Kosmos Energy Ltd. (“Kosmos” or the “Company”) (NYSE/LSE: KOS)
announced today its financial and operating results for the second
quarter of 2022. For the quarter, the Company generated a net
income of $117 million, or $0.25 per diluted share. When adjusted
for certain items that impact the comparability of results, the
Company generated an adjusted net income(1) of $132 million, or
$0.28 per diluted share for the second quarter of 2022.
SECOND QUARTER 2022 HIGHLIGHTS
- Net Production(2): ~62,200 barrels of oil equivalent per day
(boepd) with sales of ~62,400 boepd
- Revenues: $620 million, or $109.28 per boe (excluding the
impact of derivative cash settlements)
- Production expense: $90 million, or $15.88 per boe
- Capital expenditures (excluding acquisitions and divestitures):
$220 million
- Generated free cash flow(1) of approximately $67 million (~$290
million in 1H 2022)
- Accelerating debt repayment with net leverage falling to
~1.6x
- Phase One of the Greater Tortue Ahmeyim LNG project over 80%
complete at quarter end
Commenting on the Company’s second quarter 2022 performance,
Chairman and Chief Executive Officer Andrew G. Inglis said: “Kosmos
delivered another quarter of strong operational and financial
performance. Production at the upper end of guidance and continued
free cash flow delivery helped reduce debt and drive net leverage
lower. Following the robust underlying business performance
year-to-date, and despite seeing some inflationary cost pressures,
we expect full year free cash flow generation and debt reduction to
be in line with previous guidance with year-end net leverage
expected to be lower than our 1.5x target.
"We continued to make good progress on our three core
development projects -- Tortue Phase 1, Jubilee Southeast and
Winterfell -- which we expect will collectively grow production by
~50% by 2024. We are also advancing our other gas projects in
Mauritania and Senegal, which are expected to drive the next phase
of growth beyond 2024 as we continue to materially increase the gas
weighting of the portfolio.
“With low-cost, high margin oil assets that generate material
cash to both de-lever and fund our investment in our world-class
gas assets, we believe we have the right portfolio at the right
time. We are well positioned for the energy transition and expect
to play an increasingly important role alongside our host countries
in providing energy security to nations looking to diversify
current supply sources.”
FINANCIAL UPDATE
Net capital expenditure for the second quarter of 2022,
excluding acquisitions and divestitures, was approximately $220
million. The $20 million increase from guidance was a result of
inflationary pressures primarily related to activity in Mauritania
and Senegal. Full year capital expenditure guidance for 2022 is now
expected to be around $700 million, incorporating the Company’s
latest inflation impact estimates (an increase of approximately
5%).
Kosmos exited the second quarter of 2022 with $2.1 billion of
net debt(1) and available liquidity of over $1.0 billion. The
Company generated $67 million of free cash flow in the second
quarter, and around $290 million in the first half of the year.
Excluding capital expenditure in Mauritania and Senegal, base
business cash flow in the first half of the year was around $450
million. Utilizing free cash flow from the strong business
performance in the first half of the year, the Company paid down
over $200 million of debt in the quarter. With growing EBITDAX and
a reduction in net debt, the Company remains well on track to
deliver on its target net leverage ratio of less than 1.5x by
year-end.
OPERATIONAL UPDATE
Production
Total net production(2) in the second quarter of 2022 averaged
approximately 62,200 boepd, at the upper end of guidance. The
Company exited the quarter in a slight net overlift position.
Ghana
Production in Ghana averaged approximately 31,600 barrels of oil
per day (bopd) net in the second quarter of 2022. Kosmos lifted
three cargos from Ghana during the quarter, in line with
guidance.
At Jubilee, production averaged approximately 73,600 bopd gross
during the quarter, which includes the impact of the planned
floating, production, storage and offloading vessel ("FPSO")
shutdown. Excluding the planned shutdown, Jubilee production
averaged approximately 92,000 bopd gross in the second quarter. At
TEN, production averaged approximately 23,600 bopd gross for the
second quarter. High reliability of the Ghana production facilities
continues, as well as high levels of water injection and gas
offtake by the Government of Ghana. As the operator recently
communicated, drilling performance has been excellent with wells
coming in ahead of schedule and under budget.
During the second quarter, the Jubilee FPSO underwent a planned
two-week shut down for routine maintenance and facility upgrades.
The key objectives for the shut down were achieved, including
facility upgrades necessary to tie-in the Jubilee Southeast wells
that are expected to increase production from mid-2023. Production
has remained strong since the Jubilee FPSO restarted operations,
with a second quarter exit rate of over 90,000 bopd gross.
The Jubilee Southeast development continues to progress and is
now approximately 40% complete. Long-lead items necessary for the
project have been ordered and drilling is expected to begin in the
fourth quarter with initial production expected around mid-2023.
The partnership expects the new wells to increase gross production
in the field to ~100,000 bopd.
At TEN, the partnership drilled the first of the two riser base
wells (NT-10) to initially define the extent of the Ntomme
reservoir supporting the TEN Enhancement Project. The well was
drilled to test two separate reservoir objectives and encountered
better reservoir quality and thickness than expected but was water
bearing. A second well (NT-11) is currently being planned to target
a different fairway in a structurally higher setting. The results
of the two wells will allow the partnership to high-grade and
optimize the future drilling plans for the TEN Enhancement
Project.
U.S. Gulf of Mexico
Production in the U.S. Gulf of Mexico averaged approximately
20,600 boepd net (82% oil) during the second quarter, an increase
over the first quarter as a result of less downtime at third-party
facilities. The scheduled drydock of the Helix Producer-1 vessel
was deferred from the second quarter to the third quarter, which is
expected to result in around 45 days of downtime for the Tornado
field in the third quarter.
The Kodiak sidetrack well was drilled during the second quarter.
Completion activities are ongoing with production expected to begin
in the third quarter.
During the second quarter, Kosmos exercised and closed its
preferential right to purchase an additional 5.9% interest in
Kodiak from Marubeni for approximately $21 million with additional
deferred payments of $8 million.
At the end of the second quarter, Kosmos, as the operator of the
Odd Job field, executed a contract with Subsea 7 (US) LLC and
OneSubsea LLC to fabricate and install a multi-phase subsea pump to
enhance recovery and boost production in the Odd Job field from
mid-2024 (Kosmos ~55% working interest).
On Winterfell, the operator has submitted the field development
plan, with a final investment decision ("FID") approval expected
later this quarter. The development is planned to be phased, with
the first phase targeting around 100 million barrels of gross
recoverable resource in the central Winterfell area. Five wells in
total are expected in the first phase, with three wells online at
first oil. Long lead items have been ordered and a rig has been
selected for drilling and completion activities in 2023. First oil
is expected approximately 18 months from FID approval.
Based on recent pressure work from the initial two wells, the
partnership now believes there is significant upside to resources
estimates across the greater Winterfell area, with up to 200
million barrels of gross recoverable resource that could be
de-risked as the partnership evaluates the results from the first
phase development wells.
Equatorial Guinea
Production in Equatorial Guinea averaged approximately 31,300
bopd gross and 10,000 bopd net in the second quarter of 2022.
Production was lower than the first quarter due to some facility
downtime and maintenance work. As forecasted, Kosmos lifted one
cargo from Equatorial Guinea during the quarter.
In the second quarter, Kosmos and its joint venture partners
completed the previously announced agreement with the Ministry of
Mines and Hydrocarbons of Equatorial Guinea to extend the Block G
petroleum contract term. The extension harmonizes the expiration of
the Ceiba and Okume field production licenses (2029 and 2034
respectively) to 2040.
After the end of the second quarter, a drilling rig has been
selected for the next drilling program which is expected to begin
in the second half of 2023.
Mauritania & Senegal
Phase 1 of the Greater Tortue Ahmeyim liquified natural gas
(LNG) project continues to make good progress and was over 80%
complete at quarter-end with the following developments across the
key workstreams:
- FLNG: construction and mechanical completion activities
continue and commissioning work has begun
- FPSO: mechanical completion loop checks continue and
commissioning work has commenced
- Hub Terminal: all 21 caissons installed. The piling
installation is nearing completion and the living quarters platform
is currently in transit to site
- Subsea: subsea equipment has begun to arrive in region and
installation of the export pipeline has commenced
- Drilling: successfully drilled two of the four wells required
for first gas and the third well is in progress
The operator has been unable to make up the delay from the
lockdown of the FPSO yard in April and the ongoing Covid-19
restrictions in China. As a result, the FPSO sailaway date is now
expected to be in the fourth quarter with the same high level of
completion prior to sailaway (previously expected to be end of the
third quarter). We continue to target first gas in the third
quarter of 2023 with first LNG end-2023.
The plans to develop and optimize Phase 2 of the Greater Tortue
Ahmeyim LNG project continue to progress. Given the change in the
global gas markets in 2022, the partnership is working closely with
host governments to evaluate the optimal solution to best utilize
the infrastructure associated with Phase 1 of the project. A
development decision is planned at the end of the third
quarter.
To optimize the commercial value of sales for the gas production
from Greater Tortue Ahmeyim, Kosmos plans to utilize existing
contractual rights under our Phase 1 LNG sales agreement to divert
cargos to prospective buyers in order to benefit from the current
market environment.
In June 2022, the exploration period of Block C8 offshore
Mauritania expired. The partnership and the government of
Mauritania are currently in the process of finalizing a new
Production Sharing Contract (“PSC”) covering the BirAllah and/or
Orca discoveries. The new PSC is expected to provide two years to
submit a development plan covering these discoveries with the terms
of the new PSC substantially similar to the former PSC for Block C8
with additional provisions for potentially enhanced back-in rights
for the Government of Mauritania, local content, capacity building
and an environmental fund. As a result, during the second quarter
of 2022 we wrote off approximately $64.2 million of previously
capitalized costs related to the BirAllah and Orca discoveries
incurred under the C8 license to exploration expense, however,
these costs will still be tax deductible and cost recoverable
against our Greater Tortue development.
At Yakaar-Teranga, the partnership continues to make progress
for the first phase development concept with the Government of
Senegal focused on a domestic gas solution.
(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 2022 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 +1-877-407-0784. 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 NOC financing. 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,
2022
2021
2022
2021
Revenues and other income:
Oil and gas revenue
$
620,368
$
384,045
$
1,279,383
$
560,519
Gain on sale of assets
471
—
471
26
Other income, net
43
74
95
144
Total revenues and other income
620,882
384,119
1,279,949
560,689
Costs and expenses:
Oil and gas production
90,189
115,803
214,892
161,555
Facilities insurance modifications,
net
(384
)
1,270
6,752
1,941
Exploration expenses
89,565
9,289
101,441
17,470
General and administrative
24,624
21,728
50,417
44,169
Depletion, depreciation and
amortization
121,679
151,161
280,648
227,702
Interest and other financing costs,
net
29,382
39,326
62,521
63,854
Derivatives, net
75,204
111,921
357,376
214,382
Other expenses, net
(3,528
)
(2,659
)
(1,102
)
809
Total costs and expenses
426,731
447,839
1,072,945
731,882
Income (loss) before income taxes
194,151
(63,720
)
207,004
(171,193
)
Income tax expense (benefit)
76,978
(6,533
)
88,431
(23,238
)
Net income (loss)
$
117,173
$
(57,187
)
$
118,573
$
(147,955
)
Net income (loss) per share:
Basic
$
0.26
$
(0.14
)
$
0.26
$
(0.36
)
Diluted
$
0.25
$
(0.14
)
$
0.25
$
(0.36
)
Weighted average number of shares used to
compute net income (loss) per share:
Basic
455,512
408,131
454,811
409,828
Diluted
475,645
408,131
473,471
409,828
Kosmos Energy Ltd.
Condensed Consolidated Balance
Sheets
(In thousands,
unaudited)
June 30,
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
223,327
$
131,620
Receivables, net
290,457
177,526
Other current assets
176,499
232,806
Total current assets
690,283
541,952
Property and equipment, net
4,032,327
4,183,987
Other non-current assets
208,580
214,712
Total assets
$
4,931,190
$
4,940,651
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
286,730
$
184,403
Accrued liabilities
352,055
250,670
Current maturities of long-term debt
30,000
30,000
Other current liabilities
197,172
65,879
Total current liabilities
865,957
530,952
Long-term liabilities:
Long-term debt, net
2,280,625
2,590,495
Deferred tax liabilities
582,973
711,038
Other non-current liabilities
539,269
578,929
Total long-term liabilities
3,402,867
3,880,462
Total stockholders’ equity
662,366
529,237
Total liabilities and stockholders’
equity
$
4,931,190
$
4,940,651
Kosmos Energy Ltd.
Condensed Consolidated
Statements of Cash Flow
(In thousands,
unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Operating activities:
Net income (loss)
$
117,173
$
(57,187
)
$
118,573
$
(147,955
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depletion, depreciation and amortization
(including deferred financing costs)
124,270
153,781
285,909
232,893
Deferred income taxes
2,360
(47,406
)
(83,432
)
(69,485
)
Unsuccessful well costs and leasehold
impairments
71,261
3,396
73,662
4,865
Change in fair value of derivatives
76,568
117,001
367,374
223,159
Cash settlements on derivatives,
net(1)
(130,568
)
(63,617
)
(223,618
)
(96,615
)
Equity-based compensation
8,737
7,608
17,129
15,889
Gain on sale of assets
(471
)
—
(471
)
(26
)
Loss on extinguishment of debt
—
15,223
192
15,223
Other
(1,454
)
224
(3,742
)
(666
)
Changes in assets and liabilities:
Net changes in working capital
10,682
159,858
56,610
64,973
Net cash provided by operating
activities
278,558
288,881
608,186
242,255
Investing activities
Oil and gas assets
(211,953
)
(161,737
)
(320,787
)
(290,539
)
Acquisition of oil and gas properties
(21,205
)
—
(21,205
)
—
Proceeds on sale of assets
471
1,301
118,693
1,932
Notes receivable from partners
(11,428
)
(13,765
)
(11,428
)
(36,181
)
Net cash used in investing activities
(244,115
)
(174,201
)
(234,727
)
(324,788
)
Financing activities:
Borrowings under long-term debt
—
—
—
100,000
Payments on long-term debt
(207,500
)
(50,000
)
(315,000
)
(400,000
)
Net proceeds from issuance of senior
notes
—
—
—
444,375
Purchase of treasury stock / tax
withholdings
—
(19
)
(2,753
)
(1,037
)
Dividends
(13
)
(14
)
(655
)
(444
)
Deferred financing costs
(550
)
(16,028
)
(6,288
)
(17,062
)
Net cash provided by (used in) financing
activities
(208,063
)
(66,061
)
(324,696
)
125,832
Net increase (decrease) in cash, cash
equivalents and restricted cash
(173,620
)
48,619
48,763
43,299
Cash, cash equivalents and restricted cash
at beginning of period
397,279
144,444
174,896
149,764
Cash, cash equivalents and restricted cash
at end of period
$
223,659
$
193,063
$
223,659
$
193,063
____________________
(1)
Cash settlements on commodity hedges were
$(129.3) million and $(58.8) million for the three months ended
June 30, 2022 and 2021, respectively, and $(212.9) million and
$(87.4) million for the six months ended June 30, 2022 and 2021,
respectively.
Kosmos Energy Ltd.
EBITDAX
(In thousands,
unaudited)
Three Months Ended
Six months ended
Twelve Months Ended
June 30, 2022
June 30, 2021
June 30, 2022
June 30, 2021
June 30, 2022
Net income (loss)
$
117,173
$
(57,187
)
$
118,573
$
(147,955
)
$
188,692
Exploration expenses
89,565
9,289
101,441
17,470
149,353
Facilities insurance modifications,
net
(384
)
1,270
6,752
1,941
3,225
Depletion, depreciation and
amortization
121,679
151,161
280,648
227,702
520,167
Equity-based compensation
8,737
7,608
17,129
15,889
32,891
Derivatives, net
75,204
111,921
357,376
214,382
413,179
Cash settlements on commodity
derivatives
(129,333
)
(58,823
)
(212,896
)
(87,446
)
(349,871
)
Restructuring and other
59
233
281
1,419
2,685
Other, net
(3,587
)
(2,892
)
(1,383
)
(610
)
5,515
Gain on sale of assets
(471
)
—
(471
)
(26
)
(2,009
)
Interest and other financing costs,
net
29,382
39,326
62,521
63,854
127,038
Income tax expense (benefit)
76,978
(6,533
)
88,431
(23,238
)
146,125
EBITDAX
$
385,002
$
195,373
$
818,402
$
283,382
$
1,236,990
Acquired Kodiak & Ghana interest with
pre-emption EBITDAX Adj(1)
2,969
(15,723
)
85,933
Pro Forma EBITDAX
$
387,971
$
802,679
$
1,322,923
____________________
(1)
Adjustment to present Pro Forma EBITDAX
for the impact of the revenues less direct operating expenses from
the acquired Kodiak & Ghana interests, as adjusted for the
Ghana pre-emption, 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.
Kosmos Energy Ltd.
Adjusted Net Income
(Loss)
(In thousands, except per
share amounts, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Net income (loss)
$
117,173
$
(57,187
)
$
118,573
$
(147,955
)
Derivatives, net
75,204
111,921
357,376
214,382
Cash settlements on commodity
derivatives
(129,333
)
(58,823
)
(212,896
)
(87,446
)
Gain on sale of assets
(471
)
—
(471
)
(26
)
Facilities insurance modifications,
net
(384
)
1,270
6,752
1,941
Restructuring and other
59
233
281
1,419
Other, net
(3,462
)
(3,110
)
(1,353
)
(787
)
Impairment of suspended well costs
64,249
—
64,249
—
Loss on extinguishment of debt
—
15,223
192
15,223
Total selected items before tax
5,862
66,714
214,130
144,706
Income tax (expense) benefit on
adjustments(1)
17,163
(20,024
)
(46,816
)
(40,222
)
Impact of valuation adjustments and U.S.
tax law changes
(8,096
)
—
(11,391
)
—
Adjusted net income (loss)
$
132,102
(10,497
)
274,496
(43,471
)
Net income (loss) per diluted share
$
0.25
$
(0.14
)
$
0.25
$
(0.36
)
Derivatives, net
0.16
0.27
0.75
0.52
Cash settlements on commodity
derivatives
(0.27
)
(0.14
)
(0.45
)
(0.21
)
Gain on sale of assets
—
—
—
—
Facilities insurance modifications,
net
—
—
0.01
—
Other, net
(0.01
)
(0.01
)
—
—
Impairment of suspended well costs
0.14
—
0.14
—
Loss on extinguishment of debt
—
0.04
—
0.04
Total selected items before tax
0.02
0.16
0.45
0.35
Income tax (expense) benefit on
adjustments(1)
0.03
(0.05
)
(0.10
)
(0.10
)
Impact of valuation adjustments and U.S.
tax law changes
(0.02
)
—
(0.02
)
—
Adjusted net income (loss) per diluted
share
$
0.28
$
(0.03
)
$
0.58
$
(0.11
)
Weighted average number of diluted
shares
475,645
408,131
473,471
409,828
____________________
(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,
2022
2021
2022
2021
Reconciliation of free cash
flow:
Net cash provided by operating
activities
$
278,558
$
288,881
$
608,186
$
242,255
Net cash used for oil and gas assets -
base business
(68,163
)
(70,146
)
(154,088
)
(118,660
)
Base business free cash flow
210,395
218,735
454,098
123,595
Net cash used for oil and gas assets -
Mauritania/Senegal
(143,790
)
(91,591
)
(166,699
)
(171,879
)
Free cash flow(1)
$
66,605
$
127,144
$
287,399
$
(48,284
)
____________________
(1)
Commencing in the fourth quarter of 2021,
the Company refined its definition of free cash flow to exclude
non-recurring activity such as acquisitions, divestitures and NOC
financing that may affect the comparability of results in order to
better reflect cash flow of the underlying business, consistent
with general industry practice.
Operational Summary
(In thousands, except barrel
and per barrel data, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Net Volume Sold
Oil (MMBbl)
5.339
5.689
11.569
8.630
Gas (MMcf)
1.252
1.221
2.256
2.547
NGL (MMBbl)
0.129
0.127
0.246
0.254
Total (MMBoe)
5.677
6.020
12.191
9.309
Total (Boepd)
62.381
66.150
67.354
51.428
Revenue
Oil sales
$
604,668
$
377,632
$
1,254,676
$
546,782
Gas sales
10,271
3,679
15,207
8,219
NGL sales
5,429
2,734
9,500
5,518
Total oil and gas revenue
620,368
384,045
1,279,383
560,519
Cash settlements on commodity
derivatives
(129,333
)
(58,823
)
(212,896
)
(87,446
)
Realized revenue
$
491,035
$
325,222
$
1,066,487
$
473,073
Oil and Gas Production Costs
$
90,189
$
115,803
$
214,892
$
161,555
Sales per Bbl/Mcf/Boe
Average oil sales price per Bbl
$
113.25
$
66.38
$
108.45
$
63.36
Average gas sales price per Mcf
8.20
3.01
6.74
3.23
Average NGL sales price per Bbl
42.09
21.52
38.62
21.72
Average total sales price per Boe
109.28
63.80
104.94
60.22
Cash settlements on commodity derivatives
per oil Bbl(1)
(24.22
)
(10.34
)
(18.40
)
(10.13
)
Realized revenue per Boe
86.50
54.03
87.48
50.82
Oil and gas production costs per
Boe
$
15.88
$
19.24
$
17.63
$
17.36
____________________
(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
91.0 thousand barrels as of June 30, 2022.
Hedging Summary
As of June 30, 2022(1)
(Unaudited)
Weighted Average Price per
Bbl
Index
MBbl
Floor(2)
Sold Put
Ceiling
2022:
Three-way collars
Dated Brent
2,250
$
56.67
$
43.33
$
76.91
Three-way collars
NYMEX WTI
500
65.00
50.00
85.00
Two-way collars
Dated Brent
3,000
62.50
—
83.33
2023:
Three-way collars
Dated Brent
2,000
65.00
47.50
95.25
Two-way collars
Dated Brent
2,000
75.00
—
125.00
____________________
(1)
Please see the Company’s filed 10-K for
full disclosure on hedging material.
(2)
“Floor” represents floor price for collars
and strike price for purchased puts.
Note: Excludes 0.8 MMBbls of sold (short)
calls with a strike price of $60.00 per Bbl in 2022.
2022 Guidance
3Q2022
FY 2022 Guidance
Production(1,2)
60,000 - 63,000 boe per day
63,000 - 67,000 boe per day
Opex
$14.00 - $16.00 per boe
$16.00 - $18.00 per boe
DD&A
$21.00 - $23.00 per boe
G&A(~65% cash)
$24 - $26 million
~$100 million
Exploration Expense(3)
$15 - $20 million
$50 - $60 million
Net Interest
~40 million / quarter
Tax
$15.00 - $17.00 per boe
$10.00 - $12.00 per boe
Capital Expenditure(4)
$200 - $225 million
~$700 million
____________________
Note: Ghana / Equatorial Guinea revenue
calculated by number of cargos.
(1)
3Q 2022 cargos forecast - Ghana: 3 cargos
/ Equatorial Guinea: 0.5 cargos. FY 2022 Ghana: 14 cargos /
Equatorial Guinea 3.5 cargos. Average cargo size ~950,000 barrels
of oil.
(2)
U.S. Gulf of Mexico Production - 3Q 2022
forecast 15,500-16,500 boe per day. FY2022: 18,500-20,500 boe per
day. Oil/Gas/NGL split for 2022: ~80%/~12%/~8%.
(3)
Excludes leasehold impairments and dry
hole costs
(4)
Excludes acquisitions/sales of oil &
gas assets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220807005029/en/
Investor Relations Jamie Buckland +44 (0) 203 954 2831
jbuckland@kosmosenergy.com
Media Relations Thomas Golembeski +1-214-445-9674
tgolembeski@kosmosenergy.com
Kosmos Energy (NYSE:KOS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Kosmos Energy (NYSE:KOS)
Historical Stock Chart
From Sep 2023 to Sep 2024