an oil spill on or related to New Talos’s properties and operations could expose New Talos to joint and several strict liability, without regard to fault, under applicable law for containment and oil removal costs and a variety of public and private damages, including, but not limited to, the costs of responding to a release of oil, natural resource damages and economic damages suffered by persons adversely affected by an oil spill. If an oil discharge or substantial threat of discharge were to occur, New Talos may be liable for costs and damages, which costs and damages could be material to its results of operations and financial position.

New Talos’s business will also be subject to the risks and uncertainties normally associated with the exploration for and development and production of oil and natural gas that will be beyond its control, including uncertainties as to the presence, size and recoverability of hydrocarbons. New Talos may not encounter commercially productive oil and natural gas reservoirs. New Talos may not recover all or any portion of its investment in new wells. The presence of unanticipated pressures or irregularities in formations, miscalculations or accidents may cause New Talos’s drilling activities to be unsuccessful and/or result in a total loss of its investment, which could have a material adverse effect on its financial condition, results of operations and cash flows. In addition, New Talos may be uncertain as to the future cost or timing of drilling, completing and operating wells.

New Talos will have an interest in five deepwater fields: the Phoenix Field, the Bushwood Field, the Gunnison Field, the Pompano Field and the Amberjack Field, and may attempt to pursue additional operational activity in the future and acquire additional fields and leases in the deepwaters of the Gulf of Mexico (water depths greater than 2,000 feet). Exploration for oil or natural gas in the deepwater of the Gulf of Mexico generally involves greater operational and financial risks than exploration on the GOM Conventional Shelf. Deepwater drilling generally requires more time and more advanced drilling technologies, involving a higher risk of technological failure and usually higher drilling costs. For example, the drilling of deepwater wells requires specific types of drilling rigs with significantly higher day rates and limited availability as compared to the rigs used in shallower water. Deepwater wells often use subsea completion techniques with subsea trees tied back to host production facilities with flow lines. The installation of these subsea trees and flow lines requires substantial time and the use of advanced remote installation mechanics. These operations may encounter mechanical difficulties and equipment failures that could result in cost overruns. Furthermore, the deepwater operations generally lack the physical and oilfield service infrastructure present on the GOM Conventional Shelf. As a result, a considerable amount of time may elapse between a deepwater discovery and the marketing of the associated oil or natural gas, increasing both the financial and operational risk involved with these operations. Because of the lack and high cost of infrastructure, some reserve discoveries in the deepwater may never be produced economically.

If any of these industry operating risks occur, New Talos could have substantial losses. Substantial losses may be caused by injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties, suspension of operations and production and repairs to resume operations. Any of these industry operating risks could have a material adverse effect on New Talos’s business, results of operations, and financial condition.

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New Talos’s business could be negatively affected by security threats, including cybersecurity threats, terrorist attacks, and other disruptions.

As an oil and gas producer, New Talos will face various security threats, including cybersecurity threats to gain unauthorized access to sensitive information or to render data or systems unusable, threats to the security of its facilities and infrastructure or third-party facilities and infrastructure, such as processing plants and pipelines, and threats from terrorist acts. The potential for such security threats will subject New Talos’s operations to increased risks that could have a material adverse effect on its business. In particular, the implementation of various procedures and controls to monitor and mitigate security threats and to increase security for New Talos’s information, facilities, and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of sensitive information, critical infrastructure, or capabilities essential to New Talos’s operations and could have a material adverse effect on its reputation, financial position, results of operations, or cash flows. Cybersecurity attacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and systems, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data. These events could damage New Talos’s reputation and lead to financial losses from remedial actions, loss of business, or potential liability.

The U.S. government has issued warnings that U.S. energy assets may be the future targets of terrorist organizations. These developments will subject New Talos’s operations to increased risks. Any future terrorist attack at New Talos’s facilities, or those of its purchasers, could have a material adverse effect on its financial condition and operations.

New Talos’s estimates of future asset retirement obligations may vary significantly from period to period and unanticipated decommissioning costs could materially adversely affect its future financial position and results of operations.

New Talos will be required to record a liability for the discounted present value of its asset retirement obligations to plug and abandon inactive, non-producing wells; to remove inactive or damaged platforms, facilities and equipment; and to restore the land or seabed at the end of oil and natural gas operations. These costs are typically considerably more expensive for offshore operations as compared to most land-based operations due to increased regulatory scrutiny and the logistical issues associated with working in waters of various depths. Estimating future restoration and removal costs in the Gulf of Mexico is especially difficult because most of the removal obligations may be many years in the future, regulatory requirements are subject to change or more restrictive interpretation, and asset removal technologies are constantly evolving, which may result in additional or increased or decreased costs. As a result, New Talos may significantly increase or decrease its estimated asset retirement obligations in future periods. For example, because New Talos will operate in the Gulf of Mexico, platforms, facilities and equipment will be subject to damage or destruction as a result of hurricanes and other adverse weather conditions. Also, the sustained lower commodity price environment may cause New Talos’s non-operator partners to be unable to pay their share of costs, which may require New Talos to pay its proportionate share of the defaulting party’s share of costs.

The estimated costs to plug and abandon a well or dismantle a platform can change dramatically if the host platform from which the work was anticipated to be performed is damaged or toppled rather than structurally intact. Accordingly, New Talos’s estimates of future asset retirement obligations could differ dramatically from what it may ultimately incur as a result of damage from a hurricane.

Moreover, the timing for pursuing restoration and removal activities has accelerated for operators in the Gulf of Mexico following BSEE’s issuance of an NTL that established a more stringent regimen for the timely decommissioning of what is known as “idle iron” wells, which are platforms and pipelines that are no longer

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producing or serving exploration or support functions with respect to an operator’s lease in the Gulf of Mexico. The idle iron NTL requires decommissioning of any well that has not been used during the past five years for exploration or production on active leases and is no longer capable of producing in paying quantities, which must then be permanently plugged or temporarily abandoned within three years’ time. Similarly, platforms or other facilities no longer useful for operations must be removed within five years of the cessation of operations. New Talos may have to draw on funds from other sources to satisfy decommissioning costs. The use of other funds to satisfy such decommissioning costs could have a material adverse effect on its financial position and results of operations. Moreover, as a result of the implementation of the idle iron NTL, there is expected to be increased demand for salvage contractors and equipment operating in the Gulf of Mexico, resulting in increased estimates of plugging, abandonment, and removal costs and associated increases in operators’ asset retirement obligations.

In addition, New Talos could become responsible for decommissioning liabilities related to offshore facilities it no longer owns or operates. Federal regulations allow the government to call upon predecessors in interest of oil and natural gas leases to pay for P&A, restoration, and decommissioning obligations if the current operator fails to fulfill those obligations, the costs of which could be significant. Moreover, several onshore and offshore exploration and production companies have sought bankruptcy protection over the past several years. The government may seek to impose a bankrupt entity’s P&A obligations on New Talos or other predecessors-in-interest, which could be significant and adversely affect New Talos’s business, results of operations, financial condition, and cash flows.

New Talos may not receive payment for a portion of its future production.

New Talos may not receive payment for a portion of its future production. New Talos will attempt to diversify its sales and obtain credit protections, such as parent guarantees, from certain of its purchasers. The tightening of credit in the financial markets may make it more difficult for customers to obtain financing and, depending on the degree to which this occurs, there may be a material increase in the nonpayment and nonperformance by customers. New Talos is unable to predict what impact the financial difficulties of certain purchasers may have on its future results of operations and liquidity.

New Talos may not realize all of the anticipated benefits from its acquisitions, and New Talos may be unable to successfully integrate acquisitions.

New Talos’s growth strategy will, in part, rely on acquisitions. New Talos will have to plan and manage acquisitions effectively to achieve revenue growth and maintain profitability in its evolving market. New Talos will grow in the future by expanding the exploitation and development of its existing assets, in addition to growing through targeted acquisitions in the Gulf of Mexico or in other basins. New Talos may not realize all of the anticipated benefits from its future acquisitions, such as increased earnings, cost savings, and revenue enhancements, for various reasons, including difficulties integrating operations and personnel, higher than expected acquisition and operating costs or other difficulties, inexperience with operating in new geographic regions, unknown liabilities, inaccurate reserve estimates, and fluctuations in market prices.

In addition, integrating acquired businesses and properties involves a number of special risks and unforeseen difficulties can arise in integrating operations and systems and in retaining and assimilating employees. These difficulties include, among other things:

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Any of these or other similar risks could lead to potential adverse short-term or long-term effects on New Talos’s operating results. The process of integrating New Talos’s operations could cause an interruption of or loss of momentum in the activities of its business. Members of New Talos’s management may be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage its business. If New Talos’s management is not able to effectively manage the integration process, or if any business activities are interrupted as a result of the integration process, New Talos’s business could suffer.

New Talos’s acquisitions could expose it to potentially significant liabilities, including P&A liabilities.

New Talos expects that acquisitions will contribute to its future growth. In connection with potential future acquisitions, New Talos may only be able to perform limited due diligence.

Successful acquisitions of oil and natural gas properties require an assessment of a number of factors, including estimates of recoverable reserves, the timing of recovering reserves, exploration potential, future oil and natural gas prices, operating costs, and potential environmental, regulatory and other liabilities, including P&A liabilities. Such assessments are inexact and may not disclose all material issues or liabilities. In connection with its assessments, New Talos will perform a review of the acquired properties. However, such a review may not reveal all existing or potential problems. In addition, New Talos’s review may not permit it to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities.

There may be threatened, contemplated, asserted, or other claims against the acquired assets related to environmental, title, regulatory, tax, contract, litigation, or other matters of which New Talos will be unaware, which could materially and adversely affect its production, revenues, and results of operations. New Talos will sometimes be able to obtain contractual indemnification for preclosing liabilities, including environmental liabilities, but New Talos will generally acquire interests in properties on an “as is” basis with limited remedies for breaches of representations and warranties. In addition, even if New Talos is able to obtain such indemnification from the sellers, these indemnification obligations will usually expire over time and could potentially expose New Talos to unindemnified liabilities, which could materially adversely affect its production, revenues, and results of operations.

New Talos may be exposed to liabilities under the U.S. Foreign Corrupt Practices Act (the “FCPA”).

New Talos is subject to the FCPA and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties for the purpose of obtaining or retaining business. New Talos may do business in the future in countries and regions in which it may face, directly or indirectly, corrupt demands by officials, tribal or insurgent organizations, or private entities. Thus, New Talos will face the risk of unauthorized payments or offers of payments by one of its employees or consultants, given that these parties may not always be subject to New Talos’s control. New Talos’s existing safeguards and any future improvements may prove to be less than effective, and its employees and consultants may engage in conduct for which New Talos might be held responsible.

Under the PSCs with the CNH, New Talos will work as a consortium with two other partners—Sierra and Premier. In the future, New Talos may partner with other companies with whom it will be unfamiliar. Violations of the FCPA, by any consortium partner, may result in severe criminal or civil sanctions, and New Talos may be subject to other liabilities, which could negatively affect its business, operating results and financial condition. In addition, the CNH has the authority to rescind the PSCs if these violations occur.

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New Talos’s operations may be adversely affected by political and economic circumstances in the countries in which it will operate.

New Talos’s oil and gas exploration, development, and production activities will be subject to political and economic uncertainties (including but not limited to changes, sometimes frequent or marked, in energy policies or the personnel administering them), expropriation of property, cancellation or modification of contract rights, changes in laws and policies governing operations of foreign-based companies, unilateral renegotiation of contracts by governmental entities, redefinition of international boundaries or boundary disputes, foreign exchange restrictions, currency fluctuations, royalty and tax increases, and other risks arising out of governmental sovereignty over the areas in which New Talos’s operations will be conducted, as well as risks of loss due to acts of terrorism, piracy, disease, illegal cartel activities, and other political risks, including tension and confrontations among political parties. Some of these risks may be higher in the developing countries in which New Talos will conduct its activities, namely, Mexico. Mexico’s next presidential election will be held in July 2018. The presidential election will result in a change in administration, as presidential reelection is not permitted in Mexico. As a result, New Talos cannot predict whether changes in Mexican governmental policy will result from the change in administration. Political events in Mexico could adversely affect economic conditions and/or the oil and gas industry and, by extension, New Talos’s results of operations and financial position.

New Talos’s operations may be exposed to risks of illegal cartel activities, local economic conditions, political disruption, and governmental policies that may:

Disruptions may occur in the future, and losses caused by these disruptions may not be covered by insurance. Consequently, New Talos’s exploration, development, and production activities may be substantially affected by factors that could have a material adverse effect on its financial condition and results of operations. Furthermore, in the event of a dispute arising from non-U.S. operations, New Talos may be subject to the exclusive jurisdiction of courts outside the United States or may not be successful in subjecting non-U.S. persons to the jurisdiction of courts in the United States, which could adversely affect the outcome of such dispute.

New Talos’s operations may also be adversely affected by laws and policies of the jurisdictions, including Mexico, the United States, the Netherlands and other jurisdictions, in which New Talos will do business that affect foreign trade and taxation. Changes in any of these laws or policies or the implementation thereof could have a material adverse effect on New Talos’s results of operations and financial position.

New technologies may cause New Talos’s current exploration and drilling methods to become obsolete, and New Talos may not be able to keep pace with technological developments in its industry.

The oil and natural gas industry is subject to rapid and significant advancements in technology, including the introduction of new products and services using new technologies. As competitors use or develop new technologies, New Talos may be placed at a competitive disadvantage, and competitive pressures may force New Talos to implement new technologies at a substantial cost. In addition, competitors may have greater financial, technical, and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before New Talos can. New Talos will rely heavily on the use of seismic technology to identify low-risk development and exploitation opportunities and to reduce its geological risk. Seismic technology or other technologies that New Talos may implement in the future may become obsolete. New Talos cannot be certain that it will be able to implement technologies on a timely basis or at a cost

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that will be acceptable to New Talos. If New Talos is unable to maintain technological advancements consistent with industry standards, its business, results of operations, and financial condition may be materially adversely affected.

New Talos may not be in a position to control the timing of development efforts, the associated costs, or the rate of production of the reserves from its non-operated properties.

As New Talos carries out its drilling program, it may not serve as operator of all planned wells. New Talos may have limited ability to exercise influence over the operations of some non-operated properties and their associated costs. New Talos’s dependence on the operator and other working interest owners and its limited ability to influence operations and associated costs of properties operated by others could prevent the realization of anticipated results in drilling or acquisition activities. The success and timing of development and exploitation activities on properties operated by others will depend upon a number of factors that could be largely outside of New Talos’s control, including:

In addition, with respect to oil and natural gas projects that New Talos will not operate, New Talos will have limited influence over operations, including limited control over the maintenance of safety and environmental standards. The operators of those properties may, depending on the terms of the applicable joint operating agreement:

The occurrence of any of the foregoing events could have a material adverse effect on New Talos’s anticipated exploration and development activities.

Competition within New Talos’s industry may adversely affect its operations.

Competition within New Talos’s industry is intense, particularly with respect to the acquisition of producing properties and undeveloped acreage. New Talos will compete with major oil and gas companies and other independent producers of varying sizes, all of which are engaged in the acquisition of properties and the exploration and development of such properties. Many of New Talos’s competitors have financial resources and

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exploration and development budgets that will be substantially greater than its budget, which may adversely affect its ability to compete. If other companies relocate to the Gulf of Mexico region, levels of competition may increase and New Talos’s business could be adversely affected. In the exploration and production business, some of the larger integrated companies may be better able than New Talos to respond to industry changes including price fluctuations, oil and gas demand, political change and government regulations.

New Talos will actively compete with other companies when acquiring new leases or oil and gas properties. For example, new leases acquired from BOEM are acquired through a “sealed bid” process and are generally awarded to the highest bidder. These additional resources can be particularly important in reviewing prospects and purchasing properties. The competitors may also have a greater ability to continue drilling activities during periods of low oil and gas prices, such as the current decline in oil prices, and to absorb the burden of current and future governmental regulations and taxation. Competitors may be able to evaluate, bid for and purchase a greater number of properties and prospects than New Talos’s financial or personnel resources will permit. Competitors may also be able to pay more for productive oil and gas properties and exploratory prospects than New Talos will be able or willing to pay. Further, New Talos’s competitors may be able to expend greater resources on the existing and changing technologies that New Talos believes will impact attaining success in the industry. If New Talos is unable to compete successfully in these areas in the future, its future revenues and growth may be diminished or restricted.

The loss of New Talos’s larger customers could materially reduce its revenue and materially adversely affect its business, financial condition and results of operations.

New Talos will have a limited number of customers that provide a substantial portion of its revenue. The loss of New Talos’s larger customers, including Shell Trading (US) Company (“Shell”), could adversely affect its current and future revenue and have a material adverse effect on its business, financial condition and results of operations.

New Talos’s business will depend on access to oil and natural gas processing, gathering and transportation systems and facilities.

The marketability of New Talos’s oil and natural gas production will depend in large part on the operation, availability, proximity, capacity and expansion of processing, gathering and transportation facilities owned by third parties. New Talos can provide no assurance that sufficient processing, gathering and/or transportation capacity will exist or that New Talos will be able to obtain sufficient processing, gathering and/or transportation capacity on economic terms. A lack of available capacity on processing, gathering and transportation facilities or delays in their planned expansions could result in the shut-in of producing wells or the delay or discontinuance of drilling plans for properties. A lack of availability of these facilities for an extended period of time could negatively impact New Talos’s revenues. In addition, New Talos will enter into contracts for firm transportation and any failure to renew those contracts on the same or better commercial terms could increase New Talos’s costs and its exposure to the risks described above. In addition, the rates charged for processing, gathering and transportation services may increase over time.

The loss of key personnel could adversely affect New Talos’s ability to operate.

New Talos’s industry has lost a significant number of experienced professionals over the years due to its cyclical nature, which is attributable, among other reasons, to the volatility in commodity prices. New Talos’s operations will be dependent upon key management and technical personnel. New Talos cannot assure you that individuals will remain with New Talos for the immediate or foreseeable future. The unexpected loss of the services of one or more of these individuals could have an adverse effect on New Talos and its operations.

In addition, New Talos’s exploration, production and decommissioning activities will require personnel with specialized skills and experience. As a result, New Talos’s ability to remain productive and profitable will

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depend upon its ability to employ and retain skilled workers. New Talos’s ability to expand its operations will depend in part on its ability to increase the size of its skilled labor force, including geologists and geophysicists, field operations managers and engineers, to handle all aspects of its exploration, production and decommissioning activities. The demand for skilled workers in New Talos’s industry is high, and the supply is limited. A significant increase in the wages paid by competing employers or the unionization of New Talos’s Gulf of Mexico employees could result in a reduction of its labor force, increases in the wage rates that New Talos will have to pay or both. If either of these events were to occur, New Talos’s capacity and profitability could be diminished and its growth potential could be impaired.

Resolution of litigation could materially affect New Talos’s financial position and results of operations.

Resolution of litigation could materially affect New Talos’s financial position and results of operations. To the extent that potential exposure to liability will not be covered by insurance or insurance coverage will be inadequate, New Talos may incur losses that could be material to its financial position or results of operations in future periods.

Tax laws and regulations are highly complex, subject to interpretation, and may change over time.

The tax laws and regulations to which New Talos is subject are highly complex, subject to interpretation, and may change over time. New Talos’s tax filings are based upon its interpretation of the tax laws in effect in various jurisdictions at the time such filings are made. If the tax laws and regulations to which New Talos is subject change, or if the taxing authorities do not agree with New Talos’s interpretation of the effects of such laws and regulations, it could have an adverse effect on New Talos’s financial position, results of operations, and cash flows.

On December 22, 2017, the President signed into law Public Law No. 115-97, a comprehensive tax reform bill commonly referred to as the Tax Cuts and Jobs Act (the “Act”), which significantly reforms the Code. Among other changes, the Act (i) permanently reduces the U.S. corporate income tax rate, (ii) repeals the corporate alternative minimum tax, (iii) eliminates the deduction for certain domestic production activities, (iv) imposes new limitations on the utilization of net operating losses generated after 2017, and (v) provides for more general changes to the taxation of corporations, including changes to cost recovery rules and to the deductibility of interest expense, all of which may impact the taxation of oil and gas companies. The Act is complex and far-reaching and New Talos has not yet completed a full analysis of the impact the Act on New Talos’s business and financial condition. The impact of the Act may differ from New Talos’s current estimates due to changes in interpretations and assumptions made by New Talos and the issuance of additional regulatory guidance. Any such changes in New Talos’s interpretations or assumptions could have an adverse effect on New Talos’s financial position, results of operations, and cash flows.

Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in increased operating costs and reduced demand for the crude oil and natural gas that New Talos will produce.

The EPA has determined that emissions of carbon dioxide, methane, and other “greenhouse gases” present an endangerment to public health and the environment because emissions of such gases contribute to warming of the Earth’s atmosphere and other climatic changes. Based on these findings, the EPA began adopting and implementing regulations to restrict emissions of greenhouse gases under existing provisions of the federal Clean Air Act (the “CAA”). The EPA adopted two sets of rules regulating greenhouse gas emissions under the CAA, one of which requires a reduction in emissions of greenhouse gases from motor vehicles and the other of which regulates emissions of greenhouse gases from certain large stationary sources through preconstruction and operating permit requirements.

The EPA has also adopted rules requiring the reporting of greenhouse gas emissions from specified large greenhouse gas emission sources in the United States, on an annual basis. Recent regulation of emissions of

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greenhouse gases has focused on fugitive methane emissions. For example, in June 2016, the EPA finalized rules that established new air emission controls for emissions of methane from certain equipment and processes in the oil and natural gas source category, including production, processing, transmission, and storage activities. The EPA’s rule package includes first-time standards to address emissions of methane from equipment and processes across the source category, including hydraulically fractured oil and natural gas well completions. However, in a March 28, 2017 executive order, President Trump directed the EPA to review the 2016 regulations and, if appropriate, to initiate a rulemaking to rescind or revise them consistent with the stated policy of promoting clean and safe development of the nation’s energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production. On June 16, 2017, the EPA published a proposed rule to stay for two years certain requirements of the 2016 regulations, including fugitive emission requirements.

In addition, while the United States Congress has not taken any legislative action to reduce emissions of greenhouse gases, many states have established greenhouse gas cap and trade programs. Most of these cap and trade programs work by requiring major sources of emissions, such as electric power plants, or major producers of fuels, such as refineries and gas processing plants, to acquire and surrender emission allowances. The number of allowances available for purchase is reduced each year in an effort to achieve the overall greenhouse gas emission reduction goal.

Additionally, the United States is one of almost 200 nations that, in December 2015, agreed to the Paris Agreement, an international climate change agreement in Paris, France that calls for countries to set their own greenhouse gas emissions targets and be transparent about the measures each country will use to achieve its greenhouse gas emissions targets. The Paris Agreement entered into force on November 4, 2016. In June 2017, President Trump stated that the United States would withdraw from the Paris Agreement, but may enter into a future international agreement related to greenhouse gases. The Paris Agreement provides for a four-year exit process beginning when it took effect in November 2016, which would result in an effective exit date of November 2020. The United States’ adherence to the exit process is uncertain and/or the terms on which the United States may reenter the Paris Agreement or a separately negotiated agreement are unclear at this time.

The adoption of legislation or regulatory programs to reduce emissions of greenhouse gases could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emissions allowances or to comply with new regulatory or reporting requirements. Substantial limitations on greenhouse gas emissions could also adversely affect demand for the oil and natural gas New Talos will produce and lower the value of its reserves. Consequently, legislation and regulatory programs to reduce emissions of greenhouse gases could have an adverse effect on New Talos’s business, financial condition, and results of operations.

In addition, claims have been made against certain energy companies alleging that greenhouse gas emissions from oil and natural gas operations constitute a public nuisance under federal and/or state common law. As a result, private individuals or public entities may seek to enforce environmental laws and regulations against us and could allege personal injury, property damage, or other liabilities. While our business is not a party to any such litigation, we could be named in actions making similar allegations. An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

Finally, it should be noted that some scientists have concluded that increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods, and other climatic events. New Talos’s offshore operations will be particularly at risk from severe climatic events. If any such climate changes were to occur, they could have an adverse effect on New Talos’s financial condition and results of operations.

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The enactment of derivatives legislation could have an adverse effect on New Talos’s ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with its business.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), enacted on July 21, 2010, expanded federal oversight and regulation of the over-the-counter derivatives market and entities, such as New Talos, that participate in that market. The Act requires the U.S. Commodity Futures Trading Commission (the “CFTC”) and the SEC to promulgate rules and regulations implementing the Act. Although the CFTC and the SEC have finalized certain regulations, others remain to be finalized or implemented and it is not possible at this time to predict when this will be accomplished.

In one of its rulemaking proceedings still pending under the Act, the CFTC issued on December 5, 2016, re-proposed rules imposing position limits for certain futures and option contracts in various commodities (including oil and gas) and for swaps that are their economic equivalents. Under the proposed rules on position limits, certain types of hedging transactions are exempt from these limits on the size of positions that may be held, provided that such hedging transactions satisfy the CFTC’s requirements for certain enumerated “bona fide hedging” transactions or positions. As these new position limit rules are not yet final, the impact of those provisions on New Talos is uncertain at this time.

The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing and the associated rules also will require New Talos, in connection with covered derivative activities, to comply with clearing and trade-execution requirements or to take steps to qualify for an exemption to such requirements. Although New Talos expects to qualify for the end-user exception from the mandatory clearing requirements for swaps to be entered into to hedge its commercial risks, the application of the mandatory clearing and trade execution requirements to other market participants, such as swap dealers, may change the cost and availability of the swaps that New Talos will use for hedging. In addition, certain banking regulators and the CFTC have recently adopted final rules establishing minimum margin requirements for uncleared swaps. Although New Talos expects to qualify for, and to utilize, the end-user exception from such margin requirements for swaps to be entered into to hedge its commercial risks, the application of such requirements to other market participants, such as swap dealers, may change the cost and availability of the swaps that New Talos will use for hedging. If any of New Talos’s swaps will not qualify for the commercial end-user exception, posting of collateral could impact liquidity and reduce cash available to New Talos for capital expenditures, therefore reducing its ability to execute hedges to reduce risk and protect cash flows.

The full impact of the Act and related regulatory requirements upon New Talos’s business will not be known until the regulations are fully implemented and the market for derivatives contracts has adjusted. The Act and any new regulations could significantly increase the cost of derivative contracts, materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks New Talos may encounter, or reduce its ability to monetize or restructure its existing derivative contracts. If New Talos reduces its use of derivatives as a result of the Act and regulations implementing the Act, its results of operations may become more volatile and its cash flows may be less predictable, which could adversely affect its ability to plan for and fund capital expenditures. Finally, the Act was intended, in part, to reduce the volatility of oil and gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and natural gas. New Talos’s revenues could therefore be adversely affected if a consequence of the Act and implementing regulations is to lower commodity prices. Any of these consequences could have a material adverse effect on New Talos, its financial condition and its results of operations.

In addition, the European Union and other non-U.S. jurisdictions have implemented and continue to implement new regulations with respect to the derivatives market. To the extent New Talos will transact with counterparties in foreign jurisdictions, it may become directly subject to such regulations and in any event the global derivatives market will be affected to the extent that foreign counterparties are affected by such regulations. At this time, the impact of such regulations is not clear.

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Hedging transactions may limit New Talos’s potential gains.

In order to manage its exposure to price risks in the marketing of its oil, natural gas, and natural gas liquids, New Talos will periodically enter into oil, natural gas, and natural gas liquids price hedging arrangements with respect to a portion of its expected production. New Talos’s hedging policy is expected to provide that New Talos will enter into hedging arrangements covering up to the following maximum percentages of volumes: (i) 90% of the reasonably anticipated quarterly production of oil, natural gas, and natural gas liquids of proved developed producing volumes during months January through July and November through December, (ii) 65% of the reasonably anticipated quarterly production of oil, natural gas, and natural gas liquids of proved developed producing during months August through October, (iii) 50% of the reasonably anticipated quarterly production of oil, natural gas, and natural gas liquids of proved developed non-producing volumes during months January through July and November through December and (iv) 0% of the reasonably anticipated quarterly production of oil, natural gas and natural gas liquids of its proved developed non-producing volumes during months August through October. These arrangements may include futures contracts on the New York Mercantile Exchange (“NYMEX”). While intended to reduce the effects of volatile oil and natural gas prices, such transactions, depending on the hedging instrument used, may limit New Talos’s potential gains if oil and natural gas prices were to rise substantially over the price established by the hedge. In addition, such transactions may expose New Talos to the risk of financial loss in certain circumstances, including instances in which:

All of New Talos’s outstanding commodity derivative instruments will be with certain lenders or affiliates of the lenders under its credit facility. Its derivative agreements with the lenders will be secured by the security documents executed by the parties under its credit facility. Future collateral requirements for New Talos’s commodity hedging activities are uncertain and will depend on the arrangements it will negotiate with the counterparty and the volatility of oil and natural gas prices and market conditions.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This consent solicitation statement/prospectus may contain certain forward-looking statements, including certain plans, expectations, goals, projections, and statements about the expected benefits of the Transactions, Talos Energy’s, Stone Energy’s and New Talos’s plans, objectives, expectations, and intentions, the expected timing of completion of the Transactions, and other statements that are not historical facts. Such statements are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, project, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements including: the timing, extent, and volatility of changes in commodity prices for oil and gas; operating risks; liquidity risks; political and regulatory developments and legislation, including developments and legislation relating to Talos Energy’s and Stone Energy’s operations in the Gulf of Mexico Basin; the possibility that the Transactions do not close when expected or at all because required regulatory, stockholder, or other approvals are not received or other conditions to the closing, including the successful completion of the Tender Offer and Consent Solicitation for the 2022 Secured Notes, are not satisfied or waived on a timely basis or at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Transactions; uncertainties as to the timing of the Transactions; competitive responses to the Transactions; the possibility that the anticipated benefits of the Transactions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies; the possibility that the Transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; the ability to complete the combination and integration of Talos Energy and Stone Energy successfully; litigation relating to the Transactions; and other factors that may affect future results of Talos Energy, Stone Energy, and New Talos. Additional factors that could cause results to differ materially from those described above can be found in Stone Energy’s Annual Report on Form 10-K for the year ended December 31, 2017, which is on file with the SEC and available in the “Investor Center” section of Stone Energy’s website, www.stoneenergy.com under the heading “SEC Filings” and in other documents Stone Energy files with the SEC.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Stone Energy nor New Talos assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

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SOLICITATION OF WRITTEN CONSENTS

Stone Energy is providing this consent solicitation statement/prospectus to its stockholders in connection with the solicitation of written consents. This consent solicitation statement/prospectus is first being mailed to the Stone Energy stockholders on or about April 12, 2018.

Record Date

The record date for the determination of the Stone Energy stockholders entitled to execute and return written consents with respect to this consent solicitation statement/prospectus is April 5, 2018.

Shares Entitled to Consent

Only the Stone Energy stockholders of record at the close of business on the record date of April 5, 2018 will be entitled to execute and return written consents. Shares of Stone Energy common stock held by Stone Energy as treasury shares will not be entitled to vote.

As of the close of business on the record date, there were 19,998,701 shares of Stone Energy common stock outstanding and entitled to execute and return written consents. Each holder of Stone Energy common stock is entitled to one vote for each share of Stone Energy common stock owned as of the close of business on the record date.

Consent Required

To adopt the Transaction Agreement, and thereby approve and adopt the Transactions, the holders of a majority of the outstanding shares of Stone Energy common stock must consent to the adoption of the Transaction Agreement. To approve the Transaction-Related Compensation on a non-binding, advisory basis, the holders of a majority of the outstanding shares of Stone Energy common stock must consent to the approval of the Transaction-Related Compensation. To adopt the New Talos LTIP, the holders of a majority of the outstanding shares of Stone Energy common stock must consent to the adoption of the New Talos LTIP.

The parties to the Voting Agreements, representing approximately 53% of the outstanding shares of Stone Energy common stock, have agreed, subject to the terms of the Voting Agreements, to execute and return written consents approving and adopting the Transaction Agreement, the Transactions, and any other matters necessary for the consummation of the Transactions within two business days after the registration statement of which this consent solicitation statement/prospectus forms a part becomes effective under the Securities Act. The delivery of the written consents by the parties to the Voting Agreements will be sufficient to adopt the Transaction Agreement and thereby approve and adopt the Transactions.

Consent by Stone Energy Directors and Executive Officers

At the close of business on the record date, Stone Energy’s directors and executive officers and their affiliates beneficially owned and had the right to vote 7,230 shares of Stone Energy common stock, which represents less than 1% of the shares of Stone Energy common stock entitled to execute and deliver written consents. The number and percentage of shares of Stone Energy common stock owned by directors and executive officers of Stone Energy and their affiliates as of the record date are not expected to be meaningfully different from the number and percentage as of April 11, 2018.

It is expected that Stone Energy’s directors and executive officers will consent to:

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However, no director or executive officer has entered into any agreement obligating him or her to vote in any particular way.

How to Return Your Written Consent

Holders of shares of Stone Energy common stock as of the close of business on the record date may fill out, date, and sign the written consent furnished with this consent solicitation statement/prospectus and promptly return it to Stone Energy by hand delivery or mail to Stone Energy Corporation, 625 E. Kaliste Saloom Road, Lafayette, Louisiana 70508, Attention: Corporate Secretary. Stone Energy has set 5:00 p.m., Lafayette, Louisiana time, on April 11, 2018 as the targeted final date for the receipt of written consents, which is the latest date on which Stone Energy expects to receive the written consents under the Voting Agreements. Stone Energy reserves the right to extend the final date for the receipt of written consents beyond April 11, 2018. Any such extension may be made without notice to the Stone Energy stockholders. Once a sufficient number of consents to adopt the Transaction Agreement have been received, the consent solicitation will conclude. The delivery of the written consents by the parties to the Voting Agreements will be sufficient to adopt the Transaction Agreement and thereby approve and adopt the Transactions.

Written Consent Not Returned

If you are a Stone Energy stockholder as of the close of business on the record date and you do not execute and return a written consent, it will have the same effect as a vote against the adoption of the Transaction Agreement, against the approval of the Transaction-Related Compensation on a non-binding, advisory basis, and against the adoption of the New Talos LTIP.

Written Consents Without Instruction

If you are a Stone Energy stockholder as of the close of business on the record date and you execute and return your written consent, but do not make specific choices with respect to the items in the written consent, you will have consented to:

Revocation of Consent

Stockholders may revoke their written consent at any time before the consents of a sufficient number of shares to adopt a proposal have been delivered to Stone Energy in accordance with the DGCL. If you are a Stone Energy stockholder as of the close of business on the record date, your consent can be revoked before that time by returning a new written consent with a later date or by delivering a written notice stating that you revoke your consent to Stone Energy Corporation, 625 E. Kaliste Saloom Road, Lafayette, Louisiana 70508, Attention: Corporate Secretary.

Solicitation of Consents

This consent solicitation statement/prospectus is furnished in connection with the solicitation of written consents by the Stone Energy Board.

Stone Energy will bear all costs and expenses in connection with the solicitation of written consents, including the charges of brokerage houses and other custodians, nominees, or fiduciaries for forwarding documents to security owners. Written consents may also be solicited by certain of Stone Energy’s directors, officers, and employees by telephone, electronic mail, letter, facsimile, or in person, but no additional compensation will be paid to them (other than reasonable out-of-pocket expenses).

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Stockholders Should Not Send Stock Certificates With Their Written Consents

A letter of transmittal and instructions for the surrender of Stone Energy stock certificates or book entry shares will be mailed to the Stone Energy stockholders shortly after the effective time of the Transactions, if the Transactions are approved and adopted.

Stone Energy Stockholder Account Maintenance

Stone Energy’s transfer agent is Computershare Shareowner Services LLC. All communications concerning accounts of the Stone Energy stockholders of record, including address changes, name changes, inquiries as to requirements to transfer shares of common stock, and similar issues can be handled by calling Computershare Shareowner Services LLC toll-free at (888) 216-8057.

Recommendations to the Stone Energy stockholders (see page 95)

The Stone Energy Board has reviewed and considered the terms of the Transaction Agreement and the Transactions and has unanimously determined that the Transaction Agreement and the Transactions are advisable and in the best interests of Stone Energy and its stockholders. Accordingly, the Stone Energy Board unanimously recommends that the Stone Energy stockholders execute and deliver written consent to:

The Stone Energy stockholders should carefully read this consent solicitation statement/prospectus, including any documents incorporated by reference, and the annexes in their entirety for more detailed information concerning the Transaction Agreement and the Transactions, the Transaction-Related Compensation, and the New Talos LTIP.

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THE TRANSACTIONS

The Companies

New Talos

New Talos is Sailfish Energy Holdings Corporation, a Delaware corporation that was formed by Stone Energy for the purpose of engaging in the Transactions. To date, New Talos has not conducted any material activities other than those incident to its formation and the matters contemplated by the Transaction Agreement. Upon Closing, New Talos will become a holding company whose principal asset will be 100% of the equity interests in Talos Production, which will directly and indirectly own all of the historical Stone Energy and Talos Energy assets. Immediately after the completion of the Transactions, New Talos will be named Talos Energy, Inc. and its outstanding equity capital will consist solely of the New Talos common stock issued pursuant to the Transactions. In the Transaction Agreement, New Talos represents that it has not carried on any business or conducted any operations other than the execution and delivery of the Transaction Agreement, the performance of its obligations thereunder, and matters ancillary thereto. For a description of the capital stock of New Talos, see “Description of New Talos Capital Stock” beginning on page 183 of this consent solicitation statement/prospectus.

Stone Energy

Stone Energy is an independent oil and natural gas company engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. Stone Energy has been operating in the Gulf of Mexico Basin since its incorporation in 1993 and has established technical and operational expertise in this area. Additional information about Stone Energy and its subsidiaries is included in documents incorporated by reference in this consent solicitation statement/prospectus. See “Where You Can Find Additional Information” beginning on page 278 of this consent solicitation statement/prospectus.

Talos Energy

Talos Energy is a technically driven independent exploration and production company with operations in the Gulf of Mexico and in the shallow waters off the coast of Mexico. Its focus in the Gulf of Mexico is the exploration, acquisition, exploitation and development of deep and shallow water assets near existing infrastructure. The shallow waters off the coast of Mexico provide it with high impact exploration opportunities in an emerging basin. For further information about Talos Energy, see “Business—Talos Energy” beginning on page 188 of this consent solicitation statement/prospectus.

Merger Sub

Sailfish Merger Sub Corporation has been formed solely for the purpose of engaging in the Transactions. Merger Sub has not conducted any business since its formation, and prior to Closing, will have no assets, liabilities or obligations of any kind other than those incident to its formation and pursuant to the Transaction Agreement. Merger Sub is, and will be prior to Closing, a corporation incorporated in Delaware and wholly and indirectly owned by Stone Energy.

Sailfish Energy LLC

Stone Energy, the surviving entity in the Merger, will convert into a Delaware limited liability company, Sailfish Energy LLC. Pursuant to the Transactions and upon Closing, Talos Energy will become the sole managing member of Sailfish Energy LLC.

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General

The Transaction Agreement and related documents provide that, on the terms and subject to the conditions set forth in the Transaction Agreement, among other things:

The Transaction Agreement is attached as Annex A and is incorporated by reference into this consent solicitation statement/prospectus. We encourage you to read the Transaction Agreement carefully and fully, as it is the legal document that governs the Transactions. For a summary of the material terms of the Transaction Agreement, see “The Transaction Agreement” beginning on page 131 of this consent solicitation statement/prospectus.

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The following diagram illustrates the structure of New Talos and its stockholders and a simplified version of its operating subsidiaries upon completion of the Transactions:

Background of the Transactions

In December 2016 Stone Energy filed bankruptcy petitions seeking relief under the provisions of Chapter 11 of the U.S. Bankruptcy Code to pursue a prepackaged plan of reorganization. On February 15, 2017, the bankruptcy court entered an order confirming the plan of reorganization, and on February 28, 2017, the plan of reorganization became effective and Stone Energy emerged from bankruptcy.

Upon emergence from bankruptcy, pursuant to the plan of reorganization, the previous members of the Stone Energy Board ceased to serve on the Stone Energy Board, and a new board of directors was appointed, which board consisted of six independent directors (Neal P. Goldman, Brad Juneau, David I. Rainey, Charles M. Sledge, James M. Trimble, and David N. Weinstein) and David H. Welch, then the Chief Executive Officer and President of Stone Energy. Neal P. Goldman, one of the independent directors, was appointed Chairman of the Stone Energy Board on March 1, 2017.

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Between March 1 and March 14, 2017, a number of potential interested parties informally contacted Mr. Goldman to express interest in exploring a potential combination with Stone Energy, including Talos Energy and two other private companies later referred to herein as Company A and Company B.

On March 14, following a special meeting of the Stone Energy Board with members of Stone Energy management, the independent members of the Stone Energy Board met and discussed the limitations and risks associated with Stone Energy continuing as a standalone entity, including the risks associated with Stone Energy’s declining asset base, the risks associated with being an undersized operator in the oil and gas business in the Gulf of Mexico deepwater, and the impact of these factors on Stone Energy’s ability to fund its drilling operations and to fully exploit and develop its oil and gas assets. Following that discussion, those directors determined that it would be appropriate for the Stone Energy Board to evaluate all potential available alternatives for Stone Energy. As part of that determination, the independent members of the Stone Energy Board agreed that Stone Energy should engage Petrie Partners to serve as financial advisor to the Stone Energy Board and to advise Stone Energy on its industry positioning, as well as to advise the Stone Energy Board in identifying, assessing, and possibly implementing one or more tactical or strategic alternatives.

On March 25, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, and Akin Gump Strauss Hauer & Feld LLP (“Akin Gump”). Petrie Partners presented its initial analysis of Stone Energy’s strategic position and potential transaction counterparties. Following that presentation, the Stone Energy Board authorized Petrie Partners to confidentially contact potential counterparties regarding a potential strategic transaction with Stone Energy. Following that meeting, Petrie Partners began contacting potential counterparties.

On March 28, Mr. Goldman had breakfast with representatives of Company A, at which those representatives indicated their interest in a potential combination with Stone Energy. Following the breakfast, Mr. Goldman referred Company A to Petrie Partners for negotiation of a confidentiality agreement.

On March 30, Stone Energy entered into an engagement letter with Petrie Partners pursuant to which Stone Energy engaged Petrie Partners to act as financial advisor to Stone Energy and the Stone Energy Board.

On March 30, Petrie Partners met with Timothy S. Duncan, the President and Chief Executive Officer of Talos Energy, to discuss a potential strategic transaction with Stone Energy.

On April 4, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners noted that it had thus far contacted eight potential counterparties and had sent confidentiality agreements to four of those counterparties, including Talos Energy and Company A. In addition, at that meeting the Stone Energy Board determined to form a “Transaction Committee” to oversee the strategic alternatives process and monitor and direct Petrie Partners and Akin Gump as the process continued. The Transaction Committee initially consisted of Mr. Goldman, Charles M. Sledge, and John “Brad” Juneau. David Rainey was added to the Transaction Committee on April 27.

On April 10, Stone Energy entered into a confidentiality agreement with Talos Energy, after which Stone Energy and Talos Energy and their respective advisors began conducting due diligence. Thereafter, each of Stone Energy and Talos Energy and their respective advisors conducted ongoing legal, financial, and commercial due diligence on the other throughout the process.

On April 11, the Transaction Committee met telephonically with members of Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, including that Petrie Partners had contacted 15 potential counterparties; Stone Energy had entered into confidentiality agreements with Company D and Talos Energy and was negotiating three additional confidentiality agreements; and Petrie Partners was arranging initial meetings with Company A and Talos Energy.

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On April 11, Stone Energy issued a press release stating that the Stone Energy Board had retained Petrie Partners to assist the Stone Energy Board in its determination of Stone Energy’s strategic direction, including assessing its various strategic alternatives. The press release stated that the Stone Energy Board intended to explore all potential avenues to increase stockholder value, which could include the acquisition of additional assets, accessing external capital, a business combination, or another strategic transaction.

On April 12, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Talos Energy management, at which Mr. Duncan and other members of Talos Energy management gave a presentation regarding Talos Energy’s business and their views on a potential combination of Talos Energy and Stone Energy.

On April 18, the Transaction Committee met telephonically with members of Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, including that Petrie Partners had contacted 26 potential counterparties; Stone Energy had entered into three confidentiality agreements and was negotiating two additional confidentiality agreements; Petrie Partners and members of the Transaction Committee and Stone Energy management had attended an initial meeting with Talos Energy; Petrie Partners had scheduled initial meetings with Company A and Company B; and Petrie Partners was working with Stone Energy management and Akin Gump to create an electronic data room and management presentation for Stone Energy.

Later on April 18, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners attended initial meetings with Company A management and Company B management, at which each of the respective management teams of Company A and Company B gave an initial presentation regarding their businesses.

On April 19, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized for the full Stone Energy Board the information presented to the Transaction Committee on the previous day, as well as information regarding the initial meetings with managements of Talos Energy, Company A, and Company B. At that meeting Stone Energy management presented to the Stone Energy Board information on two potential Gulf of Mexico asset acquisitions.

On April 19, Stone Energy entered into a confidentiality agreement with Company C.

On April 27, Mr. Welch resigned as director and Chief Executive Officer and President, and the Stone Energy Board appointed James M. Trimble as interim Chief Executive Officer and President and Keith Seilhan as Chief Operating Officer.

On April 28, Stone Energy entered into a confidentiality agreement with Company A.

On May 1, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company D and received an initial presentation regarding Company D’s business.

On May 3, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company C and received an initial presentation regarding Company C’s business.

On May 3, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company A and received a detailed management presentation regarding Company A’s business and a potential combination with Stone Energy.

On May 4, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company A. Petrie Partners and Stone Energy management gave a detailed presentation regarding Stone Energy.

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On May 5, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, and Akin Gump. The Stone Energy Board received an update from Petrie Partners on the status of the strategic alternatives review process and reviewed a potential Gulf of Mexico asset acquisition. The Stone Energy Board authorized Stone Energy management to submit an initial indication of interest regarding the potential purchase of those assets. (The indication of interest was submitted, but Stone Energy’s bid was not sufficient enough for Stone Energy to continue in the sale process for those assets.)

On May 9, the Transaction Committee met telephonically with members of Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, including noting that Stone Energy had entered into six confidentiality agreements; Petrie Partners had scheduled reciprocal diligence meetings with Talos Energy; and Petrie Partners was analyzing the information received from Company A.

On May 10, representatives of Company A met with Petrie Partners and Stone Energy management to discuss engineering, geologic, and geophysical information for Company A.

On May 12, members of the Transaction Committee, Stone Energy management, and Petrie Partners met with Talos Energy and gave a detailed presentation regarding Stone Energy’s business.

On May 15, the members of the Transaction Committee met in person and telephonically with Talos Energy management, members of Stone Energy management, and Petrie Partners. Talos Energy management gave a detailed presentation regarding Talos Energy’s business and a potential combination with Stone Energy.

On May 16, the Transaction Committee met telephonically with Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, including describing the reciprocal diligence meetings with Talos Energy and the upcoming reciprocal diligence meetings with Company C and Company D.

On May 18, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company C and gave a detailed presentation regarding Stone Energy.

On May 18, members of Stone Energy management met with Talos Energy and gave a detailed presentation regarding Stone Energy’s reserves and seismic data.

On May 18, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company A and Company A management which gave a detailed presentation regarding its business and a potential combination with Stone Energy.

On May 19, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company D and gave a detailed presentation regarding Stone Energy and its business.

On May 23, the Transaction Committee met telephonically with Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, including describing the reciprocal diligence meetings with Company C and Company D, and upcoming reciprocal diligence meetings with Company E and Company B. Petrie Partners also presented an overview of Talos Energy and Petrie Partners’ initial analysis of a potential combination of Stone Energy and Talos Energy.

On May 31, the Stone Energy Board held a regular meeting at which, among other things, Petrie Partners presented its analysis of various strategic alternatives potentially available to Stone Energy, including continuing as a standalone company, asset sales, asset acquisitions, sale of equity to a private investor, and the sale or merger of Stone Energy. Petrie Partners also reviewed its preliminary financial analysis of Talos Energy and Company A. Following the Petrie Partners presentation, the Stone Energy Board instructed Petrie Partners to set

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a timeframe within which transaction proposals would be due, which timeframe was set as the week of June 19. Akin Gump and Stone Energy’s Delaware counsel, Morris Nichols Arsht & Tunnell LLP (“MNAT”), provided a review of fiduciary duties of directors under Delaware law in the context of considering potential strategic transactions. Following the meeting, Petrie Partners informed all potential counterparties that had expressed interest in a transaction with Stone Energy of the timeframe within which proposals were expected.

On May 31, Stone Energy management met with Talos Energy management for a reciprocal review of their respective geologic and geophysical information.

On June 1, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company E and gave a detailed presentation regarding Stone Energy and its business.

On June 6, the Transaction Committee met telephonically with members of Stone Energy management, Petrie Partners and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, including an upcoming reciprocal diligence meeting with Company B, an upcoming meeting with Talos Energy to review its Mexico exploration activities, and an upcoming meeting with Company A to review its business plan and safety procedures.

On June 7, members of the Transaction Committee, members of Stone Energy management, and Petrie Partners met with Company B and gave a detailed presentation regarding Stone Energy and its business.

On June 12, members of the Transaction Committee and Petrie Partners met with Talos Energy to receive a presentation on Talos Energy’s prospect inventory. Also on June 12, members of the Transaction Committee and Petrie Partners met with Company A to receive a presentation on Company A’s operations and safety procedures.

On June 13, the Transaction Committee met telephonically with members of Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners summarized the strategic alternatives review process to date, noting that it had informed all interested parties of the proposal timeline and that Talos Energy and Company A had indicated plans to submit proposals. The Transaction Committee and Petrie Partners discussed the strengths and weaknesses of Talos Energy and Company A as potential combination partners, based on the meetings held and information reviewed to date.

On June 13, Petrie Partners and members of Stone Energy management met with Netherland, Sewell & Associates, Inc. (“NSAI”) to discuss NSAI’s reserve audit of Talos Energy and, in a separate session, NSAI’s reserve estimates for Company A. Stone Energy management and Petrie Partners also met that day with Ryder Scott Company, L.P. (“Ryder Scott”) to discuss Ryder Scott’s reserve estimates for Company A.

Between June 13 and June 18, Akin Gump participated in multiple calls with Company A’s counsel regarding potential structures for a combination of Company A and Stone Energy. On June 15, Akin Gump and Petrie Partners met telephonically with Talos Energy and its counsel, Vinson & Elkins LLP (“Vinson & Elkins”), regarding potential structures for a combination of Talos Energy and Stone Energy. Following that call, Akin Gump and Vinson & Elkins held multiple calls to discuss potential transaction structures.

On June 19, Petrie Partners received a written transaction proposal from Company A, a privately held entity, which proposed a stock-for-stock merger of Company A with Stone Energy pursuant to which Stone Energy’s stockholders would own 30% of the combined company post-closing.

On June 20, the Transaction Committee met telephonically with Stone Energy management, Petrie Partners, and Akin Gump. Petrie Partners discussed the Company A proposal with the Transaction Committee, and also discussed the review by Stone Energy management with NSAI regarding the reserve estimates for Talos Energy and with NSAI and Ryder Scott regarding the reserve estimates for Company A. The Transaction Committee discussed its assessment of Company A’s management and assets, as well as its initial assessment of Company A’s merger proposal.

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On June 20, Petrie Partners received a written transaction proposal from Talos Energy, which proposed a combination of Talos Energy and Stone Energy pursuant to which Stone Energy stockholders would own 35% of the combined company post-closing. The Talos Energy proposal also contemplated a post-closing board of directors with nine members, three of whom would be existing Stone Energy Board members, including a mutually-agreed non-executive chairman.

On June 21, Petrie Partners received a written transaction proposal from Company C, a privately held entity, which proposed a stock-for-stock merger of Company C and Stone Energy, with Stone Energy as the surviving company in the merger. The proposal did not address the post-closing ownership of the combined company or other economic or governance terms of the proposed transaction other than indicating that Company C’s current chief executive officer and chairman would be the chief executive officer and chairman of the combined company.

On June 21, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, Akin Gump, and MNAT. At that meeting Petrie Partners updated the Stone Energy Board on the strategic alternatives review process, noting that Petrie Partners had contacted 28 potential counterparties, seven of which had entered into confidentiality agreements with Stone Energy, six of which had conducted reciprocal diligence meetings with Stone Energy, and three of which had delivered transaction proposals. Petrie Partners also noted that the other four parties that had entered into confidentiality agreements had declined to make proposals. Petrie Partners then provided the Stone Energy Board with its analysis of the three proposals received, and the Stone Energy Board thoroughly discussed the positioning of each of Talos Energy, Company A, and Company C, including each company’s management, assets, and financial data, as well as each company’s transaction proposal.

Following the discussion, the Stone Energy Board determined that (i) Talos Energy was the preferred counterparty, if acceptable transaction terms could be reached, (ii) if agreement could not be reached with Talos Energy, Company A could be an acceptable counterparty if agreeable transaction terms could be reached with Company A, and (iii) Company C’s proposal was less attractive, less developed and not specific enough for a substantive counterproposal. The Stone Energy Board then instructed Petrie Partners and Akin Gump to prepare potential counterproposals for both Talos Energy and Company A and to present the draft counterproposals to the Stone Energy Board at the June 23 meeting.

On June 23, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, Akin Gump, and MNAT to discuss potential counterproposals for Talos Energy and Company A. Following discussion, the Stone Energy Board authorized Petrie Partners to send the respective counterproposals to Talos Energy and Company A. Petrie Partners also summarized for the Stone Energy Board its discussions with Company C, in which Company C stated that at least three months of additional time would be required before Company C could make a more specific proposal. The Stone Energy Board then authorized Petrie Partners to continue to discuss a potential transaction with Company C and to continue to provide Company C with access to the Stone Energy electronic data room, but to inform Company C that Stone Energy would not respond to Company C’s proposal. The Stone Energy Board also authorized Mr. Goldman to meet with Mr. Duncan regarding Stone Energy’s counterproposal to Talos Energy.

Later on June 23, Petrie Partners delivered the Stone Energy Board’s counterproposals to Talos Energy and Company A.

The Stone Energy proposal delivered to Talos Energy included the following terms: Stone Energy and Talos Energy would combine using a to-be-determined transaction structure; at the closing of the combination, the Apollo Funds and the Riverstone Funds would exchange $102 million of senior unsecured notes issued by the Talos Issuers in exchange for shares of Stone Energy common stock; following the issuance of Stone Energy common stock pursuant to that debt exchange and the other combination transactions, the current Stone Energy stockholders would collectively own 39% of the combined company and the Talos Energy stakeholders would

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collectively own 61% of the combined company (in each case on a fully-diluted basis excluding the Stone Energy warrants); the combined company board would consist of ten members, four of whom would be designated by Stone Energy from the Stone Energy Board and a majority of whom would be independent from both management and significant stockholders; the offices of Chief Executive Officer and Chairman of the combined company would be separated; and the Apollo Funds and the Riverstone Funds would be subject to a six-month post-closing lockup on their shares of Stone Energy common stock. As part of its determination of the relative post-closing ownership percentages of the combined company to be included in the counterproposal, the Stone Energy Board considered (i) Stone Energy’s and Talos Energy’s relative standalone proved reserves, production volumes, reserve life, and EBITDA, (ii) Stone Energy’s and Talos Energy’s relative forecasted production volumes, EBITDA, and capital expenditure expectations, (iii) Stone Energy’s and Talos Energy’s indebtedness, including the fact that the Apollo Funds and the Riverstone Funds would exchange $102 million of senior unsecured notes issued by the Talos Issuers in exchange for shares of Stone Energy common stock, which would reduce the leverage of the combined company, (iv) Stone Energy’s and Talos Energy’s relative prospect inventory, including the potential benefits of Talos Energy’s exploration program in Mexico, (v) Talos Energy’s corporate strategy and how it would apply to the combined company, and (vi) Stone Energy’s and Talos Energy’s management teams, including the qualifications of Talos Energy’s Chief Executive Officer, who would serve as the Chief Executive Officer of the combined company.

The Stone Energy proposal delivered to Company A included the following terms: Company A would merge into a subsidiary of Stone Energy, following which Stone Energy stockholders would collectively own 40% of the combined company and Company A stockholders would collectively own 60% of the combined company (in each case on a fully-diluted basis excluding the Stone Energy warrants); the combined company board would consist of ten members, four of whom would be designated by Stone Energy from the Stone Energy Board and a majority of whom would be independent from both management and significant stockholders; the offices of Chief Executive Officer and Chairman of the combined company would be separated; and the financial sponsors and certain executives of Company A would be subject to a six-month post-closing lockup on their shares of Stone Energy common stock.

Between June 23 and June 26, Petrie Partners held multiple discussions with Company A’s financial advisor, in which Petrie Partners was told that Company A found the Stone Energy Board’s counterproposal unacceptable and that Company A was unlikely to continue negotiations.

On June 26, Petrie Partners received a counterproposal from Talos Energy, which included the following terms: Stone Energy and Talos Energy would combine using a to-be-determined transaction structure; at the closing of the combination, (i) the Apollo Funds and the Riverstone Funds would exchange $102 million of senior unsecured notes issued by the Talos Issuers in exchange for shares of Stone Energy common stock and (ii) Franklin and MacKay Shields would exchange $102 million of senior secured notes issued by Stone Energy for shares of Stone Energy common stock; following the issuance of Stone Energy common stock pursuant to those debt exchanges and the other combination transactions, the current Stone Energy stakeholders would collectively own 39% of the combined company and the Talos Energy stakeholders would collectively own 61% of the combined company (in each case on a fully-diluted basis excluding the Stone Energy warrants); the combined company board would consist of ten members, (i) four of whom would be designated by Stone Energy from the Stone Energy Board and six of whom would be designated by Talos Energy, (ii) two of whom would initially be representatives of Apollo Management (with Apollo Management thereafter retaining the right to appoint two designees to the board subject to fall-away provisions to be negotiated), (iii) two of whom would initially be representatives of Riverstone (with Riverstone thereafter retaining the right to appoint two designees to the board subject to fall-away provisions to be negotiated), (iv) a majority of whom would be independent from management, and (v) the members of the audit committee would be independent from both management and significant stockholders; the offices of Chief Executive Officer and Chairman of the combined company would be separated; and the Apollo Funds and the Riverstone Funds would be subject to a six-month post-closing lockup on their shares of Stone Energy common stock. The Talos Energy proposal also included a draft exclusivity letter, which Talos Energy indicated would be a requirement for it to continue negotiating a potential transaction with Stone Energy.

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On June 27, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, Akin Gump, and MNAT. Petrie Partners informed the Stone Energy Board that Company A viewed the Stone Energy counterproposal negatively and was unlikely to deliver a counterproposal. The Stone Energy Board then discussed the Talos Energy counterproposal, including Talos Energy’s request for an exclusive negotiating period and for Franklin and MacKay Shields to exchange $102 million of their respective Stone Energy senior secured notes for shares of Stone Energy common stock. Following the discussion, the Stone Energy Board authorized Mr. Goldman to discuss the terms of the counterproposal with Mr. Duncan.

Later on June 27, Mr. Goldman met with Mr. Duncan to discuss Talos Energy’s counterproposal. Among other things, Mr. Goldman explained to Mr. Duncan that neither Franklin nor MacKay Shields was privy to the ongoing negotiations, or aware of any other material nonpublic information regarding Stone Energy, and accordingly Stone Energy could not include any obligations of Franklin or MacKay Shields in any negotiation at that point.

On June 28, the Stone Energy Board held a special telephonic meeting with members of Stone Energy management, Petrie Partners, Akin Gump, and MNAT. Mr. Goldman described his meeting with Mr. Duncan, and Petrie Partners discussed its analysis of the current Talos Energy counterproposal. Later on June 28, Petrie Partners received a revised counterproposal from Talos Energy, which proposal included the following: Stone Energy and Talos Energy would combine using a to-be-determined transaction structure; at the closing of the combination, the Apollo Funds and the Riverstone Funds would exchange $102 million of senior unsecured notes issued by the Talos Issuers in exchange for shares of Stone Energy common stock; following the issuance of Stone Energy common stock pursuant to that debt exchange and the other combination transactions, the current Stone Energy stockholders would collectively own 37% of the combined company and the Talos Energy stakeholders would collectively own 63% of the combined company (in each case on a fully-diluted basis excluding the Stone Energy warrants); the combined company board would consist of ten members, (i) four of whom would be designated by Stone Energy from the Stone Energy Board and six of whom would be designated by Talos Energy, (ii) two of whom would initially be representatives of Apollo Management (with Apollo Management thereafter retaining the right to appoint two designees to the board subject to fall-away provisions to be negotiated), (iii) two of whom would initially be representatives of Riverstone (with Riverstone thereafter retaining the right to appoint two designees to the board subject to fall-away provisions to be negotiated), (iv) a majority of whom would be independent from management, and (v) the members of the audit committee would be independent from both management and significant stockholders; the offices of Chief Executive Officer and Chairman of the combined company would be separated; and the Apollo Funds and the Riverstone Funds would be subject to a six-month post-closing lockup on their shares of Stone Energy common stock. The Talos Energy proposal also included a draft exclusivity letter, which Talos Energy indicated would be a requirement for it to continue negotiating a potential transaction with Stone Energy.

On July 1, the Stone Energy Board held a special telephonic meeting with Stone Energy management, Petrie Partners, Akin Gump, and MNAT. At that meeting, the Stone Energy Board discussed the revised Talos Energy proposal. The Stone Energy Board considered the terms proposed by Talos Energy, and the other options available to Stone Energy (including the facts that (i) following the publicly announced strategic alternatives review process and Petrie Partners’ discussions with interested potential counterparties, only three potential counterparties were willing to submit transaction proposals, (ii) of the three potential counterparties that were willing to make a proposal, Company C’s proposal was insufficient for analysis and Company A was unwilling to negotiate from Stone Energy’s counterproposal, (iii) no other potential counterparties had emerged during Stone Energy’s highly public strategic alternatives process, and (iv) the Stone Energy Board believed that Talos Energy was a better potential counterparty than Company A or Company C), and authorized Stone Energy to enter into an exclusivity agreement with Talos Energy, with certain minor revisions to the proposed terms.

On July 1, Petrie Partners sent a revised counterproposal and draft exclusivity agreement to Talos Energy reflecting the Stone Energy Board’s directions.

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On July 3, Stone Energy and Talos Energy entered into an exclusivity agreement that provided for a 21-day exclusive negotiating period from that date, and a non-binding term sheet with transaction terms consistent with Talos Energy’s June 28 counterproposal. The term sheet also stated that the parties would work together to determine an optimal liability management approach.

Between July 3 and July 6, Akin Gump and Vinson & Elkins held multiple discussions regarding potential transaction structures and drafting of documents. It was agreed that Vinson & Elkins would work with Talos Energy, Apollo Management, and Riverstone to formulate a transaction structure proposal and Akin Gump would prepare the first draft of the primary transaction document.

On July 6, Petrie Partners delivered a due diligence request list from Stone Energy to Talos Energy.

On July 11, the Transaction Committee, Petrie Partners, Akin Gump, and members of Stone Energy management met in person and telephonically with Talos Energy. At that meeting, Talos Energy confidentially informed the participants of its Zama discovery offshore Mexico, described the discovery and discussed potential financing arrangements for the combined company. The parties then discussed a process for informing Franklin and MacKay Shields of the potential transaction and providing information to those stockholders regarding Talos Energy and the proposed transaction. The parties also discussed the importance of determining and reaching agreement on a liability management approach that would provide the combined company with a stronger balance sheet and that would avoid paying the make-whole payments that would be required under Stone Energy’s indenture and Talos Energy’s bridge loan agreement in connection with redemption or the change in control offer that could be required under those agreements under certain transaction structures.

Following the meeting with Talos Energy, the Transaction Committee met telephonically with members of Stone Energy management, Petrie Partners and Akin Gump. The participants discussed the Talos Energy presentation and Stone Energy’s ongoing diligence regarding Talos Energy. Akin Gump reviewed with the Transaction Committee various legal considerations associated with the potential transaction, including potential transaction structures that could be utilized and considerations relating to the Stone Energy senior secured notes and the Talos Issuers second lien bridge loans.

Akin Gump then discussed considerations regarding providing material nonpublic information about the potential transaction to Franklin and MacKay Shields. As required by the registration rights agreement entered into by Stone Energy, Franklin, and MacKay Shields in connection with Stone Energy’s exit from bankruptcy, Stone Energy had filed a registration statement on Form S-3 for the resale of Franklin’s and MacKay Shields’ shares of Stone Energy common stock, and the SEC had recently completed its review of that registration statement. The registration rights agreement required that the registration statement be declared effective by the SEC as promptly as reasonably practicable following its filing with the SEC, and only permitted Stone Energy to delay effectiveness pursuant to the limited ‘blackout’ provisions of that agreement. The Transaction Committee determined that although Franklin and MacKay Shields had not been informed of the exclusivity arrangement with Talos Energy or given any other material non-public information regarding Stone Energy, the exercise of the Stone Energy ‘blackout’ right would effectively notify Franklin and MacKay Shields that a potential transaction was under consideration, and the Transaction Committee was also cognizant of Talos Energy’s desire that any definitive transaction documents would include a voting agreement from Franklin and MacKay Shields. Accordingly, the Transaction Committee authorized Stone Energy to give notice to Franklin and MacKay Shields exercising its ‘blackout’ right under the registration rights agreement, and also authorized Akin Gump to negotiate confidentiality agreements with Franklin, and then MacKay Shields, so that they could be informed of the potential transaction and receive nonpublic information regarding the potential transaction and Talos Energy.

On July 12, Talos Energy publicly announced its Zama discovery.

From July 11 through July 25, Akin Gump negotiated a confidentiality agreement with Franklin, which was signed by Franklin and Stone Energy on July 25.

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