Kosmos Energy Ltd. (“Kosmos” or the “Company”) (NYSE: KOS) announced today its financial and operating results for the second quarter of 2021. For the quarter, the Company generated a net loss of $57 million, or $0.14 per diluted share. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net loss(1) of $10 million, or $0.03 per diluted share for the second quarter of 2021.

SECOND QUARTER 2021 HIGHLIGHTS

  • Net Production(2): 51,600 barrels of oil equivalent per day (boepd) with sales of 66,200 boepd, resulting in a slight net overlift position
  • Post quarter end, successful completion of the Greater Tortue Ahmeyim (GTA) floating production, storage and offloading vessel (FPSO) sale and lease back transaction
  • Successful reserve-based lending (RBL) amendment and extension
  • Revenues: $384 million, or $63.80 per boe (excluding the impact of derivative cash settlements)
  • Production expense: $116 million, or $19.24 per boe
  • General and administrative expenses: $22 million, $14 million cash expense and $8 million non-cash
  • Capital expenditures:
    • $68 million Base Business
    • $83 million Mauritania and Senegal
  • Net cash provided by operating activities: $289 million; Free cash flow(1): $115 million

Commenting on the Company’s second quarter 2021 performance, Chairman and Chief Executive Officer Andrew G. Inglis said: “Kosmos delivered strong free cash flow in the second quarter. Through further debt reduction and EBITDAX growth, we expect leverage to continue to reduce through year-end 2021 and into 2022.

With strong cash generation, the successful RBL extension and the recently completed GTA FPSO transaction, Kosmos’ financial position has materially improved and we remain well positioned to execute our remaining financing plans later this year.

Operationally, we remain on track to grow production towards our year-end exit target of 60,000 boepd through our active infill drilling program.

With cash generative assets, a solid financial position and rising production, Kosmos is well positioned to generate significant shareholder value through the second half of the year and into 2022.”

FINANCIAL UPDATE

In May 2021, Kosmos successfully completed an amendment and restatement of the RBL facility in conjunction with the spring redetermination. The amendment extended the facility by two years, with a final maturity of March 2027 and reduced the facility size to $1.25 billion. The borrowing base was finalized, with a more conservative price deck, at approximately $1.24 billion with $1.0 billion outstanding as of June 30, 2021.

The base business net capital expenditure for the second quarter of 2021 was approximately $68 million, in-line with Company guidance. Net capital expenditure related to Mauritania and Senegal in the second quarter was $83 million.

Kosmos exited the second quarter of 2021 with $2.1 billion of net debt(1) and available liquidity of approximately $0.8 billion. The decrease in net debt in the quarter was primarily driven by increased cash generation from higher sales volumes and improving realized oil prices.

OPERATIONAL UPDATE

Production

Total net production(2) in the second quarter of 2021 averaged approximately 51,600 boepd.

Ghana

Production in Ghana averaged approximately 21,900 barrels of oil per day (bopd) net in the second quarter of 2021. As forecast, Kosmos lifted three cargos from Ghana during the second quarter.

At Jubilee, production averaged approximately 70,900 bopd gross during the quarter. At TEN, production averaged approximately 35,000 bopd gross for the second quarter.

The first two wells in our four-well campaign were drilled in the quarter with the first Jubilee producer well (J-56P) completed and now online with Jubilee currently producing around 80,000 bopd. The Jubilee injector well (J-55W) is expected online later this quarter, which should further increase production.

The rig is then scheduled to drill and complete a TEN gas injector well and a second Jubilee producer well later in the year with the Jubilee producer well expected online around the end of the year.

The reliability of the Ghana production facilities continues to improve, with uptime of the Jubilee and TEN FPSOs averaging about 98% year-to-date. Consistently high levels of water injection (>200,000 barrels/day) and gas offtake from the Government of Ghana (>110 mmscf/day) are helping to optimize reservoir performance at Jubilee, which is expected to support long-term production levels.

U.S. Gulf of Mexico

Production in the U.S. Gulf of Mexico averaged approximately 20,400 boepd net (82% oil) during the second quarter.

In April, the Kodiak-3 infill well was brought online with one of two zones intermittently producing. The Company is currently working with partners to evaluate the best intervention options to enhance production from the well.

In late-July, Talos Energy (the operator) announced the successful completion and start-up of the Tornado-5 infill well. The well was expected to add around 8,000-10,000 boepd gross to field production and is performing at the top end of expectations. As the operator reported, injection rates in the structurally downdip Tornado injector well were increased, now injecting at a rate of over 30,000 barrels of water per day into the producing B-6 formation, providing pressure support to enhance overall production and recovery efficiency.

In July, the Company commenced drilling the Zora infrastructure-led exploration prospect located in Desoto Canyon Block 266 (37.5% working interest). The well encountered reservoir quality sands however did not find hydrocarbons. The well is currently being plugged and abandoned and the well results will be integrated into the ongoing evaluation of the surrounding area. The company expects to record approximately $11 million of exploration expense in the third quarter related to the well.

During the first half of the year, Kosmos worked with its partners on an appraisal plan for Winterfell, which is expected to begin with a well in the third quarter. The appraisal well is planned to evaluate the adjacent fault block to the northwest of the original discovery, which has the same seismic signature as Winterfell, with an exploration tail into a deeper horizon. The Winterfell discovery is located within tie back distance to several existing and planned host facilities.

Equatorial Guinea

Production in Equatorial Guinea averaged approximately 29,100 bopd gross and 9,400 bopd net in the second quarter of 2021. As forecast, Kosmos lifted 1.5 cargos from Equatorial Guinea during the quarter.

The Okume upgrade project is expected to be completed in the fourth quarter, contributing additional power, water injection and gas lift capacity necessary for further de-bottlenecking of the facilities and additional electrical submersible pumps (ESPs). In April 2021, one ESP conversion was completed with additional ESP conversions planned following completion of the Okume upgrade project.

The first of three infill wells in the Okume Complex was spudded in June 2021 with positive initial results. The rig will now move to the second well location and hookup has commenced for the first well. All three wells are expected online in the fourth quarter of 2021.

At Ceiba, a major infrastructure integrity project has been completed, which is expected to improve reliability and allow greater flexibility for gas lift to additional wells.

Mauritania & Senegal

The Greater Tortue Ahmeyim liquified natural gas (LNG) project has made steady progress year-to-date with the following milestones achieved in the second quarter and post quarter-end.

  • Floating LNG vessel: The four remaining sponsons have been integrated in the final dry dock
  • FPSO: The living quarters have been installed
  • Breakwater: seven caissons have now been transported offshore with three caissons installed
  • Subsea: All subsea trees have been constructed

As reported today in a separate press release, Kosmos announced that the GTA FPSO sale and lease back transaction has been successfully completed. Following the closing of this transaction, the Company will now work to complete the re-financing of the National Oil Company loans.

(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 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 second quarter 2021 financial and operating results today 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 +1-877-407-3982. Callers in the United Kingdom should call 0800 756 3429. Callers outside the United States should dial 1-201-493-6780. 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. The Company defines net debt as the sum of notes outstanding issued at par and borrowings on the RBL Facility, Corporate revolver, and GoM Term Loan less cash and cash equivalents and 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.

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

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2021

 

2020

 

2021

 

2020

Revenues and other income:

 

 

 

 

 

 

 

 

Oil and gas revenue

 

$

384,045

 

 

$

127,314

 

 

$

560,519

 

 

$

305,094

 

Gain on sale of assets

 

 

 

 

 

26

 

 

 

Other income, net

 

74

 

 

 

 

144

 

 

1

 

Total revenues and other income

 

384,119

 

 

127,314

 

 

560,689

 

 

305,095

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

Oil and gas production

 

115,803

 

 

88,747

 

 

161,555

 

 

150,350

 

Facilities insurance modifications, net

 

1,270

 

 

52

 

 

1,941

 

 

8,090

 

Exploration expenses

 

9,289

 

 

15,711

 

 

17,470

 

 

60,316

 

General and administrative

 

21,728

 

 

18,186

 

 

44,169

 

 

39,097

 

Depletion, depreciation and amortization

 

151,161

 

 

121,857

 

 

227,702

 

 

215,159

 

Impairment of long-lived assets

 

 

 

 

 

 

 

150,820

 

Interest and other financing costs, net

 

39,326

 

 

28,274

 

 

63,854

 

 

56,109

 

Derivatives, net

 

111,921

 

 

100,075

 

 

214,382

 

 

(35,963

)

Other expenses, net

 

(2,659

)

 

1,228

 

 

809

 

 

25,157

 

Total costs and expenses

 

447,839

 

 

374,130

 

 

731,882

 

 

669,135

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(63,720

)

 

(246,816

)

 

(171,193

)

 

(364,040

)

Income tax expense (benefit)

 

(6,533

)

 

(47,425

)

 

(23,238

)

 

18,118

 

Net loss

 

$

(57,187

)

 

$

(199,391

)

 

$

(147,955

)

 

$

(382,158

)

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.14

)

 

$

(0.49

)

 

$

(0.36

)

 

$

(0.94

)

Diluted

 

$

(0.14

)

 

$

(0.49

)

 

$

(0.36

)

 

$

(0.94

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used to compute net loss per share:

 

 

 

 

 

 

 

 

Basic

 

408,131

 

 

405,195

 

 

409,828

 

 

404,990

 

Diluted

 

408,131

 

 

405,195

 

 

409,828

 

 

404,990

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

 

 

$

 

 

$

 

 

$

0.0452

 

Kosmos Energy Ltd.

Condensed Consolidated Balance Sheets

(In thousands, unaudited)

 

 

 

June 30,

 

December 31,

 

 

2021

 

2020

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

149,550

 

 

$

149,027

 

Receivables, net

 

89,423

 

 

78,813

 

Other current assets

 

204,493

 

 

172,451

 

Total current assets

 

443,466

 

 

400,291

 

 

 

 

 

 

Property and equipment, net

 

3,374,643

 

 

3,320,913

 

Other non-current assets

 

185,163

 

 

146,389

 

Total assets

 

$

4,003,272

 

 

$

3,867,593

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

272,588

 

 

$

221,430

 

Accrued liabilities

 

222,946

 

 

203,260

 

Current maturities of long-term debt

 

22,500

 

 

7,500

 

Other current liabilities

 

127,255

 

 

28,009

 

Total current liabilities

 

645,289

 

 

460,199

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

Long-term debt, net

 

2,223,912

 

 

2,103,931

 

Deferred tax liabilities

 

504,135

 

 

573,619

 

Other non-current liabilities

 

322,694

 

 

289,690

 

Total long-term liabilities

 

3,050,741

 

 

2,967,240

 

 

 

 

 

 

Total stockholders’ equity

 

307,242

 

 

440,154

 

Total liabilities and stockholders’ equity

 

$

4,003,272

 

 

$

3,867,593

 

Kosmos Energy Ltd.

Condensed Consolidated Statements of Cash Flow

(In thousands, unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2021

 

2020

 

2021

 

2020

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(57,187

)

 

$

(199,391

)

 

$

(147,955

)

 

$

(382,158

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depletion, depreciation and amortization (including deferred financing costs)

 

153,781

 

 

124,049

 

 

232,893

 

 

219,634

 

Deferred income taxes

 

(47,406

)

 

(48,527

)

 

(69,485

)

 

23,650

 

Unsuccessful well costs and leasehold impairments

 

3,396

 

 

1,627

 

 

4,865

 

 

20,855

 

Impairment of long-lived assets

 

 

 

 

 

 

 

150,820

 

Change in fair value of derivatives

 

117,001

 

 

104,707

 

 

223,159

 

 

(31,615

)

Cash settlements on derivatives, net(1)

 

(63,617

)

 

25,798

 

 

(96,615

)

 

34,814

 

Equity-based compensation

 

7,608

 

 

8,347

 

 

15,889

 

 

17,693

 

Gain on sale of assets

 

 

 

 

 

(26

)

 

 

Loss on extinguishment of debt

 

15,223

 

 

2,215

 

 

15,223

 

 

2,215

 

Other

 

224

 

 

2,555

 

 

(666

)

 

6,529

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Net changes in working capital

 

159,858

 

 

(67,253

)

 

64,973

 

 

(125,273

)

Net cash provided by (used in) operating activities

 

288,881

 

 

(45,873

)

 

242,255

 

 

(62,836

)

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Oil and gas assets

 

(161,951

)

 

(51,526

)

 

(290,399

)

 

(135,242

)

Other property

 

214

 

 

1

 

 

(140

)

 

(1,536

)

Proceeds on sale of assets

 

1,301

 

 

 

 

1,932

 

 

1,713

 

Notes receivable from partners

 

(13,765

)

 

(18,379

)

 

(36,181

)

 

(42,362

)

Net cash used in investing activities

 

(174,201

)

 

(69,904

)

 

(324,788

)

 

(177,427

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Borrowings on long-term debt

 

 

 

100,000

 

 

100,000

 

 

150,000

 

Payments on long-term debt

 

(50,000

)

 

 

 

(400,000

)

 

 

Advances under production prepayment agreement

 

 

 

50,000

 

 

 

 

50,000

 

Net proceeds from issuance of senior notes

 

 

 

 

 

444,375

 

 

 

Redemption of senior secured notes

 

 

 

 

 

 

 

 

Purchase of treasury stock / tax withholdings

 

(19

)

 

 

 

(1,037

)

 

(4,947

)

Dividends

 

(14

)

 

(25

)

 

(444

)

 

(19,181

)

Deferred financing costs

 

(16,028

)

 

(136

)

 

(17,062

)

 

(136

)

Net cash provided by (used in) financing activities

 

(66,061

)

 

149,839

 

 

125,832

 

 

175,736

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

48,619

 

 

34,062

 

 

43,299

 

 

(64,527

)

Cash, cash equivalents and restricted cash at beginning of period

 

144,444

 

 

130,757

 

 

149,764

 

 

229,346

 

Cash, cash equivalents and restricted cash at end of period

 

$

193,063

 

 

$

164,819

 

 

$

193,063

 

 

$

164,819

 

____________________

(1)

Cash settlements on commodity hedges were $(58.8) million and $30.4 million for the three months ended June 30, 2021 and 2020, respectively, and $(87.4) million and $42.4 million for the six months ended June 30, 2021 and 2020, respectively.

 

Kosmos Energy Ltd.

EBITDAX

(In thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

Twelve Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

Net loss

$

(57,187

)

 

$

(199,391

)

 

$

(147,955

)

 

$

(382,158

)

 

$

(177,383

)

 

Exploration expenses

9,289

 

 

15,711

 

 

17,470

 

 

60,316

 

 

41,770

 

 

Facilities insurance modifications, net

1,270

 

 

52

 

 

1,941

 

 

8,090

 

 

7,012

 

 

Depletion, depreciation and amortization

151,161

 

 

121,857

 

 

227,702

 

 

215,159

 

 

498,405

 

 

Impairment of long-lived assets

 

 

 

 

 

 

150,820

 

 

3,139

 

 

Equity-based compensation

7,608

 

 

8,347

 

 

15,889

 

 

17,693

 

 

30,902

 

 

Derivatives, net

111,921

 

 

100,075

 

 

214,382

 

 

(35,963

)

 

267,525

 

 

Cash settlements on commodity derivatives

(58,823

)

 

30,430

 

 

(87,446

)

 

42,449

 

 

(132,609

)

 

Restructuring and other

233

 

 

(222

)

 

1,419

 

 

17,801

 

 

12,785

 

 

Other, net

(2,892

)

 

839

 

 

(610

)

 

3,930

 

 

5,675

 

 

Gain on sale of assets

 

 

 

 

(26

)

 

 

 

(92,189

)

 

Interest and other financing costs, net

39,326

 

 

28,274

 

 

63,854

 

 

56,109

 

 

117,539

 

 

Income tax expense (benefit)

(6,533

)

 

(47,425

)

 

(23,238

)

 

18,118

 

 

(46,565

)

 

EBITDAX

195,373

 

 

$

58,547

 

 

$

283,382

 

 

$

172,364

 

 

$

536,006

 

 

Kosmos Energy Ltd.

Adjusted Net Income

(In thousands, except per share amounts, unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2021

 

2020

 

2021

 

2020

Net loss

$

(57,187

)

 

$

(199,391

)

 

$

(147,955

)

 

$

(382,158

)

 

 

 

 

 

 

 

 

Derivatives, net

111,921

 

 

100,075

 

 

214,382

 

 

(35,963

)

Cash settlements on commodity derivatives

(58,823

)

 

30,430

 

 

(87,446

)

 

42,449

 

Gain on sale of assets

 

 

 

 

(26

)

 

 

Facilities insurance modifications, net

1,270

 

 

52

 

 

1,941

 

 

8,090

 

Impairment of long-lived assets

 

 

 

 

 

 

150,820

 

Restructuring and other

233

 

 

(222

)

 

1,419

 

 

17,801

 

Other, net

(3,110

)

 

839

 

 

(787

)

 

3,930

 

Loss on extinguishment of debt

15,223

 

 

2,215

 

 

15,223

 

 

2,215

 

Total selected items before tax

66,714

 

 

133,389

 

 

144,706

 

 

189,342

 

 

 

 

 

 

 

 

 

Income tax expense (benefit) on adjustments(1)

(20,024

)

 

(29,031

)

 

(40,222

)

 

5,433

 

Impact of valuation adjustments and U.S. tax law changes

 

 

 

 

 

 

26,001

 

Adjusted net loss

$

(10,497

)

 

(95,033

)

 

(43,471

)

 

(161,382

)

 

 

 

 

 

 

 

 

Net loss per diluted share

$

(0.14

)

 

$

(0.49

)

 

$

(0.36

)

 

$

(0.94

)

 

 

 

 

 

 

 

 

Derivatives, net

0.27

 

 

0.25

 

 

0.52

 

 

(0.09

)

Cash settlements on commodity derivatives

(0.14

)

 

0.07

 

 

(0.21

)

 

0.10

 

Gain on sale of assets

 

 

 

 

 

 

 

Facilities insurance modifications, net

 

 

 

 

 

 

0.02

 

Impairment of long-lived assets

 

 

 

 

 

 

0.37

 

Restructuring and other

 

 

 

 

 

 

0.05

 

Other, net

(0.01

)

 

 

 

 

 

0.01

 

Loss on extinguishment of debt

0.04

 

 

0.01

 

 

0.04

 

 

0.01

 

Total selected items before tax

0.16

 

 

0.33

 

 

0.35

 

 

0.47

 

 

 

 

 

 

 

 

 

Income tax expense (benefit) on adjustments(1)

(0.05

)

 

(0.07

)

 

(0.10

)

 

0.01

 

Impact of valuation adjustments and U.S. tax law changes

 

 

 

 

 

 

0.06

 

Adjusted net loss per diluted share

$

(0.03

)

 

$

(0.23

)

 

$

(0.11

)

 

$

(0.40

)

 

 

 

 

 

 

 

 

Weighted average number of diluted shares

408,131

 

 

405,195

 

 

409,828

 

 

404,990

 

____________________

(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. 

Kosmos Energy Ltd.

Free Cash Flow

(In thousands, unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2021

 

2020

 

2021

 

2020

Reconciliation of net cash provided by operating activities to free cash flow:

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

288,881

 

 

$

(45,873

)

 

$

242,255

 

 

$

(62,836

)

Net cash used in investing activities - base business

(68,845

)

 

(44,892

)

 

(116,728

)

 

(120,686

)

Net cash used in investing activities - Mauritania/Senegal

(105,356

)

 

(25,012

)

 

(208,060

)

 

(56,741

)

Free cash flow

$

114,680

 

 

$

(115,777

)

 

$

(82,533

)

 

$

(240,263

)

Operational Summary

(In thousands, except barrel and per barrel data, unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2021

 

2020

 

2021

 

2020

Net Volume Sold

 

 

 

 

 

 

 

Oil (MMBbl)

5.689

 

 

5.751

 

 

8.630

 

 

9.202

 

Gas (MMcf)

1.221

 

 

1.303

 

 

2.547

 

 

3.284

 

NGL (MMBbl)

0.127

 

 

0.142

 

 

0.254

 

 

0.335

 

Total (MMBoe)

6.020

 

 

6.110

 

 

9.309

 

 

10.084

 

Total (Boepd)

66.150

 

 

67.145

 

 

51.428

 

 

55.408

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Oil sales

$

377,632

 

 

$

124,813

 

 

$

546,782

 

 

$

296,729

 

Gas sales

3,679

 

 

2,113

 

 

8,219

 

 

5,832

 

NGL sales

2,734

 

 

388

 

 

5,518

 

 

2,533

 

Total sales

384,045

 

 

127,314

 

 

560,519

 

 

305,094

 

Cash settlements on commodity derivatives

(58,823

)

 

30,430

 

 

(87,446

)

 

42,449

 

Realized revenue

$

325,222

 

 

$

157,744

 

 

$

473,073

 

 

$

347,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and Gas Production Costs

$

115,803

 

 

$

88,747

 

 

$

161,555

 

 

$

150,350

 

 

 

 

 

 

 

 

 

Sales per Bbl/Mcf/Boe

 

 

 

 

 

 

 

Oil sales per Bbl

$

66.38

 

 

$

21.70

 

 

$

63.36

 

 

$

32.25

 

Gas sales per Mcf

3.01

 

 

1.62

 

 

3.23

 

 

1.78

 

NGL sales per Bbl

21.52

 

 

2.73

 

 

21.72

 

 

7.56

 

Total sales per Boe

63.80

 

 

20.84

 

 

60.22

 

 

30.25

 

Cash settlements on commodity derivatives per oil Bbl(1)

(10.34

)

 

5.29

 

 

(10.13

)

 

4.61

 

Realized revenue per Boe

54.03

 

 

25.82

 

 

50.82

 

 

34.46

 

 

 

 

 

 

 

 

 

Oil and gas production costs per Boe

$

19.24

 

 

$

14.53

 

 

$

17.36

 

 

$

14.91

 

____________________

(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 8 thousand barrels as of June 30, 2021.

Hedging Summary

As of June 30, 2021(1)

(Unaudited)

 

 

 

 

 

 

 

Weighted Average Price per Bbl

 

 

 

 

 

 

 

 

 

 

 

 

 

Index

 

MBbl

 

Floor(2)

 

Sold Put

 

Ceiling

2021:

 

 

 

 

 

 

 

 

 

 

Swaps with sold puts

 

Dated Brent

 

3,000

 

 

$

53.96

 

 

$

42.92

 

 

$

 

Three-way collars

 

Dated Brent

 

1,500

 

 

40.00

 

 

32.50

 

 

53.47

 

Three-way collars

 

NYMEX WTI

 

500

 

 

45.00

 

 

37.50

 

 

55.00

 

2022:

 

 

 

 

 

 

 

 

 

 

Three-way collars

 

Dated Brent

 

2,500

 

 

54.00

 

 

42.00

 

 

74.00

 

Two-way collars

 

Dated Brent

 

3,000

 

 

55.00

 

 

 

 

76.67

 

____________________

(1)

Please see the Company’s filed 10-Q for full disclosure on hedging material. Includes hedging position as of June 30, 2021 and hedges added since quarter-end.

(2)

“Floor” represents floor price for collars or swaps and strike price for purchased puts.

  Note: Excludes 3.5 MMBbls of sold (short) calls with a strike price of $70.09 per Bbl in 2021 and 1.6 MMBbls of sold (short) calls with a strike price of $60.00 per Bbl in 2022.  

 

2021 Guidance

 

 

3Q 2021

 

FY 2021

 

 

 

 

Production(1,2)

52,000 - 54,000 boe per day

 

53,000 - 57,000 boe per day

 

 

 

 

Opex

$15.00 - $17.00 per boe

 

$15.50 - $17.50 per boe

 

 

 

 

DD&A

$22.00 - $24.00 per boe

 

$23.00 - $25.00 per boe

 

 

 

 

G&A(3)

$23 - $25 million

 

$85 - $95 million

 

 

 

 

Exploration Expense(4)

$18 - $20 million

 

~$35 - $45 million

 

 

 

 

Net Interest

~$30 million per quarter

 

 

 

 

Tax

$1.00 - $3.00 per boe

 

 

 

 

Base Business Capex(5)

$225 - $275 million in FY 2021

 ____________________ Note: Ghana / Equatorial Guinea revenue calculated by number of cargos.

(1)

3Q 2021 cargos forecast - Ghana: 1 cargo / Equatorial Guinea: 0.5 cargos. FY 2021 Ghana: 8 cargos / Equatorial Guinea 4.0 cargos. Average cargo sizes 950,000 barrels of oil.

(2)

U.S. Gulf of Mexico Production - 3Q 2021 forecast 20,000-22,000 boe per day. FY 2021: 20,000-22,000 boe per day. Oil/Gas/NGL split for 2021: ~80%/~15%/~5%.

(3)

G&A - Approximately 60% cash.

(4)

Excludes dry hole costs (Approximately $11 million of dry hole costs associated with Zora expected in 3Q). 3Q includes Gulf of Mexico seismic acquisition deferred from 2Q.

(5)

Excludes Mauritania and Senegal capital expenditures.

 

 

 

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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