Kosmos Energy Ltd. (“Kosmos”) (NYSE: KOS) announced today
financial and operating results for the fourth quarter of
2017. For the fourth quarter of 2017, the Company generated
a net loss of $122.1 million,
or $0.31 per diluted share as compared to net loss
of $56.7 million or $0.15 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 $37.9 million or $0.10 per diluted share for
the fourth quarter of 2017.
“2017 was a year of strong operational and strategic delivery,”
said Andrew G. Inglis, chairman and chief executive officer. “We
delivered more than $300 million in net cash flow which was used to
diversify our production base and create another source of growth
through the acquisition of assets offshore Equatorial Guinea, and
reduce our net debt. In Ghana, Kosmos replaced more than 200
percent of production on a net proved basis. In exploration, we
completed the second phase of drilling offshore Mauritania and
Senegal, which resulted in the largest hydrocarbon discovery of the
year. With growing production, the Tortue development advancing at
pace with the approval of the ICA, and an exploration portfolio
that provides a sustainable, multi-year drilling program, Kosmos is
stronger than ever.”
Fourth quarter 2017 oil revenues were $187.1 million versus
$156.1 million in the same quarter of 2016, on sales of 2.9 million
barrels of oil in 2017 as compared to 3.0 million barrels in 2016.
Fourth quarter 2017 oil revenues exclude $2.3 million of derivative
settlements. Realized oil revenues, including the impact of the
Company’s hedging program, were $64.63 per barrel of oil sold in
the fourth quarter of 2017. At the end of the quarter, the Company
was in a net underlift position of approximately 0.4 million
barrels of oil.
Production expense for the fourth quarter was $46 million, or
$15.75 per barrel, versus $44 million, or $14.75 per barrel, in the
fourth quarter of 2016. Production expense per barrel increased in
the fourth quarter of 2017 compared to the same quarter a year ago
primarily because there were no LOPI claim reimbursements received
in the fourth quarter of 2017.
Exploration expenses totaled $53 million for the fourth quarter,
compared to $76 million in the same period of 2016 primarily the
result of lower geologic and geophysical costs. While Kosmos was
carried for the Hippocampe-1 and Lamantin-1 exploration wells, $19
million of expenses related to the drilling rig that are not
eligible for reimbursement were expensed during the quarter. Also
included in the quarter was $18 million of expense related to our
withdrawal from the Boujdour Maritime licenses.
Depletion and depreciation expense for the quarter was $74
million, or $25.35 per barrel. This was a slight increase from
$25.08 per barrel in the fourth quarter of 2016.
General and administrative expenses were $18 million during the
fourth quarter, slightly less than the previous quarter. This
amount includes approximately $8 million in cash expense and $10
million in non-cash equity based compensation expense.
Fourth quarter results included a mark-to-market loss of $96
million related to the Company’s oil derivative contracts. At
December 31, 2017, the Company’s hedging position had a total
commodity net liability value of $97 million. As of the quarter end
and including recently executed hedges, Kosmos had approximately 20
million barrels of oil hedged covering 2018 and 2019.
Gain on equity method investments, net during the fourth quarter
was approximately $5.0 million and relates primarily to Kosmos' 50
percent ownership of our equity method investment in Kosmos Trident
International Petroleum Inc. (KTIPI), which holds our 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) loss on equity method investments, net in the consolidated
statement of operations.
Total capital expenditures in the fourth quarter were $62
million. Full year capital expenditures totaled $57 million, net of
the initial proceeds from the BP transaction of $222 million.
Kosmos exited the fourth quarter of 2017 with approximately $1.1
billion of liquidity and $1,020 million of net debt. In early
February 2018, Kosmos refinanced its reserve based lending facility
(RBL). The borrowing capacity has been increased to $1.5
billion, up from $1.3 billion, resulting in Kosmos' overall
liquidity increasing to $1.3 billion.
Year-End 2017 Reserves
The Company’s proved net reserves at the end of 2017 were 110
million barrels of oil equivalent (MMBoe), including 89 MMBoe of
net reserves in Ghana and 21 MMBoe of reserves in Equatorial
Guinea. These volumes also include natural gas reserves of
approximately 10 million barrels of oil equivalent, which represent
the gas anticipated to be used for power generation on the Jubilee
and TEN FPSO vessels and Ceiba/Okume complex, as well as sales gas
from the TEN fields.
In Ghana, Kosmos replaced 214 percent of production, on a net
proved basis, primarily related to the approval of the Greater
Jubilee Full Field Development Plan and positive revisions at TEN.
The Company’s reported reserves are prepared by Ryder Scott
Company, L.P., an independent reserve engineering firm.
Operational Update
Ghana
During the fourth quarter of 2017, gross sales volumes from
Ghana averaged approximately 159,000 barrels of oil per day (bopd),
including volumes from the Jubilee and TEN fields which averaged
approximately 92,000 bopd and 67,000 bopd, respectively. For the
full year, volumes from the Jubilee and TEN fields averaged
approximately 90,000 bopd and 56,000 bopd, respectively.
Throughout 2017 the Jubilee FPSO turret remediation project made
significant progress, and following the spread mooring of the FPSO
at its current heading in late February, optimization of the
offtake procedures has allowed the Jubilee field to regularly
produce in excess of 100,000 bopd. The Jubilee partners and the
Government of Ghana agreed on the need to stabilize the turret
bearing and rotate the FPSO. The operator estimates stabilization
will require a shutdown, in two phases in early 2018, resulting in
approximately four weeks of oil production downtime. The initial
phase of this shutdown commenced in early 2018. Kosmos now expects
the rotation of the vessel to its optimal heading to take place
around the end of the year with minimal impact to production in
2018.
In mid-October, the partnership received approval for the
Greater Jubilee Full Field Development Plan (GJFFDP) from the
Government of Ghana. The approval of the GJFFDP establishes a price
for gas sales and allows for drilling to resume in 2018, which is
expected to increase production, extend the field production
profile, and allowed the Company to book additional proved
reserves.
Production from TEN in the fourth quarter averaged approximately
67,000 bopd. TEN development drilling is expected to resume
imminently and the addition of new wells coming online is expected
to allow production to increase towards the FPSO capacity of 80,000
bopd.
Equatorial Guinea
In October 2017 Kosmos announced that, in partnership with
Trident Energy (Trident), it had agreed to acquire an interest in
three exploration licenses (Blocks W, S, and EG-21), as well as
Hess Corporation’s interest in the adjacent Ceiba Field and
Okume Complex assets offshore Equatorial Guinea on a
50-50 basis. Under the terms of the agreements, Kosmos is primarily
responsible for exploration and subsurface evaluation while Trident
is primarily responsible for production operations and
optimization. The transactions capture a material position in a
proven but under-explored oil basin originally discovered and
operated by members of the Kosmos management team.
The transaction expanded our position in the Gulf of Guinea and
provides immediate cash flow through existing production with
upside potential from optimizing current production operations,
infill drilling, and step-out exploration opportunities with the
potential for low cost tie-backs through existing infrastructure.
The gross acquisition price of $650 million was effective
as of January 1, 2017. Kosmos paid net cash consideration of
approximately $231 from cash on hand and proceeds from the
Company's reserves-based lending facility at close on November 28,
2017. Oil production from the Ceiba Field and Okume Complex
averaged approximately 45,000 bopd (gross) during the period Kosmos
held an interest in 2017.
Portfolio Additions
In December 2017, Kosmos expanded its portfolio with petroleum
contracts covering Blocks CI-526, CI-602, CI-603, CI-707 and CI-708
with the Government of Cote d'Ivoire. Kosmos holds a 45%
participating interest and is the operator in all five blocks. BP
has a 45% participating interest in the blocks and the Cote
d'Ivoire national oil company, PETROCI Holding ("PETROCI"),
currently has a 10% carried interest. The petroleum contracts cover
approximately 17,000 square kilometers.
Inter-Governmental Cooperation Agreement
Also in February 2018, the governments of Mauritania and Senegal
signed an Inter-Governmental Cooperation Agreement (ICA) which
enables the development of the cross-border Tortue natural gas
field to continue moving forward. With this agreement in place, we
expect a final investment decision for the Greater Tortue project
around the end of 2018 and are 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 with accompanying
slides to discuss fourth quarter 2017 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 leading independent oil and gas exploration and
production company focused on frontier and emerging areas along the
Atlantic Margins. Our assets include existing production and
development projects offshore Ghana and Equatorial Guinea, large
discoveries and significant further exploration potential offshore
Mauritania and Senegal, as well as exploration licenses offshore
Cote d'Ivoire, Equatorial Guinea, Morocco, Sao Tome and Principe,
and Suriname. 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 2016 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 Years Ended December
31, December 31, 2017 2016
2017 2016 Revenues and other
income: Oil and gas revenue $ 187,104 $ 156,118 $ 578,139 $
310,377 Other income, net — 54,799 58,697
74,978 Total revenues and other income 187,104 210,917
636,836 385,355
Costs and expenses: Oil and gas
production 46,173 43,720 126,850 119,367 Facilities insurance
modifications, net 514 9,015 (820 ) 14,961 Exploration expenses
53,371 75,782 216,050 202,280 General and administrative 17,747
27,951 68,302 87,623 Depletion and depreciation 74,294 74,373
255,203 140,404 Interest and other financing costs, net 22,866
13,879 77,595 44,147 Derivatives, net 96,372 14,269 59,968 48,021
(Gain) loss on equity method investments, net (4,978 ) — 6,252 —
Other expenses, net 2,288 9,348 5,291 23,116
Total costs and expenses 308,647 268,337
814,691 679,919 Loss before income taxes
(121,543 ) (57,420 ) (177,855 ) (294,564 ) Income tax expense
(benefit) 536 (720 ) 44,937 (10,784 ) Net loss $
(122,079 ) $ (56,700 ) $ (222,792 ) $ (283,780 )
Net loss
per share: Basic $ (0.31 ) $ (0.15 ) $ (0.57 ) $ (0.74 )
Diluted $ (0.31 ) $ (0.15 ) $ (0.57 ) $ (0.74 )
Weighted average number of shares used to compute net loss per
share: Basic 389,149 386,214 388,375 385,402
Diluted 389,149 386,214 388,375 385,402
Kosmos Energy Ltd.
Condensed Consolidated Balance
Sheets
(In thousands, unaudited)
December 31, December 31, 2017
2016 Assets Current assets: Cash and cash equivalents
$ 233,412 $ 194,057 Receivables, net 160,961 143,337 Other current
assets 139,229 137,793 Total current assets 533,602 475,187
Property and equipment, net 2,317,828 2,708,892 Other
non-current assets 341,173 157,386
Total assets $
3,192,603 $ 3,341,465
Liabilities and
shareholders’ equity Current liabilities: Accounts payable $
141,787 $ 220,627 Accrued liabilities 219,412 129,706 Other current
liabilities 67,531 19,692 Total current liabilities 428,730
370,025 Long-term liabilities: Long-term debt, net 1,282,797
1,321,874 Deferred tax liabilities 476,548 482,221 Other
non-current liabilities 107,416 86,146 Total long-term
liabilities 1,866,761 1,890,241 Total shareholders’ equity
897,112 1,081,199
Total liabilities and shareholders’
equity $ 3,192,603 $ 3,341,465
Kosmos Energy Ltd.
Condensed Consolidated Statements of
Cash Flow
(In thousands, unaudited)
Three Months Ended Years Ended December
31, December 31, 2017 2016
2017 2016 Operating activities:
Net loss $ (122,079 ) $ (56,700 ) $ (222,792 ) $
(283,780 ) Adjustments to reconcile net loss to net cash provided
by operating activities: Depletion, depreciation and amortization
76,844 76,924 265,407 150,608 Deferred income taxes (23,315 )
(6,740 ) 9,505 (23,561 ) Unsuccessful well costs 18,686 3,470
43,201 6,079 Change in fair value of derivatives 97,746 9,380
71,822 46,559 Cash settlements on derivatives, net(1) 613 44,373
25,888 188,895 Equity-based compensation 9,968 9,693 39,913 40,084
(Gain) loss on equity method investments, net (4,978 ) — 6,252 —
Other 2,540 (3 ) 5,952 13,355 Changes in assets and liabilities:
Net changes in working capital 86,180 37,303 (8,531 )
(86,162 ) Net cash provided by operating activities 142,205 117,700
236,617 52,077
Investing activities: Oil and gas
assets (39,783 ) (29,719 ) (140,495 ) (535,975 ) Other property
(1,219 ) (995 ) (2,858 ) (1,998 ) Equity method investments
(231,280 ) — (231,280 ) — Proceeds from sale of assets — —
222,068 210 Net cash used in investing
activities (272,282 ) (30,714 ) (152,565 ) (537,763 )
Financing activities: Borrowings on long-term debt 200,000 —
200,000 450,000 Payments on long-term debt — — (250,000 ) —
Purchase of treasury stock (78 ) (51 ) (2,194 ) (1,981 ) Deferred
financing costs (67 ) — (67 ) — Net cash provided by
(used in) financing activities 199,855 (51 ) (52,261 )
448,019 Net increase (decrease) in cash, cash
equivalents and restricted cash 69,778 86,935 31,791 (37,667 )
Cash, cash equivalents and restricted cash at beginning of period
235,208 186,260 273,195 310,862 Cash,
cash equivalents and restricted cash at end of period $ 304,986
$ 273,195 $ 304,986 $ 273,195
_____________________
(1) Cash settlements on commodity hedges were $2.3 million
and $41.4 million for the three months ended December 31, 2017 and
2016, respectively, and $38.7 million and $188.0 million for the
years ended December 31, 2017 and 2016.
Kosmos Energy Ltd.
Equity Method Investment
(In thousands, unaudited)
Period
November 28, 2017 through
December 31, 2017
Revenues and other income: Oil and gas revenue $ 54,615 Other
income 294 Total revenues and other income 54,909
Costs and expenses: Oil and gas production 15,509 Depletion and
depreciation 10,738 Other expenses, net (19 ) Total costs and
expenses 26,228 Income before income taxes 28,681
Income tax expense 6,588 Net income $ 22,093
Kosmos' share of net income $ 11,046 Basis difference
amortization(1) 5,812 Equity in earnings - KTIPI $ 5,234
_____________________
(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 December 31, 2017
2016 Kosmos
Equatorial Guinea(Equity Method)(1)
Total(2) Kosmos Net income (loss) $ (122,079 ) $
5,234 $ (116,845 ) $ (56,700 ) Exploration expenses 53,371 — 53,371
75,782 Facilities insurance modifications, net 514 — 514 9,015
Depletion and depreciation 74,294 11,181 85,475 74,373 Equity-based
compensation 9,968 — 9,968 9,693 Derivatives, net 96,372 — 96,372
14,269 Cash settlements on commodity derivatives 2,311 — 2,311
41,436 Inventory impairment and other 820 — 820 (279 ) Disputed
charges and related costs 1,702 — 1,702 9,473 Loss on equity method
investment - KBSL 256 — 256 — Gain on equity method investment -
KTIPI (5,234 ) — (5,234 ) — Interest and other financing costs, net
22,866 — 22,866 13,879 Income tax expense (benefit) 536
3,294 3,830 (720 ) EBITDAX $ 135,697 $ 19,709
$ 155,406 $ 190,221
Years
Ended December 31, 2017 2016
Kosmos
Equatorial Guinea(Equity Method)(1)
Total(2) Kosmos Net income (loss) $ (222,792 ) $
5,234 $ (217,558 ) $ (283,780 ) Exploration expenses 216,050 —
216,050 202,280 Facilities insurance modifications, net (820 ) —
(820 ) 14,961 Depletion and depreciation 255,203 11,181 266,384
140,404 Equity-based compensation 39,913 — 39,913 40,084
Derivatives, net 59,968 — 59,968 48,021 Cash settlements on
commodity derivatives 38,737 — 38,737 187,950 Inventory impairment
and other 403 — 403 10,718 Disputed charges and related costs 4,962
— 4,962 11,299 Loss on equity method investment - KBSL 11,486 —
11,486 — Gain on equity method investment - KTIPI (5,234 ) — (5,234
) — Interest and other financing costs, net 77,595 — 77,595 44,147
Income tax expense (benefit) 44,937 3,294 48,231
(10,784 ) EBITDAX $ 520,408 $ 19,709 $ 540,117
$ 405,300
_____________________
(1) For the three months and years ended December 31, 2017,
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, 2017 through December 31, 2017, as we account for such
investment under the equity method. (2) Pro forma EBITDAX,
including Kosmos' 50% interest in KTEGI for 2017, for the purposes
of calculation of our covenants under our RBL facility would be
$695 million and $183 million for the year ended 2017 and three
months ended December 31, 2017, respectively.
Adjusted Net Income
(In thousands, except per share
amounts, unaudited)
Three Months Ended Years Ended December
31, December 31, 2017 2016
2017 2016 Net loss $ (122,079 ) $
(56,700 ) $ (222,792 ) $ (283,780 ) Derivatives, net 96,372
14,269 59,968 48,021 Cash settlements on commodity derivatives
2,311 41,436 38,737 187,950 Facilities insurance modifications, net
514 9,015 (820 ) 14,961 Inventory impairment and other 820 (279 )
403 10,718 Disputed charges and related costs 1,702 9,473 4,962
11,299 Loss on equity method investments, net 256 —
11,486 — Total selected items before tax 101,975
73,914 114,736 272,949 Income
tax expense on adjustments(1) (34,539 ) (22,812 ) (34,547 ) (89,581
) Impact of U.S. tax law change 16,721 — 16,721
— Adjusted net loss $ (37,922 ) $ (5,598 ) $ (125,882
) $ (100,412 ) Net loss per diluted share $ (0.31 ) $ (0.15
) $ (0.57 ) $ (0.74 ) Derivatives, net 0.25 0.04 0.15 0.12
Cash settlements on commodity derivatives 0.01 0.11 0.10 0.49
Facilities insurance modifications, net — 0.02 — 0.04 Inventory
impairment and other — — — 0.03 Disputed charges and related costs
— 0.02 0.01 0.03 Loss on equity method investments, net — —
0.03 — Total selected items before tax 0.26
0.19 0.29 0.71 Income tax
expense on adjustments(1) (0.09 ) (0.05 ) (0.09 ) (0.23 ) Impact of
U.S. tax law change 0.04 — 0.04 —
Adjusted net loss per diluted share $ (0.10 ) $ (0.01 ) $ (0.33 ) $
(0.26 ) Weighted average number of diluted shares 389,149
386,214 388,375 385,402
_____________________
(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 Years Ended December
31, December 31, 2017 2016
2017 2016 Net Oil Volume Sold
(MMBbls) Jubilee 1.944 1.969 7.782 5.760 TEN 0.987 0.996 2.979
0.996 Ceiba / Okume 0.405 N/A 0.405 N/A Total 3.336
2.965 11.166 6.756
Oil revenue
Ghana $ 187,104 $ 156,118 $ 578,139 $ 310,377 Ceiba / Okume 27,307
N/A 27,307 N/A Total 214,411 156,118 605,446 310,377
Cash settlements on commodity derivatives 2,311 41,436
38,737 187,950 Realized oil revenue $ 216,722
$ 197,554 $ 644,183 $ 498,327
Oil
production costs Ghana $ 46,173 $ 43,720 $ 126,850 $ 119,367
Ceiba / Okume 7,755 N/A 7,755 N/A Total $ 53,928
$ 43,720 $ 134,605 $ 119,367
Per
Barrel: Oil revenue Ghana $ 63.84 $ 52.65 $ 53.73
$ 45.94 Ceiba / Okume 67.42 N/A 67.42 N/A Total 64.27
52.65 54.22 45.94 Cash settlements on commodity derivatives 0.79
13.98 3.60 27.82 Realized oil revenue $ 65.06
$ 66.63 $ 57.82 $ 73.76
Oil
production costs Ghana $ 15.75 $ 14.75 $ 11.78 $ 17.67 Ceiba /
Okume 19.15 N/A 19.15 N/A Total $ 16.17 $
14.75 $ 12.05 $ 17.67
_____________________
(1) For the three months and years ended December 31, 2017,
we have presented separately our 50% share of the results from
operations for the Equatorial Guinea investment from the date of
acquisition, November 28, 2017 through December 31, 2017, as we
account for such investment under the equity method. Ghana
was underlifted by approximately 428 thousand barrels as of
December 31, 2017.
Hedging Summary
As of December 31,
2017(1)
(Unaudited)
Volume Floor(2) Short Put
Ceiling Long Call (MMBbls)
2018 : Three-way
collars 2.913 $ 56.57 $ 41.57 $ 65.90 $ — Four-way collars 3.000 $
50.00 $ 40.00 $ 61.33 $ 70.00 Swaps 1.000 $ 57.25 Swaps with puts
4.000 $ 56.14 $ 42.50
2019 : Three-way collars 9.500
$ 52.63 $ 43.16 $ 65.01 $ —
_____________________
(1) Please see the Company’s filed 10-K for full disclosure
on hedging material. Includes hedging position as of December 31,
2017 and hedges added since year-end. (2) “Floor” represents floor
price for collars or swaps and strike price for purchased puts.
Note: Excludes 2.0 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 the
second half of 2018 and 0.9 MMBbls of sold (short) calls with a
strike price of $80.00/Bbl in 2019.
2018 Guidance
1Q FY 1Q FY
2018 2018
2018 2018 Kosmos
Equatorial Guinea - Equity Method Investment(1) Cargos
Jubilee 1 7 Gross Production (Bopd) 43,000 TEN 1 4 Ghana 2 11
Cargos(2) 3 10 Avg. Cargo Size (MBbls) ~975 ~975 Avg. Cargo
Size (MBbls) ~1,000 ~1,000 Opex ($/bbl) $21.00 - $23.00
$14.00 - $17.00 Opex ($/bbl) $13.00 - $15.00 DD&A
($/bbl) $27.00 - $28.00 $24.00 - $26.00 DD&A ($/bbl) $24.00 -
$26.00 G&A ($MM) $30 $100 Taxes ($/bbl) $11.00 - $13.00
% Cash 65% 65% % Cash 60% Exploration Expense Average of
$30mm per quarter Capex ($MM) $5
(Non Dry Hole) Taxes ($/bbl) $2.50 - $3.50 $3.00 - $4.00 %
Current 100% 100% Capex ($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.
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version on businesswire.com: http://www.businesswire.com/news/home/20180225005152/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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