Kosmos Energy Ltd.

Previous wording

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 project is a phased development with the initial two production wells of the first phase brought online in the third quarter of 2024. The third development well was drilled in the second quarter of 2024 and brought online in October 2024. Shortly after startup of the third well, production at the field was curtailed due to sand production from the third well seen at the production facility. We are currently working with the operator to restart production from the first two wells and to evaluate options to remediate the third well.

Current wording

In July 2024, we announced start-up of oil production from the first phase of the Winterfell development in the Green Canyon area of the Gulf of America (25% working interest). In October 2024, shortly after startup of the third well, production at the field was curtailed due to sand production from the third well seen at the production facility. Production from the first two wells was restored in December 2024. Remediation work on Winterfell-3 was performed in the first quarter of 2025, however was unsuccessful. Winterfell-3 has now been temporarily plugged and abandoned while the partnership evaluates options to restore production from the Winterfell-3 fault block. The drilling rig has moved to drill and complete Winterfell-4, commencing the second phase of the Winterfell development project. Winterfell-4 is expected online in the third quarter of 2025.

Previous wording

Production in Equatorial Guinea averaged approximately 22,900 Bopd gross (8,000 Bopd net) in the third quarter of 2024.

Current wording

Production in Equatorial Guinea averaged approximately 25,700 Bopd gross (9,000 Bopd net) in the first quarter of 2025.

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 and nine months ended September 30, 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, Equatorial Guinea, Mauritania, Senegal and the Gulf of America. Certain operating results and statistics for the three months ended March 31, 2025 and 2024 are included in the following tables:

Previous wording

Oil and gas revenue. Oil and gas revenue decreased by $118.6 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023 as a result of lower sales volumes due to the timing of a TEN oil lifting in Ghana and lower average realized oil and gas prices. We sold 5,811 MBoe at an average realized price per barrel equivalent of $70.18 during the three months ended September 30, 2024 and 6,727 MBoe at an average realized price per barrel equivalent of $78.24 during the three months ended September 30, 2023.

Current wording

Oil and gas revenue. Oil and gas revenue decreased by $129.0 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily as a result of lower production at Jubilee, the timing of our oil liftings in Equatorial Guinea and lower average realized oil and gas prices. We sold 4,445 MBoe at an average realized price per barrel equivalent of $65.27 during the three months ended March 31, 2025 and 5,701 MBoe at an average realized price per barrel equivalent of $73.52 during the three months ended March 31, 2024.

Previous wording

Oil and gas production. Oil and gas production costs decreased by $5.3 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023 primarily as a result of the timing of a TEN cargo lifting in Ghana offset by inclusion of operating costs associated with Greater Tortue Ahmeyim and increased production costs in Equatorial Guinea.

Current wording

Oil and gas production. Oil and gas production costs increased by $73.7 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily as a result of the inclusion of operating costs associated with LNG production at the GTA Phase 1 project in Mauritania and Senegal, costs related to the scheduled shutdown and maintenance activities in Ghana, and workovers in the Gulf of America.

Previous wording

Exploration expenses. Exploration expenses increased by $4.4 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023 primarily as a result of increased seismic data acquisition costs in the U.S. Gulf of Mexico business unit.

Current wording

Exploration expenses. Exploration expenses decreased by $2.4 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 primarily as a result of decreased seismic data acquisition costs in the Gulf of America business unit.

Previous wording

Interest and other financing costs, net. Interest and other financing costs, net decreased by $3.3 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 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 $35.4 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 primarily as a result of decreased capitalized interest related to the GTA Phase 1 project commencing first gas production in December 2024.

Previous wording

Derivatives, net. During the three months ended September 30, 2024 and 2023, we recorded a gain of $15.3 million and a loss of $46.0 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.

Current wording

Derivatives, net. During the three months ended March 31, 2025 and 2024, we recorded a loss of $6.7 million and a loss of $23.8 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.

Previous wording

We are actively engaged in an ongoing process of anticipating and meeting our funding requirements related to our strategy as a full-cycle exploration and production company. We have historically met our funding requirements through cash flows generated from our operating activities and obtained additional funding from issuances of equity and debt, as well as partner carries.

Current wording

We are actively engaged in an ongoing process of anticipating and meeting our funding requirements related to our strategy as a deepwater exploration and production company. We have historically met our funding requirements through cash flows generated from our operating activities and obtained additional funding from issuances of equity and debt, as well as partner carries.

Previous wording

Oil prices are historically volatile and a significant decrease in oil prices could negatively impact our ability to generate sufficient operating cash flows to meet our funding requirements. This volatility could also result in wide fluctuations in future oil prices, which could impact our ability to comply with our financial covenants. To partially mitigate this price volatility, we maintain an active hedging program and review our capital spending program on a regular basis. Our investment decisions are based on longer-term commodity prices based on the nature of our projects and development plans. Current commodity prices, combined with our hedging program and our current liquidity position support our remaining capital program for 2024.

Current wording

Oil prices are historically volatile and could negatively impact our ability to generate sufficient operating cash flows to meet our funding requirements. This oil price volatility could impact our ability to comply with our financial covenants. To partially mitigate this price volatility, we maintain an active hedging program and review our capital spending program on a regular basis. Our investment decisions are based on longer-term commodity prices based on the nature of our projects and development plans. Current commodity prices, combined with our hedging program and our current liquidity position support our remaining capital program for 2025.

Previous wording

As such, our 2024 capital budget is based on our exploitation and production plans for Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, our infrastructure-led exploration and appraisal program in the U.S. Gulf of Mexico and Equatorial Guinea, and our appraisal and development activities in the U.S. Gulf of Mexico, Mauritania and Senegal.

Current wording

As such, our 2025 capital budget is based on our exploitation and production plans for Ghana, Equatorial Guinea, Mauritania, Senegal and the Gulf of America, and our appraisal and development activities in the Gulf of America, Mauritania and Senegal.

Previous wording

Our future financial condition and liquidity can be impacted by, among other factors, the success of our exploitation, exploration and appraisal drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the reliability of our oil and gas production facilities, our ability to continuously export oil and gas, our ability to secure and maintain partners and their alignment with respect to capital plans, the actual cost of exploitation, exploration, appraisal and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.

Current wording

Our future financial condition and liquidity can be impacted by, among other factors, the success of our exploration, appraisal and exploitation drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the reliability of our oil and gas production facilities, our ability to continuously export oil and gas, our ability to secure and maintain partners and their alignment with respect to capital plans, the actual cost of exploration, appraisal, exploitation and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.

Previous wording

The following table presents the sources and uses of our cash and cash equivalents and restricted cash for the nine months ended September 30, 2024 and 2023:

Current 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, 2025 and 2024:

Previous wording

Net cash provided by operating activities. Net cash provided by operating activities for the nine months ended September 30, 2024 was $502.5 million compared with net cash provided by operating activities for the nine months ended September 30, 2023 of $471.4 million. The increase in cash provided by operating activities in the nine months ended September 30, 2024 when compared to the same period in 2023 is primarily a result of higher sales volumes and higher average realized gas prices for the nine months ended September 30, 2024 offset by higher oil and gas production costs and changes in working capital.

Current wording

Net cash provided by (used in) operating activities. Net cash used in operating activities for the three months ended March 31, 2025 was $0.9 million compared with net cash provided by operating activities for the three months ended March 31, 2024 of $272.6 million. The decrease in cash provided by operating activities in the three months ended March 31, 2025 when compared to the same period in 2024 is primarily a result of lower sales volumes in Ghana and Equatorial Guinea, lower average realized oil and gas prices, higher oil and gas production costs related to the inclusion of operating costs associated with LNG production at the GTA Phase 1 project and costs related to the scheduled shutdown and maintenance activities in Ghana and workovers in the Gulf of America for the three months ended March 31, 2025.

Previous wording

• drill additional infill wells and execute exploitation and production activities in Ghana, Equatorial Guinea and the U.S. Gulf of Mexico;

Current wording

• drill additional infill wells and execute exploitation and production activities in Ghana, Equatorial Guinea and the Gulf of America;

Previous wording

We estimate we will spend around $800 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 $400 million or less of capital for the year ending December 31, 2025, excluding any acquisitions or divestiture of oil and gas properties during the year. This capital expenditure budget consists of:

Previous wording

•Approximately $350 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 $275 million related to maintenance activities across our producing Ghana, Equatorial Guinea and Gulf of America assets, including infill development drilling and facilities integrity spend;

Previous wording

The ultimate amount of capital we will spend may fluctuate materially based on market conditions and the success of our exploitation and drilling results among other factors. Our future financial condition and liquidity will be impacted by, among other factors, our level of production of oil and the prices we receive from the sale of oil, our ability to effectively hedge future production volumes, the success of our multi-faceted infrastructure-led exploration and appraisal drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, our partners’ alignment with respect to capital plans, and the actual cost of exploitation, exploration, appraisal and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.

Current wording

The ultimate amount of capital we will spend may fluctuate materially based on market conditions and the success of our exploitation and drilling results among other factors. Our future financial condition and liquidity will be impacted by, among other factors, our level of production of oil, natural gas and LNG and the prices we receive from the sale of oil, natural gas and LNG, and our ability to effectively hedge future production volumes, the success of our multi-faceted infrastructure-led exploration, appraisal and development drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, our partners’ alignment with respect to capital plans, and the actual cost of exploration, appraisal, exploitation and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.

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 September 30, 2024, borrowings under the Facility totaled $850.0 million and the undrawn availability under the Facility was $500.0 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 Company’s production assets in Ghana and Equatorial Guinea. As of March 31, 2025, borrowings under the Facility totaled $1.0 billion and the undrawn availability under the Facility was $350.0 million.

Previous wording

The Facility provides a revolving credit and letter of credit facility. The availability period for the revolving credit facility expires one month prior to the final maturity date. The letter of credit facility expires on the final maturity date. As of September 30, 2024, we had no letters of credit issued under the Facility. We have the right to cancel all the undrawn commitments under the amended and restated Facility.

Current wording

The Facility provides a revolving credit and letter of credit facility. The availability period for the revolving credit facility expires one month prior to the final maturity date. The letter of credit facility expires on the final maturity date. 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. The Facility has a final maturity date of December 31, 2029. As of March 31, 2025, we had no letters of credit issued under the Facility. We have the right to cancel all the undrawn commitments under the amended and restated Facility.

Previous wording

We have four series of senior notes outstanding as of September 30, 2024, which we collectively refer to as the “Senior Notes.” Our 7.125% Senior Notes have an outstanding balance of $250.0 million and mature on April 4, 2026. Interest is payable on the 7.125% Senior Notes each April 4 and October 4. Our 7.750% Senior Notes have an outstanding balance of $350.0 million and mature on May 1, 2027. Interest is payable on the 7.750% Senior Notes each May 1 and November 1. Our 7.500% Senior Notes have an outstanding balance of approximately $400.3 million and mature on March 1, 2028. Interest is payable on the 7.500% Senior Notes each March 1 and September 1. In September 2024, the Company issued $500.0 million of 8.750% Senior Notes that mature on October 1, 2031. Interest is payable on the 8.750% Senior Notes each April 1 and October 1.

Current wording

We have four series of senior notes outstanding as of March 31, 2025, which we collectively refer to as the “Senior Notes.” Our 7.125% Senior Notes have an outstanding balance of $250.0 million and mature on April 4, 2026. Interest is payable on the 7.125% Senior Notes each April 4 and October 4. Our 7.750% Senior Notes have an outstanding balance of $350.0 million and mature on May 1, 2027. Interest is payable on the 7.750% Senior Notes each May 1 and November 1. Our 7.500% Senior Notes have an outstanding balance of approximately $400.3 million and mature on March 1, 2028. Interest is payable on the 7.500% Senior Notes each March 1 and September 1. Our 8.750% Senior Notes have an outstanding balance of $500.0 million and mature on October 1, 2031. Interest is payable on the 8.750% Senior Notes each April 1 and October 1.

Previous wording

The Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equally in right of payment with all of its existing and future senior indebtedness (including all borrowings under the Corporate Revolver and the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility). The Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's U.S. Gulf of Mexico assets, and on a subordinated, unsecured basis by entities that borrow under, or guarantee, our Facility.

Current wording

The Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equally in right of payment with all of its existing and future senior indebtedness (including the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility). The Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's Gulf of America assets, and on a subordinated, unsecured basis by entities that borrow under, or guarantee, our Facility.

Previous wording

The 3.125% Convertible Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the Corporate Revolver and the Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility, to the extent of the value of the assets securing such indebtedness). The 3.125% Convertible Senior Notes are guaranteed on a senior, unsecured basis by certain of our existing subsidiaries that guarantee on a senior basis the Corporate Revolver and the Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries.

Current wording

The 3.125% Convertible Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility, to the extent of the value of the assets securing such indebtedness). The 3.125% Convertible Senior Notes are guaranteed on a senior, unsecured basis by certain of our existing subsidiaries that guarantee on a senior basis the Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries. The 3.125% Convertible Senior Notes are guaranteed on a subordinated, unsecured basis by certain of our existing subsidiaries that borrow under or guarantee the Facility and guarantee on a subordinated basis the Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries.

Previous wording

Other than in connection with certain tax law changes, we may not redeem the notes prior to March 22, 2027. We may redeem for cash all or any portion of the 3.125% Convertible Senior Notes, at our option, on or after March 22, 2027 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide the related notice of redemption, at a redemption price equal to 100% of the principal amount of the 3.125% Convertible Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. We are not required to redeem or retire the 3.125% Convertible Senior Notes periodically. We may not elect to redeem less than all of the outstanding 3.125% Convertible Senior Notes unless at least $75.0 million aggregate principal amount of 3.125% Convertible Senior Notes are outstanding and not subject to redemption as of the time we send the related redemption notice. The 3.125% Convertible Senior Notes indenture contains customary terms and covenants.

Current wording

The 3.125% Convertible Senior Notes indenture contains customary terms and covenants.

Previous wording

The following table summarizes by period the payments due for our estimated contractual obligations as of September 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.

Current wording

The following table summarizes by period the payments due for our estimated contractual obligations as of March 31, 2025, and the weighted average interest rates expected to be paid on the Facility 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

(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 into the trust will be invested into various securities. Those investments will be accounted for as trading securities and reported as long-term investments 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 costs associated with the Jubilee Field was finalized. The operator currently estimates the total commitment to be approximately $126.1 million as of March 31, 2025, net to Kosmos, which will be funded annually by Kosmos over an estimated 11 year period. It is possible that our funding requirements could change based on future changes in the decommissioning plan or estimates.

Previous wording

As of September 30, 2024, we have a commitment to drill two development wells and one exploration well in Equatorial Guinea. One of the two development wells is currently being drilled.

Current wording

As of March 31, 2025, we have a commitment to drill one development well in Equatorial Guinea.

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 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 September 30, 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 incurred for the GTA Phase 1 project. Kosmos’ total share for the two agreements combined is currently estimated at approximately $370.0 million, of which $312.7 million has been incurred through March 31, 2025, excluding accrued interest. The amount financed by Kosmos is to be repaid through the national oil companies’ share of future revenues.

Previous wording

We consider accounting policies related to our revenue recognition, exploration and development costs, receivables, income taxes, derivative instruments and hedging activities, estimates of proved oil and natural gas reserves, asset retirement obligations and impairment of long-lived assets as critical accounting policies. The policies include significant estimates made by management using information available at the time the estimates are made. However, these estimates could change materially if different information or assumptions were used. Other than items discussed in Note 2 — Accounting Policies, there have been no changes to our critical accounting policies which are summarized in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our annual report on Form 10-K, for the year ended December 31, 2023.

Current wording

We consider accounting policies related to our revenue recognition, exploration and development costs, receivables, income taxes, derivative instruments and hedging activities, estimates of proved oil and gas reserves, asset retirement obligations and impairment of long-lived assets as critical accounting policies. The policies include significant estimates made by management using information available at the time the estimates are made. However, these estimates could change materially if different information or assumptions were used. Other than items discussed in Note 2 — Accounting Policies, there have been no changes to our critical accounting policies which are summarized in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our annual report on Form 10-K, for the year ended December 31, 2024.

Previous wording

•the impacts of Russia’s war in Ukraine and potential instability in the Middle East and the effects these events have on the oil and gas industry as a whole, including increased volatility with respect to oil, natural gas and NGL prices and operating and capital expenditures;

Current wording

•the impacts of the continued war in Ukraine and ongoing instability in the Middle East and the effects these events have on the oil and gas industry as a whole, including increased volatility with respect to oil, natural gas and LNG prices and operating and capital expenditures;

Previous wording

•the volatility of oil, natural gas and NGL prices, as well as our ability to implement hedges addressing such volatility on commercially reasonable terms;

Current wording

•the volatility of oil, natural gas and LNG prices, as well as our ability to implement hedges addressing such volatility on commercially reasonable terms;