Kosmos Energy Announces Fourth Quarter and Full Year 2013 Results
Highlights for the quarter ended
- Sold just under two million barrels of oil, net to Kosmos
- Realized a net reserve replacement ratio of 140% at year-end 2013
- Advanced the development of the TEN project following plan of development approval
-
Executed our
Northwest Africa farm-out initiatives to BP andCairn Energy -
Completed significant 3D seismic programs offshore
Ireland andMauritania -
Secured the Maersk Discoverer rig to drill our first exploration well
in
Morocco
Fourth quarter 2013 oil revenues were
Production expense for the fourth quarter of 2013 was
Exploration expenses in the fourth quarter of 2013 totaled
Depletion and depreciation expense was
Derivative expense for the fourth quarter of 2013 was
The Company’s hedging position at year-end 2013 included 6.0 million barrels of 2014 production and 3.7 million barrels of 2015 production.
Operational Update
“Reservoir performance from Jubilee continues to be strong as
demonstrated by the increase in our year-end proved reserves,” said
2014 year-to-date gross production from the Jubilee field has averaged approximately 104,000 barrels of oil per day (bopd). In the fourth quarter of 2013, Jubilee field production averaged nearly 93,000 bopd, an increase over the third quarter’s production of around 88,000 bopd which was impacted by the planned maintenance program performed on the Jubilee floating production, storage and offloading vessel (FPSO) in late September.
Phase 1A drilling and completion operations continued during the fourth
quarter, with three production wells and the two water injection wells
associated with Phase 1A now online. Due to continued delays in the gas
export infrastructure and the resulting limits on gas disposition, the
Jubilee field partners are actively pursuing various alternatives to
handle the gas associated with Jubilee production. Discussions are
ongoing with the Government of
The Tweneboa, Enyenra and Ntomme (TEN) project continues to build
positive momentum. Construction on the FPSO is ongoing, and development
drilling began in the fourth quarter. The second major oil development
project in
Appraisal of the Mahogany, Teak and Akasa (MTA) discoveries within the Greater Jubilee area continued in the fourth quarter with the completion of the Akasa-2A appraisal well. The well successfully tested the down-dip extent of the Akasa accumulation and further refined the resource base attributable to the three discovery areas.
In preparation for our 2014 drilling campaign, the farm-out of our
During the fourth quarter, Kosmos continued to make progress on a number
of other exploration initiatives. A 5,000 square kilometer 3D seismic
program in the
Conference Call and Webcast Information
Kosmos will host a conference call and webcast to discuss fourth quarter
and full year 2013 financial and operating results today at
About
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’
| Kosmos Energy Ltd. | |||||||||||||||||||
| Consolidated Statement of Operations | |||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Revenues and other income: | |||||||||||||||||||
| Oil and gas revenue | $ | 214,564 | $ | 217,591 | $ | 851,212 | $ | 667,951 | |||||||||||
| Interest income | 84 | (57 | ) | 275 | 1,108 | ||||||||||||||
| Other income | 233 | 2,220 | 941 | 3,150 | |||||||||||||||
| Total revenues and other income | 214,881 | 219,754 | 852,428 | 672,209 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Oil and gas production | 17,140 | 23,318 | 96,791 | 95,109 | |||||||||||||||
| Exploration expenses | 35,930 | 4,518 | 230,314 | 100,652 | |||||||||||||||
| General and administrative | 39,634 | 44,529 | 158,421 | 157,087 | |||||||||||||||
| Depletion and depreciation | 46,966 | 57,265 | 222,544 | 185,707 | |||||||||||||||
| Amortization - deferred financing costs | 2,785 | 2,402 | 11,054 | 8,984 | |||||||||||||||
| Interest expense | 9,022 | 8,490 | 36,811 | 52,207 | |||||||||||||||
| Derivatives, net | 16,641 | 5,083 | 17,027 | 31,490 | |||||||||||||||
| Loss on extinguishment of debt | — | 5,342 | — | 5,342 | |||||||||||||||
| Other expenses, net | 167 | 747 | 3,512 | 1,475 | |||||||||||||||
| Total costs and expenses | 168,285 | 151,694 | 776,474 | 638,053 | |||||||||||||||
| Income before income taxes | 46,596 | 68,060 | 75,954 | 34,156 | |||||||||||||||
| Income tax expense | 42,430 | 36,454 | 166,998 | 101,184 | |||||||||||||||
| Net income (loss) | $ | 4,166 | $ | 31,606 | (91,044 | ) | $ | (67,028 | ) | ||||||||||
| Net income (loss) per share: | |||||||||||||||||||
| Basic | $ | 0.01 | $ | 0.08 | $ | (0.24 | ) | $ | (0.18 | ) | |||||||||
| Diluted | $ | 0.01 | $ | 0.08 | $ | (0.24 | ) | $ | (0.18 | ) | |||||||||
| Weighted average number of shares used to compute net income (loss) per: | |||||||||||||||||||
| Basic | 377,738 | 373,953 | 376,819 | 371,847 | |||||||||||||||
| Diluted | 378,316 | 374,146 | 376,819 | 371,847 | |||||||||||||||
| Kosmos Energy Ltd. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands, unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2013 | 2012 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 598,108 | $ | 515,164 | ||||
| Receivables | 21,326 | 134,216 | ||||||
| Other current assets | 115,527 | 100,738 | ||||||
| Total current assets | 734,961 | 750,118 | ||||||
| Property and equipment, net | 1,522,962 | 1,525,762 | ||||||
| Other non-current assets | 87,903 | 90,243 | ||||||
| Total assets | $ | 2,345,826 | $ | 2,366,123 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 94,172 | $ | 128,855 | ||||
| Accrued liabilities | 115,212 | 41,021 | ||||||
| Other current liabilities | 9,940 | 20,377 | ||||||
| Total current liabilities | 219,324 | 190,253 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 900,000 | 1,000,000 | ||||||
| Deferred tax liability | 170,226 | 104,137 | ||||||
| Other non-current liabilities | 63,941 | 42,827 | ||||||
| Total long-term liabilities | 1,134,167 | 1,146,964 | ||||||
| Total shareholders’ equity | 992,335 | 1,028,906 | ||||||
| Total liabilities and shareholders’ equity | $ | 2,345,826 | $ | 2,366,123 | ||||
| Kosmos Energy Ltd. | ||||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| Operating Activities: | ||||||||||||||||||||
| Net income (loss) | $ | 4,166 | $ | 31,606 | $ | (91,044 | ) | $ | (67,028 | ) | ||||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||||||||||
| Depletion, depreciation and amortization | 49,751 | 59,667 | 233,598 | 194,691 | ||||||||||||||||
| Deferred income taxes | 19,623 | 28,169 | 82,380 | 80,036 | ||||||||||||||||
| Unsuccessful well costs | 8,653 | 12,872 | 107,565 | 32,229 | ||||||||||||||||
| Non-cash change in fair value of derivatives | 18,341 | 4,618 | 23,093 | 18,465 | ||||||||||||||||
| Cash settlements on derivatives | (14,753 | ) | (9,839 | ) | (33,411 | ) | (28,594 | ) | ||||||||||||
| Equity-based compensation | 18,234 | 25,208 | 69,026 | 83,423 | ||||||||||||||||
| Loss on extinguishment of debt | — | 5,342 | — | 5,342 | ||||||||||||||||
| Other | 448 | 151 | 4,916 | 7,890 | ||||||||||||||||
| Changes in assets and liabilities: | ||||||||||||||||||||
| Net changes in working capital | 136,592 | 63,626 | 126,281 | 45,076 | ||||||||||||||||
| Net cash provided by operating activities | 241,055 | 221,420 | 522,404 | 371,530 | ||||||||||||||||
| Investing activities: | ||||||||||||||||||||
| Oil and gas assets | (72,961 | ) | (96,309 | ) | (317,413 | ) | (368,990 | ) | ||||||||||||
| Other property | (1,258 | ) | (964 | ) | (4,970 | ) | (9,994 | ) | ||||||||||||
| Restricted cash | (8,964 | ) | (589 | ) | (1,750 | ) | (23,678 | ) | ||||||||||||
| Net cash used in investing activities | (83,183 | ) | (97,862 | ) | (324,133 | ) | (402,662 | ) | ||||||||||||
| Financing activities: | ||||||||||||||||||||
| Payments on long-term debt | — | — | (100,000 | ) | (110,000 | ) | ||||||||||||||
| Purchase of treasury stock | (31 | ) | — | (13,101 | ) | (8,378 | ) | |||||||||||||
| Deferred financing costs | — | (8,044 | ) | (2,226 | ) | (8,418 | ) | |||||||||||||
| Net cash used in financing activities | (31 | ) | (8,044 | ) | (115,327 | ) | (126,796 | ) | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | 157,841 | 115,514 | 82,944 | (157,928 | ) | |||||||||||||||
| Cash and cash equivalents at beginning of period | 440,267 | 399,650 | 515,164 | 673,092 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 598,108 | $ | 515,164 | $ | 598,108 | $ | 515,164 | ||||||||||||
| Net Proved Developed and Undeveloped Reserves | ||||||||||||
| (unaudited) | ||||||||||||
| Oil | Gas | Total | ||||||||||
| (MMBbl) | (Bcf) | (MMBoe) | ||||||||||
|
Net proved developed and undeveloped reserves at December 31, 2012 |
42 | 9 | 43 | |||||||||
| Extensions and discoveries | — | — | — | |||||||||
| Production | (8 | ) | (1 | ) | (8 | ) | ||||||
| Purchases of minerals-in-place | — | — | — | |||||||||
| Revisions in estimates | 11 | 3 | 12 | |||||||||
| Net proved developed and undeveloped reserves at December 31, 2013 | 45 | 11 | 47 | |||||||||
| Oil | Gas | Total | ||||||||||
| (MMBbl) | (Bcf) | (MMBoe) | ||||||||||
| Proved reserves at December 31, 2013(1) | ||||||||||||
| Proved developed reserves | 36 | 10 | 38 | |||||||||
| Proved undeveloped reserves | 9 | 1 | 9 | |||||||||
|
(1) |
The sum of proved developed reserves and proved undeveloped reserves may not add to net proved developed and undeveloped reserves due to rounding. |
||||
Costs Incurred in Oil and Gas Activities
(unaudited)
The following table reflects total costs incurred, both capitalized and
expensed, for oil and gas property acquisition, exploration, and
development activities for the year ended
| Ghana | Other (1) | Total | ||||||||||
| (in thousands) | ||||||||||||
| Property acquisition | ||||||||||||
| Unproved | $ | — | $ | 13,787 | $ | 13,787 | ||||||
| Proved | — | — | — | |||||||||
| Exploration | 183,635 | 183,213 | 366,848 | |||||||||
| Development | 61,071 | — | 61,071 | |||||||||
| Total costs incurred | $ | 244,706 | $ | 197,000 | $ | 441,706 | ||||||
| (1) | Includes Africa, excluding Ghana, Europe and South America. |
Source:
Kosmos Energy Ltd.
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+1-214-445-9669
jcappon@kosmosenergy.com
or
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