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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240225087360/en/
Investor Relations Jamie Buckland +44 (0) 203 954 2831
jbuckland@kosmosenergy.com
Media Relations Thomas Golembeski +1-214-445-9674
tgolembeski@kosmosenergy.com
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