Core Insights - Kosmos Energy Ltd. reported mixed results for the third quarter, indicating progress in operations but continued pressure on financial metrics [1] - The latest Adjusted EPS was -$0.15, while GAAP EPS was -$0.26, both of which did not meet expectations [1] Financial Performance - The company experienced a decline in earnings per share, with Adjusted EPS at -$0.15 and GAAP EPS at -$0.26, reflecting ongoing financial challenges [1] Operational Progress - Despite financial pressures, operations at Kosmos Energy are moving forward, suggesting potential for future improvement [1]

Production and Revenue - In Q3 2025, production from Ghana averaged approximately 93,600 Boepd gross (31,300 Boepd net) and production from the Gulf of America averaged approximately 16,600 Boepd net (~84% oil) [135][138] - The Greater Tortue Ahmeyim project achieved first LNG production in February 2025, with 13.5 gross cargoes lifted through October 2025, and a daily contracted sales volume of approximately 2.45 million tonnes per annum [145] - Total oil and gas revenue for Q3 2025 was $310.96 million, a decrease from $407.79 million in Q3 2024, with oil sales contributing $255.66 million [149] - Oil and gas revenue decreased by $96.8 million to $310.96 million for the three months ended September 30, 2025, compared to $407.79 million in the same period of 2024, primarily due to lower average realized prices and production volumes [155] - For the nine months ended September 30, 2025, oil and gas revenue decreased by $284.1 million to $993.73 million, compared to $1.28 billion in 2024 [165] Costs and Expenses - Total production costs for Q3 2025 were $147.70 million, compared to $133.47 million in Q3 2024, with average cost per Boe rising to $26.78 from $22.97 [149] - Total costs and expenses increased by $116.4 million to $417.7 million for the three months ended September 30, 2025, compared to $301.3 million in 2024 [154] - Oil and gas production costs increased by $180.3 million to $558.12 million for the nine months ended September 30, 2025, compared to $377.82 million in 2024 [166] - Exploration expenses rose by $28.7 million to $68.69 million for the nine months ended September 30, 2025, primarily due to costs associated with the Winterfell-4 well [167] Financial Performance - Net loss for the three months ended September 30, 2025, was $124.3 million, a decrease of $169.3 million compared to a net income of $44.97 million in the same period of 2024 [154] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $98.7 million, a decrease of 80.4% compared to $502.5 million for the same period in 2024 [178] - The company had a net debt of $2.947 billion as of September 30, 2025, compared to $2.715 billion at the end of 2024 [180] Debt and Financing - A senior secured term loan credit agreement was entered into on September 24, 2025, with a first tranche of $150 million funded on October 1, 2025 [148] - Total long-term debt increased to $3.025 billion as of September 30, 2025, up from $2.800 billion at the end of 2024 [180] - The company repurchased $150 million of its 7.125% Senior Notes due 2026, reducing the outstanding balance to $100 million [191] - As of September 30, 2025, borrowings under the Facility totaled approximately $1.1 billion, with undrawn availability of $225 million [177] - The facility's undrawn availability was $225 million as of September 30, 2025, with total borrowings under the facility at approximately $1.1 billion [185] Operational Developments - The partnership in Ghana has prepared amendments to extend the WCTP and DT licenses to 2040, covering the Jubilee and TEN fields [137] - The company received approval for a twelve-month extension for the exploration phase of Block EG-24 in Equatorial Guinea, extending to December 2026 [143] - The company plans to drill additional infill wells and advance development efforts in Ghana, Equatorial Guinea, and the Gulf of America [183] - The company has a commitment to drill one development well in Equatorial Guinea as of September 30, 2025 [205] Market and Price Sensitivity - Average oil sales price per barrel in Q3 2025 was $67.30, down from $76.64 in Q3 2024, while average gas sales price per Mcf increased to $5.54 from $3.54 [149] - Oil prices in the first nine months of 2025 ranged between $61.09 and $83.06 per Bbl for Dated Brent, indicating significant price volatility [216] - A hypothetical 10% increase in oil prices would decrease future pre-tax earnings by approximately $53.6 million, while a 10% decrease would increase future pre-tax earnings by approximately $47.3 million [222] - If oil prices average $50.00 or $60.00 per barrel for the remainder of 2025 and 2026, the average realized pricing after derivatives would be approximately $56.00 and $62.00 per barrel, respectively [222] Derivative Instruments and Risk Management - The company has entered into various oil derivative contracts to mitigate exposure to commodity price risk, including swaps and options [217] - The company’s commodity derivative financial instruments are sensitive to changes in oil prices, with specific contracts outlined for 2025 and 2026 [221] - The fair market value of the company's interest rate swaps was a net asset of approximately $0.2 million as of September 30, 2025 [225] - Changes in market interest rates could impact interest costs associated with future debt issuances or borrowings [224] Commitments and Covenants - The company is subject to a financial covenant under the Facility, which was amended to be less restrictive for the next two assessment dates [188] - The company is subject to a GoA net leverage ratio covenant of not more than 3.50x and a field life coverage ratio of not less than 1.50x [204] - The total commitment for decommissioning trust funds is estimated to be approximately $126.1 million as of September 30, 2025 [209]

Financial Data and Key Metrics Changes - The company reported total net production of approximately 31,300 barrels of oil equivalent per day, with Jubilee gross oil production increasing by 13% quarter on quarter to around 62,500 barrels of oil per day [8][19] - Operating costs decreased by nearly 40% quarter on quarter, reflecting improvements across all business units [19] - Capital expenditures (CapEx) for the year are expected to be below the $350 million forecast, with third-quarter CapEx reported at $67 million [6][19] Business Line Data and Key Metrics Changes - At Jubilee, the first producer well of the 2025-2026 drilling campaign came online in July, contributing to increased production [4][11] - At GTA, net production rose to approximately 11,400 barrels of oil equivalent per day, a 60% increase from the previous quarter, with 6.8 gross LNG cargoes lifted during the quarter [8][14] - In the Gulf of Mexico, net production was around 16,600 barrels of oil equivalent per day, driven by strong performance from Oddjob and Kodiak [9][17] Market Data and Key Metrics Changes - The company lifted 13.5 gross LNG cargoes through October, with expectations of 7-8.5 cargoes in the fourth quarter [15] - The first gross condensate cargo was lifted early in the fourth quarter, marking a new revenue source for the project [9][15] Company Strategy and Development Direction - The company aims to grow production and reduce costs to prioritize free cash flow while strengthening the balance sheet [3][24] - A focus on enhancing the resilience of the balance sheet has been emphasized, with proactive measures taken to address upcoming debt maturities [7][21] - The company is targeting a significant increase in production at Jubilee through a committed drilling program of five more wells in 2026 [12][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's unique, world-class portfolio of assets and the ability to weather commodity price volatility [7][24] - The company anticipates further production growth and cost reductions, with a focus on maintaining a sustainable business in a lower-price environment [25][41] Other Important Information - The company has secured a $250 million term loan from Shell to address upcoming debt maturities [7][21] - Hedging strategies have been implemented to protect against near-term commodity price volatility, with significant portions of oil production hedged for 2026 [22][40] Q&A Session Summary Question: Can you provide details on the 10 FPSO sale and repurchase agreement? - The company is finalizing a purchase option for the FPSO, which will reduce operating costs significantly, with no additional payments until a closeout payment in 2027 [26][29] Question: What are the expectations for cash flows and deleveraging in 2026? - The company expects to break even in the mid-$50 per barrel range, with excess free cash flow dependent on oil prices beyond that [30][31] Question: Can you discuss GTA operating expenses and future expectations? - Current operating expenses are around $60 million, with expectations to reduce them to approximately $30 per barrel [32] Question: What lessons have been learned from the Winterfell challenges? - The company emphasized the need for rigorous planning and execution in future operations, focusing on simpler completion strategies [34] Question: What are the drivers for cargoes from Ghana in Q4? - The timing of year-end cargoes will depend on performance, with a relatively flat production profile expected [35] Question: Can you elaborate on liquidity and balance sheet confidence? - The company has made significant progress in addressing immediate debt issues and is proactively managing future maturities [39][40] Question: What is the expected CapEx for the year and potential savings from FPSO lease refinancing? - CapEx is projected to be below $350 million, with real savings expected from drilling efficiencies and lower contract rates [46][50]

Production and Operations - Third quarter net production was approximately 65,500 boepd[10] - Ghana's third quarter net production reached approximately 31,300 boepd[10] - Mauritania & Senegal's third quarter net production was approximately 11,400 boepd[10] - Gulf of America's third quarter net production was approximately 16,600 boepd[10] - Equatorial Guinea's third quarter net production was approximately 6,200 bopd[10] Financial Performance and Cost Management - The company is on track to achieve fiscal year 2025 capex of less than $350 million, a year-on-year reduction of approximately $500 million[9] - Operating costs decreased by approximately 39% quarter-over-quarter[9] - The company is on track to deliver a targeted $25 million overhead reduction by year-end 2025[9] - Third quarter 2025 opex was approximately $19.5/boe, compared to approximately $28.2/boe in the second quarter of 2025[25] Balance Sheet and Liquidity - The company completed a $250 million Gulf of America term loan[9] - The company repaid $150 million of 2026 notes[9] - The company has hedged 8.5 million barrels for 2026[9]

Financial Performance - The company reported a net loss of $124 million, or $0.26 per diluted share, for Q3 2025, with an adjusted net loss of $72 million, or $0.15 per diluted share[1]. - Oil and gas revenue for Q3 2025 was $310,959,000, a decrease of 23.7% compared to $407,794,000 in Q3 2024[38]. - Total revenues and other income for the nine months ended September 30, 2025, were $995,178,000, down from $1,277,906,000 in the same period of 2024, representing a decline of 22.1%[38]. - Net loss for Q3 2025 was $124,299,000, compared to a net income of $44,974,000 in Q3 2024, indicating a significant shift in performance[38]. - Total costs and expenses for Q3 2025 increased to $417,701,000, up from $301,279,000 in Q3 2024, marking a rise of 38.7%[38]. - Cash and cash equivalents as of September 30, 2025, were $64,032,000, down from $84,972,000 at the end of 2024, reflecting a decrease of 24.7%[40]. - Net cash used in operating activities for Q3 2025 was $(27,568,000), compared to $6,282,000 in Q3 2024, indicating a negative cash flow shift[42]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $(330,924,000), down from $(774,813,000) in the same period of 2024[42]. - The company reported a net increase in cash, cash equivalents, and restricted cash of $26,065,000 for Q3 2025, contrasting with a decrease of $(122,232,000) in Q3 2024[42]. - Net income for the three months ended September 30, 2025, was $(124,299) thousand, compared to $44,974 thousand for the same period in 2024, representing a significant decline[46]. - Free cash flow for the three months ended September 30, 2025, was $(98,935) thousand, compared to $(212,963) thousand for the same period in 2024[48]. Production and Sales - Net production averaged approximately 65,500 barrels of oil equivalent per day (boepd), a 3% increase compared to Q2 2025, with sales of approximately 59,900 boepd[2]. - Production in Ghana averaged approximately 31,300 boepd net, with Jubilee oil production averaging approximately 62,500 bopd gross[18]. - The company lifted 6.8 gross LNG cargos from the Greater Tortue Ahmeyim (GTA) project during the quarter, with an additional 2.7 cargos lifted post quarter-end[2][14]. - Total net volume sold for oil in the three months ended September 30, 2025, was 3.799 million barrels, down from 5.135 million barrels in the same period of 2024[50]. - Oil sales revenue for the three months ended September 30, 2025, was $255,661 thousand, down from $393,555 thousand in the same period of 2024[50]. - Average oil sales price per barrel for the three months ended September 30, 2025, was $67.30, compared to $76.64 in the same period of 2024[50]. - The average total sales price per Boe for the three months ended September 30, 2025, was $56.39, down from $70.18 in the same period of 2024[50]. Capital Expenditures and Costs - Capital expenditures for Q3 2025 were $67 million, with full-year capital expenditures expected to be below $350 million, representing a reduction of over 60% year-on-year[5][10]. - Operating costs decreased by 39% compared to Q2 2025, with a targeted overhead reduction of $25 million by year-end[5][10]. - Operating expenses (Opex) for 4Q 2025 are projected to be between $15.00 and $18.00 per boe, while FY 2025 is expected to be around $22.00 per boe[57]. - Depreciation, Depletion, and Amortization (DD&A) for 4Q 2025 is estimated at $21.00 to $23.00 per boe, with FY 2025 guidance of $22.00 to $24.00 per boe[57]. - General and Administrative expenses (G&A) for 4Q 2025 are expected to be approximately $15 million, with FY 2025 guidance at around $75 million[57]. - Exploration expenses for FY 2025 are projected to be between $25 million and $45 million[57]. - Net interest expense for FY 2025 is expected to be around $220 million[57]. - Capital expenditures for 4Q 2025 are forecasted to be between $80 million and $100 million, with FY 2025 expected to be less than $350 million[57]. Debt and Liquidity - The company exited Q3 2025 with approximately $2.9 billion in net debt and liquidity of approximately $540 million[11][28]. - Long-term debt, net, as of September 30, 2025, was $2,728,500,000, slightly down from $2,744,712,000 at the end of 2024[40]. - Total long-term debt as of September 30, 2025, increased to $3,025,274 thousand from $2,800,274 thousand as of December 31, 2024[44]. Future Outlook - 4Q 2025 production forecast is between 66,000 and 72,000 boe per day, with FY 2025 guidance at approximately 65,000 boe per day[57]. - Ghana's FY 2025 revenue is forecasted based on 9-10 cargoes, with an average cargo size of 950,000 barrels of oil[59]. - Gulf of America production for FY 2025 is projected to be between 17,000 and 19,000 boe per day, with an oil/gas/NGL split of approximately 83%/11%/6%[61]. - Operating costs associated with GTA for FY 2025 are expected to total approximately $225 million to $245 million net[61].

Core Viewpoint - Kosmos Energy Ltd. reported a net loss of $124 million for Q3 2025, translating to a loss of $0.26 per diluted share, with an adjusted net loss of $72 million or $0.15 per diluted share when accounting for certain items affecting comparability [1] Financial Performance - The company generated a net loss of $124 million for the third quarter of 2025 [1] - Adjusted net loss was $72 million, or $0.15 per diluted share [1] - Loss per diluted share was reported at $0.26 [1] Operational Highlights - Specific operational metrics and production figures were not detailed in the provided excerpt [1]

Core Insights - Kosmos Energy Ltd. is recognized as one of the best oil and gas penny stocks to buy, driven by hedge fund interest and significant upside potential [1] Financial Performance - On October 1, 2025, Kosmos Energy completed its semi-annual assessment of reserve-based lending facilities, confirming that all financial covenants, including liquidity tests related to its 2027 notes, have been met, with the borrowing base exceeding the $1.35 billion facility size [2] - Kosmos Energy and Shell Trading Company finalized a $250 million senior secured term loan facility, with $150 million available for redeeming Kosmos 2026 unsecured notes partially, and the remaining $100 million accessible until April 2026 [3] Risk Management - On October 6, 2025, Kosmos will redeem $150 million of its debt and has increased its oil hedging positions for 2026, raising the total hedged volumes to 8.5 million barrels at an average floor price of $66 per barrel, which aims to improve its balance sheet and provide downside protection amid commodity market volatility [4] Company Overview - Kosmos Energy specializes in oil and gas exploration and production, focusing on deepwater fields with offshore assets across West Africa, positioning itself as a notable player in the penny stock sector [5]

Core Points - Kosmos Energy announced the schedule for its third quarter 2025 results, with the earnings release set for November 3, 2025, before the UK market opens [1] - A conference call will take place on the same day at 11:00 a.m. ET, available via telephone and webcast [1] - Dial-in numbers for the conference call include a toll-free option and an international number [1]

Core Viewpoint - Kosmos Energy has provided a financial update highlighting positive developments in its financing activities, particularly regarding its reserve-based lending facility [1] Group 1: Financial Update - The company has successfully completed the semi-annual re-determination of its reserve-based lending (RBL) facility [1] - The borrowing base remains in excess of the RBL's $1.35 billion facility size, indicating strong asset quality and resilience [1]

Oil Market Overview - Oil prices have stabilized, with Brent crude at $67.73 per barrel and U.S. WTI at $63.66 per barrel, marking the first weekly gains in three weeks [1] - The stabilization was driven by a larger-than-expected drawdown in U.S. crude inventories, indicating strong demand [1] - Geopolitical risks, particularly related to the stalled Russia-Ukraine peace talks and potential new sanctions on Russian oil, continue to inject uncertainty into the market [1][2] Economic Influences - Weak economic data from Germany has raised concerns about global consumption, impacting oil demand [2] - Anticipation of signals from the Federal Reserve's Jackson Hole conference regarding potential interest rate cuts could stimulate economic growth and boost oil demand [2] Investment Opportunities - Investors are encouraged to look for undervalued energy stocks that can capitalize on market volatility while limiting downside risk [3] - Identified stocks include Ring Energy (REI), RPC, Inc. (RES), and Kosmos Energy (KOS), all trading under $5 and holding a Value Score of A [3][10] Company Profiles Ring Energy (REI) - An independent exploration and production company focused on oil and natural gas in the Permian Basin of Texas, with a high level of operational control [4] - Utilizes modern drilling techniques to create long-life wells with low breakeven costs, emphasizing predictable growth and strong cash flow [5] - Currently trading at less than $1 per share, with a 50% increase in the Zacks Consensus Estimate for 2025 earnings over the past 60 days [6] RPC, Inc. (RES) - A U.S.-based oilfield services provider with a diverse portfolio serving exploration and production companies [7] - Known for a debt-free balance sheet and consistent returns of excess free cash to shareholders, with a recent acquisition enhancing its service mix [8] - Shares trade for less than $5, with a projected 7.8% growth in 2025 revenues according to the Zacks Consensus Estimate [9] Kosmos Energy (KOS) - A deepwater exploration and production company with a balanced portfolio across proven basins, including offshore Ghana and the U.S. Gulf of Mexico [11] - Focuses on disciplined growth and sustainable cash generation, with recent milestones supporting future free cash flow [12] - Currently priced at $1.84 per share, with a 26% increase in the Zacks Consensus Estimate for 2025 earnings over the past 60 days [13]