Kosmos Energy Announces Second Quarter 2022 Results
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
"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
“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
Kosmos exited the second quarter of 2022 with
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.
Production in
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
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
Production in the
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
At the end of the second quarter, Kosmos, as the operator of the Odd Job field, executed a contract with
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.
Production in
In the second quarter, Kosmos and its joint venture partners completed the previously announced agreement with the
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.
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
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
At Yakaar-Teranga, the partnership continues to make progress for the first phase development concept with the Government of
(1) A Non-GAAP measure, see attached reconciliation of non-GAAP measure.
(2) Production means net entitlement volumes. In
Conference Call and Webcast Information
Kosmos will host a conference call and webcast to discuss second quarter 2022 financial and operating results today at
About
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
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’
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Consolidated Statements of Operations (In thousands, except per share amounts, unaudited) |
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Three Months Ended |
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Six Months Ended |
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|
|
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||||||||||||
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
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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 |
) |
|
|
|
|
|
|
|
|
|
|
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Net income (loss) per share: |
|
|
|
|
|
|
|
|
||||||||
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Basic |
|
$ |
0.26 |
|
|
$ |
(0.14 |
) |
|
$ |
0.26 |
|
|
$ |
(0.36 |
) |
|
Diluted |
|
$ |
0.25 |
|
|
$ |
(0.14 |
) |
|
$ |
0.25 |
|
|
$ |
(0.36 |
) |
|
|
|
|
|
|
|
|
|
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Weighted average number of shares used to compute net income (loss) per share: |
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|
|
|
|
|
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Basic |
|
|
455,512 |
|
|
|
408,131 |
|
|
|
454,811 |
|
|
|
409,828 |
|
|
Diluted |
|
|
475,645 |
|
|
|
408,131 |
|
|
|
473,471 |
|
|
|
409,828 |
|
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Condensed Consolidated Balance Sheets (In thousands, unaudited) |
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2022 |
|
2021 |
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Assets |
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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 |
|
Condensed Consolidated Statements of Cash Flow (In thousands, unaudited) |
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Three Months Ended |
|
Six Months Ended |
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|
||||||||||||
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|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
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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 |
|
EBITDAX (In thousands, unaudited) |
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|||||||||||||||
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|
Three Months Ended |
Six months ended |
Twelve Months
|
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|
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|
|
|
|
|
|||||||||||||||
|
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 & |
|
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 & |
|
Adjusted Net Income (Loss) (In thousands, except per share amounts, unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
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 |
|
(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 |
|
(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 |
|
Free Cash Flow (In thousands, unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
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 - |
|
(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 |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
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 |
|
|
Hedging Summary
As of (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 |
|
|
2022 Guidance |
||
|
|
3Q2022 |
FY 2022 Guidance |
|
|
|
|
|
Production(1,2) |
60,000 - 63,000 boe per day |
63,000 - 67,000 boe per day |
|
|
|
|
|
Opex |
|
|
|
|
|
|
|
DD&A |
|
|
|
|
|
|
|
G&A(~65% cash) |
|
|
|
|
|
|
|
Exploration Expense(3) |
|
|
|
|
|
|
|
Net Interest |
~40 million / quarter |
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
|
Capital Expenditure(4) |
|
|
| ____________________ | |
|
Note: |
|
|
(1) |
3Q 2022 cargos forecast - |
|
(2) |
|
|
(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
+44 (0) 203 954 2831
jbuckland@kosmosenergy.com
Media Relations
+1-214-445-9674
tgolembeski@kosmosenergy.com
Source: