Current Report Filing (8-k)
October 06 2020 - 04:40PM
Edgar (US Regulatory)
0001509991 false 0001509991 2020-09-30
2020-09-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported):
September 30, 2020
KOSMOS ENERGY LTD.
(Exact Name of Registrant as Specified in its Charter)
|
Delaware |
|
001-35167 |
|
98-0686001 |
| (State or other jurisdiction of
incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
|
8176 Park Lane
Dallas,
Texas
|
|
|
|
75231 |
| (Address of Principal Executive
Offices) |
|
|
|
(Zip Code) |
Registrant’s telephone number, including area code:
214-445-9600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
|
☐ |
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
|
☐ |
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
☐ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
|
☐ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
| Securities registered
pursuant to Section 12(b) of the Securities Exchange Act of
1934: |
| |
|
Title of each
class |
|
Trading symbol(s) |
|
Name of each exchange on which
registered |
|
Common Stock, $0.01 Par Value |
|
KOS |
|
New York Stock Exchange
London Stock Exchange
|
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (17
CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
Emerging growth company
☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act. ☐
Item 1.01. Entry into a Material
Definitive Agreement
On September 30, 2020, Kosmos Energy
Gulf of Mexico Operations, LLC (“GOM Operations”) and Kosmos
Energy GOM Holdings, LLC (“GOM Holdings” and, together with
GOM Operations, the “Borrowers”), along with Kosmos Energy
Gulf of Mexico, LLC (“Holdings”), Kosmos Energy Gulf of
Mexico Management, LLC (“GOM Management”), Kosmos Energy
Ltd. (“Kosmos Energy”), and certain other subsidiary
guarantors (the “Guarantors”) entered into a Senior Secured
Term Loan Credit Agreement (the “Credit Agreement”) with
Trafigura Trading LLC (“Trafigura”) and an affiliate of Beal
Bank (together, the “Lenders”) and CLMG Corp., as
administrative agent and term loan collateral agent.
The following is a summary of the key
terms of the Credit Agreement and related agreements:
|
· |
Amounts: The Lenders have
agreed to make terms loans to the Borrowers pursuant to two
separate facilities each with a 5 year term: (i) a Term Loan A
Facility in an aggregate principal amount of $150,000,000 and (ii)
a Term Loan B Facility in an aggregate principal amount of
$50,000,000 (the “Term Loan Facilities”). The Credit
Agreement also includes an accordion feature providing for
incremental term loan commitments of up to $100,000,000, subject to
certain conditions. |
|
· |
Use of
Proceeds: $50,000,000 of the proceeds of the Term Loan A
Facility will be loaned to Holdings to repay intercompany debt
owing to Kosmos Energy. The balance of the proceeds of the Term
Loan A Facility will be used to fund working capital and general
operating expenses of the Borrowers and their subsidiaries, and to
pay fees and expenses incurred in connection with the entry into
the Term Loan Facilities. The proceeds of the Term Loan B Facility
will constitute the deemed repayment in full of GOM Operations’
obligations under the previously Prepayment Agreement dated as of
June 26, 2020 between GOM Operations, as seller and Trafigura, as
buyer (the “Prepayment Agreement”). |
|
· |
Interest: Interest on
outstanding loans under the Term Loan Facilities is payable
quarterly in arrears and accrues at a benchmark rate (subject to
certain minimums) plus an effective margin of approximately 6% per
annum. |
|
· |
Guarantee: Each Borrower’s
obligations under the Term Loan Facilities are guaranteed by Kosmos
Energy, each other Borrower and certain of their subsidiaries
(collectively, the “Loan Parties”). Pursuant to a Parent
Guarantee Agreement dated as of September 30, 2020 (the “Parent
Guarantee Agreement”), Kosmos Energy Delaware Holdings, LLC,
Kosmos Energy Holdings and any other intermediate entity in the
direct chain of ownership between Kosmos Energy and GOM Holdings
from time to time shall be subject to providing a springing
guarantee that becomes effective upon such entities becoming liable
for an aggregate amount of indebtedness in excess of
$10,000,000. |
|
· |
Security: In accordance with
the Term Loan Collateral and Guarantee Agreement dated as of
September 30, 2020 (the “Term Loan Security Agreement”), the
obligations of the Loan Parties under the Term Loan Facilities are
secured by liens on certain assets of the Loan Parties, including
(i) all the oil and gas properties owned by any Borrower or certain
of its subsidiaries, (ii) all equity interests issued by Holdings,
GOM Management, GOM Operations and its |
subsidiaries, and (iii) all other
property of any Borrower or its subsidiaries (other than certain
excluded property).
|
· |
Covenants: The Credit Agreement
contains customary affirmative and negative covenants, including
covenants that affect the ability of the Borrowers and their
subsidiaries to incur additional indebtedness, create liens, merge,
dispose of assets, and make distributions, dividends, investments
or capital expenditures, among other things. |
|
· |
Events
of Default: The Term Loan Facility includes certain
representations and warranties, indemnities and events of default
that, subject to certain materiality thresholds and grace periods,
arise as a result of a payment default, failure to comply with
covenants, material inaccuracy of representation or warranty, and
certain bankruptcy or insolvency proceedings. If there is an event
of default, the Lenders may declare all or any portion of the
outstanding indebtedness to be immediately due and payable and
exercise any rights they might have (including against the
collateral). |
The foregoing description of the
Credit Agreement, Parent Guarantee Agreement and Term Loan Security
Agreement is not complete and is qualified in its entirety by
reference to the text of the Credit Agreement, Parent Guarantee
Agreement and Term Loan Security Agreement. Copies of the Credit
Agreement and Parent Guarantee Agreement will be filed as an
exhibit to Kosmos Energy’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2020.
Item 1.02. Termination of a
Material Definitive Agreement.
The information set forth in Item
1.01 of this Report is hereby incorporated by reference into this
Item 1.02 in its entirety.
As previously disclosed, on June 26,
2020, GOM Operations and Trafigura entered into the Prepayment
Agreement for up to $200 million of crude oil sales related
primarily to a portion of GOM Operations 2022 and 2023 production,
with $150 million committed by Trafigura. On September 30, 2020,
GOM Operations and Trafigura agreed to terminate the Prepayment
Agreement pursuant to, and subject to the terms of, the Credit
Agreement.
Item 2.03. Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information set forth in Item
1.01 of this Form 8-K is incorporated by reference to this Item
2.03.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, the registrant has
duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 6, 2020
| |
KOSMOS ENERGY
LTD. |
| |
|
| |
|
| |
By: |
/s/ Neal D. Shah |
| |
|
Neal D. Shah |
| |
|
Senior Vice President, Chief
Financial Officer |
Kosmos Energy (NYSE:KOS)
Historical Stock Chart
From Oct 2020 to Nov 2020
Kosmos Energy (NYSE:KOS)
Historical Stock Chart
From Nov 2019 to Nov 2020
