Kosmos Energy Ltd. (“Kosmos”) (NYSE: KOS) announced today
financial and operating results for the second quarter of
2018. For the second quarter of 2018, the Company generated
a net loss of $103.3 million,
or $0.26 per diluted share as compared to net loss
of $8.5 million or $0.02 per diluted share in the same period last
year. When adjusted for certain items that impact the
comparability of results, the Company generated an adjusted
net loss(1) of $34.9 million or $0.09 per diluted share for
the second quarter of 2018.
Andrew G. Inglis, chairman and chief executive officer, said:
“The business continued to perform well during the second quarter
with strong production from our high-margin production assets in
Ghana and Equatorial Guinea. We remain focused on implementing
plans in both countries to enhance production going forward. The
other parts of our business - development and exploration -
continue to make progress against key objectives. The Tortue gas
development offshore Mauritania and Senegal is moving forward with
front end engineering design (FEED) for Phase 1 of the project
progressing on schedule and the partnership’s commercial teams
evaluating gas marketing proposals from a range of potential
buyers. We expect to make a final investment decision (FID) on the
Tortue project around the end of the year. In exploration, our
program is unchanged, with one remaining test this year offshore
Suriname. We expect to spud the Pontoenoe prospect in Block 42 in
mid-August. We remain on track to deliver $100 to $200 million of
net cash flow in 2018.”
Second quarter 2018 oil revenues were $215 million versus $136
million in the same quarter of 2017, on sales of 2.9 million
barrels of oil in 2018 as compared to 2.9 million barrels in 2017.
Including the impact of the Company’s hedging program, revenue was
$61.36 per barrel of oil sold in the second quarter of 2018. At
quarter end, the Company was in a net underlift position of
approximately 0.2 million barrels of oil.
Production expense for the second quarter was $50 million, or
$17.21 per barrel, versus $22 million, or $7.41 per barrel, in the
second quarter of 2017. Production expense per barrel increased in
the second quarter of 2018 compared to the same quarter a year ago
primarily because the year ago quarter included insurance proceeds
received related to increased costs due to the Jubilee FPSO turret
bearing issue, and a credit accrual adjustment from the operator of
the Jubilee and TEN fields. Second quarter 2018 production expense
of $17.21 per barrel decreased sequentially from the first quarter
of 2018 of $24.18 due to the higher number of liftings at Jubilee,
which has a lower unit production expense than TEN.
Exploration expenses totaled $77 million for the second quarter,
and includes amounts related to ongoing seismic and geologic and
geophysical costs as well as unsuccessful well costs of
approximately $45 million related to the Anapai-1 and 1A wells.
Depletion and depreciation expense for the quarter was $74
million, or $25.66 per barrel compared to $24.85 per barrel in the
second quarter of 2017.
General and administrative expenses were $17 million during the
second quarter. This amount includes approximately $8 million in
cash expense and $9 million in non-cash equity based compensation
expense.
Second quarter results included a mark-to-market loss of $140
million related to the Company’s oil derivative contracts. At
June 30, 2018, the Company’s hedging position had a total
commodity net liability value of approximately $219 million. As of
the quarter end and including recently executed hedges, Kosmos had
approximately 16 million barrels of oil hedged covering 2018 and
2019.
Gain on equity method investments, net during the second quarter
was approximately $16 million and represents Kosmos' 50 percent
ownership of our equity method investment in Kosmos Trident
International Petroleum Inc. (KTIPI), which holds our production
interests in Equatorial Guinea. Under the equity method of
accounting, Kosmos only recognizes its share of the adjusted net
income of KTIPI, including basis difference amortization, which is
recorded in the Gain on equity method investments, net in the
consolidated statement of operations. Year to date through the end
of July, the assets have delivered approximately $148 million of
cash dividend distributions to Kosmos, or approximately 64 percent
of the purchase price.
Total capital expenditures in the second quarter were $97
million, bringing the first half total to $155 million.
Kosmos exited the second quarter of 2018 with approximately $1.3
billion of liquidity and $1,079 million of net debt.
Operational Update
Ghana
During the second quarter of 2018, gross sales volumes from
Ghana averaged approximately 129,400 barrels of oil per day (bopd),
including volumes from the Jubilee and TEN fields.
Gross production from Jubilee averaged approximately 67,900
barrels of oil per day during the second quarter resulting in
Kosmos lifting two cargos, as expected. During the quarter the
field was shut down for the second phase turret remediation and
stabilization work which was successfully completed. We continue to
expect the rotation of the vessel to take place around the end of
2018 with minimal impact to production in 2018. Following the
shutdown, the field has consistently produced above 100,000 bopd.
The combination of the work performed during the shutdown and the
completion of two producer wells, one each in the third and fourth
quarter this year, is expected to allow oil production to grow
towards the FPSO nameplate capacity of 120,000 bopd.
Gross production from TEN averaged approximately 61,500 bopd
during the second quarter, resulting in Kosmos lifting one cargo,
as expected. Two producer wells are expected to be completed in the
field by year-end, including the Ntomme-5 well in August, which is
the first well to be put on production since field startup two
years ago. This drilling activity at TEN is expected to allow
production to increase towards the FPSO capacity of 80,000
bopd.
Kosmos and its partners have decided to add a second rig, the
Stena Forth, in Ghana beginning in October 2018, with the objective
of accelerating the addition of new wells. There will be no impact
to the 2018 capital budget as the savings from the later arrival of
the first rig will offset the costs of the second rig.
Equatorial Guinea
Gross oil production from the Ceiba Field and Okume Complex
averaged over 46,000 bopd during the second quarter of 2018,
exceeding the full year 2018 forecast of 43,000 barrels per day for
the second quarter in a row. Second quarter production resulted in
two cargo liftings net to KTIPI, or one cargo net to Kosmos' 50
percent interest in KTIPI. Kosmos and it's partners are currently
focused on production optimization and planning for the first phase
electric submersible pump (ESP) installation with the work expected
to commence in the fourth quarter of 2018. In May, Kosmos began a
3D seismic survey of approximately 10,100 square kilometers over
blocks EG-21, EG-24, S and W offshore Equatorial Guinea, and
approximately 200 square kilometers over Block G.
Suriname
Kosmos expects to commence drilling operations on the
Pontoenoe-1 well in mid-August. Pontoenoe is the first of up to
three independent prospects in Block 42 offshore Suriname and is a
similar play type to the Turbot and Longtail discoveries located
approximately 70 kilometers to the west in Guyana.
Tortue
Front End Engineering Design (FEED) contracts have been awarded
by the operator and this work remains ongoing. In addition, Kosmos
has received proposals for gas marketing from a shortlisted group
of potential buyers and is in the process of evaluating these with
the partners. Kosmos expects a final investment decision for the
Greater Tortue project around the end of 2018 and is aiming for
first gas in late 2021.
(1) A Non-GAAP measure, see attached
reconciliation of adjusted net income.
Conference Call and Webcast Information
Kosmos will host a conference call and webcast to discuss second
quarter 2018 financial and operating results today at 10:00 a.m.
Central time (11:00 a.m. Eastern time). A live webcast of the event
and slides can be accessed on the Investors page of Kosmos’ website
at investors.kosmosenergy.com. The dial-in telephone number for the
call is +1.877.407.3982. Callers outside the United States should
dial +1.201.493.6780. A replay of the webcast will be available on
the Investors page of Kosmos’ website for approximately 90 days
following the event.
About Kosmos Energy
Kosmos is a well-capitalized, pure play deepwater oil and gas
company with growing production, a pipeline of development
opportunities and a balanced exploration portfolio along the
Atlantic Margins. Our assets include growing production offshore
Ghana and Equatorial Guinea, a competitively positioned Tortue gas
project in Mauritania and Senegal and a sustainable exploration
program balanced between proven basins (Equatorial Guinea),
emerging basins (Mauritania, Senegal and Suriname) and frontier
basins (Cote d'Ivoire and Sao Tome and Principe). As an ethical and
transparent company, Kosmos is committed to doing things the right
way. The Company’s Business Principles articulate our
commitment to transparency, ethics, human rights, safety and the
environment. Read more about this commitment in the
Kosmos 2017 Corporate Responsibility Report. For additional
information, visit www.kosmosenergy.com.
Non-GAAP Financial Measures
EBITDAX, Adjusted net income (loss) and Adjusted net income
(loss) per share are supplemental non-GAAP financial measures used
by management and external users of the Company's consolidated
financial statements, such as industry analysts, investors, lenders
and rating agencies. The Company defines EBITDAX as net income
(loss) plus (i) exploration expense, (ii) depletion,
depreciation and amortization expense, (iii) equity-based
compensation expense, (iv) unrealized (gain) loss on commodity
derivatives (realized losses are deducted and realized gains are
added back), (v) (gain) loss on sale of oil and gas
properties, (vi) interest (income) expense, (vii) income
taxes, (viii) loss on extinguishment of debt,
(ix) doubtful accounts expense and (x) similar other
material items which management believes affect the comparability
of operating results. The Facility EBITDAX definition includes 50%
of the EBITDAX adjustments of Kosmos-Trident International
Petroleum Inc. The Company defines adjusted net income (loss) as
net income (loss) after adjusting for the impact of certain
non-cash and non-recurring items, including non-cash changes in the
fair value of derivative instruments, cash settlements on commodity
derivatives, gain on sale of assets, and other similar non-cash and
non-recurring charges, and then the non-cash and related tax
impacts in the same period.
We believe that EBITDAX, Adjusted net income (loss), and
Adjusted net income (loss) per share and other similar measures are
useful to investors because they are frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in the oil and gas sector and will provide investors
with a useful tool for assessing the comparability between periods,
among securities analysts, as well as company by company. Because
EBITDAX, Adjusted net income (loss), and Adjusted net income (loss)
per share excludes some, but not all, items that affect net income,
these measures as presented by us may not be comparable to
similarly titled measures of other companies.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All
statements, other than statements of historical facts, included in
this press release that address activities, events or developments
that Kosmos expects, believes or anticipates will or may occur in
the future are forward-looking statements. Kosmos’ estimates
and forward-looking statements are mainly based on its current
expectations and estimates of future events and trends, which
affect or may affect its businesses and operations. Although Kosmos
believes that these estimates and forward-looking statements are
based upon reasonable assumptions, they are subject to several
risks and uncertainties and are made in light of information
currently available to Kosmos. When used in this press release, the
words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will”
or other similar words are intended to identify forward-looking
statements. Such statements are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of
Kosmos, which may cause actual results to differ materially from
those implied or expressed by the forward-looking statements.
Further information on such assumptions, risks and uncertainties is
available in Kosmos’ Securities and Exchange
Commission (“SEC”) filings. Kosmos undertakes no
obligation and does not intend to update or correct these
forward-looking statements to reflect events or circumstances
occurring after the date of this press release, except as required
by applicable law. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. All forward-looking statements are qualified
in their entirety by this cautionary statement.
Kosmos Energy Ltd. Consolidated Statements of
Operations (In thousands, except per share amounts,
unaudited) Three Months Ended
Six Months Ended June 30, June 30, 2018
2017 2018 2017 Revenues and
other income: Oil and gas revenue $ 215,191 $ 136,363 $ 342,387
$ 239,795 Other income, net 282 10,161 263
58,695 Total revenues and other income 215,473 146,524
342,650 298,490
Costs and expenses: Oil and gas
production 49,815 21,604 96,583 41,490 Facilities insurance
modifications, net 1,029 (2 ) 9,478 2,572 Exploration expenses
77,481 19,982 98,674 125,696 General and administrative 17,497
14,739 39,380 30,526 Depletion and depreciation 74,289 72,441
128,566 107,419 Interest and other financing costs, net 18,870
19,465 44,564 36,251 Derivatives, net 140,272 (25,411 ) 178,750
(63,268 ) (Gain) loss on equity method investments, net (16,100 )
6,426 (34,796 ) 6,426 Other expenses, net 938 2,008
4,643 2,770 Total costs and expenses 364,091
131,252 565,842 289,882 Income (loss)
before income taxes (148,618 ) 15,272 (223,192 ) 8,608 Income tax
expense (benefit) (45,345 ) 23,739 (69,693 ) 45,916
Net loss $ (103,273 ) $ (8,467 ) $ (153,499 ) $ (37,308 )
Net loss per share: Basic $ (0.26 ) $ (0.02 ) $ (0.39 ) $
(0.10 ) Diluted $ (0.26 ) $ (0.02 ) $ (0.39 ) $ (0.10 )
Weighted average number of shares used to
compute net lossper share:
Basic 396,826 387,952 396,218 387,634
Diluted 396,826 387,952 396,218 387,634
Kosmos Energy Ltd. Condensed Consolidated
Balance Sheets (In thousands, unaudited)
June 30, December 31, 2018 2017
Assets Current assets: Cash and cash equivalents $ 116,941 $
233,412 Receivables, net 157,817 160,961 Other current assets
143,153 139,229 Total current assets 417,911 533,602
Property and equipment, net 2,263,064 2,317,828 Other non-current
assets 222,468 341,173
Total assets $ 2,903,443
$ 3,192,603
Liabilities and shareholders’
equity Current liabilities: Accounts payable $ 128,471 $
141,787 Accrued liabilities 145,600 219,412 Other current
liabilities 162,329 67,531 Total current liabilities 436,400
428,730 Long-term liabilities: Long-term debt, net 1,167,775
1,282,797 Deferred tax liabilities 392,918 476,548 Other
non-current liabilities 162,219 107,416 Total long-term
liabilities 1,722,912 1,866,761 Total shareholders’ equity
744,131 897,112
Total liabilities and shareholders’
equity $ 2,903,443 $ 3,192,603
Kosmos
Energy Ltd. Condensed Consolidated Statements of Cash
Flow (In thousands, unaudited) Three
Months Ended Six Months Ended June 30,
June 30, 2018 2017 2018
2017 Operating activities: Net loss $
(103,273 ) $ (8,467 ) $ (153,499 ) $ (37,308 )
Adjustments to reconcile net loss to net
cash provided by(used in) operating activities:
Depletion, depreciation and amortization 76,572 74,992 133,289
112,521 Deferred income taxes (57,179 ) 18,884 (81,876 ) 41,017
Unsuccessful well costs 44,611 3,517 44,654 3,605 Change in fair
value of derivatives 138,824 (20,767 ) 177,790 (58,944 ) Cash
settlements on derivatives, net(1) (35,824 ) 8,264 (56,221 ) 19,417
Equity-based compensation 9,068 10,499 17,085 20,329 Loss on
extinguishment of debt — — 4,056 — Distributions in excess of
equity in earnings — 6,426 5,234 6,426 Other 927 1,893 449 2,514
Changes in assets and liabilities: Net changes in working capital
(56,277 ) (82,373 ) (90,528 ) (127,091 ) Net cash provided by (used
in) operating activities 17,449 12,868 433 (17,514 )
Investing activities Oil and gas assets (57,938 ) (10,995 )
(92,650 ) (42,805 ) Other property (1,058 ) (1,183 ) (2,815 )
(1,454 ) Return of investment from KTIPI 38,900 — 79,970 — Proceeds
on sale of assets — 18,149 — 222,068
Net cash provided by (used in) investing activities (20,096 ) 5,971
(15,495 ) 177,809
Financing activities: Payments on
long-term debt (100,000 ) (50,000 ) (100,000 ) (200,000 ) Purchase
of treasury stock (5,821 ) (830 ) (17,695 ) (1,945 ) Deferred
financing costs (774 ) — (25,743 ) — Net cash used in
financing activities (106,595 ) (50,830 ) (143,438 ) (201,945 )
Net decrease in cash, cash equivalents and restricted cash
(109,242 ) (31,991 ) (158,500 ) (41,650 )
Cash, cash equivalents and restricted cash
at beginning ofperiod
255,728 263,536 304,986 273,195 Cash,
cash equivalents and restricted cash at end of period $ 146,486
$ 231,545 $ 146,486 $ 231,545
(1) Cash settlements on commodity hedges were $(37.5)
million and $12.9 million for the three months ended June 30, 2018
and 2017, respectively, and $(57.3) million and $24.3 million for
the six months ended June 30, 2018 and 2017.
Kosmos
Energy Ltd. Equity Method Investment (In thousands,
unaudited) Three months ended Six
months ended June 30, 2018 June 30, 2018
Revenues and other income: Oil and gas revenue $ 138,395 $ 384,749
Other income (170 ) 117 Total revenues and other
income 138,225 384,866 Costs and expenses: Oil and gas
production 23,332 75,033 Depletion and depreciation 21,881 75,951
Other expenses, net (73 ) (152 ) Total costs and expenses
45,140 150,832 Income before income
taxes 93,085 234,034 Income tax expense 33,620 83,251
Net income $ 59,465 $ 150,783
Kosmos' share of net income $ 29,733 $ 75,392 Basis difference
amortization(1) 13,633 40,596 Equity in
earnings - KTIPI $ 16,100 $ 34,796 (1)
The basis difference, which is associated with oil and gas
properties and subject to amortization, has been allocated to the
Ceiba Field and Okume Complex. We amortize the basis difference
using the unit-of-production method.
Kosmos Energy
Ltd. EBITDAX (In thousands, unaudited)
Three Months Ended June 30, 2018 2017
Kosmos
EquatorialGuinea (EquityMethod)(1)
Total Kosmos Net income (loss) $ (103,273 ) $ 16,100 $ (87,173 ) $
(8,467 ) Exploration expenses 77,481 — 77,481 19,982 Facilities
insurance modifications, net 1,029 — 1,029 (2 ) Depletion and
depreciation 74,289 24,574 98,863 72,441 Equity-based compensation
9,068 — 9,068 10,499 Derivatives, net 140,272 — 140,272 (25,411 )
Cash settlements on commodity derivatives (37,521 ) — (37,521 )
12,928 Inventory impairment and other (24 ) — (24 ) 545 Disputed
charges and related costs 626 — 626 1,209 Loss on equity method
investment - KBSL — — — 6,426 Gain on equity method investment -
KTIPI (16,100 ) — (16,100 ) — Interest and other financing costs,
net 18,870 — 18,870 19,465 Income tax expense (benefit) (45,345 )
16,810 (28,535 ) 23,739 EBITDAX $ 119,372 $
57,484 $ 176,856 $ 133,354
Six
months ended June 30, 2018 2017 Kosmos
EquatorialGuinea (EquityMethod)(1)
Total(2) Kosmos Net income (loss) $ (153,499 ) $ 34,796 $ (118,703
) $ (37,308 ) Exploration expenses 98,674 — 98,674 125,696
Facilities insurance modifications, net 9,478 — 9,478 2,572
Depletion and depreciation 128,566 78,572 207,138 107,419
Equity-based compensation 17,085 — 17,085 20,329 Derivatives, net
178,750 — 178,750 (63,268 ) Cash settlements on commodity
derivatives (57,265 ) — (57,265 ) 24,348 Inventory impairment and
other (5 ) — (5 ) 84 Disputed charges and related costs 2,961 —
2,961 2,439 Loss on equity method investment - KBSL — — — 6,426
Gain on equity method investment - KTIPI (34,796 ) — (34,796 ) —
Interest and other financing costs, net 44,564 — 44,564 36,251
Income tax expense (benefit) (69,693 ) 41,626 (28,067 )
45,916 EBITDAX $ 164,820 $ 154,994 $ 319,814
$ 270,904
Twelve Months Ended June
30, 2018 Kosmos
EquatorialGuinea (EquityMethod)(2)
Total Net income (loss) $ (338,983 ) $ 40,030 $ (298,953)
Exploration expenses 189,028 — 189,028 Facilities insurance
modifications, net 6,086 — 6,086 Depletion and depreciation 276,350
89,753 366,103 Equity-based compensation 36,669 — 36,669
Derivatives, net 301,986 — 301,986 Cash settlements on commodity
derivatives (42,876 ) —
(42,876)
Inventory impairment and other 314 — 314 Disputed charges and
related costs 5,484 — 5,484 Loss on equity method investment - KBSL
5,060 — 5,060 Gain on equity method investment - KTIPI (40,030 ) —
(40,030) Interest and other financing costs, net 85,908 — 85,908
Income tax expense (benefit) (70,672 ) 44,920 (25,752)
EBITDAX $ 414,324 $ 174,703 $ 589,027
(1) For the three months ended June 30, 2018, we have
presented separately our 50% share of the results from operations
and amortization of our basis difference for the Equatorial Guinea
investment, as we account for such investment under the equity
method. (2) For the twelve months ended June 30, 2018, we have
presented separately our 50% share of the results from operations
and amortization of our basis difference for the Equatorial Guinea
investment from the date of acquisition, November 28, 2107 through
June 30, 2018, as we account for such investment under the equity
method.
Adjusted Net Income (In thousands, except
per share amounts, unaudited) Three Months
Ended Six Months Ended June 30, June
30, 2018 2017 2018
2017 Net loss $ (103,273 ) $ (8,467 ) $ (153,499 ) $ (37,308
) Derivatives, net 140,272 (25,411 ) 178,750 (63,268 ) Cash
settlements on commodity derivatives (37,521 ) 12,928 (57,265 )
24,348 Facilities insurance modifications, net 1,029 (2 ) 9,478
2,572 Inventory impairment and other (24 ) 545 (5 ) 84 Disputed
charges and related costs 626 1,209 2,961 2,439 Loss on
extinguishment of debt — — 4,056 — Loss on equity method
investments, net — 6,426 — 6,426 Total
selected items before tax 104,382 (4,305 ) 137,975
(27,399 ) Income tax expense on adjustments(1) (35,963 )
4,369 (42,527 ) 13,622 Adjusted net loss $ (34,854 )
$ (8,403 ) $ (58,051 ) $ (51,085 ) Net loss per diluted
share $ (0.26 ) $ (0.02 ) $ (0.39 ) $ (0.10 ) Derivatives,
net 0.35 (0.06 ) 0.45 (0.16 ) Cash settlements on commodity
derivatives (0.09 ) 0.03 (0.14 ) 0.06 Facilities insurance
modifications, net — — 0.02 — Inventory impairment and other — — —
— Disputed charges and related costs — — — 0.01 Loss on
extinguishment of debt — — 0.01 — Loss on equity method
investments, net — 0.02 — 0.02 Total
selected items before tax 0.26 (0.01 ) 0.34 (0.07 )
Income tax expense on adjustments(1) (0.09 ) 0.01
(0.10 ) 0.04 Adjusted net loss per diluted share $ (0.09 ) $
(0.02 ) $ (0.15 ) $ (0.13 ) Weighted average number of
diluted shares 396,826 387,952 396,218 387,634 (1)
Income tax expense is calculated at the statutory rate in which
such item(s) reside. Statutory rate for Ghana is 35%.
Operational Summary(1)
(In thousands, except barrel and per barrel data, unaudited)
Three Months Ended Six Months Ended
June 30, June 30, 2018 2017
2018 2017 Net Oil Volume Sold (MMBbls)
Jubilee 1.900 1.919 2.897 3.895 TEN 0.995 0.996 1.932 0.996 Ceiba /
Okume 0.950 N/A 2.830 N/A Total 3.845 2.915
7.659 4.891
Oil revenue Ghana $ 215,191
$ 136,363 $ 342,387 $ 239,795 Ceiba / Okume 69,198 N/A
192,375 N/A Total 284,389 136,363 534,762 239,795 Cash
settlements on commodity derivatives (37,521 ) 12,928
(57,265 ) 24,348 Realized oil revenue $ 246,868 $ 149,291
$ 477,497 $ 264,143
Oil production
costs Ghana $ 49,815 $ 21,604 $ 96,583 $ 41,490 Ceiba / Okume
11,666 N/A 37,516 N/A Total $ 61,481 $ 21,604
$ 134,099 $ 41,490
Per Barrel:
Oil revenue Ghana $ 74.32 $ 46.78 $ 70.90 $ 49.03 Ceiba /
Okume 72.84 N/A 67.98 N/A Total 73.96 46.78 69.82 49.03 Cash
settlements on commodity derivatives(2) (12.96 ) 4.43 (11.86 ) 4.98
Realized oil revenue(3) 64.20 51.21 62.34 54.01
Oil
production costs Ghana $ 17.21 $ 7.41 $ 20.01 $ 8.48 Ceiba /
Okume 12.28 N/A 13.26 N/A Total 15.99 7.41 $ 17.51 $ 8.48
(1) For the three and six months June 30, 2018, we have
presented separately our 50% share of the results from operations
for the Equatorial Guinea investment, as we account for such
investment under the equity method. (2) Cash settlements on
commodity derivatives are only related to Ghana and are calculated
on a per barrel basis using only Ghana Net Oil Volumes Sold. (3)
Realized oil revenue includes revenue from Ghana, Ceiba / Okume,
and Cash settlements on commodity derivatives, and on a per barrel
basis is calculated using the total Net Oil Volume Sold from both
Ghana and Ceiba / Okume
Ghana was underlifted by approximately 227 thousand barrels as
of June 30, 2018.
Hedging Summary
As of June 30, 2018(1)
(Unaudited) Volume
Floor(2)
Short Put
Ceiling
Long Call
(MMBbls)
2018 : Three-way collars 1.466 $ 56.57 $ 41.57 $
65.91 $ — Four-way collars 1.503 $ 50.00 $ 40.00 $ 61.33 $ 70.00
Swaps with puts 3.000 $ 56.75 $ 43.33 $ — $ —
2019 :
Three-way collars 10.500 $ 53.33 $ 43.81 $ 73.10 $ — (1)
Please see the Company’s filed 10-Q for full disclosure on
hedging material. Includes hedging position as of June 30, 2018 and
hedges added since quarter-end. (2) “Floor” represents floor price
for collars or swaps and strike price for purchased puts.
Note: Excludes 1.0 MMBbls of sold (short) calls with a strike
price of $65.00/Bbl in 2018, 1.0 MMBbls of purchased (long) calls
with a strike price of $70.00/Bbl in 2018, 0.9 MMBbls of sold
(short) calls with a strike price of $80.00/Bbl in 2019 and 7.5
MMBbls of sold (short) calls with a strike price of $80.00/Bbl in
2020.
2018 Guidance
FY FY
2018 2018
Kosmos
Equatorial Guinea - Equity Method
Investment(1)
Cargos Jubilee 7 Gross Production (Bopd) 43,000 TEN 4
Ghana 11 Cargos(2) 10 Avg. Cargo Size (MBbls) ~975 Avg.
Cargo Size (MBbls) ~1,000 Opex ($/bbl) $ 14.00 - $17.00 Opex
($/bbl) $13.00 - $15.00 DD&A ($/bbl) $ 24.00 - $26.00
DD&A ($/bbl) $24.00 - $26.00 G&A ($MM) $ 100 Taxes
($/bbl) $11.00 - $13.00 % Cash 65 % % Cash 60% Exploration
Expense
Average of $30mmper quarter
Capex ($MM) $5 (Non Dry Hole) Taxes ($/bbl) $ 3.00 -
$4.00 % Current 100 % Capex ($MM) $ 300 Ghana $ 110
Exploration Suriname Drilling $ 50 Seismic $ 80 New Ventures $ 50
Corporate $ 10 (1) Represents 100% interest in our
equity method investment Kosmos Trident International Petroleum
Inc. ("KTIPI"). Kosmos owns a 50% interest in KTIPI which holds an
85% participating interest in the Ceiba Field and Okume Complex
through its wholly-owned subsidiary, Kosmos-Trident Equatorial
Guinea Inc. ("KTEGI"), representing a 40.375% net indirect interest
to Kosmos. (2) Entitlement share of production net to KTIPI in
which Kosmos holds a 50% interest.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180805005015/en/
Kosmos Energy Ltd.Investor RelationsJamie
Buckland, +44 (0) 203 954 2831jbuckland@kosmosenergy.comorRhys
Williams, +1-214-445-9693rwilliams@kosmosenergy.comorMedia
RelationsThomas Golembeski,
+1-214-445-9674tgolembeski@kosmosenergy.com
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