The correct statement about the reaction that forms water (specifically, the combustion of hydrogen gas with oxygen) is:
The reaction is exothermic because the total energy released by the products is greater than the energy absorbed in the reactants.
In an exothermic reaction, the energy released in forming the products (in this case, water) is greater than the energy required to break the bonds in the reactants (hydrogen and oxygen), resulting in a net release of energy.