Kosmos Energy Provides Ghana Pre-emption Update

Rhea-AI Summary

Kosmos Energy (NYSE: KOS) has completed a pre-emption transaction with Tullow Oil and is in the ongoing process with PetroSA regarding the acquisition of Occidental Petroleum’s interests in Ghana’s Jubilee and TEN fields. Tullow's completion reduces Kosmos' interest in Jubilee by 3.8% to 38.3% and in TEN by 8.3% to 19.8%. The transaction generated approximately $118 million in initial payments, with an additional $10 million expected. The net impact for 2022 includes a reduction of 4,000 barrels of oil per day and a capital expenditure reduction of around $30 million.

Positive

• Generated approximately $118 million from Tullow pre-emption.
• Plans to use proceeds for accelerated debt reduction.
• Reduced capital expenditures by about $30 million.

Negative

• Reduced oil production by approximately 4,000 barrels per day.
• Reduced interest in Jubilee and TEN fields.

DALLAS--(BUSINESS WIRE)-- Kosmos Energy (NYSE/LSE: KOS) (“Kosmos” or the “Company”) announced in November 2021 that it had received notice from Tullow Oil plc (“Tullow”) and PetroSA that they intend to exercise their pre-emption rights in relation to the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields in Ghana to Kosmos, announced October 13, 2021.

After execution of definitive transaction documentation and receipt of required government approvals, Kosmos and Tullow have now concluded their pre-emption transaction. For PetroSA, the process is ongoing and remains subject to execution of definitive agreements and required government approvals.

Following completion of the pre-emption by both Tullow and PetroSA, Kosmos’ ultimate interest in Jubilee will be reduced by 3.8% to 38.3% (Kosmos retains ~80% of the original acquired interest), and Kosmos’ ultimate interest in TEN will be reduced by 8.3% to 19.8% (Kosmos retains ~25% of the original acquired interest).

Consideration paid to Kosmos from Tullow after taking into account closing adjustments was approximately $118 million in the first quarter. An additional ~$10 million is expected to be payable on completion of the PetroSA pre-emption process. Kosmos plans to accelerate debt reduction with the proceeds.

The net 2022 production impact of the pre-emption exercise for Kosmos is a reduction of approximately 4,000 barrels of oil per day, based on the March 17 closing date, and is expected to result in one less Ghana cargo lifting this year and a reduction in 2022 capital expenditure of approximately $30 million.

About Kosmos Energy

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 Ghana, Equatorial Guinea and U.S. Gulf of Mexico, as well as a world-class gas development offshore Mauritania and Senegal. Kosmos is listed on the New York Stock Exchange and London Stock Exchange and is traded under the ticker symbol KOS. 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 our Corporate Responsibility Report. For additional information, visit www.kosmosenergy.com.

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.

Management does not provide a reconciliation for forward looking non GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of our control or cannot be reasonably predicted. For the same reasons, management is unable to address the probable significance of the unavailable information. Forward looking non GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220321005093/en/

Investor Relations

Jamie Buckland

+44 (0) 203 954 2831

jbuckland@kosmosenergy.com

Media Relations

Thomas Golembeski

+1-214-445-9674

tgolembeski@kosmosenergy.com

Source: Kosmos Energy Ltd.

FAQ

What was the outcome of Kosmos Energy's pre-emption transaction with Tullow Oil?

Kosmos Energy successfully completed its pre-emption transaction with Tullow Oil, resulting in a reduced interest in Ghana's Jubilee and TEN fields.

How much did Kosmos Energy generate from the Tullow Oil pre-emption?

Kosmos Energy generated approximately $118 million from the Tullow Oil pre-emption after closing adjustments.

What are the production impacts for Kosmos Energy in 2022 due to the pre-emption?

The pre-emption is expected to reduce Kosmos' oil production by about 4,000 barrels per day in 2022.

How will Kosmos Energy utilize the proceeds from the pre-emption transaction?

Kosmos Energy plans to use the proceeds from the pre-emption to accelerate debt reduction.

What is the estimated capital expenditure reduction for Kosmos Energy in 2022?

Kosmos anticipates a capital expenditure reduction of approximately $30 million in 2022 as a result of the pre-emption.