Note 3  Acquisitions Asset Acquisitions Each of the acquisitions below qualified as an asset acquisition that requires, among other items, that the cost of the assets acquired and liabilities assumed to be recognized on the balance sheet by allocating the asset cost on a relative fair value basis. The fair value measurements of the oil and natural gas properties acquired and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates by the Companys management at the time of the valuation. Transaction costs incurred on an asset acquisition are capitalized as a component of the assets acquired and any contingent consideration is recognized as the contingency is resolved. Acquisition of Gunflint Field  On January 11, 2019, the Company completed the acquisition of an approximate 9.6% non-operated working interest in the Gunflint Field located in the Mississippi Canyon area (the Gunflint Acquisition) from Samson Offshore Mapleleaf, LLC for $29.6 million ($27.9 million after customary purchase price adjustments). The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on January 11, 2019 (in thousands): Property and equipment $ 28,912 Asset retirement obligations (996 ) Allocated purchase price $ 27,916 Acquisition of Whistler Energy II, LLC  On August 31, 2018, the Company completed the acquisition of all the issued and outstanding membership interests of Whistler Energy II, LLC (Whistler) from Whistler Energy II Holdco, LLC, an affiliate of the Apollo Funds (the Whistler Acquisition), for $ 52.6 million ($ 14.8 million, net of $ 37.8 million of cash acquired). The $37.8 million of cash acquired consists of $ 30.8 million of cash collateral posted by Whistler and released by third party surety companies at closing and $ 7.0 million of cash on hand for working capital purposes. Through the acquisition, the Company acquired and assumed all of Whistlers oil and natural gas assets and the associated asset retirement obligations for interests located in Green Canyon Block 18, Green Canyon Block 60 and Ewing Bank Blocks 944 and 988, including a fixed production platform on Green Canyon Block 18. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on August 31, 2018 (in thousands): Current assets (1) $ 45,337 Property and equipment 35,344 Other long-term assets 66 Current liabilities (4,261 ) Asset retirement obligations (23,862 ) Allocated purchase price $ 52,624 (1) Includes $37.8 million of cash acquired and trade receivables of $3.2 million, which the Company expects all to be realizable. Business Combination Acquisitions qualifying as a business combination are accounted for under the acquisition method of accounting, which requires, among other items, that assets acquired and liabilities assumed be recognized on the consolidated balance sheet at their fair values as of the acquisition date. The fair value measurements of the oil and natural gas properties acquired and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation. ILX and Castex Acquisition  On December 10, 2019, the Company and Talos Production Inc., formerly known as Talos Production LLC, entered into separate Purchase and Sale Agreements (collectively, the Purchase Agreements) with each of the following parties: ILX Holdings, LLC (ILX Holdings), ILX Holdings II, LLC (ILX Holdings II), ILX Holdings III LLC (ILX Holdings III) and Castex Energy 2014, LLC (Castex 2014), each a related party and an affiliate of the Riverstone Funds (Riverstone Sellers and such Purchase Agreements the Riverstone Purchase Agreements), and Castex Energy 2016, LP (together with the Riverstone Sellers, the Sellers). Subsequent Event  On February 24, 2020, the Company, Talos Production Inc. and the Riverstone Sellers amended the Riverstone Purchase Agreements. Pursuant to the Purchase Agreements, as amended, among other things, the Company will acquire all of the issued and outstanding limited liability company interests in certain wholly owned subsidiaries of each of the respective Sellers (collectively, the ILX and Castex Acquisition) for an aggregate consideration of cash equal to $385.0 million and 110,000 shares of Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock will automatically convert into 100 shares (subject to adjustment) of Common Stock on the 20th day following the mailing of a definitive information statement relating to such conversion. On February 28, 2020, the Company completed the ILX and Castex Acquisition with an effective date of July 1, 2019. Due to the timing of the ILX and Castex Acquisition, the Company is unable to make a reasonable estimate of the purchase price allocation of such acquisition at this time. Combination Between Talos Energy LLC and Stone Energy Corporation  On May 10, 2018, the Company consummated the Transactions contemplated by the Transaction Agreement and Exchange Agreement, pursuant to which, among other things, Talos Energy LLC and Stone became wholly-owned subsidiaries of the Company. The combination was executed as an all-stock transaction whereby the former stakeholders of Talos Energy LLC held approximately 63% of the Companys outstanding Common Stock and the former stockholders of Stone held approximately 37% of the Companys outstanding Common Stock as of the Stone Closing Date. The purchase price of $732.0 million is based on the closing price of Stone common stock and common warrants immediately prior to closing. The following table summarizes the purchase price (in thousands, except per share data): Stone Energy common stock - issued and outstanding as of May 9, 2018 20,038 Stone Energy common stock price $ 35.49 Common stock value $ 711,149 Stone Energy common stock warrants - issued and outstanding as of May 9, 2018 3,528 Stone Energy common stock warrants price $ 5.90 Common stock warrants value $ 20,815 Total purchase price $ 731,964 During 2018, the Company incurred approximately $88.6 million of transaction related costs, of which, $32.5 million was expensed and reflected in general and administrative expense on the consolidated statements of operations. The remaining $56.1 million was the result of (i) $9.3 million in work fees paid to holders of the 11.00% Notes reflected as a debt discount reducing long-term debt on the consolidated balance sheet and (ii) $46.8 million in fees for seismic use agreements for change in control provisions and reflected in proved properties on the consolidated balance sheet. The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on May 10, 2018 (in thousands): Current assets (1) $ 372,963 Property and equipment 886,406 Other long-term assets 19,494 Current liabilities (132,846 ) Long-term debt (235,416 ) Other long-term liabilities (178,637 ) Allocated purchase price $ 731,964 (1) Includes $293.0 million of cash acquired. The fair values of current assets acquired includes trade receivables and joint interest receivables of $43.3 million and $3.5 million, respectively, which the Company expects all to be realizable. The follow table presents revenue and net income attributable to the assets acquired in the Stone Combination for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Revenue $ 414,056 332,944 Net income $ 187,428 148,473 Pro Forma Financial Information (Unaudited)  The following supplemental pro forma information (in thousands, except per common share amounts), presents the consolidated results of operations for the years ended December 31, 2018 and 2017 as if the Stone Combination had occurred on January 1, 2017. The unaudited pro forma information was derived from historical statements of operations of the Company and Stone and adjusted to include (i) depletion and accretion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) interest expense to reflect the debt transactions contemplated by the Exchange Agreement and (iii) general and administrative expense adjusted for transaction related costs incurred. This information does not purport to be indicative of results of operations that would have occurred had the Stone Combination occurred on January 1, 2017, nor is such information indicative of any expected future results of operations. Year Ended December 31, 2018 2017 Revenue $ 1,013,184 $ 712,648 Net income (loss) $ 274,577 $ (100,980 ) Basic net income (loss) per common share $ 5.07 $ (1.86 ) Diluted net income (loss) per common share $ 5.07 $ (1.86 )