Press

Kosmos Energy Announces Second Quarter 2018 Results


08/06/18

DALLAS--(BUSINESS WIRE)--Aug. 6, 2018-- Kosmos Energy Ltd. (“Kosmos”) (NYSE: KOS) announced today financial and operating results for the second quarter of 2018. For the second quarter of 2018, the Company generated a net loss of $103.3 million, or $0.26 per diluted share as compared to net loss of $8.5 million or $0.02 per diluted share in the same period last year. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net loss(1) of $34.9 millionor $0.09 per diluted share for the second quarter of 2018.

Andrew G. Inglis, chairman and chief executive officer, said: “The business continued to perform well during the second quarter with strong production from our high-margin production assets in Ghana and Equatorial Guinea. We remain focused on implementing plans in both countries to enhance production going forward. The other parts of our business - development and exploration - continue to make progress against key objectives. The Tortue gas development offshore Mauritania and Senegal is moving forward with front end engineering design (FEED) for Phase 1 of the project progressing on schedule and the partnership's commercial teams evaluating gas marketing proposals from a range of potential buyers. We expect to make a final investment decision (FID) on the Tortue project around the end of the year. In exploration, our program is unchanged, with one remaining test this year offshore Suriname. We expect to spud the Pontoenoe prospect in Block 42 in mid-August. We remain on track to deliver $100 to $200 million of net cash flow in 2018.”

Second quarter 2018 oil revenues were $215 million versus $136 million in the same quarter of 2017, on sales of 2.9 million barrels of oil in 2018 as compared to 2.9 million barrels in 2017. Including the impact of the Company's hedging program, revenue was $61.36 per barrel of oil sold in the second quarter of 2018. At quarter end, the Company was in a net underlift position of approximately 0.2 million barrels of oil.

Production expense for the second quarter was $50 million, or $17.21 per barrel, versus $22 million, or $7.41 per barrel, in the second quarter of 2017. Production expense per barrel increased in the second quarter of 2018 compared to the same quarter a year ago primarily because the year ago quarter included insurance proceeds received related to increased costs due to the Jubilee FPSO turret bearing issue, and a credit accrual adjustment from the operator of the Jubilee and TEN fields. Second quarter 2018 production expense of $17.21 per barrel decreased sequentially from the first quarter of 2018 of $24.18 due to the higher number of liftings at Jubilee, which has a lower unit production expense than TEN.

Exploration expenses totaled $77 million for the second quarter, and includes amounts related to ongoing seismic and geologic and geophysical costs as well as unsuccessful well costs of approximately $45 million related to the Anapai-1 and 1A wells.

Depletion and depreciation expense for the quarter was $74 million, or $25.66 per barrel compared to $24.85 per barrel in the second quarter of 2017.

General and administrative expenses were $17 million during the second quarter. This amount includes approximately $8 million in cash expense and $9 million in non-cash equity based compensation expense.

Second quarter results included a mark-to-market loss of $140 million related to the Company's oil derivative contracts. At June 30, 2018, the Company's hedging position had a total commodity net liability value of approximately $219 million. As of the quarter end and including recently executed hedges, Kosmos had approximately 16 million barrels of oil hedged covering 2018 and 2019.

Gain on equity method investments, net during the second quarter was approximately $16 million and represents Kosmos' 50 percent ownership of our equity method investment in Kosmos Trident International Petroleum Inc. (KTIPI), which holds our production interests in Equatorial Guinea. Under the equity method of accounting, Kosmos only recognizes its share of the adjusted net income of KTIPI, including basis difference amortization, which is recorded in the Gain on equity method investments, net in the consolidated statement of operations. Year to date through the end of July, the assets have delivered approximately $148 million of cash dividend distributions to Kosmos, or approximately 64 percent of the purchase price.

Total capital expenditures in the second quarter were $97 million, bringing the first half total to $155 million.

Kosmos exited the second quarter of 2018 with approximately $1.3 billion of liquidity and $1,079 million of net debt.

Operational Update

Ghana

During the second quarter of 2018, gross sales volumes from Ghana averaged approximately 129,400 barrels of oil per day (bopd), including volumes from the Jubilee and TEN fields.

Gross production from Jubilee averaged approximately 67,900 barrels of oil per day during the second quarter resulting in Kosmos lifting two cargos, as expected. During the quarter the field was shut down for the second phase turret remediation and stabilization work which was successfully completed. We continue to expect the rotation of the vessel to take place around the end of 2018 with minimal impact to production in 2018. Following the shutdown, the field has consistently produced above 100,000 bopd. The combination of the work performed during the shutdown and the completion of two producer wells, one each in the third and fourth quarter this year, is expected to allow oil production to grow towards the FPSO nameplate capacity of 120,000 bopd.

Gross production from TEN averaged approximately 61,500 bopd during the second quarter, resulting in Kosmos lifting one cargo, as expected. Two producer wells are expected to be completed in the field by year-end, including the Ntomme-5 well in August, which is the first well to be put on production since field startup two years ago. This drilling activity at TEN is expected to allow production to increase towards the FPSO capacity of 80,000 bopd.

Kosmos and its partners have decided to add a second rig, the Stena Forth, in Ghanabeginning in October 2018, with the objective of accelerating the addition of new wells. There will be no impact to the 2018 capital budget as the savings from the later arrival of the first rig will offset the costs of the second rig.

Equatorial Guinea

Gross oil production from the Ceiba Field and Okume Complex averaged over 46,000 bopd during the second quarter of 2018, exceeding the full year 2018 forecast of 43,000 barrels per day for the second quarter in a row. Second quarter production resulted in two cargo liftings net to KTIPI, or one cargo net to Kosmos' 50 percent interest in KTIPI. Kosmos and it's partners are currently focused on production optimization and planning for the first phase electric submersible pump (ESP) installation with the work expected to commence in the fourth quarter of 2018. In May, Kosmos began a 3D seismic survey of approximately 10,100 square kilometers over blocks EG-21, EG-24, S and W offshore Equatorial Guinea, and approximately 200 square kilometers over Block G.

Suriname

Kosmos expects to commence drilling operations on the Pontoenoe-1 well in mid-August. Pontoenoe is the first of up to three independent prospects in Block 42 offshore Suriname and is a similar play type to the Turbot and Longtail discoveries located approximately 70 kilometers to the west in Guyana.

Tortue

Front End Engineering Design (FEED) contracts have been awarded by the operator and this work remains ongoing. In addition, Kosmos has received proposals for gas marketing from a shortlisted group of potential buyers and is in the process of evaluating these with the partners. Kosmos expects a final investment decision for the Greater Tortue project around the end of 2018 and is aiming for first gas in late 2021.

(1) A Non-GAAP measure, see attached reconciliation of adjusted net income.

Conference Call and Webcast Information

Kosmos will host a conference call and webcast to discuss second quarter 2018 financial and operating results today at 10:00 a.m. Central time (11:00 a.m. Eastern time). A live webcast of the event and slides can be accessed on the Investors page of Kosmos' website at investors.kosmosenergy.com. The dial-in telephone number for the call is +1.877.407.3982. 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 well-capitalized, pure play deepwater oil and gas company with growing production, a pipeline of development opportunities and a balanced exploration portfolio along the Atlantic Margins. Our assets include growing production offshore Ghana and Equatorial Guinea, a competitively positioned Tortue gas project in Mauritania and Senegal and a sustainable exploration program balanced between proven basins (Equatorial Guinea), emerging basins (Mauritania, Senegal and Suriname) and frontier basins (Cote d'Ivoire and Sao Tome and Principe). 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 2017 Corporate Responsibility Report. For additional information, visit www.kosmosenergy.com.

Non-GAAP Financial Measures

EBITDAX, Adjusted net income (loss) and Adjusted net income (loss) per share 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 Facility EBITDAX definition includes 50% of the EBITDAX adjustments of Kosmos-Trident International Petroleum Inc.The Company defines adjusted net income (loss) as net income (loss) after adjusting for the impact of certain non-cash and non-recurring items, including non-cash changes in the fair value of derivative instruments, cash settlements on commodity derivatives, gain on sale of assets, and other similar non-cash and non-recurring charges, and then the non-cash and related tax impacts in the same period.

We believe that EBITDAX, Adjusted net income (loss), and Adjusted net income (loss) per share 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. Because EBITDAX, Adjusted net income (loss), and Adjusted net income (loss) per share excludes some, but not all, items that affect net income, these measures 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, 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,
  2018 2017 2018 2017
Revenues and other income:        
Oil and gas revenue $215,191  $136,363  $342,387  $239,795 
Other income, net 282  10,161  263  58,695 
Total revenues and other income 215,473  146,524  342,650  298,490 
         
Costs and expenses:        
Oil and gas production 49,815  21,604  96,583  41,490 
Facilities insurance modifications, net 1,029  (2) 9,478  2,572 
Exploration expenses 77,481  19,982  98,674  125,696 
General and administrative 17,497  14,739  39,380  30,526 
Depletion and depreciation 74,289  72,441  128,566  107,419 
Interest and other financing costs, net 18,870  19,465  44,564  36,251 
Derivatives, net 140,272  (25,411) 178,750  (63,268)
(Gain) loss on equity method investments, net (16,100) 6,426  (34,796) 6,426 
Other expenses, net 938  2,008  4,643  2,770 
Total costs and expenses 364,091  131,252  565,842  289,882 
         
Income (loss) before income taxes (148,618) 15,272  (223,192) 8,608 
Income tax expense (benefit) (45,345) 23,739  (69,693) 45,916 
Net loss $(103,273) $(8,467) $(153,499) $(37,308)
         
Net loss per share:        
Basic $(0.26) $(0.02) $(0.39) $(0.10)
Diluted $(0.26) $(0.02) $(0.39) $(0.10)
         
         

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

        
Basic 396,826  387,952  396,218  387,634 
Diluted 396,826  387,952  396,218  387,634 
             
 
Kosmos Energy Ltd.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
 
  June 30, December 31,
  2018 2017
Assets    
Current assets:    
Cash and cash equivalents $116,941  $233,412
Receivables, net 157,817  160,961
Other current assets 143,153  139,229
Total current assets 417,911  533,602
     
Property and equipment, net 2,263,064  2,317,828
Other non-current assets 222,468  341,173
Total assets $2,903,443  $3,192,603
     
Liabilities and shareholders' equity    
Current liabilities:    
Accounts payable $128,471  $141,787
Accrued liabilities 145,600  219,412
Other current liabilities 162,329  67,531
Total current liabilities 436,400  428,730
     
Long-term liabilities:    
Long-term debt, net 1,167,775  1,282,797
Deferred tax liabilities 392,918  476,548
Other non-current liabilities 162,219  107,416
Total long-term liabilities 1,722,912  1,866,761
     
Total shareholders' equity 744,131  897,112
Total liabilities and shareholders' equity $2,903,443  $3,192,603
        
 
Kosmos Energy Ltd.
Condensed Consolidated Statements of Cash Flow
(In thousands, unaudited)
 
  Three Months Ended Six Months Ended
  June 30, June 30,
  2018 2017 2018 2017
Operating activities:        
Net loss $(103,273) $(8,467) $(153,499) $(37,308)

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

        
Depletion, depreciation and amortization 76,572  74,992  133,289  112,521 
Deferred income taxes (57,179) 18,884  (81,876) 41,017 
Unsuccessful well costs 44,611  3,517  44,654  3,605 
Change in fair value of derivatives 138,824  (20,767) 177,790  (58,944)
Cash settlements on derivatives, net(1) (35,824) 8,264  (56,221) 19,417 
Equity-based compensation 9,068  10,499  17,085  20,329 
Loss on extinguishment of debt     4,056   
Distributions in excess of equity in earnings   6,426  5,234  6,426 
Other 927  1,893  449  2,514 
Changes in assets and liabilities:        
Net changes in working capital (56,277) (82,373) (90,528) (127,091)
Net cash provided by (used in) operating activities 17,449  12,868  433  (17,514)
         
Investing activities        
Oil and gas assets (57,938) (10,995) (92,650) (42,805)
Other property (1,058) (1,183) (2,815) (1,454)
Return of investment from KTIPI 38,900    79,970   
Proceeds on sale of assets   18,149    222,068 
Net cash provided by (used in) investing activities (20,096) 5,971  (15,495) 177,809 
         
Financing activities:        
Payments on long-term debt (100,000) (50,000) (100,000) (200,000)
Purchase of treasury stock (5,821) (830) (17,695) (1,945)
Deferred financing costs (774)   (25,743)  
Net cash used in financing activities (106,595) (50,830) (143,438) (201,945)
         
Net decrease in cash, cash equivalents and restricted cash (109,242) (31,991) (158,500) (41,650)

Cash, cash equivalents and restricted cash at beginning of
period

 255,728  263,536  304,986  273,195 
Cash, cash equivalents and restricted cash at end of period $146,486  $231,545  $146,486  $231,545 
                 
(1) Cash settlements on commodity hedges were $(37.5) million and $12.9 million for the three months ended June 30, 2018 and 2017, respectively, and $(57.3) million and $24.3 million for the six months ended June 30, 2018 and 2017.
 
Kosmos Energy Ltd.
Equity Method Investment
(In thousands, unaudited)
     
  Three months ended Six months ended
  June 30, 2018 June 30, 2018
Revenues and other income:    
Oil and gas revenue $138,395  $384,749 
Other income (170) 117 
Total revenues and other income 138,225  384,866 
     
Costs and expenses:    
Oil and gas production 23,332  75,033 
Depletion and depreciation 21,881  75,951 
Other expenses, net (73) (152)
Total costs and expenses 45,140  150,832 
     
Income before income taxes 93,085  234,034 
Income tax expense 33,620  83,251 
Net income $59,465  $150,783 
     
Kosmos' share of net income $29,733  $75,392 
Basis difference amortization(1) 13,633  40,596 
Equity in earnings - KTIPI $16,100  $34,796 
         
(1) The basis difference, which is associated with oil and gas properties and subject to amortization, has been allocated to the Ceiba Field and Okume Complex. We amortize the basis difference using the unit-of-production method.
   
Kosmos Energy Ltd.
EBITDAX
(In thousands, unaudited)
   
  Three Months Ended
  June 30,
  2018 2017
  Kosmos 

Equatorial
Guinea (Equity
Method)(1)

 Total Kosmos
Net income (loss) $(103,273) $16,100  $(87,173) $(8,467)
Exploration expenses 77,481    77,481  19,982 
Facilities insurance modifications, net 1,029    1,029  (2)
Depletion and depreciation 74,289  24,574  98,863  72,441 
Equity-based compensation 9,068    9,068  10,499 
Derivatives, net 140,272    140,272  (25,411)
Cash settlements on commodity derivatives (37,521)   (37,521) 12,928 
Inventory impairment and other (24)   (24) 545 
Disputed charges and related costs 626    626  1,209 
Loss on equity method investment - KBSL       6,426 
Gain on equity method investment - KTIPI (16,100)   (16,100)  
Interest and other financing costs, net 18,870    18,870  19,465 
Income tax expense (benefit) (45,345) 16,810  (28,535) 23,739 
EBITDAX $119,372  $57,484  $176,856  $133,354 
                 
  Six months ended
  June 30,
  2018 2017
  Kosmos 

Equatorial
Guinea (Equity
Method)(1)

 Total(2) Kosmos
Net income (loss) $(153,499) $34,796  $(118,703) $(37,308)
Exploration expenses 98,674    98,674  125,696 
Facilities insurance modifications, net 9,478    9,478  2,572 
Depletion and depreciation 128,566  78,572  207,138  107,419 
Equity-based compensation 17,085    17,085  20,329 
Derivatives, net 178,750    178,750  (63,268)
Cash settlements on commodity derivatives (57,265)   (57,265) 24,348 
Inventory impairment and other (5)   (5) 84 
Disputed charges and related costs 2,961    2,961  2,439 
Loss on equity method investment - KBSL       6,426 
Gain on equity method investment - KTIPI (34,796)   (34,796)  
Interest and other financing costs, net 44,564    44,564  36,251 
Income tax expense (benefit) (69,693) 41,626  (28,067) 45,916 
EBITDAX $164,820  $154,994  $319,814  $270,904 
         
   Twelve Months Ended 
   June 30, 2018 
   Kosmos 

Equatorial
Guinea (Equity
Method)(2)

 Total 
Net income (loss)  $(338,983) $40,030  $(298,953) 
Exploration expenses  189,028    189,028 
Facilities insurance modifications, net  6,086    6,086 
Depletion and depreciation  276,350  89,753  366,103 
Equity-based compensation  36,669    36,669 
Derivatives, net  301,986    301,986 
Cash settlements on commodity derivatives  (42,876)   

(42,876)

 
Inventory impairment and other  314    314 
Disputed charges and related costs  5,484    5,484 
Loss on equity method investment - KBSL  5,060    5,060 
Gain on equity method investment - KTIPI  (40,030)   (40,030) 
Interest and other financing costs, net  85,908    85,908 
Income tax expense (benefit)  (70,672) 44,920  (25,752) 
EBITDAX  $414,324  $174,703  $589,027 
               
(1) For the three months ended June 30, 2018, we have presented separately our 50% share of the results from operations and amortization of our basis difference for the Equatorial Guinea investment, as we account for such investment under the equity method.
(2) For the twelve months ended June 30, 2018, we have presented separately our 50% share of the results from operations and amortization of our basis difference for the Equatorial Guinea investment from the date of acquisition, November 28, 2107 through June 30, 2018, as we account for such investment under the equity method.
 
Adjusted Net Income
(In thousands, except per share amounts, unaudited)
 
  Three Months Ended Six Months Ended
  June 30, June 30,
  2018 2017 2018 2017
Net loss $(103,273) $(8,467) $(153,499) $(37,308)
         
Derivatives, net 140,272  (25,411) 178,750  (63,268)
Cash settlements on commodity derivatives (37,521) 12,928  (57,265) 24,348 
Facilities insurance modifications, net 1,029  (2) 9,478  2,572 
Inventory impairment and other (24) 545  (5) 84 
Disputed charges and related costs 626  1,209  2,961  2,439 
Loss on extinguishment of debt     4,056   
Loss on equity method investments, net   6,426    6,426 
Total selected items before tax 104,382  (4,305) 137,975  (27,399)
         
Income tax expense on adjustments(1) (35,963) 4,369  (42,527) 13,622 
Adjusted net loss $(34,854) $(8,403) $(58,051) $(51,085)
         
Net loss per diluted share $(0.26) $(0.02) $(0.39) $(0.10)
         
Derivatives, net 0.35  (0.06) 0.45  (0.16)
Cash settlements on commodity derivatives (0.09) 0.03  (0.14) 0.06 
Facilities insurance modifications, net     0.02   
Inventory impairment and other        
Disputed charges and related costs       0.01 
Loss on extinguishment of debt     0.01   
Loss on equity method investments, net   0.02    0.02 
Total selected items before tax 0.26  (0.01) 0.34  (0.07)
         
Income tax expense on adjustments(1) (0.09) 0.01  (0.10) 0.04 
Adjusted net loss per diluted share $(0.09) $(0.02) $(0.15) $(0.13)
         
Weighted average number of diluted shares 396,826  387,952  396,218  387,634 
             
(1) Income tax expense is calculated at the statutory rate in which such item(s) reside. Statutory rate for Ghana is 35%.
   
 

Operational Summary(1)

(In thousands, except barrel and per barrel data, unaudited)
     
  Three Months Ended Six Months Ended
  June 30, June 30,
  2018 2017 2018 2017
Net Oil Volume Sold (MMBbls)        
Jubilee 1.900  1.919  2.897  3.895
TEN 0.995  0.996  1.932  0.996
Ceiba / Okume 0.950  N/A 2.830  N/A
Total 3.845  2.915  7.659  4.891
         
Oil revenue        
Ghana $215,191  $136,363  $342,387  $239,795
Ceiba / Okume 69,198  N/A 192,375  N/A
Total 284,389  136,363  534,762  239,795
Cash settlements on commodity derivatives (37,521) 12,928  (57,265) 24,348
Realized oil revenue $246,868  $149,291  $477,497  $264,143
         
Oil production costs        
Ghana $49,815  $21,604  $96,583  $41,490
Ceiba / Okume 11,666  N/A 37,516  N/A
Total $61,481  $21,604  $134,099  $41,490
         
Per Barrel:        
         
Oil revenue        
Ghana $74.32  $46.78  $70.90  $49.03
Ceiba / Okume 72.84  N/A 67.98  N/A
Total 73.96  46.78  69.82  49.03
Cash settlements on commodity derivatives(2) (12.96) 4.43  (11.86) 4.98
Realized oil revenue(3) 64.20  51.21  62.34  54.01
         
Oil production costs        
Ghana $17.21  $7.41  $20.01  $8.48
Ceiba / Okume 12.28  N/A 13.26  N/A
Total 15.99  7.41  $17.51  $8.48
              
(1) For the three and six months June 30, 2018, we have presented separately our 50% share of the results from operations for the Equatorial Guinea investment, as we account for such investment under the equity method.
(2) Cash settlements on commodity derivatives are only related to Ghana and are calculated on a per barrel basis using only Ghana Net Oil Volumes Sold.
(3) Realized oil revenue includes revenue from Ghana, Ceiba / Okume, and Cash settlements on commodity derivatives, and on a per barrel basis is calculated using the total Net Oil Volume Sold from both Ghana and Ceiba / Okume
   

Ghana was underlifted by approximately 227 thousand barrels as of June 30, 2018.

 
Hedging Summary

As of June 30, 2018(1)

(Unaudited)
           
  Volume Floor(2) 

Short
Put

 Ceiling 

Long
Call

  (MMBbls)        
2018 :          
Three-way collars 1.466 $56.57  $41.57  $65.91  $
Four-way collars 1.503 $50.00  $40.00  $61.33  $70.00
Swaps with puts 3.000 $56.75  $43.33  $  $
           
2019 :          
Three-way collars 10.500 $53.33  $43.81  $73.10  $
                  
(1) Please see the Company's filed 10-Q for full disclosure on hedging material. Includes hedging position as of June 30, 2018 and hedges added since quarter-end.
(2) “Floor” represents floor price for collars or swaps and strike price for purchased puts.
   

Note: Excludes 1.0 MMBbls of sold (short) calls with a strike price of $65.00/Bbl in 2018, 1.0 MMBbls of purchased (long) calls with a strike price of $70.00/Bbl in 2018, 0.9 MMBbls of sold (short) calls with a strike price of $80.00/Bbl in 2019 and 7.5 MMBbls of sold (short) calls with a strike price of $80.00/Bbl in 2020.

 

2018 Guidance

 
  FY     FY
  2018     2018
         
Kosmos     

Equatorial Guinea - Equity Method
Investment(1)

Cargos        
Jubilee  7    Gross Production (Bopd) 43,000
TEN  4       
Ghana  11    Cargos(2) 10
         
Avg. Cargo Size (MBbls) ~975   Avg. Cargo Size (MBbls) ~1,000
         
Opex ($/bbl) $14.00 - $17.00    Opex ($/bbl) $13.00 - $15.00
         
DD&A ($/bbl) $24.00 - $26.00    DD&A ($/bbl) $24.00 - $26.00
         
G&A ($MM) $100    Taxes ($/bbl) $11.00 - $13.00
% Cash  65%   % Cash 60%
         
Exploration Expense 

Average of $30mm
per quarter

   Capex ($MM) $5
(Non Dry Hole)        
         
Taxes ($/bbl) $3.00 - $4.00       
% Current  100%      
         
Capex ($MM) $300       
Ghana $110       
Exploration        
Suriname Drilling $50       
Seismic $80       
New Ventures $50       
Corporate $10       
         
(1) Represents 100% interest in our equity method investment Kosmos Trident International Petroleum Inc. ("KTIPI"). Kosmos owns a 50% interest in KTIPI which holds an 85% participating interest in the Ceiba Field and Okume Complex through its wholly-owned subsidiary, Kosmos-Trident Equatorial Guinea Inc. ("KTEGI"), representing a 40.375% net indirect interest to Kosmos.
(2) Entitlement share of production net to KTIPI in which Kosmos holds a 50% interest.
   

 



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