Talos Energy Inc. (NYSE: TALO)

by | Jun 17, 2025 | Daily Trade Alerts

Talos Energy Inc. (NYSE: TALO) – Offshore Energy Meets Carbon Capture Ambition

Talos Energy Inc. (NYSE: TALO) is an independent energy company focused on offshore oil and gas production in the U.S. Gulf of Mexico and Mexico, along with a rapidly expanding carbon capture and storage (CCS) business. With proven reserves, low lifting costs, and strategic infrastructure partnerships, Talos is well-positioned to bridge traditional energy with low-carbon solutions.

While many offshore players are deep in debt or stuck in cyclical malaise, Talos is generating free cash flow, scaling CCS initiatives, and trading well below intrinsic value.

The Bigger Picture: Where Talos Operates

Talos’s portfolio includes:

  • Deepwater U.S. Gulf of Mexico: High-margin, infrastructure-connected oil fields with stable output and low decline rates
  • Zama Project (Mexico): One of the largest offshore discoveries globally in the past decade, now moving toward development phase
  • Talos Low Carbon Solutions: A top-5 U.S. CCS developer, with over 1 gigaton of total storage capacity under lease

This dual strategy gives Talos exposure to both strong near-term energy cash flows and long-duration decarbonization tailwinds.

Key Catalysts Driving Talos’s Momentum

  1. Cash Flow Generation: With oil near $80/bbl, Talos’s Gulf assets are printing cash—supporting debt reduction and potential buybacks.
  2. Zama Development Milestone: Final investment decision (FID) expected in 2025, unlocking billions in value from a world-class Mexican discovery.
  3. Carbon Capture Growth: Talos has secured storage sites in Louisiana and Texas and signed MOUs with major industrial emitters.
  4. Balance Sheet Improvements: Net debt has dropped significantly; Talos expects to achieve leverage under 1.0x by year-end.
  5. Undervalued vs. Peers: Trades at ~2.5x forward EBITDA—well below offshore and CCS peers with comparable production profiles.

Technical Analysis: TALO’s Reversal Potential

  • Moving Averages: TALO has crossed back above its 50-day average; next resistance sits at the 200-day (~$15.50).
  • MACD: Fresh bullish crossover, with histogram expanding—indicating renewed positive momentum.
  • RSI: RSI is climbing at 59—neutral to bullish, with room before overbought territory.
  • Support/Resistance: Support established near $12.75; breakout above $15.50 could target $17.00–$18.50 range.
  • Volume Trends: Steady institutional accumulation noted over the past 6 weeks, especially on green days.

Potential Risks to Consider

  • Commodity Exposure: Oil price volatility impacts cash flow, valuation, and capex flexibility.
  • Regulatory Overhang: Offshore and CCS permitting are subject to regulatory delays and political shifts.
  • Zama Execution: Mexico’s regulatory and partnership complexities could delay or complicate development timelines.


Talos Energy is more than just another oil name—it’s a cash-generating machine with a foot in the future of energy. With a cheap valuation, CCS upside, and improving sentiment, TALO could be an alpha generator in the energy patch heading into 2025.

[sponsor]

Sponsored Content