Kosmos Energy Announces Third Quarter 2022 Results
THIRD QUARTER 2022 HIGHLIGHTS
- Net Production(2): ~60,900 barrels of oil equivalent per day (boepd), up ~20% over 3Q 2021, with sales of ~50,900 boepd resulting in an underlift position at the end of the quarter
-
Revenues:
$456 million , or$97.34 per boe (excluding the impact of derivative cash settlements) -
Production expense:
$62 million , or$13.31 per boe -
Capital expenditures:
$203 million -
Generated free cash flow(1) of approximately
$32 million (~$320 million for the first nine months of the year) - Continued debt repayment with net leverage falling to ~1.5x
- Phase One of the Greater Tortue Ahmeyim LNG project around 85% complete at quarter end
Commenting on the Company’s third quarter 2022 performance, Chairman and Chief Executive Officer
“Importantly, we continue to make good progress on our three core development projects -- Tortue Phase 1, Jubilee Southeast and Winterfell -- which we expect will collectively grow production approximately 50% by 2024. We are also advancing several other gas opportunities in
“Demand for energy is growing, particularly in
FINANCIAL UPDATE
Net capital expenditure for the third quarter of 2022 was approximately
Kosmos exited the third quarter of 2022 with
OPERATIONAL UPDATE
Production
Total net production(2) in the third quarter of 2022 averaged approximately 60,900 boepd, in line with guidance. The Company exited the quarter in a net underlift position, which we expect to reverse in the fourth quarter.
Production in
At Jubilee, production averaged approximately 88,900 bopd gross during the quarter. At TEN, production averaged approximately 22,200 bopd gross for the third quarter.
At the beginning of the third quarter, the handover of the Jubilee FPSO operations and maintenance from MODEC took place. Since the transition, operating performance has continued to be strong with no reportable safety incidents and facility uptime of over 98%. In addition, several potential future cost savings have been identified, primarily through direct contracting, optimizing work scope and competitive re-tendering.
The Jubilee Southeast development continues to progress and is now over 50% complete. Drilling of the first well has commenced ahead of schedule with all three wells expected to be drilled by early 2023. Completion of the wells is planned for the first half of 2023, with initial production expected around mid-2023. The partnership expects the new wells to increase gross production in the field to approximately 100,000 bopd.
At TEN, an Enyenra producer well (EN-21) was drilled and came online around the end of the quarter and has now been choked back, awaiting pressure support from the nearby water injection well.
Post quarter-end, the partnership drilled the second of the two riser base wells (NT-11) to define the extent of the Ntomme reservoir supporting further development of the TEN fields. The well encountered approximately 5 meters of net oil pay with poorer than expected reservoir quality. The partnership will continue to evaluate the full results of the two wells to high-grade and optimize the future drilling plans for TEN, with a focus on proven accumulations and areas with existing well control.
Production in the
The scheduled drydock of the Helix Producer-1 vessel resulted in around 45 days of downtime for the Tornado field in the third quarter as expected. Production from the Tornado field was also impacted late in the third quarter and early in the fourth quarter by loop currents in the
The planned
The Kodiak sidetrack well was drilled during the second quarter and successfully brought online in early September. Well results and initial production were in line with expectations, however well productivity declined through the end of the third quarter and workover plans are being developed.
Following the planned and unplanned downtime, production in the
At the end of the second quarter, Kosmos, as the operator of the Odd Job field, executed a contract to fabricate and install a multi-phase subsea pump, which is planned to enhance recovery and boost production in the Odd Job field from mid-2024. Work began on the project early in the third quarter, which is an important step in sustaining the long-term performance of the field.
During the third quarter of 2022, Kosmos completed the acquisition of an additional 3.2% interest in the Winterfell area in Green
The Winterfell partners signed the field development plan in September and the operator has signed a rig commitment letter to drill and complete three wells starting mid-2023. The host facility production handling agreement and midstream export agreement are also expected to be completed within the next several months, supporting first oil targeted at the end of the first quarter in 2024.
Production in
In late-August, the partnership entered into a rig contract for the next drilling campaign, which is expected to begin in the second half of 2023, targeting 2-3 infill wells in Block G and an infrastructure led exploration (ILX) well.
At the beginning of the fourth quarter, the second 2022 electrical submersible pump ("ESP") installation began, which is expected to support current production levels through year-end into 2023.
In October, Panoro Energy ASA ("Panoro") agreed to farm-in to the Kosmos-operated Block S offshore
Phase 1 of the Greater Tortue Ahmeyim liquified natural gas (LNG) project continues to make good progress and was around 85% complete at quarter-end with the following updates across the key workstreams:
-
Hub Terminal : Largely complete with the living quarters platform installed and commissioning activities commenced - Drilling: Successfully drilled all four wells with expected production capacity estimated at ~700 million standard cubic feet of gas per day, significantly more than the ~400 million standard cubic feet per day needed for Phase 1 liquefaction volumes. One well was recently successfully completed and has flowed back to the rig for a short clean-up period.
- FLNG: On track for sailaway in first half of 2023 as construction and mechanical completion activities continue and commissioning work has begun
-
Subsea : Shallow water gas export pipeline from the FPSO to the hub terminal has been installed. The deepwater pipelay vessel is in the region conducting final testing prior to mobilization which is expected in the coming weeks to lay the deepwater pipeline and in-field flowlines -
FPSO: In
September 2022 , Typhoon Muifa passed through the COSCO shipyard in Qidong inChina causing the mooring lines of the vessel to become compromised. As a result, the vessel drifted approximately 200 meters off the quayside. The FPSO has been returned to the quayside and inspections conducted to date have not identified any significant damage. The forward plan is to complete all inspections and incorporate any findings into mechanical completion activities along with commissioning work prior to sailaway, which is expected around the end of the year
The operator is working hard and making good progress to overcome the challenges from Covid, supply chain constraints and more recently Typhoon Muifa. We expect first gas around nine months from the FPSO sailaway and continue to target first LNG around year-end 2023.
To optimize the commercial value of sales for the gas production from the first phase of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our Phase 1 LNG sales agreement to potentially sell cargos in order to benefit from the robust forward gas price outlook. We are seeing significant interest in the opportunity and will provide further updates as the discussions mature.
The plans to develop Phase 2 of the Greater Tortue Ahmeyim LNG project continue to progress. Kosmos is in advanced discussions with partners, BP, Petrosen, SMH and the two governments on the right concept. In light of the rapidly evolving global LNG markets, the governments are rightly considering the importance of their gas resource and the opportunity to build new government-to-government relationships. The partnership's aim in the coming months is to agree the right low cost solution, which leverages the infrastructure from Phase 1 and allows the partnership to access attractive gas marketing opportunities.
In mid-October, Kosmos and BP (operator) signed a new Production Sharing Contract (“PSC”) with the
At Yakaar-Teranga, the partnership continues to advance 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 third 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 |
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(In thousands, except per share amounts, unaudited) |
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Three Months Ended |
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Nine Months Ended |
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||||||||||||
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|
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2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
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Revenues and other income: |
|
|
|
|
|
|
|
|
||||||||
|
Oil and gas revenue |
|
$ |
456,056 |
|
|
$ |
198,936 |
|
|
$ |
1,735,439 |
|
|
$ |
759,455 |
|
|
Gain on sale of assets |
|
|
— |
|
|
|
1,538 |
|
|
|
471 |
|
|
|
1,564 |
|
|
Other income, net |
|
|
48 |
|
|
|
66 |
|
|
|
143 |
|
|
|
210 |
|
|
Total revenues and other income |
|
|
456,104 |
|
|
|
200,540 |
|
|
|
1,736,053 |
|
|
|
761,229 |
|
|
|
|
|
|
|
|
|
|
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Costs and expenses: |
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|
|
|
|
|
|
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Oil and gas production |
|
|
62,372 |
|
|
|
50,316 |
|
|
|
277,264 |
|
|
|
211,871 |
|
|
Facilities insurance modifications, net |
|
|
494 |
|
|
|
1,554 |
|
|
|
7,246 |
|
|
|
3,495 |
|
|
Exploration expenses |
|
|
17,215 |
|
|
|
23,982 |
|
|
|
118,656 |
|
|
|
41,452 |
|
|
General and administrative |
|
|
24,007 |
|
|
|
22,459 |
|
|
|
74,424 |
|
|
|
66,628 |
|
|
Depletion, depreciation and amortization |
|
|
106,313 |
|
|
|
64,914 |
|
|
|
386,961 |
|
|
|
292,616 |
|
|
Interest and other financing costs, net |
|
|
29,796 |
|
|
|
26,873 |
|
|
|
92,317 |
|
|
|
90,727 |
|
|
Derivatives, net |
|
|
(113,842 |
) |
|
|
38,224 |
|
|
|
243,534 |
|
|
|
252,606 |
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Other expenses, net |
|
|
(218 |
) |
|
|
194 |
|
|
|
(1,320 |
) |
|
|
1,003 |
|
|
Total costs and expenses |
|
|
126,137 |
|
|
|
228,516 |
|
|
|
1,199,082 |
|
|
|
960,398 |
|
|
|
|
|
|
|
|
|
|
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||||||||
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Income (loss) before income taxes |
|
|
329,967 |
|
|
|
(27,976 |
) |
|
|
536,971 |
|
|
|
(199,169 |
) |
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Income tax expense (benefit) |
|
|
107,713 |
|
|
|
621 |
|
|
|
196,144 |
|
|
|
(22,617 |
) |
|
Net income (loss) |
|
$ |
222,254 |
|
|
$ |
(28,597 |
) |
|
$ |
340,827 |
|
|
$ |
(176,552 |
) |
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|
|
|
|
|
|
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Net income (loss) per share: |
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|
|
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Basic |
|
$ |
0.49 |
|
|
$ |
(0.07 |
) |
|
$ |
0.75 |
|
|
$ |
(0.43 |
) |
|
Diluted |
|
$ |
0.47 |
|
|
$ |
(0.07 |
) |
|
$ |
0.72 |
|
|
$ |
(0.43 |
) |
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|
|
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Weighted average number of shares used to compute net income (loss) per share: |
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Basic |
|
|
455,840 |
|
|
|
408,520 |
|
|
|
455,158 |
|
|
|
408,009 |
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Diluted |
|
|
476,431 |
|
|
|
408,520 |
|
|
|
474,820 |
|
|
|
408,009 |
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Condensed Consolidated Balance Sheets |
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(In thousands, unaudited) |
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2022 |
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2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
|
$ |
231,565 |
|
$ |
131,620 |
|
Receivables, net |
|
|
130,632 |
|
|
177,526 |
|
Other current assets |
|
|
185,592 |
|
|
232,806 |
|
Total current assets |
|
|
547,789 |
|
|
541,952 |
|
|
|
|
|
|
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Property and equipment, net |
|
|
4,138,667 |
|
|
4,183,987 |
|
Other non-current assets |
|
|
234,956 |
|
|
214,712 |
|
Total assets |
|
$ |
4,921,412 |
|
$ |
4,940,651 |
|
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|
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
|
$ |
272,767 |
|
$ |
184,403 |
|
Accrued liabilities |
|
|
252,196 |
|
|
250,670 |
|
Current maturities of long-term debt |
|
|
30,000 |
|
|
30,000 |
|
Other current liabilities |
|
|
37,477 |
|
|
65,879 |
|
Total current liabilities |
|
|
592,440 |
|
|
530,952 |
|
|
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Long-term liabilities: |
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|
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Long-term debt, net |
|
|
2,275,769 |
|
|
2,590,495 |
|
Deferred tax liabilities |
|
|
629,755 |
|
|
711,038 |
|
Other non-current liabilities |
|
|
529,957 |
|
|
578,929 |
|
Total long-term liabilities |
|
|
3,435,481 |
|
|
3,880,462 |
|
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|
|
|
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|
Total stockholders’ equity |
|
|
893,491 |
|
|
529,237 |
|
Total liabilities and stockholders’ equity |
|
$ |
4,921,412 |
|
$ |
4,940,651 |
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Condensed Consolidated Statements of Cash Flow |
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(In thousands, unaudited) |
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Three Months Ended |
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Nine Months Ended |
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|
2022 |
|
2021 |
|
2022 |
|
2021 |
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Operating activities: |
|
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|
|
|
|
|
|
||||||||
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Net income (loss) |
|
$ |
222,254 |
|
|
$ |
(28,597 |
) |
|
$ |
340,827 |
|
|
$ |
(176,552 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
||||||||
|
Depletion, depreciation and amortization (including deferred financing costs) |
|
|
108,890 |
|
|
|
67,511 |
|
|
|
394,799 |
|
|
|
300,404 |
|
|
Deferred income taxes |
|
|
45,987 |
|
|
|
1,119 |
|
|
|
(37,445 |
) |
|
|
(68,366 |
) |
|
Unsuccessful well costs and leasehold impairments |
|
|
9,424 |
|
|
|
11,907 |
|
|
|
83,086 |
|
|
|
16,772 |
|
|
Change in fair value of derivatives |
|
|
(110,262 |
) |
|
|
36,130 |
|
|
|
257,112 |
|
|
|
259,289 |
|
|
Cash settlements on derivatives, net(1) |
|
|
(80,710 |
) |
|
|
(53,640 |
) |
|
|
(304,328 |
) |
|
|
(150,255 |
) |
|
Equity-based compensation |
|
|
8,767 |
|
|
|
8,122 |
|
|
|
25,896 |
|
|
|
24,011 |
|
|
Gain on sale of assets |
|
|
— |
|
|
|
(1,538 |
) |
|
|
(471 |
) |
|
|
(1,564 |
) |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
192 |
|
|
|
15,223 |
|
|
Other |
|
|
(2,198 |
) |
|
|
(2,097 |
) |
|
|
(5,940 |
) |
|
|
(2,763 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
||||||||
|
Net changes in working capital |
|
|
52,898 |
|
|
|
(137,331 |
) |
|
|
109,508 |
|
|
|
(72,358 |
) |
|
Net cash provided by (used in) operating activities |
|
|
255,050 |
|
|
|
(98,414 |
) |
|
|
863,236 |
|
|
|
143,841 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
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Investing activities |
|
|
|
|
|
|
|
|
||||||||
|
Oil and gas assets |
|
|
(222,562 |
) |
|
|
(87,311 |
) |
|
|
(543,349 |
) |
|
|
(377,850 |
) |
|
Acquisition of oil and gas properties |
|
|
— |
|
|
|
— |
|
|
|
(21,205 |
) |
|
|
— |
|
|
Proceeds on sale of assets |
|
|
10 |
|
|
|
3,395 |
|
|
|
118,703 |
|
|
|
5,327 |
|
|
Notes receivable from partners |
|
|
(16,760 |
) |
|
|
(5,531 |
) |
|
|
(28,188 |
) |
|
|
(41,712 |
) |
|
Net cash used in investing activities |
|
|
(239,312 |
) |
|
|
(89,447 |
) |
|
|
(474,039 |
) |
|
|
(414,235 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
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Financing activities: |
|
|
|
|
|
|
|
|
||||||||
|
Borrowings under long-term debt |
|
|
— |
|
|
|
150,000 |
|
|
|
— |
|
|
|
250,000 |
|
|
Payments on long-term debt |
|
|
(7,500 |
) |
|
|
— |
|
|
|
(322,500 |
) |
|
|
(400,000 |
) |
|
Net proceeds from issuance of senior notes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
444,375 |
|
|
Tax withholdings on restricted stock units |
|
|
— |
|
|
|
(63 |
) |
|
|
(2,753 |
) |
|
|
(1,100 |
) |
|
Dividends |
|
|
— |
|
|
|
(68 |
) |
|
|
(655 |
) |
|
|
(512 |
) |
|
Deferred financing costs |
|
|
— |
|
|
|
(229 |
) |
|
|
(6,288 |
) |
|
|
(17,291 |
) |
|
Net cash provided by (used in) financing activities |
|
|
(7,500 |
) |
|
|
149,640 |
|
|
|
(332,196 |
) |
|
|
275,472 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
8,238 |
|
|
|
(38,221 |
) |
|
|
57,001 |
|
|
|
5,078 |
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
223,659 |
|
|
|
193,063 |
|
|
|
174,896 |
|
|
|
149,764 |
|
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
231,897 |
|
|
$ |
154,842 |
|
|
$ |
231,897 |
|
|
$ |
154,842 |
|
| ____________________________________ | |
| (1) |
Cash settlements on commodity hedges were |
|
|
|||||||||||||||||||
|
EBITDAX |
|||||||||||||||||||
|
(In thousands, unaudited) |
|||||||||||||||||||
|
|
|||||||||||||||||||
|
|
Three Months Ended |
|
Nine months ended |
|
Twelve Months
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income (loss) |
$ |
222,254 |
|
|
$ |
(28,597 |
) |
|
$ |
340,827 |
|
|
$ |
(176,552 |
) |
|
$ |
439,543 |
|
|
Exploration expenses |
|
17,215 |
|
|
|
23,982 |
|
|
|
118,656 |
|
|
|
41,452 |
|
|
|
142,586 |
|
|
Facilities insurance modifications, net |
|
494 |
|
|
|
1,554 |
|
|
|
7,246 |
|
|
|
3,495 |
|
|
|
2,165 |
|
|
Depletion, depreciation and amortization |
|
106,313 |
|
|
|
64,914 |
|
|
|
386,961 |
|
|
|
292,616 |
|
|
|
561,566 |
|
|
Equity-based compensation |
|
8,767 |
|
|
|
8,122 |
|
|
|
25,896 |
|
|
|
24,011 |
|
|
|
33,536 |
|
|
Derivatives, net |
|
(113,842 |
) |
|
|
38,224 |
|
|
|
243,534 |
|
|
|
252,606 |
|
|
|
261,113 |
|
|
Cash settlements on commodity derivatives |
|
(77,001 |
) |
|
|
(55,446 |
) |
|
|
(289,897 |
) |
|
|
(142,892 |
) |
|
|
(371,426 |
) |
|
Restructuring and other |
|
(821 |
) |
|
|
(407 |
) |
|
|
(540 |
) |
|
|
1,012 |
|
|
|
2,271 |
|
|
Other, net |
|
603 |
|
|
|
601 |
|
|
|
(780 |
) |
|
|
(9 |
) |
|
|
5,517 |
|
|
Gain on sale of assets |
|
— |
|
|
|
(1,538 |
) |
|
|
(471 |
) |
|
|
(1,564 |
) |
|
|
(471 |
) |
|
Interest and other financing costs, net |
|
29,796 |
|
|
|
26,873 |
|
|
|
92,317 |
|
|
|
90,727 |
|
|
|
129,961 |
|
|
Income tax expense (benefit) |
|
107,713 |
|
|
|
621 |
|
|
|
196,144 |
|
|
|
(22,617 |
) |
|
|
253,217 |
|
|
EBITDAX |
$ |
301,491 |
|
|
$ |
78,903 |
|
|
$ |
1,119,893 |
|
|
$ |
362,285 |
|
|
$ |
1,459,578 |
|
|
Sold |
|
— |
|
|
|
|
|
(15,723 |
) |
|
|
|
|
(29,734 |
) |
||||
|
Pro Forma EBITDAX |
$ |
301,491 |
|
|
|
|
$ |
1,104,170 |
|
|
|
|
$ |
1,429,844 |
|
||||
| ______________________________________ | |
| (1) |
Adjustment to present Pro Forma EBITDAX for the impact of the revenues less direct operating expenses from the sold |
|
|
|||||||||||||||
|
Adjusted Net Income (Loss) |
|||||||||||||||
|
(In thousands, except per share amounts, unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
Net income (loss) |
$ |
222,254 |
|
|
$ |
(28,597 |
) |
|
$ |
340,827 |
|
|
$ |
(176,552 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Derivatives, net |
|
(113,842 |
) |
|
|
38,224 |
|
|
|
243,534 |
|
|
|
252,606 |
|
|
Cash settlements on commodity derivatives |
|
(77,001 |
) |
|
|
(55,446 |
) |
|
|
(289,897 |
) |
|
|
(142,892 |
) |
|
Gain on sale of assets |
|
— |
|
|
|
(1,538 |
) |
|
|
(471 |
) |
|
|
(1,564 |
) |
|
Facilities insurance modifications, net |
|
494 |
|
|
|
1,554 |
|
|
|
7,246 |
|
|
|
3,495 |
|
|
Restructuring and other |
|
(821 |
) |
|
|
(407 |
) |
|
|
(540 |
) |
|
|
1,012 |
|
|
Other, net |
|
731 |
|
|
|
579 |
|
|
|
(622 |
) |
|
|
(208 |
) |
|
Impairment of suspended well costs |
|
(355 |
) |
|
|
— |
|
|
|
63,894 |
|
|
|
— |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
192 |
|
|
|
15,223 |
|
|
Total selected items before tax |
|
(190,794 |
) |
|
|
(17,034 |
) |
|
|
23,336 |
|
|
|
127,672 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income tax (expense) benefit on adjustments(1) |
|
59,739 |
|
|
|
2,677 |
|
|
|
12,923 |
|
|
|
(37,545 |
) |
|
Impact of valuation adjustments and |
|
(1,354 |
) |
|
|
— |
|
|
|
(12,745 |
) |
|
|
— |
|
|
Adjusted net income (loss) |
$ |
89,845 |
|
|
|
(42,954 |
) |
|
|
364,341 |
|
|
|
(86,425 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss) per diluted share |
$ |
0.47 |
|
|
$ |
(0.07 |
) |
|
$ |
0.72 |
|
|
$ |
(0.43 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Derivatives, net |
|
(0.24 |
) |
|
|
0.09 |
|
|
|
0.51 |
|
|
|
0.62 |
|
|
Cash settlements on commodity derivatives |
|
(0.16 |
) |
|
|
(0.14 |
) |
|
|
(0.61 |
) |
|
|
(0.35 |
) |
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Facilities insurance modifications, net |
|
— |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
Other, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Impairment of suspended well costs |
|
— |
|
|
|
— |
|
|
|
0.13 |
|
|
|
— |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
|
Total selected items before tax |
|
(0.40 |
) |
|
|
(0.05 |
) |
|
|
0.05 |
|
|
|
0.31 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income tax (expense) benefit on adjustments(1) |
|
0.12 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
(0.09 |
) |
|
Impact of valuation adjustments and |
|
— |
|
|
|
— |
|
|
|
(0.03 |
) |
|
|
— |
|
|
Adjusted net income (loss) per diluted share |
$ |
0.19 |
|
|
$ |
(0.11 |
) |
|
$ |
0.77 |
|
|
$ |
(0.21 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average number of diluted shares |
|
476,431 |
|
|
|
408,520 |
|
|
|
474,820 |
|
|
|
408,009 |
|
| ____________________________________ | |
| (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 |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
Reconciliation of free cash flow: |
|
|
|
|
|
|
|
||||||||
|
Net cash provided by (used in) operating activities |
$ |
255,050 |
|
|
$ |
(98,414 |
) |
|
$ |
863,236 |
|
|
$ |
143,841 |
|
|
Net cash used for oil and gas assets - base business |
|
(123,207 |
) |
|
|
(68,732 |
) |
|
|
(277,295 |
) |
|
|
(187,392 |
) |
|
Base business free cash flow |
|
131,843 |
|
|
|
(167,146 |
) |
|
|
585,941 |
|
|
|
(43,551 |
) |
|
Net cash used for oil and gas assets - |
|
(99,355 |
) |
|
|
(18,579 |
) |
|
|
(266,054 |
) |
|
|
(190,458 |
) |
|
Free cash flow(1) |
$ |
32,488 |
|
|
$ |
(185,725 |
) |
|
$ |
319,887 |
|
|
$ |
(234,009 |
) |
| ___________________________________ | |
| (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 |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
Net Volume Sold |
|
|
|
|
|
|
|
||||||||
|
Oil (MMBbl) |
|
4.458 |
|
|
|
2.719 |
|
|
|
16.028 |
|
|
|
11.349 |
|
|
Gas (MMcf) |
|
0.859 |
|
|
|
1.078 |
|
|
|
3.115 |
|
|
|
3.624 |
|
|
NGL (MMBbl) |
|
0.084 |
|
|
|
0.111 |
|
|
|
0.330 |
|
|
|
0.365 |
|
|
Total (MMBoe) |
|
4.685 |
|
|
|
3.010 |
|
|
|
16.877 |
|
|
|
12.318 |
|
|
Total (Boepd) |
|
50.926 |
|
|
|
32.714 |
|
|
|
61.821 |
|
|
|
45.121 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenue |
|
|
|
|
|
|
|
||||||||
|
Oil sales |
$ |
444,491 |
|
|
$ |
190,599 |
|
|
$ |
1,699,167 |
|
|
$ |
737,381 |
|
|
Gas sales |
|
8,595 |
|
|
|
4,508 |
|
|
|
23,802 |
|
|
|
12,727 |
|
|
NGL sales |
|
2,970 |
|
|
|
3,829 |
|
|
|
12,470 |
|
|
|
9,347 |
|
|
Total oil and gas revenue |
|
456,056 |
|
|
|
198,936 |
|
|
|
1,735,439 |
|
|
|
759,455 |
|
|
Cash settlements on commodity derivatives |
|
(77,001 |
) |
|
|
(55,446 |
) |
|
|
(289,897 |
) |
|
|
(142,892 |
) |
|
Realized revenue |
$ |
379,055 |
|
|
$ |
143,490 |
|
|
$ |
1,445,542 |
|
|
$ |
616,563 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Oil and Gas Production Costs |
$ |
62,372 |
|
|
$ |
50,316 |
|
|
$ |
277,264 |
|
|
$ |
211,871 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Sales per Bbl/Mcf/Boe |
|
|
|
|
|
|
|
||||||||
|
Average oil sales price per Bbl |
$ |
99.71 |
|
|
$ |
70.10 |
|
|
$ |
106.01 |
|
|
$ |
64.97 |
|
|
Average gas sales price per Mcf |
|
10.01 |
|
|
|
4.18 |
|
|
|
7.64 |
|
|
|
3.51 |
|
|
Average NGL sales price per Bbl |
|
35.36 |
|
|
|
34.50 |
|
|
|
37.79 |
|
|
|
25.61 |
|
|
Average total sales price per Boe |
|
97.34 |
|
|
|
66.10 |
|
|
|
102.83 |
|
|
|
61.65 |
|
|
Cash settlements on commodity derivatives per oil Bbl(1) |
|
(17.27 |
) |
|
|
(20.39 |
) |
|
|
(18.09 |
) |
|
|
(12.59 |
) |
|
Realized revenue per Boe |
|
80.90 |
|
|
|
47.68 |
|
|
|
85.65 |
|
|
|
50.05 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Oil and gas production costs per Boe |
$ |
13.31 |
|
|
$ |
16.72 |
|
|
$ |
16.43 |
|
|
$ |
17.20 |
|
| ___________________________________ | |
| (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 underlifted by approximately 828.0 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 |
|
1,125 |
|
$ |
56.67 |
|
$ |
43.33 |
|
$ |
76.91 |
|
Three-way collars |
|
NYMEX WTI |
|
250 |
|
|
65.00 |
|
|
50.00 |
|
|
85.00 |
|
Two-way collars |
|
Dated Brent |
|
1,500 |
|
|
62.50 |
|
|
— |
|
|
83.33 |
|
2023: |
|
|
|
|
|
|
|
|
|
|
|||
|
Three-way collars |
|
Dated Brent |
|
5,000 |
|
|
71.00 |
|
|
49.00 |
|
|
107.10 |
|
Two-way collars |
|
Dated Brent |
|
4,000 |
|
|
72.50 |
|
|
— |
|
|
117.50 |
| ____________________________________ | |
| (1) |
Please see the Company’s filed 10-K for full disclosure on hedging material. Includes hedging position as of |
| (2) |
“Floor” represents floor price for collars and strike price for purchased puts. |
|
|
|
| Note: Excludes 0.4 MMBbls of sold (short) calls with a strike price of |
|
|
2022 Guidance |
||
|
|
4Q2022 |
FY 2022 Guidance |
|
|
|
|
|
Production(1,2) |
58,000 - 62,000 boe per day |
63,000 - 65,000 boe per day |
|
|
|
|
|
Opex |
|
|
|
|
|
|
|
DD&A |
|
|
|
|
|
|
|
G&A(~65% cash) |
|
|
|
|
|
|
|
Exploration Expense(3) |
|
|
|
|
|
|
|
Net Interest |
~40 million / quarter |
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
|
Capital Expenditure(4) |
|
|
| _______________________________________ | |
| Note: |
|
| (1) |
4Q 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/20221106005071/en/
Investor Relations
+44 (0) 203 954 2831
jbuckland@kosmosenergy.com
Media Relations
+1-214-445-9674
tgolembeski@kosmosenergy.com
Source: