Source - LSE Regulatory
RNS Number : 4152S
Kosmos Energy Limited
06 November 2023
 

 

KOSMOS ENERGY ANNOUNCES THIRD QUARTER 2023 RESULTS

 

DALLAS November 6, 2023-- Kosmos Energy Ltd. ("Kosmos" or the "Company") (NYSE/LSE: KOS) announced today its financial and operating results for the third quarter of 2023. For the quarter, the Company generated a net income of $85 million, or $0.18 per diluted share. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net income(1) of $126 million, or $0.26 per diluted share for the third quarter of 2023.

 

THIRD QUARTER 2023 HIGHLIGHTS

 

•     Net Production(2): ~68,200 barrels of oil equivalent per day (boepd), with sales of ~73,100 boepd

 

•     Start up of the Jubilee South East development offshore Ghana

 

•     Post quarter-end, Tiberius infrastructure-led exploration (ILX) oil discovery offshore U.S. Gulf of Mexico

 

•   Post quarter-end, assumption of operatorship and a greater working interest at Yakaar-Teranga offshore Senegal, subject to customary government approvals

 

•     Repayment of Gulf of Mexico Term Loan, reducing our cost of capital and simplifying our capital structure

 

•     Revenues: $526 million, or $78.24 per boe (excluding the impact of derivative cash settlements)

 

•     Production expense: $139 million, or $20.63 per boe

 

•     Capital expenditures: $193 million

 

 

Commenting on the Company's third quarter 2023 performance, Chairman and Chief Executive Officer Andrew G. Inglis said: "Kosmos continues to create value for its stakeholders through the consistent delivery of its strategy to grow production, advance its advantaged oil and LNG projects, and add resource through infrastructure-led exploration.

 

"Production in the quarter increased by around 17% versus the second quarter following the successful startup of the Jubilee South East development, with three producers brought online taking gross field production up to around 100,000 barrels of oil per day, with continued growth expected.

 

"In addition, Kosmos advanced its two key development projects at Winterfell and Tortue Phase 1. When online, these projects together with Jubilee South East are expected to increase production by around 50% from the second half of 2022, generating the cash flow inflection we have been working towards. 

 

"Looking to options for future growth, Kosmos recently announced the Tiberius oil discovery in the U.S. Gulf of Mexico, as well as the assumption of operatorship of the Yakaar-Teranga gas fields offshore Senegal. These low cost, lower carbon oil and gas projects are expected to provide the next phase of growth for the company beyond 2024. We plan to balance the pace and working interest of these future projects to ensure we can manage our growth and generate material free cash flow."

 

FINANCIAL UPDATE

 

Kosmos exited the third quarter of 2023 with approximately $2.4 billion of total long-term debt and approximately $2.3 billion of net debt(1) and available liquidity of approximately $0.6 billion. The Company generated net cash provided by operating activities of approximately $249 million and free cash flow(1) of approximately $54 million in the third quarter, in line with expectations.

 

During the quarter, Kosmos repaid the Gulf of Mexico term loan, simplifying the company's capital structure. The Company also successfully completed the semi-annual redetermination of the reserve-based lending facility and deferred the first amortization period, which results in no scheduled debt maturities until 2025 and beyond.

 

Net capital expenditure for the third quarter of 2023 was $193 million, in line with guidance.

 

OPERATIONAL UPDATE

 

Production

 

Total net production(2) in the third quarter of 2023 averaged approximately 68,200 boepd, a ~17% increase from the second quarter, in line with guidance. The Company exited the quarter in a net underlift position of approximately 0.5 million barrels, which is expected to partially reverse in the fourth quarter.

 

Ghana

 

Production in Ghana averaged approximately 43,600 boepd net in the third quarter of 2023. Kosmos lifted four cargos from Ghana during the quarter, in line with guidance.

 

At Jubilee, production averaged approximately 95,900 bopd gross during the quarter, ~32% higher compared to the previous quarter.

 

Three producer wells were brought online during the third quarter, taking gross field production up to around 100,000 bopd.

 

Post quarter-end, two water injection wells, which were delayed due to operational issues, were brought online. This delay coupled with higher than anticipated downtime of the water injection pumps within the quarter, resulted in a slower ramp-up in Jubilee production. This is expected to result in one Jubilee cargo lifting originally planned for Kosmos in the fourth quarter of 2023, being deferred into early 2024.

 

At TEN, production averaged approximately 15,100 bopd gross for the third quarter, in line with expectations, and lower quarter-on-quarter largely due to a planned two week shutdown.

 

The partnership has submitted a draft amended plan of development for a high-graded activity set at TEN and a combined gas sales agreement for Jubilee and TEN to the Government of Ghana for approval. An interim gas sales agreement for Jubilee associated gas has been extended through November 2023 at a price of $2.90/mmbtu while discussions are ongoing on a longer-term agreement.

 

U.S. Gulf of Mexico

 

Production in the U.S. Gulf of Mexico averaged approximately 15,700 boepd net (~82% oil) during the third quarter, above guidance due to lower storm activity than anticipated during the period.

 

The Winterfell development continues to make good progress. Drilling of the wells commenced in August and the first well has now been successfully completed. Partners are targeting first oil around the end of the first quarter of 2024.

 

As announced in October, the Tiberius ILX well in Keathley Canyon, block 964 encountered approximately 250 feet (~75 meters) of net oil pay in the primary Wilcox target. The Tiberius well is located in approximately 7,500 feet (2,300 meters) of water and was drilled to a total vertical depth of approximately 25,800 feet (7,800 meters).

 

Kosmos is undertaking rock and fluid analysis to confirm the production potential of the reservoir, with results expected around year-end. Kosmos is also working with partners on subsea development options. The discovery is located approximately 6 miles southeast of the Occidental-operated Lucius SPAR production facility, enabling a short tie-back in the event of a development.

 

The Odd Job subsea pump project, intended to sustain long-term production from the field, continues to progress and remains on track to be in service by mid-2024. The Odd Job field saw some unplanned downtime in October and is expected back online in November.

 

At Kodiak, workover plans have been developed for remediation and are now expected to commence around the middle of 2024 given the better than forecast performance of the well this year.

 

Equatorial Guinea

 

Production in Equatorial Guinea averaged approximately 25,400 bopd gross and 8,900 bopd net in the third quarter of 2023. Kosmos lifted one cargo from Equatorial Guinea during the quarter, in line with guidance.

 

The infill drilling campaign is scheduled to commence in the fourth quarter of 2023 following a two well workover program utilizing the drilling rig. The first of three infill wells is expected to be online around the end of the first quarter 2024, with all three wells expected online by the second quarter of 2024.

 

Akeng Deep, an ILX opportunity targeting an estimated pre-drill gross resource of ~180 million barrels of oil in the deeper Albian trend, is expected to spud next year following the completion of the workover and infill drilling campaign.

 

Mauritania & Senegal

 

On Greater Tortue Ahmeyim, the following milestones have been achieved:

 

•     Drilling: Earlier in the year, the operator, successfully drilled and completed all four wells with expected production capacity significantly higher than what is required for first gas.

 

•     Hub Terminal: Construction work is complete, and handover to operations was completed in August 2023.

 

•     Subsea: Significant progress has been made on the revised plan to complete installation of the infield flowlines and subsea structures due to the previously announced delay in the subsea workstream. Work on the revised plan is expected to commence later this quarter with new contractors.

 

•     FLNG: Construction and mechanical completion activities are finishing and pre-commissioning work is underway. The vessel is expected to sail away later this quarter arriving on location early next year when hookup work is expected to commence.

 

•     FPSO: Currently en route to Mauritania/Senegal and is now expected to arrive on location in the first quarter of 2024.

 

The critical path to first gas on Phase 1 of the Greater Tortue Ahmeyim project is now through the arrival, hookup and commissioning of the FPSO. The delivery of first gas in the first quarter of 2024, as signaled by BP (the operator) in its third quarter results last week, depends on the execution of this workstream, which has the potential to slip into the second quarter of 2024.

 

On Yakaar-Teranga, Kosmos announced today that it had assumed operatorship and increased its interest in the field to 90% (from 30%), subject to customary government approvals. Kosmos is working closely with Senegal's national oil company (PETROSEN) and the Government of Senegal on an innovative development concept that prioritizes cost-competitive gas to the rapidly growing domestic market, combined with an offshore liquefied natural gas facility targeting exports into international LNG markets. The project supports the country's 'Plan Sénégal Emergent' objective of providing affordable, abundant, and cleaner energy.

 

 

(1) A Non-GAAP measure, see attached reconciliation of non-GAAP measure.

(2) Production means net entitlement volumes. In Ghana and Equatorial Guinea, this means those volumes net to Kosmos' working interest or participating interest and net of royalty or production sharing contract effect. In the U.S. Gulf of Mexico, this means those volumes net to Kosmos' working interest and net of royalty.

 

Conference Call and Webcast Information

 

Kosmos will host a conference call and webcast to discuss third quarter 2023 financial and operating results today, November 6, 2023, at 10:00 a.m Central time (11:00 a.m. Eastern time). The live webcast of the event can be accessed on the Investors page of Kosmos' website at http://investors.kosmosenergy.com/investor-events. The dial-in telephone number for the call is +1-877-407-0784. Callers in the United Kingdom should call 0800 756 3429. Callers outside the United States should dial +1-201-689-8560. 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 full-cycle deepwater independent oil and gas exploration and production company focused along the Atlantic Margins. Our key assets include production offshore Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, as well as a world-class gas development offshore Mauritania and Senegal. We also maintain a sustainable proven basin exploration program in Equatorial Guinea, Ghana and the U.S. Gulf of Mexico. Kosmos is listed on the New York Stock Exchange and London Stock Exchange and is traded under the ticker symbol KOS. 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 Sustainability Report. For additional information, visit www.kosmosenergy.com.

 

Non-GAAP Financial Measures

 

EBITDAX, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, and net debt 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 Company defines Adjusted net income (loss) as Net income (loss) adjusted for certain items that impact the comparability of results. The Company defines free cash flow as net cash provided by operating activities less Oil and gas assets, Other property, and certain other items that may affect the comparability of results and excludes non-recurring activity such as acquisitions, divestitures and National Oil Company ("NOC") financing. NOC financing refers to the amounts funded by Kosmos under the Carry Advance Agreements that the Company has in place with the national oil companies of each of Mauritania and Senegal related to the financing of the respective national oil companies' share of certain development costs at Greater Tortue Ahmeyim. The Company defines net debt as total long-term debt less cash and cash equivalents and total restricted cash.

 

We believe that EBITDAX, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, Net debt 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. EBITDAX, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, and net debt as presented by us may not be comparable to similarly titled measures of other companies.

 

This release also contains certain forward-looking non-GAAP financial measures, including free cash flow. Due to the forward-looking nature of the aforementioned non-GAAP financial measures, management cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, we are unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from these non-GAAP measures in future periods could be significant.

 

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 (including, but not limited to, the impact of the COVID-19 pandemic), 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

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2023

 

2022

 

2023

 

2022

Revenues and other income:

 

 

 

 

 

 

 

 

Oil and gas revenue

 

$   526,348

 

$   456,056

 

$  1,193,843

 

$  1,735,439

Gain on sale of assets

 

              -

 

              -

 

              -

 

            471

Other income, net

 

            198

 

              48

 

          (115)

 

            143

Total revenues and other income

 

     526,546

 

     456,104

 

  1,193,728

 

  1,736,053

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

Oil and gas production

 

     138,782

 

       62,372

 

     286,297

 

     277,264

Facilities insurance modifications, net

 

              -

 

            494

 

              -

 

         7,246

Exploration expenses

 

       10,290

 

       17,215

 

       33,305

 

     118,656 

General and administrative

 

       25,120

 

       24,007

 

       77,731

 

       74,424

Depletion, depreciation and amortization

 

     132,347

 

     106,313

 

     331,634

 

     386,961

Interest and other financing costs, net

 

       25,440

 

       29,796

 

       74,379

 

       92,317

Derivatives, net

 

       45,971

 

   (113,842)

 

       42,162

 

     243,534

Other expenses, net

 

       11,055 

 

          (218)

 

       17,864

 

       (1,320)

Total costs and expenses

 

     389,005

 

     126,137

 

     863,372

 

  1,199,082

 

 

 

 

 

 

 

 

 

Income before income taxes

 

     137,541

 

     329,967

 

     330,356

 

     536,971

Income tax expense

 

       52,356

 

     107,713

 

     138,517

 

     196,144

Net income

 

$     85,185

 

$   222,254

 

$   191,839

 

$   340,827

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$         0.19

 

$         0.49

 

$         0.42

 

$         0.75

Diluted

 

$         0.18

 

$         0.47

 

$         0.40

 

$         0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used to compute net income per share:

 

 

 

 

 

 

 

 

Basic

 

     460,108

 

     455,840

 

     459,477

 

     455,158

Diluted

 

     481,099

 

     476,431

 

     479,738

 

     474,820

 

Kosmos Energy Ltd.

Condensed Consolidated Balance Sheets

(In thousands, unaudited)

 

September 30,

December 31,

 

2023

2022

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$          138,742

 

$          183,405

Receivables, net

 

            118,567 

 

            119,735 

Other current assets

 

            204,487

 

            165,581

Total current assets

 

            461,796

 

            468,721

 

 

 

 

 

Property and equipment, net

 

         4,179,969

 

         3,842,647

Other non-current assets

 

            327,636

 

            268,620

Total assets

 

$       4,969,401

 

$       4,579,988

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$          199,031

 

$          212,275

Accrued liabilities

 

            338,790

 

            325,206

Current maturities of long-term debt

 

                     -

 

              30,000

Other current liabilities

 

              26,597

 

                6,773

Total current liabilities

 

            564,418

 

            574,254

 

 

 

 

 

Long-term liabilities:

 

 

 

 

Long-term debt, net

 

         2,389,197

 

         2,195,911 

Deferred tax liabilities

 

            433,628

 

            468,445

Other non-current liabilities

 

            582,489

 

            553,530

Total long-term liabilities

 

         3,405,314

 

         3,217,886

 

 

 

 

 

Total stockholders' equity

 

            999,669

 

            787,848

Total liabilities and stockholders' equity

 

$       4,969,401

 

$       4,579,988

 

Kosmos Energy Ltd.

Condensed Consolidated Statements of Cash Flow

(In thousands, unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2023

 

2022

 

2023

 

2022

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$     85,185      

 

$   222,254    

 

$   191,839    

 

$   340,827    

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depletion, depreciation and amortization (including deferred financing costs)

 

     134,809    

 

     108,890    

 

     339,177    

 

     394,799    

Deferred income taxes

 

     (28,452)

 

       45,987      

 

     (37,481)

 

     (37,445)

Unsuccessful well costs and leasehold impairments

 

           931

 

         9,424        

 

         2,244        

 

       83,086      

Change in fair value of derivatives

 

       52,687      

 

   (110,262)

 

       52,467      

 

     257,112    

Cash settlements on derivatives, net(1)

 

     (10,846)

 

     (80,710)

 

     (21,478)

 

   (304,328)

Equity-based compensation

 

       10,580      

 

         8,767        

 

       31,778      

 

       25,896      

Gain on sale of assets

 

             -

 

             -

 

             -

 

          (471)

Loss on extinguishment of debt

 

         1,503        

 

             -

 

         1,503        

 

           192

Other

 

         4,021        

 

       (2,198)

 

         2,547        

 

       (5,940)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Net changes in working capital

 

          (987)

 

       52,898      

 

     (91,202)

 

     109,508    

Net cash provided by operating activities

 

     249,431    

 

     255,050    

 

     471,394    

 

     863,236    

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Oil and gas assets

 

   (195,047)

 

   (222,562)

 

   (611,914)

 

   (543,349)

Acquisition of oil and gas properties

 

             -

 

             -

 

             -

 

     (21,205)

Proceeds on sale of assets

 

             -

 

             10

 

             -

 

     118,703    

Notes receivable from partners

 

     (13,337)

 

     (16,760)

 

     (46,632)

 

     (28,188)

Net cash used in investing activities

 

   (208,384)

 

   (239,312)

 

   (658,546)

 

   (474,039)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Borrowings under long-term debt

 

     150,000    

 

             -

 

     300,000    

 

             -

Payments on long-term debt

 

   (137,500)

 

       (7,500)

 

   (145,000)

 

   (322,500)

Tax withholdings on restricted stock units

 

             -

 

             -

 

     (11,811)

 

       (2,753)

Dividends

 

             -

 

             -

 

          (166)

 

          (655)

Deferred financing costs

 

          (534)

 

             -

 

          (534)

 

       (6,288)

Net cash provided by (used in) financing activities

 

       11,966

 

       (7,500)

 

     142,489    

 

   (332,196)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

       53,013      

 

         8,238        

 

     (44,663)

 

       57,001      

Cash, cash equivalents and restricted cash at beginning of period

 

       89,145      

 

     223,659    

 

     186,821    

 

     174,896    

Cash, cash equivalents and restricted cash at end of period

 

$   142,158    

 

$   231,897    

 

$   142,158    

 

$   231,897    

 

 

(1)   Cash settlements on commodity hedges were $(4.1) million and $(77.0) million for the three months ended September 30, 2023 and 2022, respectively, and $(12.3) million and $(289.9) million for the nine months ended September 30, 2023 and 2022.

Kosmos Energy Ltd.

EBITDAX

(In thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine months ended

 

Twelve Months Ended

 

 

September 30, 2023

 

September 30, 2022

 

September 30, 2023

 

September 30, 2022

 

September 30, 2023

 

Net income

$            85,185

 

$          222,254

 

$          191,839

 

$          340,827

 

$            77,563

 

Exploration expenses

              10,290

 

              17,215

 

              33,305

 

            118,656

 

              48,879

 

Facilities insurance modifications, net

                      -

 

                    494

 

                      -

 

                 7,246

 

               (1,003)

 

Depletion, depreciation and amortization

            132,347

 

            106,313

 

            331,634

 

            386,961

 

            442,929

 

Impairment of long-lived assets

                      -

 

                      -

 

                      -

 

                      -

 

            449,969

 

Equity-based compensation

              10,580

 

                 8,767

 

              31,778

 

              25,896

 

              40,428

 

Derivatives, net

              45,971

 

          (113,842)

 

              42,162

 

            243,534

 

              59,520

 

Cash settlements on commodity derivatives

               (4,130)

 

             (77,001)

 

             (12,343)

 

          (289,897)

 

             (50,318)

 

Other expenses, net(2)

              11,055

 

                  (218)

 

              17,864

 

               (1,320)

 

              10,129

 

Gain on sale of assets

                      -

 

                      -

 

                      -

 

                  (471)

 

             (50,000)

 

Interest and other financing costs, net

              25,440

 

              29,796

 

              74,379

 

              92,317

 

            100,322

 

Income tax expense

              52,356

 

            107,713

 

            138,517

 

            196,144

 

              52,889

 

EBITDAX

$          369,094

 

$          301,491

 

$          849,135

 

$       1,119,893

 

$       1,181,307

 

Sold Ghana & acquired Kodiak interests EBITDAX Adj(1)

                      -

 

                      -

 

                      -

 

             (15,723)

 

                      -

 

Pro Forma EBITDAX

$          369,094

 

$          301,491

 

$          849,135

 

$       1,104,170

 

$       1,181,307

 

 

 

(1)   Adjustment to present Pro Forma EBITDAX for the impact of the revenues less direct operating expenses from the sold Ghana interest associated with the Ghana pre-emption and the acquired Kodiak interest, for the respective period. The results are presented on the accrual basis of accounting, however as the acquired properties were not accounted for or operated as a separate segment, division, or entity, complete financial statements under U.S. generally accepted accounting principles are not available or practicable to produce. The results are not intended to be a complete presentation of the results of operations of the acquired properties and may not be representative of future operations as they do not include general and administrative expenses; interest expense; depreciation, depletion, and amortization; provision for income taxes; and certain other revenues and expenses not directly associated with revenues from the sale of crude oil and natural gas.

(2)   Commencing in the first quarter of 2023, the Company combined the lines for "Restructuring and other" and "Other, net" in its presentation of EBITDAX into a single line titled "Other expenses, net."

 

The following table presents our net debt as of September 30, 2023 and December 31, 2022:

 

 

September 30,

 

December 31,

 

 

2023

2022

Total long-term debt

 

$        2,425,000

 

$        2,270,000

Cash and cash equivalents

 

              138,742

 

              183,405

Total restricted cash

 

                  3,416

 

                  3,416

Net debt

 

$        2,282,842

 

$        2,083,179

 

Kosmos Energy Ltd.

Adjusted Net Income (Loss)

(In thousands, except per share amounts, unaudited)

 

Three Months Ended

Nine Months Ended

 

September 30,

September 30,

 

2023

 

2022

2023

 

2022

Net income

$         85,185          

 

$       222,254        

 

$       191,839        

 

$       340,827        

 

 

 

 

 

 

 

 

Derivatives, net

           45,971          

 

        (113,842)

 

           42,162          

 

         243,534        

Cash settlements on commodity derivatives

           (4,130)

 

         (77,001)

 

         (12,343)

 

        (289,897)

Gain on sale of assets

                 -

 

                 -

 

                 -

 

              (471)

Facilities insurance modifications, net

                 -

 

                494

 

                 -

 

             7,246            

Other, net(2)

           11,117

 

                (90)

 

           17,854          

 

           (1,162)

Impairment of suspended well costs

                 -

 

              (355)

 

                 -

 

           63,894          

Loss on extinguishment of debt

             1,503            

 

                 -

 

             1,503            

 

                192

Total selected items before tax

           54,461          

 

        (190,794)

 

           49,176          

 

           23,336          

 

 

 

 

 

 

 

 

Income tax (expense) benefit on adjustments(1)

         (13,630)

 

           59,739          

 

           (9,845)

 

           12,923          

Impact of valuation adjustments and U.S. tax law changes

                 -

 

           (1,354)

 

                 -

 

         (12,745)

Adjusted net income

$       126,016        

 

           89,845          

 

         231,170        

 

         364,341        

 

 

 

 

 

 

 

 

Net income per diluted share

$             0.18

 

$             0.47

 

$             0.40

 

$             0.72

 

 

 

 

 

 

 

 

Derivatives, net

               0.10

 

             (0.24)

 

               0.09

 

               0.51

Cash settlements on commodity derivatives

             (0.01)

 

             (0.16)

 

             (0.03)

 

             (0.61)

Gain on sale of assets

                 -

 

                 -

 

                 -

 

                 -

Facilities insurance modifications, net

                 -

 

                 -

 

                 -

 

               0.02

Other, net(2)

               0.02

 

                 -

 

               0.04

 

                 -

Impairment of suspended well costs

                 -

 

                 -

 

                 -

 

               0.13

Loss on extinguishment of debt

                 -

 

                 -

 

                 -

 

                 -

Total selected items before tax

               0.11

 

             (0.40)

 

               0.10

 

               0.05

 

 

 

 

 

 

 

 

Income tax (expense) benefit on adjustments(1)

             (0.03)

 

               0.12

 

             (0.02)

 

               0.03

Impact of valuation adjustments and U.S. tax law changes

                 -

 

                 -

 

                 -

 

             (0.03)

Adjusted net income per diluted share

$             0.26

 

$             0.19

 

$             0.48

 

$             0.77

 

 

 

 

 

 

 

 

Weighted average number of diluted shares

         481,099        

 

         476,431        

 

         479,738        

 

         474,820        

 

 

(1)   Income tax expense is calculated at the statutory rate in which such item(s) reside. Statutory rates for the U.S. and Ghana/Equatorial Guinea are 21% and 35%, respectively.

(2)   Commencing in the first quarter of 2023, the Company combined the lines for "Restructuring and other" and "Other, net" in its presentation of Adjusted net income into a single line titled "Other, net."

 

Kosmos Energy Ltd.

Free Cash Flow

(In thousands, unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

2022

Reconciliation of free cash flow:

 

 

 

 

 

 

 

Net cash provided by operating activities

$   249,431

 

$   255,050

 

$   471,394

 

$   863,236

Net cash used for oil and gas assets - base business

   (122,542)

 

     (89,811)

 

   (337,488)

 

   (243,899)

Base business free cash flow

     126,889

 

     165,239

 

     133,906

 

     619,337

Net cash used for oil and gas assets - Mauritania/Senegal

     (72,505)

 

   (132,751)

 

   (274,426)

 

   (299,450)

Free cash flow

$     54,384

 

$     32,488

 

$ (140,520)

 

$   319,887

 

 

 

 


 

Kosmos Energy Ltd.

Operational Summary

(In thousands, except barrel and per barrel data, unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

Net Volume Sold

 

 

 

 

 

 

 

Oil (MMBbl)

                 5.956

 

                 4.458

 

               14.448

 

               16.028

Gas (MMcf)

                 4.046

 

                 0.859

 

                 9.582

 

                 3.115

NGL (MMBbl)

                 0.097

 

                 0.084

 

                 0.299

 

                 0.330

Total (MMBoe)

                 6.727

 

                 4.685

 

               16.344

 

               16.877

Total (Mboepd)

               73.123

 

               50.926

 

               59.868

 

               61.821

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Oil sales

$          511,735

 

$           444,491

 

$       1,166,983

 

$       1,699,167

Gas sales

               13,080

 

                 8,595

 

               20,514

 

               23,802

NGL sales

                 1,533

 

                 2,970

 

                 6,346

 

               12,470

Total oil and gas revenue

             526,348

 

             456,056

 

          1,193,843

 

          1,735,439

Cash settlements on commodity derivatives

               (4,130)

 

             (77,001)

 

             (12,343)

 

           (289,897)

Realized revenue

$          522,218

 

$           379,055

 

$       1,181,500

 

$       1,445,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas Production Costs

$          138,782

 

$             62,372

 

$           286,297

 

$           277,264

 

 

 

 

 

 

 

 

Sales per Bbl/Mcf/Boe

 

 

 

 

 

 

 

Average oil sales price per Bbl

$               85.92

 

$               99.71

 

$               80.77

 

$             106.01

Average gas sales price per Mcf

                   3.23

 

                 10.01

 

                    2.14

 

                    7.64

Average NGL sales price per Bbl

                 15.80

 

                 35.36

 

                 21.22

 

                 37.79

Average total sales price per Boe

                 78.24

 

                 97.34

 

                 73.04

 

               102.83

Cash settlements on commodity derivatives per Boe

                 (0.61)

 

               (16.44)

 

                  (0.76)

 

               (17.18)

Realized revenue per Boe

                 77.63

 

                 80.91

 

                 72.29

 

                 85.65

 

 

 

 

 

 

 

 

Oil and gas production costs per Boe

$               20.63

 

$               13.31

 

$               17.51

 

$               16.43

 

 

(1)   Cash settlements on commodity derivatives are only related to Kosmos and are calculated on a per barrel basis using Kosmos' Net Oil Volumes Sold.

 

Kosmos was underlifted by approximately 494.7 thousand barrels as of September 30, 2023.

 


Kosmos Energy Ltd.

Hedging Summary

As of September 30, 2023(1)

(Unaudited)


 

 

 


 

Weighted Average Price per Bbl

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Index

 

MBbl

 

Floor(2)

 

Sold Put

 

Ceiling

 

2023:

 

 

 

 

 

 

 

 

 

 

 

Three-way collars

 

Dated Brent

 

        1,500

 

$        71.67

 

$        49.17

 

$      107.58

 

Two-way collars

 

Dated Brent

 

        1,250

 

          72.00

 

               -

 

        112.00 

 

2024:

 

 

 

 

 

 

 

 

 

 

 

Three-way collars

 

Dated Brent

 

        4,000

 

          70.00

 

          45.00

 

          96.25

 

Two-way collars

 

Dated Brent

 

        2,000

 

          65.00

 

               -

 

          85.00

 

Two-way collars

 

Dated Brent

 

        2,000

 

          70.00

 

               -

 

        100.00

 

 

 

(1)   Please see the Company's filed 10-Q for additional disclosure on hedging material. Includes hedging position as of September 30, 2023 and hedges put in place through filing date.

(2)   "Floor" represents floor price for collars and strike price for purchased puts.

 

2023 Guidance

 

4Q 2023

FY 2023 Guidance

 

 

 

Production(1,2)

66,000 - 69,000 boe per day

~63,000 boe per day

 

 

 

Opex

$12 - $14 per boe

~$16 per boe

 

 

 

DD&A

$18 - $20 per boe

~$20 per boe

 

 

 

G&A(~60% cash)

$31 - $33 million

~$110 million

 

 

 

Exploration Expense(3)

~$10 million

~$40 million

 

 

 

Net Interest Expense(4)

~$25 million / quarter

 

 

 

Tax

$14 - $16 per boe

$10 - $11 per boe

 

 

 

Capital Expenditure(5)

$225 - $250 million

~$800 million

 

 

 

Note: Ghana / Equatorial Guinea revenue calculated by number of cargos.

(1)   4Q 2023 cargo forecast - Ghana: 4 cargos / Equatorial Guinea 1 cargo. FY 2023 Ghana: 13 cargos / Equatorial Guinea 3.5 cargos. Average cargo sizes 950,000 barrels of oil.

(2)   U.S. Gulf of Mexico Production: 4Q 2023 forecast 13,500-14,500 boe per day. FY2023: 15,000-15,500 boe per day. Oil/Gas/NGL split for 2023: ~81%/~12%/~7%.

(3)   Excludes leasehold impairments and dry hole costs

(4)   Includes impact of capitalized interest through year-end 2023 of ~$30 million/quarter

(5)   Excludes acquisitions/sales of oil & gas assets

 

 

 

Source: Kosmos Energy Ltd.

 

 

Investor Relations

Jamie Buckland

+44 (0) 203 954 2831

jbuckland@kosmosenergy.com

 

           

Media Relations

Thomas Golembeski

+1-214-445-9674

tgolembeski@kosmosenergy.com

 

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