News Release Details

KOSMOS ENERGY ANNOUNCES FOURTH QUARTER AND

FULL YEAR 2017 RESULTS

DALLAS-February 26, 2018-- Kosmos Energy Ltd. ("Kosmos") (NYSE: KOS) announced today financial and operating results for the fourth quarter of 2017. For the fourth quarter of 2017, the Company generated a net loss of $122.1 million, or $0.31 per diluted share as compared to net loss of $56.7 million or $0.15 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 $37.9 million or $0.10 per diluted share for the fourth quarter of 2017.

"2017 was a year of strong operational and strategic delivery," said Andrew G. Inglis, chairman and chief executive officer. "We delivered more than $300 million in net cash flow which was used to diversify our production base and create another source of growth through the acquisition of assets offshore Equatorial Guinea, and reduce our net debt. In Ghana, Kosmos replaced more than 200 percent of production on a net proved basis. In exploration, we completed the second phase of drilling offshore Mauritania and Senegal, which resulted in the largest hydrocarbon discovery of the year. With growing production, the Tortue development advancing at pace with the approval of the ICA, and an exploration portfolio that provides a sustainable, multi-year drilling program, Kosmos is stronger than ever."

Fourth quarter 2017 oil revenues were $187.1 million versus $156.1 million in the same quarter of 2016, on sales of 2.9 million barrels of oil in 2017 as compared to 3.0 million barrels in 2016. Fourth quarter 2017 oil revenues exclude $2.3 million of derivative settlements. Realized oil revenues, including the impact of the Company's hedging program, were $64.63 per barrel of oil sold in the fourth quarter of 2017. At the end of the quarter, the Company was in a net underlift position of approximately 0.4 million barrels of oil.

Production expense for the fourth quarter was $46 million, or $15.75 per barrel, versus $44 million, or $14.75 per barrel, in the fourth quarter of 2016. Production expense per barrel increased in the fourth quarter of 2017 compared to the same quarter a year ago primarily because there were no LOPI claim reimbursements received in the fourth quarter of 2017.

Exploration expenses totaled $53 million for the fourth quarter, compared to $76 million in the same period of 2016 primarily the result of lower geologic and geophysical costs. While Kosmos was carried for the Hippocampe-1 and Lamantin-1 exploration wells, $19 million of expenses related to the drilling rig that are not eligible for reimbursement were expensed during the quarter. Also included in the quarter was $18 million of expense related to our withdrawal from the Boujdour Maritime licenses.

Depletion and depreciation expense for the quarter was $74 million, or $25.35 per barrel. This was a slight increase from $25.08 per barrel in the fourth quarter of 2016.

General and administrative expenses were $18 million during the fourth quarter, slightly less than the previous quarter. This amount includes approximately $8 million in cash expense and $10 million in non-cash equity based compensation expense.

Fourth quarter results included a mark-to-market loss of $96 million related to the Company's oil derivative contracts. At December 31, 2017, the Company's hedging position had a total commodity net liability value of $97 million. As of the quarter end and including recently executed hedges, Kosmos had approximately 20 million barrels of oil hedged covering 2018 and 2019.

Gain on equity method investments, net during the fourth quarter was approximately $5.0 million and relates primarily to Kosmos' 50 percent ownership of our equity method investment in Kosmos Trident International Petroleum Inc. (KTIPI), which holds our 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) loss on equity method investments, net in the consolidated statement of operations.

Total capital expenditures in the fourth quarter were $62 million. Full year capital expenditures totaled $57 million, net of the initial proceeds from the BP transaction of $222 million.

Kosmos exited the fourth quarter of 2017 with approximately $1.1 billion of liquidity and $1,020 million of net debt. In early February 2018, Kosmos refinanced its reserve based lending facility (RBL). The borrowing capacity has been increased to $1.5 billion, up from $1.3 billion, resulting in Kosmos' overall liquidity increasing to $1.3 billion.

Year-End 2017 Reserves

The Company's proved net reserves at the end of 2017 were 110 million barrels of oil equivalent (MMBoe), including 89 MMBoe of net reserves in Ghana and 21 MMBoe of reserves in Equatorial Guinea. These volumes also include natural gas reserves of approximately 10 million barrels of oil equivalent, which represent the gas anticipated to be used for power generation on the Jubilee and TEN FPSO vessels and Ceiba/Okume complex, as well as sales gas from the TEN fields.

In Ghana, Kosmos replaced 214 percent of production, on a net proved basis, primarily related to the approval of the Greater Jubilee Full Field Development Plan and positive revisions at TEN. The Company's reported reserves are prepared by Ryder Scott Company, L.P., an independent reserve engineering firm.

Operational Update

Ghana

During the fourth quarter of 2017, gross sales volumes from Ghana averaged approximately 159,000 barrels of oil per day (bopd), including volumes from the Jubilee and TEN fields which averaged approximately 92,000 bopd and 67,000 bopd, respectively. For the full year, volumes from the Jubilee and TEN fields averaged approximately 90,000 bopd and 56,000 bopd, respectively.

Throughout 2017 the Jubilee FPSO turret remediation project made significant progress, and following the spread mooring of the FPSO at its current heading in late February, optimization of the offtake procedures has allowed the Jubilee field to regularly produce in excess of 100,000 bopd. The Jubilee partners and the Government of Ghana agreed on the need to stabilize the turret bearing and rotate the FPSO. The operator estimates stabilization will require a shutdown, in two phases in early 2018, resulting in approximately four weeks of oil production downtime. The initial phase of this shutdown commenced in early 2018. Kosmos now expects the rotation of the vessel to its optimal heading to take place around the end of the year with minimal impact to production in 2018.

In mid-October, the partnership received approval for the Greater Jubilee Full Field Development Plan (GJFFDP) from the Government of Ghana. The approval of the GJFFDP establishes a price for gas sales and allows for drilling to resume in 2018, which is expected to increase production, extend the field production profile, and allowed the Company to book additional proved reserves.

Production from TEN in the fourth quarter averaged approximately 67,000 bopd. TEN development drilling is expected to resume imminently and the addition of new wells coming online is expected to allow production to increase towards the FPSO capacity of 80,000 bopd.

Equatorial Guinea

In October 2017 Kosmos announced that, in partnership with Trident Energy (Trident), it had agreed to acquire an interest in three exploration licenses (Blocks W, S, and EG-21), as well as Hess Corporation's interest in the adjacent Ceiba Field and Okume Complex assets offshore Equatorial Guinea on a 50-50 basis. Under the terms of the agreements, Kosmos is primarily responsible for exploration and subsurface evaluation while Trident is primarily responsible for production operations and optimization. The transactions capture a material position in a proven but under-explored oil basin originally discovered and operated by members of the Kosmos management team.

The transaction expanded our position in the Gulf of Guinea and provides immediate cash flow through existing production with upside potential from optimizing current production operations, infill drilling, and step-out exploration opportunities with the potential for low cost tie-backs through existing infrastructure. The gross acquisition price of $650 million was effective as of January 1, 2017. Kosmos paid net cash consideration of approximately $231 from cash on hand and proceeds from the Company's reserves-based lending facility at close on November 28, 2017. Oil production from the Ceiba Field and Okume Complex averaged approximately 45,000 bopd (gross) during the period Kosmos held an interest in 2017.

Portfolio Additions

In December 2017, Kosmos expanded its portfolio with petroleum contracts covering Blocks CI-526, CI-602, CI-603, CI-707 and CI-708 with the Government of Cote d'Ivoire.  Kosmos holds a 45% participating interest and is the operator in all five blocks. BP has a 45% participating interest in the blocks and the Cote d'Ivoire national oil company, PETROCI Holding ("PETROCI"), currently has a 10% carried interest. The petroleum contracts cover approximately 17,000 square kilometers.

Inter-Governmental Cooperation Agreement

Also in February 2018, the governments of Mauritania and Senegal signed an Inter-Governmental Cooperation Agreement (ICA) which enables the development of the cross-border Tortue natural gas field to continue moving forward. With this agreement in place, we expect a final investment decision for the Greater Tortue project around the end of 2018 and are 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 with accompanying slides to discuss fourth quarter 2017 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 leading independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margins. Our assets include existing production and development projects offshore Ghana and Equatorial Guinea, large discoveries and significant further exploration potential offshore Mauritania and Senegal, as well as exploration licenses offshore Cote d'Ivoire, Equatorial Guinea, Morocco, Sao Tome and Principe, and Suriname.  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 2016 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.

Inside Information

This announcement contains inside information. The person responsible for arranging the release of this announcement is Jamie Buckland, Vice President, Investor Relations.

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