Kosmos Power Publicizes Third Quarter 2022 Outcomes

DALLAS–(BUSINESS WIRE)–Kosmos Power Ltd. (“Kosmos” or the “Firm”) (NYSE/LSE: KOS) introduced in the present day its monetary and working outcomes for the third quarter of 2022. For the quarter, the Firm generated a internet revenue of $222 million, or $0.47 per diluted share. When adjusted for sure gadgets that affect the comparability of outcomes, the Firm generated an adjusted internet revenue⁽¹⁾ of $90 million, or $0.19 per diluted share for the third quarter of 2022.

THIRD QUARTER 2022 HIGHLIGHTS

• Internet Manufacturing⁽²⁾: ~60,900 barrels of oil equal per day (boepd), up ~20% over 3Q 2021, with gross sales of ~50,900 boepd leading to an underlift place on the finish of the quarter
• Revenues: $456 million, or $97.34 per boe (excluding the affect of by-product money settlements)
• Manufacturing expense: $62 million, or $13.31 per boe
• Capital expenditures: $203 million
• Generated free money stream⁽¹⁾ of roughly $32 million (~$320 million for the primary 9 months of the yr)
• Continued debt reimbursement with internet leverage falling to ~1.5x
• Part One of many Higher Tortue Ahmeyim LNG undertaking round 85% full at quarter finish

Commenting on the Firm’s third quarter 2022 efficiency, Chairman and Chief Government Officer Andrew G. Inglis stated: “Kosmos posted one other quarter of strong strategic and operational supply, with the corporate reaching its year-end leverage goal forward of schedule.

“Importantly, we proceed to make good progress on our three core growth tasks — Tortue Part 1, Jubilee Southeast and Winterfell — which we anticipate will collectively develop manufacturing roughly 50% by 2024. We’re additionally advancing a number of different gasoline alternatives in West Africa, which we imagine will drive development past 2024 and proceed to extend the gasoline weighting of the portfolio.

“Demand for power is rising, notably in Africa, and Kosmos has the appropriate technique on the proper time to assist meet this rising demand whereas creating worth for all of our stakeholders. Given the standard of our asset base and the wealth of alternatives inside our differentiated portfolio, we imagine Kosmos has an necessary function to play in delivering inexpensive, safe and cleaner power to the world.”

FINANCIAL UPDATE

Internet capital expenditure for the third quarter of 2022 was roughly $203 million. Full yr capital expenditure steerage for 2022 stays round $700 million, excluding acquisitions and divestitures.

Kosmos exited the third quarter of 2022 with $2.1 billion of internet debt⁽¹⁾ and accessible liquidity of roughly $1.0 billion. The Firm generated $32 million of free money stream within the third quarter, and round $320 million by the primary 9 months of the yr. With EBITDAX⁽¹⁾ for the quarter virtually 4 instances greater than the identical quarter final yr and continued internet debt discount by 2022, the Firm achieved its goal internet leverage ratio of 1.5x forward of schedule with additional progress anticipated within the subsequent quarter at present costs.

OPERATIONAL UPDATE

Manufacturing

Whole internet manufacturing⁽²⁾ within the third quarter of 2022 averaged roughly 60,900 boepd, consistent with steerage. The Firm exited the quarter in a internet underlift place, which we anticipate to reverse within the fourth quarter.

Ghana

Manufacturing in Ghana averaged roughly 36,900 barrels of oil per day (bopd) internet within the third quarter of 2022. Kosmos lifted three cargos from Ghana throughout the quarter, consistent with steerage.

At Jubilee, manufacturing averaged roughly 88,900 bopd gross throughout the quarter. At TEN, manufacturing averaged roughly 22,200 bopd gross for the third quarter.

Firstly of the third quarter, the handover of the Jubilee FPSO operations and upkeep from MODEC occurred. Because the transition, working efficiency has continued to be robust with no reportable security incidents and facility uptime of over 98%. As well as, a number of potential future value financial savings have been recognized, primarily by direct contracting, optimizing work scope and aggressive re-tendering.

The Jubilee Southeast growth continues to progress and is now over 50% full. Drilling of the primary properly has commenced forward of schedule with all three wells anticipated to be drilled by early 2023. Completion of the wells is deliberate for the primary half of 2023, with preliminary manufacturing anticipated round mid-2023. The partnership expects the brand new wells to extend gross manufacturing within the subject to roughly 100,000 bopd.

At TEN, an Enyenra producer properly (EN-21) was drilled and got here on-line across the finish of the quarter and has now been choked again, awaiting stress assist from the close by water injection properly.

Publish quarter-end, the partnership drilled the second of the 2 riser base wells (NT-11) to outline the extent of the Ntomme reservoir supporting additional growth of the TEN fields. The properly encountered roughly 5 meters of internet oil pay with poorer than anticipated reservoir high quality. The partnership will proceed to judge the complete outcomes of the 2 wells to high-grade and optimize the longer term drilling plans for TEN, with a deal with confirmed accumulations and areas with present properly management.

U.S. Gulf of Mexico

Manufacturing within the U.S. Gulf of Mexico averaged roughly 14,700 boepd internet (~83% oil) throughout the third quarter.

The scheduled drydock of the Helix Producer-1 vessel resulted in round 45 days of downtime for the Twister subject within the third quarter as anticipated. Manufacturing from the Twister subject was additionally impacted late within the third quarter and early within the fourth quarter by loop currents within the Gulf of Mexico.

The deliberate Delta Home turnaround occurred at the start of the third quarter and was accomplished mid-October, partially prolonged as a result of affect of Hurricane Ian. In late October, the ability noticed roughly two weeks of unplanned downtime resulting from a difficulty with the gasoline compressors. The difficulty has now been resolved with the affect factored into fourth quarter and full yr steerage.

The Kodiak sidetrack properly was drilled throughout the second quarter and efficiently introduced on-line in early September. Properly outcomes and preliminary manufacturing had been consistent with expectations, nonetheless properly productiveness declined by the top of the third quarter and workover plans are being developed.

Following the deliberate and unplanned downtime, manufacturing within the Gulf of Mexico was restored to round 18,000 boepd in early November.

On the finish of the second quarter, Kosmos, because the operator of the Odd Job subject, executed a contract to manufacture and set up a multi-phase subsea pump, which is deliberate to boost restoration and increase manufacturing within the Odd Job subject from mid-2024. Work started on the undertaking early within the third quarter, which is a vital step in sustaining the long-term efficiency of the sector.

Through the third quarter of 2022, Kosmos accomplished the acquisition of a further 3.2% curiosity within the Winterfell space in Inexperienced Canyon Blocks 943, 944, 987 and 988 and a further 1.4% curiosity in Inexperienced Canyon Blocks 899 and 900. The acquisition takes Kosmos’ general curiosity in Winterfell to 25% in complete.

The Winterfell companions signed the sector growth plan in September and the operator has signed a rig dedication letter to drill and full three wells beginning mid-2023. The host facility manufacturing dealing with settlement and midstream export settlement are additionally anticipated to be accomplished throughout the subsequent a number of months, supporting first oil focused on the finish of the primary quarter in 2024.

Equatorial Guinea

Manufacturing in Equatorial Guinea averaged roughly 29,700 bopd gross and 9,300 bopd internet within the third quarter of 2022. As forecasted, Kosmos lifted 0.5 cargo from Equatorial Guinea throughout the quarter.

In late-August, the partnership entered right into a rig contract for the subsequent drilling marketing campaign, which is predicted to start within the second half of 2023, focusing on 2-3 infill wells in Block G and an infrastructure led exploration (ILX) properly.

Firstly of the fourth quarter, the second 2022 electrical submersible pump (“ESP”) set up started, which is predicted to assist present manufacturing ranges by year-end into 2023.

In October, Panoro Power ASA (“Panoro”) agreed to farm-in to the Kosmos-operated Block S offshore Equatorial Guinea for a 12% non-operated collaborating curiosity. Panoro’s farm-in is conditional on the idea that it’s going to purchase a 6% collaborating curiosity from every of Kosmos and Trident Power, forward of drilling an ILX properly in early 2024.

Mauritania & Senegal

Part 1 of the Higher Tortue Ahmeyim liquified pure gasoline (LNG) undertaking continues to make good progress and was round 85% full at quarter-end with the next updates throughout the important thing workstreams:

• Hub Terminal: Largely full with the residing quarters platform put in and commissioning actions commenced
• Drilling: Efficiently drilled all 4 wells with anticipated manufacturing capability estimated at ~700 million commonplace cubic ft of gasoline per day, considerably greater than the ~400 million commonplace cubic ft per day wanted for Part 1 liquefaction volumes. One properly was not too long ago efficiently accomplished and has flowed again to the rig for a brief clean-up interval.
• FLNG: On monitor for sailaway in first half of 2023 as development and mechanical completion actions proceed and commissioning work has begun
• Subsea: Shallow water gasoline export pipeline from the FPSO to the hub terminal has been put in. The deepwater pipelay vessel is within the area conducting last testing previous to mobilization which is predicted within the coming weeks to put the deepwater pipeline and in-field flowlines
• FPSO: In September 2022, Storm Muifa handed by the COSCO shipyard in Qidong in China inflicting the mooring strains of the vessel to change into compromised. In consequence, the vessel drifted roughly 200 meters off the quayside. The FPSO has been returned to the quayside and inspections carried out thus far haven’t recognized any important injury. The ahead plan is to finish all inspections and incorporate any findings into mechanical completion actions together with commissioning work previous to sailaway, which is predicted across the finish of the yr

The operator is working exhausting and making good progress to beat the challenges from Covid, provide chain constraints and extra not too long ago Storm Muifa. We anticipate first gasoline round 9 months from the FPSO sailaway and proceed to focus on first LNG round year-end 2023.

To optimize the business worth of gross sales for the gasoline manufacturing from the primary part of Higher Tortue Ahmeyim, Kosmos has commenced a course of with potential patrons to make the most of present contractual rights below our Part 1 LNG gross sales settlement to doubtlessly promote cargos in an effort to profit from the strong ahead gasoline value outlook. We’re seeing important curiosity within the alternative and can present additional updates because the discussions mature.

The plans to develop Part 2 of the Higher Tortue Ahmeyim LNG undertaking proceed to progress. Kosmos is in superior discussions with companions, BP, Petrosen, SMH and the 2 governments on the appropriate idea. In gentle of the quickly evolving international LNG markets, the governments are rightly contemplating the significance of their gasoline useful resource and the chance to construct new government-to-government relationships. The partnership’s purpose within the coming months is to agree the appropriate low value answer, which leverages the infrastructure from Part 1 and permits the partnership to entry enticing gasoline advertising and marketing alternatives.

In mid-October, Kosmos and BP (operator) signed a brand new Manufacturing Sharing Contract (“PSC”) with the Authorities of Mauritania masking the BirAllah and/or Orca discoveries. The brand new PSC supplies as much as 30 months to submit a growth plan masking these discoveries with the phrases of the brand new PSC considerably much like the previous PSC for Block C8.

At Yakaar-Teranga, the partnership continues to advance the primary part growth idea with the Authorities of Senegal targeted on a home gasoline answer.

(1) A Non-GAAP measure, see connected reconciliation of non-GAAP measure.

(2) Manufacturing means internet entitlement volumes. In Ghana and Equatorial Guinea, this implies these volumes internet to Kosmos’ working curiosity or collaborating curiosity and internet of royalty or manufacturing sharing contract impact. Within the Gulf of Mexico, this implies these volumes internet to Kosmos’ working curiosity and internet of royalty.

Convention Name and Webcast Data

Kosmos will host a convention name and webcast to debate third quarter 2022 monetary and working outcomes in the present day at 10:00 a.m. Central time (11:00 a.m. Jap time). The reside webcast of the occasion might be accessed on the Buyers web page of Kosmos’ web site at http://traders.kosmosenergy.com/investor-events. The dial-in phone quantity for the decision is +1-877-407-0784. Callers in the UK ought to name 0800 756 3429. Callers exterior the US ought to dial +1-201-689-8560. A replay of the webcast can be accessible on the Buyers web page of Kosmos’ web site for about 90 days following the occasion.

About Kosmos Power

Kosmos is a full-cycle deepwater impartial oil and gasoline exploration and manufacturing firm targeted alongside the Atlantic Margins. Our key property embody manufacturing offshore Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, in addition to a world-class gasoline growth offshore Mauritania and Senegal. We additionally keep a sustainable confirmed basin exploration program in Equatorial Guinea, Ghana and the U.S. Gulf of Mexico. Kosmos is listed on the New York Inventory Trade and London Inventory Trade and is traded below the ticker image KOS. As an moral and clear firm, Kosmos is dedicated to doing issues the appropriate means. The Firm’s Enterprise Rules articulate our dedication to transparency, ethics, human rights, security and the surroundings. Learn extra about this dedication within the Kosmos Sustainability Report. For added info, go to www.kosmosenergy.com.

Non-GAAP Monetary Measures

EBITDAX, Adjusted internet revenue (loss), Adjusted internet revenue (loss) per share, free money stream, and internet debt are supplemental non-GAAP monetary measures utilized by administration and exterior customers of the Firm’s consolidated monetary statements, equivalent to trade analysts, traders, lenders and ranking companies. The Firm defines EBITDAX as Internet revenue (loss) plus (i) exploration expense, (ii) depletion, depreciation and amortization expense, (iii) fairness primarily based compensation expense, (iv) unrealized (acquire) loss on commodity derivatives (realized losses are deducted and realized good points are added again), (v) (acquire) loss on sale of oil and gasoline properties, (vi) curiosity (revenue) expense, (vii) revenue taxes, (viii) loss on extinguishment of debt, (ix) uncertain accounts expense and (x) comparable different materials gadgets which administration believes have an effect on the comparability of working outcomes. The Firm defines Adjusted internet revenue (loss) as Internet revenue (loss) adjusted for sure gadgets that affect the comparability of outcomes. The Firm defines free money stream as internet money supplied by working actions much less Oil and gasoline property, Different property, and sure different gadgets that will have an effect on the comparability of outcomes and excludes non-recurring exercise equivalent to acquisitions, divestitures and NOC financing. The Firm defines internet debt because the sum of notes excellent issued at par and borrowings on the RBL Facility, Company revolver, and GoM Time period Mortgage much less money and money equivalents and restricted money.

We imagine that EBITDAX, Adjusted internet revenue (loss), Adjusted internet revenue (loss) per share, free money stream, Internet debt and different comparable measures are helpful to traders as a result of they’re continuously utilized by securities analysts, traders and different events within the analysis of firms within the oil and gasoline sector and can present traders with a great tool for assessing the comparability between durations, amongst securities analysts, in addition to firm by firm. EBITDAX, Adjusted internet revenue (loss), Adjusted internet revenue (loss) per share, free money stream, and internet debt as introduced by us will not be akin to equally titled measures of different firms.

Ahead-Trying Statements

This press launch comprises forward-looking statements throughout the which means of Part 27A of the Securities Act of 1933 and Part 21E of the Securities Trade Act of 1934. All statements, apart from statements of historic information, included on this press launch that deal with actions, occasions or developments that Kosmos expects, believes or anticipates will or could happen sooner or later are forward-looking statements. Kosmos’ estimates and forward-looking statements are primarily primarily based on its present expectations and estimates of future occasions and tendencies, which have an effect on or could have an effect on its companies and operations. Though Kosmos believes that these estimates and forward-looking statements are primarily based upon affordable assumptions, they’re topic to a number of dangers and uncertainties and are made in gentle of knowledge at the moment accessible to Kosmos. When used on this press launch, the phrases “anticipate,” “imagine,” “intend,” “anticipate,” “plan,” “will” or different comparable phrases are supposed to determine forward-looking statements. Such statements are topic to quite a lot of assumptions, dangers and uncertainties, lots of that are past the management of Kosmos (together with, however not restricted to, the affect of the COVID-19 pandemic), which can trigger precise outcomes to vary materially from these implied or expressed by the forward-looking statements. Additional info on such assumptions, dangers and uncertainties is out there in Kosmos’ Securities and Trade Fee (“SEC”) filings. Kosmos undertakes no obligation and doesn’t intend to replace or right these forward-looking statements to replicate occasions or circumstances occurring after the date of this press launch, besides as required by relevant regulation. You’re cautioned to not place undue reliance on these forward-looking statements, which communicate solely as of the date of this press launch. All forward-looking statements are certified of their entirety by this cautionary assertion.