Kosmos Energy Ltd
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
KOS$2.11-4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001509991-24-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0001509991-24-000072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 149 current paragraphs.
104 unchanged; 35 reworded; 9 added; 4 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
In July 2024, we announced start-up of oil production at the Winterfell development in the Green Canyon area of the U.S. Gulf of Mexico (25% working interest). The Winterfell development project is a phased development with the initial two production wells of the first phase now online. The third development well was successfully drilled in the second quarter of 2024. We expect Winterfell-3 to be online by the end of the third quarter of 2024.
Current report
The Kodiak #3 infill well located in Mississippi Canyon was initially brought online in April 2021. The well experienced production issues and was shut-in. In March 2022, the Company commenced operations to plug back and side-track the original Kodiak #3 infill well. The Kodiak-3ST well was brought online in early September 2022. Well results and initial production were in line with expectations, however well productivity declined thereafter. Recent workover operations were completed in July 2024 and successfully restored well productivity.
Current report
•FPSO: The vessel arrived on location offshore Mauritania/Senegal during the second quarter of 2024 with mooring now complete. All risers were installed in June 2024 and commissioning is ongoing with handover to operations targeted for September 2024 with first gas expected shortly thereafter.
Current report
Oil and gas production. Oil and gas production costs increased by $87.2 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023 primarily as a result of increased sales volumes, higher production costs per barrel related to a TEN cargo lifting in Ghana, inclusion of operating costs associated with Greater Tortue Ahmeyim and workover costs in the U.S. Gulf of Mexico associated with Kodiak #3 well.
Current report
Six months ended June 30, 2024 compared to six months ended June 30, 2023
Current report
Oil and gas revenue. Oil and gas revenue increased by $202.5 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 primarily as a result of higher sales volumes primarily driven by increased production at Jubilee, timing of our international liftings and higher average realized oil and gas prices. We sold 11,653 MBoe at an average realized price per barrel equivalent of $74.66 during the six months ended June 30, 2024 and 9,618 MBoe at an average realized price per barrel equivalent of $69.40 during the six months ended June 30, 2023.
Current report
Depletion, depreciation and amortization. Depletion, depreciation and amortization decreased $8.3 million during the six months ended June 30, 2024, as compared with the six months ended June 30, 2023 primarily as a result by a lower depletion rate per barrel in Ghana resulting from an increase in Jubilee reserves at the end of 2023 and a lower cost basis in our TEN Fields due to the impairment loss recorded in the year ended December 31, 2023 partially offset by higher sales volumes in the current year.
Current report
Interest and other financing costs, net. Interest and other financing costs, net increased $4.8 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, primarily as a result of a $22.0 million loss on debt modifications and extinguishments related to the amendment and restatement of the Facility during the second quarter of 2024 partially offset by increased capitalized interest related to the Greater Tortue Ahmeyim project.
Current report
Income tax expense. For the six months ended June 30, 2024 and 2023, our overall effective tax rates were impacted by the difference in our 21% U.S. income tax reporting rate and the 35% statutory tax rates applicable to our Ghanaian and Equatorial Guinean operations, jurisdictions that have a 0% statutory tax rate or where we have incurred losses and have recorded valuation allowances against the corresponding deferred tax assets, and other non-deductible expenses, primarily in the U.S.
Removed paragraphs (4)
Previous report
The Winterfell development project continued to make progress during the first quarter of 2024 with first oil for Phase 1A of the project targeted in the second quarter of 2024 with production from the first two wells. Tieback to the Heidelberg facility was completed in April 2024 and the host facility production handling agreement and oil export agreements have been executed. The Winterfell-3 well is expected online in the second half of 2024.
Previous report
•FPSO: Inspection and repair of the vessel’s fairleads is complete with the vessel now en route to the project site with mooring work to commence thereafter. Hookup and commissioning of the FPSO remain on the critical path to first gas, expected in the third quarter of 2024 with first LNG expected in the fourth quarter of 2024.
Previous report
Corporate Revolver was also amended in April 2024 in connection with the amendment and restatement of the Facility, reducing the borrowing capacity from $250.0 million to approximately $165 million, with all of the commitments that were cancelled (either in full or in part) under the Corporate Revolver being transferred to the Facility as part of the amendment and restatement.
Previous report
(1)In April 2024, the Company agreed to an amendment and restatement of the Facility. As part of the amendment, the overall Facility size was increased from $1.25 billion to $1.35 billion, capped by total commitments of approximately $1.2 billion. The Corporate Revolver was also amended in April 2024 in connection with the amendment and restatement of the Facility, reducing the borrowing capacity from $250.0 million to approximately $165 million, with all of the commitments that were cancelled (either in full or in part) under the Corporate Revolver being transferred to the Facility as part of the amendment and restatement.
Reworded paragraphs (35)
Previous wording
In April 2024, in conjunction with the spring borrowing base redetermination, the Company agreed to an amendment and restatement of the Facility. As amended, the Facility size is approximately $1.35 billion (increased from $1.25 billion) with total commitments of approximately $1.2 billion. In April 2024, in connection with the amendment and restatement of the Facility, we also amended the Corporate Revolver, reducing the borrowing capacity from $250.0 million to approximately $165 million, with all of the commitments that were cancelled (either in full or in part) under the Corporate Revolver being transferred to the Facility as part of the amendment and restatement.
Current wording
In April 2024, in conjunction with the spring borrowing base redetermination, the Company executed an amendment and restatement of the Facility. As amended, the Facility size and borrowing base capacity is approximately $1.35 billion (increased from $1.25 billion) with current total commitments of approximately $1.21 billion. In April 2024, in connection with the amendment and restatement of the Facility, we also amended the Corporate Revolver, reducing the borrowing capacity from $250.0 million to approximately $165 million, with all of the commitments that were cancelled (either in full or in part) under the Corporate Revolver being transferred to the Facility as part of the amendment and restatement.
Previous wording
During the first quarter of 2024, Ghana production averaged approximately 128,100 Boepd gross (43,800 Boepd net).
Current wording
During the second quarter of 2024, Ghana production averaged approximately 123,400 Boepd gross (41,900 Boepd net).
Previous wording
The Jubilee Field infill drilling campaign continued during the first quarter of 2024 bringing one water injection well and two production wells online during the quarter. An additional production well was brought online in April 2024, and the partnership expects to bring one additional water injection well online in the second quarter of 2024 before the rig contract is expected to conclude later in the second quarter of 2024.
Current wording
The Jubilee Field infill drilling campaign continued during the second quarter of 2024 bringing one water injection well and one production well online during the quarter. The rig contract concluded in the second quarter of 2024 completing the three year infill drilling campaign in Ghana. The partnership now plans to conduct a new 4D seismic survey starting in early 2025.
Previous wording
Production from the U.S. Gulf of Mexico averaged approximately 14,500 Boepd net (~81% oil) for the first quarter of 2024.
Current wording
Production from the U.S. Gulf of Mexico averaged approximately 11,700 Boepd net (~83% oil) for the second quarter of 2024.
Previous wording
The Odd Job Field subsea pump installation project continued to make progress during the first quarter of 2024 with an expected online date in the middle of 2024. The project is expected to sustain long-term production from the Odd Job Field.
Current wording
The Odd Job Field subsea pump installation project continued during the second quarter of 2024 and was successfully brought online in July 2024. The project is expected to sustain long-term production from the Odd Job Field.
Previous wording
In October 2023, we announced the Tiberius infrastructure-led exploration well, located in Keathley Canyon Block 964 in the Outer Wilcox play, encountered approximately 75 meters (250 feet) of net oil pay in the primary Wilcox target. Initial fluid and core analysis supports the production potential of the well, with characteristics analogous with similar nearby discoveries in the Wilcox trend. During the first quarter of 2024, Kosmos was awarded five blocks in the U.S. Gulf of Mexico Lease Sale 261, including three blocks nearby to our Tiberius discovery. In March 2024, Kosmos completed the acquisition of an additional 16.7% participating interest in the Tiberius area in Keathley Canyon Blocks 920 and 964 offshore US. Gulf of Mexico. As a result of the transaction, Kosmos’ participating interest in Tiberius is increased from 33.3% to 50.0%. The Tiberius project continues to progress as a phased development, with project sanction expected later in 2024. Around the time of project sanction, we will look to farm down our participating interest to optimize our working interest to fit within the capital program for 2025 and beyond.
Current wording
In October 2023, we announced the Tiberius infrastructure-led exploration well, located in Keathley Canyon Block 964 in the Outer Wilcox play, encountered approximately 75 meters (250 feet) of net oil pay in the primary Wilcox target. Initial fluid and core analysis supports the production potential of the well, with characteristics analogous with similar nearby discoveries in the Wilcox trend. During the first quarter of 2024, Kosmos was awarded five blocks in the U.S. Gulf of Mexico Lease Sale 261, including three blocks nearby to our Tiberius discovery. In March 2024, Kosmos completed the acquisition of an additional 16.7% participating interest in the Keathley Canyon Blocks 920 and 964, offshore US. Gulf of Mexico. As a result of the transaction, Kosmos’ participating interest in the Tiberius discovery area increased from 33.3% to 50.0%. The Tiberius project continues to progress as a phased development, with a final investment decision expected later in 2024. Kosmos plans to farm down our participating interest to optimize our working interest to fit within the capital program for 2025 and beyond.
Previous wording
Production in Equatorial Guinea averaged approximately 24,400 Bopd gross (8,400 Bopd net) in the first quarter of 2024.
Current wording
Production in Equatorial Guinea averaged approximately 24,200 Bopd gross (8,500 Bopd net) in the second quarter of 2024.
Previous wording
The Ceiba Field and Okume Complex workover and infill drilling campaign commenced in the fourth quarter of 2023, completing one production well workover. However, as a result of safety issues with the drilling rig, the operator terminated the rig contract in early February 2024. The partnership has now secured an alternative rig and drilling contractor to resume the drilling campaign, which is now expected to re-commence around mid-year 2024 and is planned to include the drilling and completion of two infill production wells in Block G and the drilling of the Akeng Deep ILX prospect in Block S. The partnership expects the two infill production wells online later in 2024.
Current wording
The Ceiba Field and Okume Complex workover and infill drilling campaign commenced in the fourth quarter of 2023, completing one production well workover. However, as a result of safety issues with the drilling rig, the operator terminated the rig contract in early February 2024. In the second quarter of 2024, the partnership secured an alternative rig and drilling contractor to resume the drilling campaign. The infill drilling campaign re-commenced in July 2024 and is now planned to include the drilling and completion of two infill production wells in Block G with both wells expected online in the fourth quarter of 2024. Following completion of the second infill well, the rig is contracted to drill the Akeng Deep ILX prospect in Block S, with results expected around the end of the year.
Previous wording
The Greater Tortue liquefied natural gas project continues to progress in the first quarter of 2024. The following milestones have been achieved:
Current wording
The Greater Tortue liquefied natural gas project continues to make good progress. The following milestones have been achieved:
Previous wording
•Drilling: The operator has successfully drilled and completed all four wells with expected production capacity significantly higher than what is required for first gas.
Current wording
•Drilling: The operator has successfully drilled and completed the first batch of four wells with expected production capacity significantly higher than what is required for first gas.
Previous wording
•Hub Terminal: Construction work is complete and Hub Terminal handed over to operations.
Current wording
•Hub Terminal: The Hub Terminal has been handed over to operations.
Previous wording
•Subsea: The subsea workscope is progressing in line with expectations with the flowline installation now complete and final connection work ongoing.
Current wording
•Subsea: The subsea workscope is progressing in line with expectations with final connection work ongoing. Mechanical completion for first gas is expected in August 2024.
Previous wording
•FLNG: The vessel arrived on location offshore Mauritania/Senegal during the first quarter of 2024 and is now moored to the Hub Terminal. The partnership is continuing to work with the vessel operator to accelerate commissioning work.
Current wording
•FLNG: The vessel arrived on location offshore Mauritania and Senegal during the first quarter of 2024 and is now moored to the Hub Terminal. The partnership is working with the vessel operator to advance commissioning work and plans to bring in a pre-commissioning cargo to accelerate the cool down of the vessel in August 2024. First LNG is expected in the fourth quarter of 2024.
Previous wording
The Yakaar and Teranga discoveries continue to be analyzed as a joint development. The participating interests in the Cayar Offshore Profond Block are: Kosmos 90% and PETROSEN 10%, with PETROSEN having the right to increase its participating interest after issuance of an exploitation authorization to up to 35%. In March 2024, the current phase of the Cayar Block exploration license was extended an additional two years to July 2026. Kosmos will look to farm down our working interest to approximately 25% - 33% while retaining operatorship of the project.
Current wording
The Yakaar and Teranga discoveries continue to be analyzed as a joint development. The participating interests in the Cayar Offshore Profond Block are: Kosmos 90% and PETROSEN 10%, with PETROSEN having the right to increase its participating interest after issuance of an exploitation authorization to up to 35%. In March 2024, the current phase of the Cayar Block exploration license was extended an additional two years to July 2026. Kosmos has completed the concept development work and will now transition towards finalizing the partnership to support advancement of the project.
Previous wording
All of our results, as presented in the table below, represent operations from Ghana, the U.S. Gulf of Mexico and Equatorial Guinea. Certain operating results and statistics for the three months ended March 31, 2024 and 2023 are included in the following tables:
Current wording
All of our results, as presented in the table below, represent operations from Ghana, the U.S. Gulf of Mexico and Equatorial Guinea. Certain operating results and statistics for the three and six months ended June 30, 2024 and 2023 are included in the following tables:
Previous wording
Oil and gas revenue. Oil and gas revenue increased by $24.9 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023 primarily as a result of higher sales volumes and higher average realized oil and gas prices. We sold 5,701 MBoe at an average realized price per barrel equivalent of $73.52 during the three months ended March 31, 2024 and 5,501 MBoe at an average realized price per barrel equivalent of $71.67 during the three months ended March 31, 2023.
Current wording
Oil and gas revenue. Oil and gas revenue increased by $177.6 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023 as a result of higher sales volumes primarily driven by increased production at Jubilee, timing of our international oil liftings and higher average realized oil and gas prices. We sold 5,954 MBoe at an average realized price per barrel equivalent of $75.73 during the three months ended June 30, 2024 and 4,116 MBoe at an average realized price per barrel equivalent of $66.38 during the three months ended June 30, 2023.
Previous wording
Depletion, depreciation and amortization. Depletion, depreciation and amortization decreased by $8.4 million during the three months ended March 31, 2024, as compared with the three months ended March 31, 2023 primarily as a result of a lower depletion rate per barrel on Jubilee due to an increase in reserves at the end of 2023.
Current wording
Depletion, depreciation and amortization. Depletion, depreciation and amortization increased by $0.2 million during the three months ended June 30, 2024, as compared with the three months ended June 30, 2023 primarily as a result of higher sales volumes during the quarter offset by a lower depletion rate per barrel in Ghana resulting from an increase in Jubilee reserves at the end of 2023 and a lower cost basis in our TEN Fields due to the impairment loss recorded in the year ended December 31, 2023.
Previous wording
Interest and other financing costs, net. Interest and other financing costs, net decreased by $8.1 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023 primarily as a result of increased capitalized interest related to the Greater Tortue Ahmeyim project partially offset by an increase in interest expense due to higher interest rates.
Current wording
Interest and other financing costs, net. Interest and other financing costs, net increased by $12.9 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023 primarily as a result of a $22.0 million loss on debt modifications and extinguishments related to the amendment and restatement of the Facility during the second quarter of 2024 partially offset by increased capitalized interest related to the Greater Tortue Ahmeyim project.
Previous wording
Derivatives, net. During the three months ended March 31, 2024 and 2023, we recorded a loss of $23.8 million and a gain of $6.8 million, respectively, on our outstanding hedge positions. The amounts recorded were a result of changes in the forward oil price curve during the respective periods.
Current wording
Derivatives, net. During the three months ended June 30, 2024 and 2023, we recorded a gain of $2.9 million and a loss of $3.0 million, respectively, on our outstanding hedge positions. The amounts recorded were a result of changes in the forward oil price curve during the respective periods.
Previous wording
Income tax expense (benefit). For the three months ended March 31, 2024 and 2023, changes to our effective tax rates are driven by which tax jurisdictions our income before income taxes is generated. The jurisdictions in which we operate have statutory tax rates ranging from 0% to 35%.
Current wording
Income tax expense. For the three months ended June 30, 2024 and 2023, changes to our effective tax rates are driven by which tax jurisdictions our income before income taxes is generated. The jurisdictions in which we operate have statutory tax rates ranging from 0% to 35%.
Previous wording
Oil and gas production. Oil and gas production costs increased by $9.7 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023 primarily as a result of workover costs in the U.S. Gulf of Mexico of and Equatorial Guinea.
Current wording
Oil and gas production. Oil and gas production costs increased by $96.8 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 primarily as a result of increased sales volumes, higher production costs per barrel related to a TEN cargo lifting in Ghana, inclusion of operating costs associated with Greater Tortue Ahmeyim and workover costs in the U.S. Gulf of Mexico and Equatorial Guinea.
Previous wording
As of March 31, 2024, borrowings under the Facility totaled $800.0 million and the undrawn availability under the Facility was $450.0 million. Additionally, as of March 31, 2024, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was $250.0 million. In April 2024, the Company agreed to an amendment and restatement of the Facility. As part of the amendment, the overall Facility size was increased from $1.25 billion to $1.35 billion. The amended Facility size of approximately $1.35 billion is capped by total commitments of approximately $1.2 billion. The
Current wording
As of June 30, 2024, borrowings under the Facility totaled $750.0 million and the undrawn availability under the Facility was $455.0 million. Additionally, as of June 30, 2024, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was approximately $165 million.
Previous wording
The following table presents the sources and uses of our cash and cash equivalents and restricted cash for the three months ended March 31, 2024 and 2023:
Current wording
The following table presents the sources and uses of our cash and cash equivalents and restricted cash for the six months ended June 30, 2024 and 2023:
Previous wording
Net cash provided by operating activities. Net cash provided by operating activities for the three months ended March 31, 2024 was $272.6 million compared with net cash provided by operating activities for the three months ended March 31, 2023 of $203.9 million. The increase in cash provided by operating activities in the three months ended March 31, 2024 when compared to the same period in 2023 is primarily a result of higher sales volumes and higher average oil prices for the three months ended March 31, 2024 and changes in working capital.
Current wording
Net cash provided by operating activities. Net cash provided by operating activities for the six months ended June 30, 2024 was $496.2 million compared with net cash provided by operating activities for the six months ended June 30, 2023 of $222.0 million. The increase in cash provided by operating activities in the six months ended June 30, 2024 when compared to the same period in 2023 is primarily a result of higher sales volumes and higher average oil prices for the six months ended June 30, 2024 and changes in working capital.
Previous wording
We estimate we will spend approximately $700-$750 million of capital for the year ending December 31, 2024, excluding any acquisitions or divestiture of oil and gas properties during the year. This capital expenditure budget consists of:
Current wording
We estimate we will spend around $750 million of capital for the year ending December 31, 2024 with the EG drilling campaign now included in our firm guidance, excluding any acquisitions or divestiture of oil and gas properties during the year. This capital expenditure budget consists of:
Previous wording
•Approximately $250-$300 million related to maintenance activities across our Ghana, Equatorial Guinea and U.S. Gulf of Mexico assets, including infill development drilling and integrity spend;
Current wording
•Approximately $300 million related to maintenance activities across our Ghana, Equatorial Guinea and U.S. Gulf of Mexico assets, including infill development drilling and integrity spend;
Previous wording
•Approximately $50-$100 million related to progressing our infrastructure-led exploration and appraisal programs in the U.S. Gulf of Mexico, including Tiberius appraisal activities, and the drilling of the ILX prospect Akeng Deep in Equatorial Guinea, as well as the appraisal plans of our greater gas resources in Mauritania and Senegal, including Phase 2 of Greater Tortue Ahmeyim and Yakaar-Teranga.
Current wording
•Approximately $50-$100 million related to progressing our infrastructure-led exploration and appraisal programs in the U.S. Gulf of Mexico, including Tiberius appraisal activities, and the drilling of the ILX prospect Akeng Deep in Equatorial Guinea, as well as the appraisal plans of our greater gas resources in Mauritania and Senegal, including the next phase of Greater Tortue Ahmeyim and Yakaar-Teranga.
Previous wording
The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September. The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets’ reserves and/or resources in the Jubilee and TEN Fields in Ghana and the Ceiba Field and Okume Complex in Equatorial Guinea. As of March 31, 2024, borrowings under the Facility totaled $800.0 million and the undrawn availability under the Facility was $450.0 million.
Current wording
The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September. The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets’ reserves and/or resources in the Jubilee and TEN Fields in Ghana and the Ceiba Field and Okume Complex in Equatorial Guinea. As of June 30, 2024, borrowings under the Facility totaled $750.0 million and the undrawn availability under the Facility was $455.0 million.
Previous wording
In April 2024, in conjunction with the spring borrowing base redetermination, the Company agreed to an amendment and restatement of the Facility. The amendment includes the following material changes: an increase in the facility size to $1.35 billion (from $1.25 billion), an increase in the interest margin by 0.25% or 0.50%, depending on the length of time that has passed from the date the Facility was entered into, and an extension in the tenor by approximately three years (final maturity date now occurs December 31, 2029). The amended Facility size of approximately $1.35 billion is capped by total commitments of approximately $1.2 billion. The available facility amount is subject to borrowing base constraints and, beginning on April 1, 2027, outstanding borrowings will be constrained by an amortization schedule.
Current wording
In April 2024, in conjunction with the spring borrowing base redetermination, the Company executed an amendment and restatement of the Facility. The amendment includes the following material changes: an increase in the Facility size and borrowing base capacity to $1.35 billion (from $1.25 billion), an increase in the interest margin by 0.25% or 0.50%, depending on the length of time that has passed from the date the Facility was entered into, and an extension in the tenor by approximately three years (final maturity date now occurs December 31, 2029). The amended Facility size and borrowing base capacity of approximately $1.35 billion is currently capped by total commitments of approximately $1.21 billion. The available facility amount is subject to borrowing base constraints and, beginning on April 1, 2027, outstanding borrowings will be constrained by an amortization schedule.
Previous wording
The Corporate Revolver is available for general corporate purposes and for oil and gas exploration, appraisal and development programs. As of March 31, 2024, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was $250.0 million with an expiration date of December 31, 2024. In April 2024, in connection with the amendment and restatement of the Facility, we amended the Corporate Revolver reducing the borrowing capacity from $250.0 million to approximately $165 million. All of the commitments that were cancelled (either in full or in part) under the Corporate Revolver were transferred to the Facility as part of the amendment and restatement. There is no change to the final maturity date of December 31, 2024.
Current wording
The Corporate Revolver is available for general corporate purposes and for oil and gas exploration, appraisal and development programs. In April 2024, in connection with the amendment and restatement of the Facility, we amended the Corporate Revolver reducing the borrowing capacity from $250.0 million to approximately $165 million. All of the commitments that were cancelled (either in full or in part) under the Corporate Revolver were transferred to the Facility as part of the amendment and restatement. There is no change to the final maturity date of December 31, 2024. As of June 30, 2024, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was approximately $165 million with an expiration date of December 31, 2024.
Previous wording
The following table summarizes by period the payments due for our estimated contractual obligations as of March 31, 2024, before consideration of the Facility amendment, and the weighted average interest rates expected to be paid on the Facility and Corporate Revolver given current contractual terms and market conditions, and the instrument’s estimated fair value. Weighted-average interest rates are based on implied forward rates in the yield curve at the reporting date. This table does not include amortization of deferred financing costs.
Current wording
The following table summarizes by period the payments due for our estimated contractual obligations as of June 30, 2024, and the weighted average interest rates expected to be paid on the Facility and Corporate Revolver given current contractual terms and market conditions, and the instrument’s estimated fair value. Weighted-average interest rates are based on implied forward rates in the yield curve at the reporting date. This table does not include amortization of deferred financing costs.
Previous wording
(1)The amounts included in the table represent principal maturities only. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the available borrowing base as of March 31, 2024. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. In April 2024, the Company agreed to an amendment and restatement of the Facility. As part of the amendment, the overall Facility size was increased from $1.25 billion to $1.35 billion. The amendment includes a three-year extension, with the Facility’s final maturity now in December 2029 extending the first repayment installment to be on April 1, 2027, rather than October 1, 2024.
Current wording
(1)The amounts included in the table represent principal maturities only. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the available borrowing base as of June 30, 2024. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter.
Previous wording
(5)In April 2024, a Decommissioning Trust agreement with the Jubilee unit partners to cash fund future retirement obligations associated with the Jubilee Field was finalized. The total commitment is currently estimated to be approximately $143.8 million, net to Kosmos, which will be funded annually by Kosmos over an estimated 13 year period. The contributions will be accounted for as trading securities and reported as a long-term investment in our consolidated balance sheet and as operating activities in our statement of cash flows. It is possible that our funding requirements could change based on future changes in the decommissioning plan or estimates.
Current wording
(5)In April 2024, a Decommissioning Trust agreement with the Jubilee unit partners to cash fund future retirement obligations associated with the Jubilee Field was finalized. The operator currently estimates the total commitment to be approximately $148.9 million, net to Kosmos, which will be funded annually by Kosmos over an estimated 13 year period. The contributions will be accounted for as trading securities and reported as a long-term investment in our consolidated balance sheet and as operating activities in our statement of cash flows. It is possible that our funding requirements could change based on future changes in the decommissioning plan or estimates.
Previous wording
We have a commitment to drill 3 development wells and one exploration well in Equatorial Guinea. We have a $200.2 million FPSO Contract Liability in Other long-term liabilities related to the deferred sale of the Greater Tortue FPSO which will be non-cash settled with the delivery of the Greater Tortue FPSO to BP Buyer upon commissioning of the Greater Tortue FPSO which is currently targeted to be in the third quarter of 2024. In March 2024, the current phase of the Cayar Block exploration license in Senegal was extended an additional two years to July 2026. The extended exploration phase commences in July 2024 and has a $55.0 million minimum work commitment.
Current wording
We have a commitment to drill 3 development wells and one exploration well in Equatorial Guinea. We have a $200.2 million FPSO Contract Liability in Other long-term liabilities related to the deferred sale of the Greater Tortue FPSO which will be non-cash settled with the delivery of the Greater Tortue FPSO to BP Buyer upon commissioning of the Greater Tortue FPSO which is currently targeted to be in September 2024.
Previous wording
In February 2019, Kosmos and BP signed Carry Advance Agreements with the national oil companies of Mauritania and Senegal, which obligate us separately to finance the respective national oil companies’ share of certain development costs. Kosmos’ total share for the two agreements combined is currently estimated at approximately $300.0 million, of which $261.7 million has been incurred through March 31, 2024, excluding accrued interest. These amounts will be repaid through the national oil companies’ share of future revenues.
Current wording
In February 2019, Kosmos and BP signed Carry Advance Agreements with the national oil companies of Mauritania and Senegal, which obligate us separately to finance the respective national oil companies’ share of certain development and production costs. Kosmos’ total share for the two agreements combined is currently estimated at approximately $370.0 million, of which $261.8 million has been incurred through June 30, 2024, excluding accrued interest. These amounts will be repaid through the national oil companies’ share of future revenues.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Derivatives, net. During the six months ended June 30, 2024 and 2023, we recorded a loss of $21.0 million and a gain of $3.8 million, respectively, on our outstanding hedge positions. The changes recorded were a result of changes in the forward curve of oil prices during the respective periods.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In March 2024, the Company issued $400.0 million of 3.125% Convertible Senior Notes and received net proceeds of $390.4 million after deducting fees. The 3.125% Convertible Senior Notes mature on March 15, 2030, unless earlier converted, redeemed or repurchased. The conversion rate for the 3.125% Convertible Senior Notes is initially 142.4501 shares of our common stock per $1,000 principal amount of 3.125% Convertible Senior Notes (which is equivalent to an initial conversion price of approximately $7.02 per share of our common stock), subject to adjustments.
Previous report — wording carried elsewhere
In connection with the issuance of the 3.125% Convertible Senior Notes, the Company used $49.8 million of the net proceeds from the issuance of the 3.125% Convertible Senior Notes to enter into the Capped Call Transactions. The Capped Call Transactions are generally expected to reduce potential dilution to holders of our common stock upon any conversion of the 3.125% Convertible Senior Notes and/or offset any cash payments that we are required to make in excess of the principal amount of any 3.125% Convertible Senior Notes that are converted, as the case may be, with such reduction and/or offset subject to a cap.