Kosmos Energy Successfully Completes Reserve Based Lending Facility Re-determination and Provides Operational Update
April 08 2020 - 8:30AM
Business Wire
Kosmos Energy (NYSE/LSE: KOS) (“Kosmos” or the “Company”)
announced today that it has successfully completed the
re-determination of its reserve based lending credit facility
(“RBL”). In addition, the company has identified a further $75
million in cost reductions across capital and operating
expenditures and gives an update on the Greater Tortue Ahmeyim LNG
project in Mauritania and Senegal.
RBL Facility and
Liquidity
The Company’s lending syndicate has approved an RBL borrowing
base capacity of $1.5 billion. In conjunction with the
re-determination, Kosmos has voluntarily reduced its facility
commitments from $1.6 billion to $1.5 billion. The borrowing base
calculation includes value related to the Jubilee and TEN fields in
Ghana and the Ceiba and Okume fields in Equatorial Guinea.
Furthermore, the Company’s producing assets in the Gulf of Mexico
and its gas assets in Mauritania and Senegal have no debt secured
against them. The first RBL amortization payment is scheduled for
March 2022 and amortization continues every six months until final
maturity in 2025.
As of April 1, 2020, following the RBL re-determination, the
Company has approximately $0.6 billion of available liquidity from
the RBL, Revolving Credit Facility and cash on the balance
sheet.
Further Operating and Capital Cost
Reductions
Kosmos has worked with its operators to identify a further $75
million in savings across operating and capital expenditure in the
base production businesses, bringing the total cost savings
identified since mid-March to around $235 million. The Company is
now targeting total capital expenditure of $200 – 225 million in
2020. The additional operational expenditure reductions represent
approximately $1-2 per barrel. These savings are expected to come
from across the Kosmos portfolio and include the earlier
termination of drilling activity and the removal of non-critical
work that does not impact safety and asset integrity. Production
guidance for the full year remains intact.
Greater Tortue Ahmeyim
Project
The operator’s priority is maintaining the safety of its staff,
contractors and the general public, and continued compliance with
international and national restrictions to stop the spread of the
coronavirus. With border closures, travel bans, social distancing
restrictions and office closures arising from the coronavirus, the
project’s activities across global locations have been impacted.
These ongoing restrictions have had an impact on time-critical
workstreams, including the construction of the breakwater during
the 2020 weather window. As a result, the Phase 1 project timeline
is expected to be delayed by approximately 12 months, with first
gas now expected in the first half of 2023. Phase 1 of the project
is currently over 30% complete.
This delay is expected to result in a significant reduction in
budgeted spend in 2020 as activity and milestone payments are
delayed. With the re-phasing of the project timeline, we are
working with the operator to establish a revised 2020 budget with
the objectives of maintaining the project economics and extending
the carry of our capital obligations through the end of this year.
In addition, we continue with the Tortue sell down process to
support a self-funded gas business.
Andrew G. Inglis, Kosmos Energy’s Chairman and Chief Executive
Officer said, "The underlying quality of our reserve base has
allowed the company to successfully execute the RBL
re-determination in a volatile environment. We thank our banks for
their continued support. We have also further reduced our costs
supporting our objective of lowering our cash flow breakeven in
2020. Coronavirus has impacted the operator’s ability to execute
the Greater Tortue Ahmeyim project. The year delay of the project
as a result of missing the weather window is an inevitable
consequence, but the safety of our people and those of our partners
remains the priority during these unprecedented times. We are
working with the operator to optimize the capital phasing of the
project.”
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 U.S. Gulf of Mexico, as well as a world-class
gas development offshore Mauritania and Senegal. We also maintain a
sustainable exploration program balanced between proven basin
infrastructure-led exploration (Equatorial Guinea and U.S. Gulf of
Mexico), emerging basins (Mauritania, Senegal and Suriname) and
frontier basins (Cote d'Ivoire, Namibia, Sao Tome and Principe and
South Africa). 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 2018
Corporate Responsibility Report. For additional information, visit
www.kosmosenergy.com.
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, 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200408005393/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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