Kosmos Energy Ltd

Net proved oil and gas reserve estimates presented were prepared by Ryder Scott Company, L.P. (“RSC”) for the years ended December 31, 2023, 2022 and 2021. RSC are independent petroleum engineers located in Houston, Texas. RSC has prepared the reserve estimates presented herein and meet the requirements regarding qualifications, independence, objectivity and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. We maintain an internal staff of petroleum engineers and geoscience professionals who work closely with our independent reserve engineers to ensure the integrity, accuracy and timeliness of data furnished to independent reserve engineers for their reserves estimation process.

Net Proved Developed and Undeveloped Reserves

The following table is a summary of net proved developed and undeveloped oil and gas reserves to Kosmos’ interests in Ghana, Equatorial Guinea, Mauritania, Senegal and the U.S. Gulf of Mexico.

(1)The sum of proved developed reserves and proved undeveloped reserves may not add to net proved developed and undeveloped reserves as a result of rounding.

(2)The revisions in estimates in 2023 are related to:

•In Ghana, Jubilee had a positive revision of 14.3 MMBbl and 125.1 Bcf primarily due to positive field performance, the addition of gas sales recognition and positive drilling results, offset by Jubilee net production of 11.2 MMBbl and 9.7 Bcf. TEN had a negative revision of 7.8 MMBbl and 28.4 Bcf primarily driven by a change in the partnership’s development work scope for the TEN Fields and well performance as well as net TEN production of 1.3 MMBbl. Overall, for the year ended December 31, 2023, Jubilee had an increase in reserves of 3.1 MMBbl and 115.3 Bcf and TEN had a decrease in reserves of 9.1 MMBbl and 28.4 Bcf. We note that the decrease in commodity prices did not result in revisions of estimates.

•In Equatorial Guinea, we had a commodity price-related reserves decrease of 0.3 MMBbl and 0.6 Bcf in Ceiba and 0.2 MMBbl and 0.3 Bcf in Okume, with an additional decrease from net production of 0.9 MMBbl and 0.5 Bcf in Ceiba and 2.3 MMBbl and 0.9 Bcf in Okume. Production performance and topsides optimization resulted in an increase of 1.5 MMBbl and 1.6 Bcf in Ceiba and an increase of 1.6 MMBbl and 0.3 Bcf in Okume. Removal of one of the wells from the development plan in Okume resulted in reserves decrease of 0.3 MMBbl. Overall, Equatorial Guinea had a decrease in reserves of 1.0 MMBbl and 0.4 Bcf.

•In Mauritania and Senegal, we had a positive revision of 9.7 Bcf due to the optimization of the timing of the Greater Tortue Ahmeyim Phase 1 project. We also had a negative revision of 0.4 MMBbl of condensate based on the incorporation of well test results. We note that the decrease in commodity prices did not result in revisions of estimates.

•In the U.S. Gulf of Mexico, we had a negative reserves revision of 1.8 MMBbl and 2.1 Bcf due to increased watercut at Tornado, production performance at Odd Job and the results of the new well in Marmalard, in addition to commodity price effect of 0.1 MMBbl and 0.1 Bcf, and the net production of 4.9 MMBbl and 4.0 Bcf. Overall, for the year ended December 31, 2023, the U.S. Gulf of Mexico had a reserves decrease of 6.8 MMBbl and 6.2 Bcf.

The revisions in estimates in 2022 are related to:

•In Ghana, we had negative revisions of 14.3 MMBbl of oil and 14.2 Bcf of gas resulting from the conclusion of the Tullow pre-emption transaction in March 2022 in the Jubilee and TEN Fields. Jubilee had a positive revision of 11.0 MMBbl due to positive drilling results and field performance and a negative revision of 3.0 Bcf related to changes in remaining field life, in addition to Jubilee net production of 11.3 MMBbl. TEN had a negative revision of 6.1 MMBbl and 9.6 Bcf due to recent well performance and updated reservoir model forecast, in addition to the net TEN production of 2.0 MMBbl. In Ghana, the increase in commodity prices resulted in a positive revision of 2.2 MMBbl and 7.1 Bcf. The overall decreases in reserves for the year ended December 31, 2022 were 6.6 MMBbl and 2.8 Bcf for Jubilee and 13.9 MMBbl and 16.7 Bcf for TEN.

•In Equatorial Guinea, we had a positive revision of 0.9 MMBbl of oil based on production performance and topsides optimization in Ceiba, offset by net production of 3.7 MMBbl. The increase in commodity prices along with the license extension in Ceiba from 2029 to 2040 and in Okume from 2034 to 2040 resulted in a positive revision of 3.2 MMBbl and 5.2 Bcf. Overall, Equatorial Guinea had an increase in reserves of 0.4 MMBbl and 5.2 Bcf.

•In Mauritania/Senegal, we had additions of 28.1 Bcf due to a field extension that resulted from drilling of production wells. We also had a 0.7 MMBbl negative revision in condensate reserves based on an updated yield estimate. We note that the increase in commodity prices did not result in revisions of estimates.

•In the U.S. Gulf of Mexico, we had a negative revision of 2.1 MMBbl and positive revision of 0.3 Bcf of gas based on recent water breakthrough in Odd Job and Tornado, Kodiak production performance, in addition to the net production of 5.7 MMBbl and 4.0 Bcf. The Winterfell discovery added 2.9 MMBbl and 1.0 Bcf of gas. The purchase of additional interest in the Kodiak field resulted in a positive revision of 0.8 MMBbl. We note the changes in commodity prices in the U.S. Gulf of Mexico were not material. The overall decrease in reserves for the U.S. Gulf of Mexico were 4.1 MMBbl and 2.7 Bcf.

The revisions in estimates in 2021 are related to:

•In Ghana, we had 5.5 MMBbl of positive revisions in estimates (primarily related to the Jubilee Field) related to overall field performance, including positive drilling results on our proved undeveloped well locations and optimized future well locations. We had 8.0 Bcf of positive revisions in estimates in the TEN Field related to the updated reservoir model forecast. The increase in commodity prices resulted in positive revisions in estimates of 4.1 MMBbl of oil reserves and 1.7 Bcf of gas reserves.

•In Equatorial Guinea, we had 3.0 MMBbl of positive revisions in estimates due to overall field performance and positive drilling results and 0.7 MMBbl of positive revisions in estimates due to the increase in commodity prices. We note changes in Equatorial Guinea gas reserves was not material.

•In Mauritania/Senegal, we had 8.2 MMBbl and 590.0 Bcf of positive revisions in proved undeveloped reserve estimates related to the economic status of Phase 1 of the Greater Tortue project due to the project progress and improved commodity prices.

•In the U.S. Gulf of Mexico, we had positive revisions of 0.6 MMBbl and 3.2 Bcf of gas reserves related to strong performance of certain fields across our portfolio. The increase in commodity prices resulted in positive revisions of 3.0 MMBbl and 1.3 Bcf, respectively.

(3)The purchases of minerals-in-place during 2021 is related to our acquisition of additional interests in the Jubilee field and TEN fields offshore Ghana, resulting in total proved oil reserve additions of 38.7 MMBbl and 12.8 MMBbl and total proved gas reserve additions of 7.2 Bcf and 20.1 Bcf, respectively.

(4)Natural gas liquids proved reserves represent an immaterial amount of our total proved reserves. Therefore, we have aggregated natural gas liquids and crude oil/condensate reserves information.

(5)The changes in proved undeveloped reserves in 2023 are related to:

•In Ghana, we converted 21.5 MMbbl of proved undeveloped reserves to proved developed reserves during the year by the drilling of five wells in Greater Jubilee at a cost of approximately $98.0 million as well as approximately $91.3 million in subsea costs. In addition, we spent $40.5 million in drilling costs towards wells that we expect to report as converted proved undeveloped reserves in 2024. Positive drilling results during the year ended December 31, 2023 resulted in an increase in proved undeveloped reserves of 0.6 MMbbl and 0.4 Bcf. In Jubilee, the recognition of gas sales resulted in a proved undeveloped reserves increase of 56.0 Bcf and positive revision of future well forecasts based on improved performance of existing wells resulted in a proved undeveloped reserves increase of 16.7 MMbbl. Changes to the partnership’s development work scope and forecasts of planned wells in TEN resulted in proved undeveloped reserves decrease of 4.9 MMbbl and 8.7 Bcf.

•In Equatorial Guinea, during the year ended December 31, 2023, we had a proved developed reserves decrease of 0.3 MMbbl due to removal of one of the planned wells from the Okume drilling plan.

•In Mauritania/ Senegal, we had a proved undeveloped reserves increase of 9.7 Bcf due to optimization of the timing of the Greater Tortue Ahmeyim Phase 1 project. We also had a negative revision of 0.4 MMbbl of condensate based on the testing results of the drilled wells. We spent approximately $259.8 million progressing the Greater Tortue Phase 1 development with first gas for the project targeted in the third quarter of 2024.

•In the U.S. Gulf of Mexico, we had a proved undeveloped reserves decrease of 0.9 MMbbl and 0.9 Bcf. We converted 0.6 MMbbl and 0.8 Bcf with the drilling of one well in Marmalard at a cost of $16.5 million, in addition to a negative revision of 0.2 MMbbl and 0.1 Bcf due to slight changes to the recovery of several fields. In addition, we spent approximately $49.0 million on the Odd Job subsea pump installation and approximately $67.5 million towards the development of the Winterfell Field.

The changes in proved undeveloped reserves in 2022 are related to:

•In Ghana, we converted 4.6 MMBbl of oil in Jubilee of proved undeveloped reserves to proved developed reserves during the year by drilling three wells at a cost of approximately $75.1 million. In TEN, we converted 5.1 MMBbl and 4.1 Bcf of gas of proved undeveloped reserves to proved developed reserves during the year by drilling one well at a cost of approximately $13.6 million. We had a decrease in proved undeveloped reserves of 4.3 MMBbl in Jubilee and 3.0 MMBbl and 3.3 Bcf in TEN related to the sale of minerals-in-place during 2022. The Jubilee Field had an increase in proved undeveloped reserves of 4.0 MMBbl related to optimization of future drilling. The TEN Field had a proved undeveloped reserves increase of 1.4 MMBbl and 4.1 Bcf related to an updated plan of development. The overall proved undeveloped reserves decreased by 5.0 MMBbl in Jubilee and by 6.7 MMBbl and 3.3 Bcf in TEN.

•In Equatorial Guinea, during the year ended December 31, 2022, Equatorial Guinea had no material changes in proved undeveloped reserves.

•In Mauritania/Senegal, we had a proved undeveloped reserves increase of 28.1 Bcf due to a field extension that resulted from drilling of production wells. We also had a 0.7 MMBbl negative revision in condensate reserves based on an updated yield estimate.

•In the U.S. Gulf of Mexico, we had a proved undeveloped reserves increase of 1.0 MMBbl and 1.8 Bcf due based on an updated plans of development in the Odd Job, Marmalard, and Big Bend fields. We converted 1.6 MMBbl and 2.2 Bcf from proved undeveloped by drilling one well in Kodiak at a cost of $13.6 million. The Winterfell discovery added 2.9 MMBbl and 1.0 Bcf of gas of proved undeveloped reserves. We added 0.2 MMBbl of proved undeveloped reserves related to our purchase of minerals-in-place during 2022 in the Kodiak field. The overall proved undeveloped reserves in the U.S. Gulf of Mexico increased by 2.4 MMBbl and 0.6 Bcf.

The changes in proved undeveloped reserves in 2021 are related to:

•In Ghana, Jubilee had a proved undeveloped reserves increase of 17.8 MMBbl related to optimization of future drilling. Related to our purchases of minerals-in-place during 2021, we added 28.5 MMBbl and 4.7 Bcf of proved undeveloped reserves. We converted 20.7 MMBbl of proved undeveloped reserves to proved developed reserves during the year by drilling three wells at a cost of $34.1 million.

•In Equatorial Guinea, during the year ended December 31, 2021, Equatorial Guinea had a PUD increase of 2.9 MMBbl related to adding a future development well and optimizing future development plans in Equatorial Guinea. We converted 1.8 MMBbl of proved undeveloped reserves to proved developed reserves during the year by drilling two wells and replacing certain subsea infrastructure at a cost of $35.6 million.

•In the U.S. Gulf of Mexico, we had a proved undeveloped reserves increase of 3.5 MMBbl of oil reserves and 6.3 Bcf of gas reserves related to adding a future development well and optimizing future development plans. We converted 1.8 MMBbl and 1.8 Bcf of gas proved undeveloped reserves to proved developed reserves through drilling of one well in Tornado at a cost of $19.0 million.

Net proved reserves were calculated utilizing the twelve month unweighted arithmetic average of the first‑day‑of‑the‑month oil price for each month based on the respective benchmark price in the period January through December 2023. The average price is adjusted for crude handling, transportation fees, quality, and a regional price differential.

Proved oil and gas reserves are defined by the SEC Rule 4.10(a) of Regulation S‑X as those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recovered under current economic conditions, operating methods, and government regulations. Inherent uncertainties exist in estimating proved reserve quantities, projecting future production rates and timing of development expenditures.

Capitalized Costs Related to Oil and Gas Activities

The following table presents aggregate capitalized costs related to oil and gas activities:

Costs Incurred in Oil and Gas Activities

The following tables reflects total costs incurred, both capitalized and expensed, for oil and gas property acquisition, exploration, and development activities for the year.

(1)Includes Africa (excluding Ghana, Equatorial Guinea, Mauritania and Senegal), Europe and South America.

(2)Includes $718.2 million of oil and gas properties acquired as a result of the purchase price allocation of the estimated fair value of identifiable assets acquired and liabilities assumed in the acquisition of additional interests in Ghana discussed in “Note 3—Acquisitions and Divestitures.”

(3)Includes $132.4 million of capitalized oil and gas properties settled against our Long-term receivable from BP Operator in Mauritania and Senegal discussed in “Note 4—Joint Interest Billings and Long-term Receivables.”

(4)Includes $67.8 million of capitalized oil and gas properties settled against our Long-term receivable from BP Operator in Mauritania and Senegal discussed in “Note 4—Joint Interest Billings and Long-term Receivables.”

(5)Excludes $66.2 million reduction of capitalized asset retirement costs resulting from the extension of the Block G licenses in Equatorial Guinea in May 2022.

Standardized Measure for Discounted Future Net Cash Flows

The following table provides projected future net cash flows based on the twelve month unweighted arithmetic average of the first‑day‑of‑the‑month oil price for Brent crude in the period January through December 2023. The average price is adjusted for crude handling, transportation fees, quality, and a regional price differential.

Because prices used in the calculation are average prices for that year, the standardized measure could vary significantly from year to year based on market conditions that occur.

The projection should not be interpreted as representing the current value to Kosmos. Material revisions to estimates of proved reserves may occur in the future; development and production of the reserves may not occur in the periods assumed; actual prices realized are expected to vary significantly from those used; and actual costs may vary. Kosmos’ investment and operating decisions are not based on the information presented, but on a wide range of reserve estimates that include probable as well as proved reserves and on a wide range of different price and cost assumptions.

The standardized measure is intended to provide a better means to compare the value of Kosmos’ proved reserves at a given time with those of other oil producing companies than is provided by comparing raw proved reserve quantities.

Changes in the Standardized Measure for Discounted Cash Flows