KOSMOS ENERGY ANNOUNCES
FOURTH QUARTER AND FULL YEAR 2023 RESULTS
DALLAS--(BUSINESS WIRE)-February 26, 2024-- Kosmos Energy Ltd. ("Kosmos"
or the "Company") (NYSE/LSE: KOS) announced today its financial and
operating results for the fourth quarter of
2023. For the quarter, the Company generated a net
income of $22
million, or $0.04 per diluted share. When adjusted
for certain items that impact the comparability of results,
the Company generated an adjusted net income(1) of $149
million, or $0.31 per diluted share
for the fourth quarter of 2023.
FOURTH QUARTER AND FULL YEAR 2023 HIGHLIGHTS
• 4Q Net
Production(2): ~66,000 barrels of oil equivalent per day
(boepd), representing ~12% growth year over
year; Net sales of ~73,000 boepd
• 4Q Revenues: $508 million, or $75.64 per boe
(excluding the impact of derivative cash settlements)
• 4Q Production expense:
$104 million, or $15.46 per boe
• 4Q Capital expenditures:
$281 million
• 1P reserves of ~280 mmboe
as of December 31, 2023, representing a 104% replacement rate
ratio
•
Assumed operatorship and a greater working interest at
Yakaar-Teranga offshore Senegal
• Tiberius infrastructure-led
exploration (ILX) oil discovery offshore U.S. Gulf of Mexico
• Maintained AAA rating with
MSCI
Commenting on the Company's 2023 performance,
Chairman and Chief Executive Officer Andrew G. Inglis
said: "In 2023, we continued to advance our
key development projects, which aim to deliver around 50%
production growth from the second half of 2022. The start-up of
Jubilee Southeast was a major step toward achieving this goal and,
in the coming months, we expect production to begin at Winterfell
in the Gulf of Mexico followed by first gas at Greater Tortue
Ahmeyim offshore Mauritania and Senegal.
"Beyond advancing our development projects, we also
strengthened our portfolio of low cost, lower carbon investment
opportunities. We delivered a significant oil discovery at Tiberius
in the Gulf of Mexico, which added an attractive short-cycle oil
development to our portfolio. Kosmos also assumed operatorship and
a larger working interest at Yakaar-Teranga, which is a key asset
in Senegal's 'Gas-to-Power' and 'Gas-to-Industry' initiatives.
"As we pursue these operated developments, as well as
other projects in our organic portfolio, we are confident in our
ability to deliver growth through the decade while generating
strong cash flow. This is expected to strengthen our balance sheet,
help us achieve our leverage targets, while providing flexibility
around future capital allocation opportunities including returns to
shareholders.
"Kosmos is well-positioned to create value for
shareholders. We have a clear strategy, top-quality assets with
greater than 20 years of 2P reserves/production life, multiple
growth catalysts, and an important role in enabling a just and
orderly energy transition in the countries where we work."
FINANCIAL
UPDATE
Kosmos exited the fourth 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 $0.7
billion. The Company generated net cash provided by
operating activities of approximately $294 million and free cash flow(1) of
approximately $(27) million in the
fourth quarter.
Net capital expenditure for the fourth quarter of 2023 was
$281 million, higher than expected
primarily due to the accelerated timing of long-lead equipment
purchases for the Equatorial Guinea
infill and ILX drilling program.
Net capital expenditures for 2024 are expected to be
approximately $700-$750 million, weighted towards the first half of
the year as the Ghana drilling campaign concludes and the
Winterfell and Tortue projects progress to startup. Our 2024
guidance reflects higher than anticipated subsea expenses at
Torture Phase 1 following the replacement of the
previous subsea contractor that failed to perform its contractual
obligations. BP, on behalf of the partner group, has
initiated the process under its agreement with the original subsea
contractor to recover the losses incurred. The partnership will
seek to recover the maximum recoverable damages in binding
arbitration. We estimate Kosmos' net share of the recoverable
damages to be up to $160.0 million.
RESERVES
UPDATE
At year-end 2023, Kosmos had 1P reserves of
approximately 280 million barrels of oil
equivalent (boe), representing a 1P reserves to production ratio of
around 12 years and a reserve replacement ratio of 104%,
primarily as a result of increased reserve
recognition at Jubilee. 2P reserves as of year-end 2023 are
approximately 520 million boe, representing
a 2P reserves-to-production ratio of over 20 years. 2P reserves do
not include any recognition for the Tiberius and Yakaar-Teranga
discoveries with changes being driven by 2023 production as well as
reduced future activity on TEN. Kosmos' year-end reserves on all
assets have been independently evaluated by Ryder Scott.
OPERATIONAL
UPDATE
Production
Total net production(2) in the
fourth quarter of 2023 averaged
approximately 66,000 boepd representing a ~12% increase compared to
the fourth quarter of 2022. Production during the quarter was
impacted by reduced water injection at Jubilee, which has since
been resolved. Production is expected to rise through the year with
additional wells at Jubilee coming online and the startup of the
Winterfell and Tortue LNG projects. The
Company exited the quarter in a net overlift position of approximately 0.2
million barrels.
Ghana
Production in Ghana averaged approximately
43,300 boepd net in the fourth quarter of 2023. Kosmos lifted four cargos from
Ghana during the quarter, in line with guidance.
At Jubilee (38.6% working interest), oil production
in the fourth quarter averaged approximately 92,400 bopd gross with
two water injection wells brought online.
In 2024, one new producer well and one injector well were brought
online in early 1Q with three additional wells expected online in
the coming months before we expect the current rig contract to
end.
FPSO reliability remains high at approximately 99%
year to date and water injection is currently at record levels of
approximately 285,000 barrels of water per day (bwpd). This
compares with ~150,000 bwpd in the fourth quarter and ~160,000 bwpd
over 2023. At current water and gas injection rates, we expect 100%
voidage replacement in 2024, providing the necessary pressure
support to maintain elevated production levels.
At TEN (20.4% working interest), production averaged
approximately 18,500 bopd gross for the fourth quarter in line with
expectations.
The partnership has submitted a draft amended plan of
development ("PoD") 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 May 2024 at a price of
$2.95/mmbtu while discussions are ongoing on a longer-term
agreement. In the fourth quarter, Ghana gas production net to
Kosmos was approximately 5,800 boepd.
As a result of negative proved oil and gas reserve
revisions at TEN, driven by a reduction in the partnership's
development work scope for the TEN Fields and well performance, we
recorded impairment charges of $222.3 million for the year ended
December 31, 2023. The impairment charges resulted in a full
impairment of the remaining book value of TEN reducing the carrying
value of the TEN Fields to zero. Jubilee 1P reserve additions more
than offset the downward revision to TEN 1P reserves during the
period.
U.S. Gulf of
Mexico
Production in the U.S. Gulf of Mexico averaged
approximately 13,900 boepd net
(~81% oil) during the fourth quarter, in line with guidance.
The Winterfell development continues to progress with
the first of three wells completed in the fourth quarter and the
second well completed in the first quarter of 2024. First
production is expected early in the second quarter of 2024 with the
third well to follow later this year.
As announced in October 2023, 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). Initial fluid
and core analysis supports the production potential of the
Tiberius development wells, with characteristics
analogous with similar nearby discoveries in the Wilcox
trend.
Kosmos is now working with partners
on subsea development options with a sanction decision for a phased
tie-back development targeted later this year. The discovery is
located approximately 6 miles southeast of the Lucius production
facility (operated by Occidental, a partner in Tiberius) enabling a
short tie-back. In the Gulf of Mexico Lease Sale 261, Kosmos and
Occidental were awarded three blocks nearby to Tiberius, including
an existing oil discovery, Logan.
The Odd Job subsea pump project, planned to sustain
long-term production from the field, was ~90% complete at quarter
end. The project remains on track to be in service by mid-2024.
At Kodiak, workover plans for the
Kodiak 3 well have been developed and are expected to commence
around the middle of 2024.
Equatorial
Guinea
Production in Equatorial Guinea averaged
approximately 24,800 bopd gross and
8,700 bopd net in the fourth quarter.
Kosmos lifted one cargo from Equatorial Guinea during the quarter,
in line with guidance.
The 2023 Ceiba Field and Okume Complex development
rig campaign commenced in the fourth quarter of 2023. The campaign
initially completed 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
is seeking to secure an alternative rig and drilling contractor to
resume the work, which is planned to include the drilling of infill
production wells in Block G and the Akeng Deep prospect in Block S.
Given uncertainty on the timing of procuring a rig, we have not
included production related to the drilling
program in our 2024 guidance, although the partnership is eager to
complete the campaign and drill the Akeng Deep ILX well as soon as
possible in a safe, reliable, and environmentally sound manner.
Mauritania &
Senegal
On Greater Tortue Ahmeyim, the project continues to
make good progress. The following
milestones have been achieved:
• Drilling: The operator has
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 installation of the infield flowlines
and subsea structures. Work re-commenced in the fourth quarter with
completion expected at the end of the second quarter of 2024.
• FLNG: Construction was
completed in the fourth quarter of 2023 and the vessel arrived on
location offshore Mauritania/Senegal in the first quarter of 2024.
Hookup work is now underway.
• FPSO: The vessel is
currently in a shipyard in Tenerife for inspection and repair of
the fairleads. Completion of this work and transit to the project
site is expected early in the second
quarter ahead of final hookup and
commissioning.
The critical path to first gas, expected in the third
quarter of 2024, continues to be through the arrival, hookup and
commissioning of the FPSO. Timely execution of this workstream is
expected to allow for first LNG in the fourth quarter.
In November 2023, Kosmos assumed operatorship and
increased its working interest in Yakaar-Teranga to 90% (from 30%),
with government approvals received in January 2024. Kosmos is
working closely with Senegal's national oil company (PETROSEN) on
pre-FEED work 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. Post completion of pre-FEED, Kosmos plans to farm down its
interest in the second half of 2024 to around 33% working interest
while retaining operatorship of the project.
(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 fourth quarter 2023 financial and operating results today,
February 26, 2024, 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
|
|
Years Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues and other income:
|
|
|
|
|
|
|
|
|
Oil and gas revenue
|
|
$ 507,765
|
|
$ 509,916
|
|
$
1,701,608
|
|
$
2,245,355
|
Gain on sale of assets
|
|
-
|
|
50,000
|
|
-
|
|
50,471
|
Other income, net
|
|
42
|
|
3,806
|
|
(73)
|
|
3,949
|
Total revenues and other
income
|
|
507,807
|
|
563,722
|
|
1,701,535
|
|
2,299,775
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Oil and gas production
|
|
103,800
|
|
125,792
|
|
390,097
|
|
403,056
|
Facilities insurance modifications,
net
|
|
-
|
|
(1,003)
|
|
-
|
|
6,243
|
Exploration expenses
|
|
8,973
|
|
15,574
|
|
42,278
|
|
134,230
|
General and
administrative
|
|
21,801
|
|
26,432
|
|
99,532
|
|
100,856
|
Depletion, depreciation and
amortization
|
|
113,293
|
|
111,295
|
|
444,927
|
|
498,256
|
Impairment of long-lived
assets
|
|
222,278
|
|
449,969
|
|
222,278
|
|
449,969
|
Interest and other financing costs,
net
|
|
21,525
|
|
25,943
|
|
95,904
|
|
118,260
|
Derivatives, net
|
|
(31,034)
|
|
17,358
|
|
11,128
|
|
260,892
|
Other expenses, net
|
|
5,792
|
|
(7,734)
|
|
23,656
|
|
(9,054)
|
Total costs and expenses
|
|
466,428
|
|
763,626
|
|
1,329,800
|
|
1,962,708
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
|
41,379
|
|
(199,904)
|
|
371,735
|
|
337,067
|
Income tax expense
(benefit)
|
|
19,698
|
|
(85,628)
|
|
158,215
|
|
110,516
|
Net income (loss)
|
|
$ 21,681
|
|
$
(114,276)
|
|
$ 213,520
|
|
$ 226,551
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.05
|
|
$ (0.25)
|
|
$
0.46
|
|
$
0.50
|
Diluted
|
|
$
0.04
|
|
$ (0.25)
|
|
$
0.44
|
|
$
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute net
income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
460,129
|
|
455,892
|
|
459,641
|
|
455,346
|
Diluted
|
|
483,252
|
|
455,892
|
|
481,070
|
|
474,857
|
Kosmos Energy Ltd.
Condensed Consolidated Balance
Sheets
(In thousands, unaudited)
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
95,345
|
|
$
183,405
|
Receivables, net
|
|
120,733
|
|
119,735
|
Other current assets
|
|
206,635
|
|
165,581
|
Total current assets
|
|
422,713
|
|
468,721
|
|
|
|
|
|
Property and equipment,
net
|
|
4,160,229
|
|
3,842,647
|
Other non-current assets
|
|
355,192
|
|
268,620
|
Total assets
|
|
$ 4,938,134
|
|
$ 4,579,988
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
248,912
|
|
$
212,275
|
Accrued liabilities
|
|
302,815
|
|
325,206
|
Current maturities of long-term
debt
|
|
-
|
|
30,000
|
Other current liabilities
|
|
3,103
|
|
6,773
|
Total current liabilities
|
|
554,830
|
|
574,254
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
Long-term debt, net
|
|
2,390,914
|
|
2,195,911
|
Deferred tax liabilities
|
|
363,918
|
|
468,445
|
Other non-current
liabilities
|
|
596,135
|
|
553,530
|
Total long-term
liabilities
|
|
3,350,967
|
|
3,217,886
|
|
|
|
|
|
Total stockholders'
equity
|
|
1,032,337
|
|
787,848
|
Total liabilities and stockholders' equity
|
|
$ 4,938,134
|
|
$ 4,579,988
|
Kosmos Energy Ltd.
Condensed Consolidated Statements of Cash
Flow
(In thousands, unaudited)
|
|
Three Months
Ended
|
|
Years Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
21,681
|
|
$
(114,276)
|
|
$ 213,520
|
|
$ 226,551
|
Adjustments to reconcile net income
to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depletion, depreciation and
amortization (including deferred financing costs)
|
|
115,671
|
|
113,858
|
|
454,848
|
|
508,657
|
Deferred income taxes
|
|
(70,079)
|
|
(160,042)
|
|
(107,560)
|
|
(197,487)
|
Unsuccessful well costs and
leasehold impairments
|
|
(36)
|
|
3,855
|
|
2,208
|
|
86,941
|
Impairment of long-lived
assets
|
|
222,278
|
|
449,969
|
|
222,278
|
|
449,969
|
Change in fair value of
derivatives
|
|
(24,118)
|
|
18,353
|
|
28,349
|
|
275,465
|
Cash settlements on derivatives,
net(1)
|
|
(10,948)
|
|
(40,140)
|
|
(32,426)
|
|
(344,468)
|
Equity-based compensation
|
|
10,915
|
|
8,650
|
|
42,693
|
|
34,546
|
Gain on sale of assets
|
|
-
|
|
(50,000)
|
|
-
|
|
(50,471)
|
Loss on extinguishment of
debt
|
|
-
|
|
-
|
|
1,503
|
|
192
|
Other
|
|
3,162
|
|
(4,159)
|
|
5,709
|
|
(10,099)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Net changes in working
capital
|
|
25,250
|
|
41,172
|
|
(65,952)
|
|
150,680
|
Net cash provided by operating
activities
|
|
293,776
|
|
267,240
|
|
765,170
|
|
1,130,476
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Oil and gas assets
|
|
(320,689)
|
|
(243,948)
|
|
(932,603)
|
|
(787,297)
|
Acquisition of oil and gas
properties
|
|
-
|
|
(873)
|
|
-
|
|
(22,078)
|
Proceeds on sale of
assets
|
|
-
|
|
50,000
|
|
-
|
|
168,703
|
Notes receivable from
partners
|
|
(15,615)
|
|
(34,995)
|
|
(62,247)
|
|
(63,183)
|
Net cash used in investing
activities
|
|
(336,304)
|
|
(229,816)
|
|
(994,850)
|
|
(703,855)
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
Borrowings under long-term
debt
|
|
-
|
|
-
|
|
300,000
|
|
-
|
Payments on long-term
debt
|
|
-
|
|
(82,500)
|
|
(145,000)
|
|
(405,000)
|
Dividends
|
|
-
|
|
-
|
|
(166)
|
|
(655)
|
Other financing costs
|
|
(869)
|
|
-
|
|
(13,214)
|
|
(9,041)
|
Net cash provided by (used in)
financing activities
|
|
(869)
|
|
(82,500)
|
|
141,620
|
|
(414,696)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash,
cash equivalents and restricted cash
|
|
(43,397)
|
|
(45,076)
|
|
(88,060)
|
|
11,925
|
Cash, cash equivalents and
restricted cash at beginning of period
|
|
142,158
|
|
231,897
|
|
186,821
|
|
174,896
|
Cash, cash equivalents and
restricted cash at end of period
|
|
$
98,761
|
|
$ 186,821
|
|
$
98,761
|
|
$ 186,821
|
(1) Cash settlements on
commodity hedges were $(4.1) million and
$(38.0) million for the three months ended December 31,
2023 and 2022, respectively, and
$(16.4) million and $(327.9) million for the years
ended December 31, 2023 and
2022.
Kosmos Energy Ltd.
EBITDAX
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
Net income (loss)
|
$
21,681
|
|
$
(114,276)
|
|
$
213,520
|
|
$
226,551
|
Exploration expenses
|
8,973
|
|
15,574
|
|
42,278
|
|
134,230
|
Facilities insurance modifications,
net
|
-
|
|
(1,003)
|
|
-
|
|
6,243
|
Depletion, depreciation and
amortization
|
113,293
|
|
111,295
|
|
444,927
|
|
498,256
|
Impairment of long-lived
assets
|
222,278
|
|
449,969
|
|
222,278
|
|
449,969
|
Equity-based compensation
|
10,915
|
|
8,650
|
|
42,693
|
|
34,546
|
Derivatives, net
|
(31,034)
|
|
17,358
|
|
11,128
|
|
260,892
|
Cash settlements on commodity
derivatives
|
(4,105)
|
|
(37,975)
|
|
(16,448)
|
|
(327,872)
|
Other expenses, net(2)
|
5,792
|
|
(7,735)
|
|
23,656
|
|
(9,055)
|
Gain on sale of assets
|
-
|
|
(50,000)
|
|
-
|
|
(50,471)
|
Interest and other financing costs,
net
|
21,525
|
|
25,943
|
|
95,904
|
|
118,260
|
Income tax expense
(benefit)
|
19,698
|
|
(85,628)
|
|
158,215
|
|
110,516
|
EBITDAX
|
$
389,016
|
|
$
332,172
|
|
$ 1,238,151
|
|
$ 1,452,065
|
Sold Ghana & acquired Kodiak
interests EBITDAX Adj(1)
|
-
|
|
-
|
|
-
|
|
(15,723)
|
Pro Forma EBITDAX
|
$
389,016
|
|
$
332,172
|
|
$ 1,238,151
|
|
$ 1,436,342
|
(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 December 31, 2023 and
December 31, 2022:
|
|
December
31,
|
|
December
31,
|
|
|
2023
|
|
2022
|
Total long-term debt
|
|
$
2,425,000
|
|
$
2,270,000
|
Cash and cash equivalents
|
|
95,345
|
|
183,405
|
Total restricted cash
|
|
3,416
|
|
3,416
|
Net debt
|
|
$
2,326,239
|
|
$
2,083,179
|
Kosmos Energy Ltd.
Adjusted Net Income (Loss)
(In thousands, except per share amounts,
unaudited)
|
Three Months
Ended
|
|
Years Ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
|
$
21,681
|
|
$ (114,276)
|
|
$
213,520
|
|
$
226,551
|
|
|
|
|
|
|
|
|
Derivatives, net
|
(31,034)
|
|
17,358
|
|
11,128
|
|
260,892
|
Cash settlements on commodity
derivatives
|
(4,105)
|
|
(37,975)
|
|
(16,448)
|
|
(327,872)
|
Gain on sale of assets
|
-
|
|
(50,000)
|
|
-
|
|
(50,471)
|
Facilities insurance modifications,
net
|
-
|
|
(1,003)
|
|
-
|
|
6,243
|
Impairment of long-lived
assets
|
222,278
|
|
449,969
|
|
222,278
|
|
449,969
|
Other, net(2)
|
5,744
|
|
(7,557)
|
|
23,598
|
|
(8,719)
|
Impairment of suspended well
costs
|
-
|
|
(2)
|
|
-
|
|
63,892
|
Loss on extinguishment of
debt
|
-
|
|
-
|
|
1,503
|
|
192
|
Total selected items before
tax
|
192,883
|
|
370,790
|
|
242,059
|
|
394,126
|
|
|
|
|
|
|
|
|
Income tax (expense) benefit on
adjustments(1)
|
(65,763)
|
|
(146,094)
|
|
(75,608)
|
|
(133,171)
|
Impact of valuation adjustments and
U.S. tax law changes
|
-
|
|
408
|
|
-
|
|
(12,336)
|
Adjusted net income
|
$
148,801
|
|
110,828
|
|
379,971
|
|
475,170
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted
share
|
$
0.04
|
|
$
(0.25)
|
|
$
0.44
|
|
$
0.48
|
|
|
|
|
|
|
|
|
Derivatives, net
|
(0.06)
|
|
0.04
|
|
0.02
|
|
0.55
|
Cash settlements on commodity
derivatives
|
(0.01)
|
|
(0.08)
|
|
(0.03)
|
|
(0.69)
|
Gain on sale of assets
|
-
|
|
(0.11)
|
|
-
|
|
(0.11)
|
Facilities insurance modifications,
net
|
-
|
|
-
|
|
-
|
|
0.01
|
Impairment of long-lived
assets
|
0.46
|
|
0.99
|
|
0.46
|
|
0.95
|
Other, net(2)
|
0.01
|
|
(0.02)
|
|
0.05
|
|
(0.01)
|
Impairment of suspended well
costs
|
-
|
|
-
|
|
-
|
|
0.13
|
Loss on extinguishment of
debt
|
-
|
|
-
|
|
-
|
|
-
|
Total selected items before
tax
|
0.40
|
|
0.82
|
|
0.50
|
|
0.83
|
|
|
|
|
|
|
|
|
Income tax (expense) benefit on
adjustments(1)
|
(0.13)
|
|
(0.32)
|
|
(0.15)
|
|
(0.28)
|
Impact of valuation adjustments and
U.S. tax law changes
|
-
|
|
-
|
|
-
|
|
(0.03)
|
Adjusted net income per diluted
share
|
$
0.31
|
|
$
0.25
|
|
$
0.79
|
|
$
1.00
|
|
|
|
|
|
|
|
|
Weighted average number of diluted
shares
|
483,252
|
|
455,892
|
|
481,070
|
|
474,857
|
(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
|
|
Years Ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of free cash flow:
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$ 293,776
|
|
$ 267,240
|
|
$ 765,170
|
|
$
1,130,476
|
Net cash used for oil and gas assets
- base business
|
(204,177)
|
|
(74,483)
|
|
(541,665)
|
|
(318,382)
|
Base business free cash
flow
|
89,599
|
|
192,757
|
|
223,505
|
|
812,094
|
Net cash used for oil and gas assets
- Mauritania/Senegal
|
(116,512)
|
|
(169,465)
|
|
(390,938)
|
|
(468,915)
|
Free cash flow
|
$ (26,913)
|
|
$ 23,292
|
|
$
(167,433)
|
|
$ 343,179
|
Kosmos Energy Ltd.
Operational Summary
(In thousands, except barrel and per barrel
data, unaudited)
|
Three Months
Ended
|
|
Years Ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
Volume Sold
|
|
|
|
|
|
|
|
Oil (MMBbl)
|
5.937
|
|
5.985
|
|
20.385
|
|
22.012
|
Gas (MMcf)
|
4.155
|
|
0.961
|
|
13.737
|
|
4.076
|
NGL (MMBbl)
|
0.083
|
|
0.096
|
|
0.382
|
|
0.426
|
Total (MMBoe)
|
6.713
|
|
6.241
|
|
23.057
|
|
23.117
|
Total (Mboepd)
|
72.962
|
|
67.839
|
|
63.168
|
|
63.335
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Oil sales
|
$
491,438
|
|
$
502,032
|
|
$ 1,658,421
|
|
$ 2,201,199
|
Gas sales
|
14,793
|
|
5,702
|
|
35,307
|
|
29,504
|
NGL sales
|
1,534
|
|
2,182
|
|
7,880
|
|
14,652
|
Total oil and gas revenue
|
507,765
|
|
509,916
|
|
1,701,608
|
|
2,245,355
|
Cash settlements on commodity
derivatives
|
(4,105)
|
|
(37,975)
|
|
(16,448)
|
|
(327,872)
|
Realized revenue
|
$
503,660
|
|
$
471,941
|
|
$ 1,685,160
|
|
$ 1,917,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
and Gas Production Costs
|
$
103,800
|
|
$
125,792
|
|
$
390,097
|
|
$
403,056
|
|
|
|
|
|
|
|
|
Sales per Bbl/Mcf/Boe
|
|
|
|
|
|
|
|
Average oil sales price per
Bbl
|
$
82.78
|
|
$
83.88
|
|
$
81.35
|
|
$
100.00
|
Average gas sales price per
Mcf
|
3.56
|
|
5.93
|
|
2.57
|
|
7.24
|
Average NGL sales price per
Bbl
|
18.48
|
|
22.73
|
|
20.61
|
|
34.39
|
Average total sales price per
Boe
|
75.64
|
|
81.70
|
|
73.80
|
|
97.13
|
Cash settlements on commodity
derivatives per Boe
|
(0.61)
|
|
(6.08)
|
|
(0.71)
|
|
(14.18)
|
Realized revenue per Boe
|
75.03
|
|
75.62
|
|
73.09
|
|
82.95
|
|
|
|
|
|
|
|
|
Oil
and gas production costs per Boe
|
$
15.46
|
|
$
20.15
|
|
$
16.92
|
|
$
17.44
|
(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 overlifted by approximately 0.2
million barrels as of December 31,
2023.
Kosmos Energy Ltd.
Hedging Summary
As of December 31,
2023(1)
(Unaudited)
|
|
|
|
|
|
Weighted Average Price per Bbl
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index
|
|
MBbl
|
|
Floor(2)
|
|
Sold Put
|
|
Ceiling
|
|
2024:
|
|
|
|
|
|
|
|
|
|
|
|
Three-way collars
|
|
Dated
Brent
|
|
4,000
|
|
$ 70.00
|
|
$ 45.00
|
|
$ 96.25
|
|
Three-way collars
|
|
Dated
Brent
|
|
2,000
|
|
70.00
|
|
45.00
|
|
90.00
|
|
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-K for additional disclosure on hedging material.
Includes hedging position as of December 31,
2023 and hedges put in place through filing date.
(2) "Floor" represents
floor price for collars and strike price for purchased
puts.
2024 Guidance
|
1Q 2024
|
FY 2024
Guidance
|
|
|
|
Production(1,2)
|
65,000 -
68,000 boe per day
|
71,000 -
77,000 boe per day
|
|
|
|
Opex(3)
|
$16.50 -
$18 per boe
|
~$15 - $17
per boe
|
|
|
|
DD&A
|
$18 - $20
per boe
|
$18 - $20
per boe
|
|
|
|
G&A(~60% cash)
|
$25 - $30
million
|
$100 -
$120 million
|
|
|
|
Exploration Expense(4)
|
$10 - $15
million
|
$40 - $60
million
|
|
|
|
Net Interest Expense(5)
|
~$25
million
|
~$150
million
|
|
|
|
Tax
|
$10 - $12
per boe
|
$10 - $12
per boe
|
|
|
|
Capital Expenditure(6)
|
$275 -
$325 million
|
$700 -
$750 million
|
Note: Ghana / Equatorial Guinea revenue calculated by number
of cargos.
(1) 1Q 2024 cargo
forecast - Ghana: 3 cargos / Equatorial Guinea 1 cargo. FY 2023
Ghana: 15 cargos / Equatorial Guinea 3 cargos. Average cargo sizes
950,000 barrels of oil.
(2) U.S. Gulf of Mexico
Production: 1Q 2024 forecast 14,000-15,000 boe per day. FY2024:
15,500-17,000 boe per day. Oil/Gas/NGL split for 2023:
~83%/~11%/~6%.
(3) FY24 opex excludes
operating costs associated with Greater Tortue Ahmeyim, which are
expected to commence later in the year and total approximately
$115-130 million
(4) Excludes leasehold
impairments and dry hole costs
(5) Includes impact of
capitalized interest in 1H24 relating to Greater Tortue Ahmeyim
development expenditure until first gas; 2H24 interest expense
expected to be ~$50 million / quarter
(6) 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