Kosmos Energy Provides Operational and Financial Update

Kosmos Energy (NYSE: KOS) provided an operational and financial update in advance of releasing its fourth quarter 2015 results.

    Ghana

Gross production volumes from the Jubilee field averaged approximately 106,000 barrels of oil per day (bopd) during the fourth quarter, and 102,500 bopd for the full year 2015. There were three liftings net to Kosmos during the fourth quarter, resulting in sales of 2.8 million barrels. Gas exports continued to increase during the fourth quarter averaging approximately 92 million cubic feet per day and exiting the quarter at more than 110 million cubic feet per day.
The Greater Jubilee Full Field Development Plan, which includes the Mahogany and Teak fields, was submitted to the Government of Ghana in December 2015 and approval is expected in the first half of 2016. The Tweneboa, Enyenra and Ntomme (TEN) project, our second major oil development in Ghana, remains on-budget and on-track to deliver first oil in the third quarter of 2016. The project is now over 80 percent complete. The TEN FPSO sailed from Singapore on January 23 and is expected to be on location in Ghana in March 2016.

    Year-End 2015 Reserves

The Company’s proved net reserves at the end of 2015 were 76.4 million barrels of oil equivalent, resulting in a 110% reserve replacement ratio on a net proved basis. Reserves increased primarily due to continued positive reservoir performance, more than offsetting the impact of lower oil prices. The Company’s reported reserves are prepared by Ryder Scott Company, L.P., an independent reserve engineering firm.

    Liquidity and 2015 Capital Program

Kosmos exited the fourth quarter of 2015 with $1.8 billion of liquidity and $614 million of net debt. This is compared to $1.9 billion of liquidity and $517 million of net debt as of September 30, 2015. Total capital expenditures in the fourth quarter were approximately $265 million. For the full year ended December 31, 2015, total capital expenditures were approximately $780 million, below previous guidance of $800 million.

    Hedging

As of the year-ended 2015, Kosmos’ commodity derivative asset position had a mark-to-market value of approximately $235 million. The fourth quarter results are expected to include a mark-to-market gain of approximately $80 million related to the Company’s oil derivative contracts. The Company’s hedging position as of December 31, 2015 was 10.9 million barrels through 2018.

“With another year of greater than 100% reserve replacement, our Ghana asset continues to demonstrate its world class quality. Our focus for 2016 is to maintain our financial strength through the continued strong operating performance from Ghana together with the disciplined allocation of capital,”

said Andrew G. Inglis, chairman and chief executive officer.
Source: Kosmos
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