Group 1 - The article suggests that Kosmos Energy (NYSE: KOS) is a strong substitute for a previously favored oil investment that was acquired by Whitecap Resources [1] - The author emphasizes a diverse investment strategy that includes cyclical industries, bonds, commodities, and forex, aiming for significant returns during economic recovery [1] - The analysis reflects a global perspective on market dynamics, influenced by the author's international education and career experiences [1] Group 2 - The author holds a beneficial long position in Kosmos Energy shares, indicating confidence in the company's future performance [2] - The article is presented as an independent opinion, with no compensation received from any company mentioned, ensuring an unbiased viewpoint [2]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Kosmos Energy (KOS) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][3][7]. Valuation Metrics - Kosmos Energy has a Price-to-Book (P/B) ratio of 0.89, which is lower than the industry average of 1.03, indicating potential undervaluation [4]. - The Price-to-Sales (P/S) ratio for KOS is 0.62, compared to the industry's average P/S of 0.79, further suggesting that the stock may be undervalued [5]. - KOS's Price-to-Cash Flow (P/CF) ratio stands at 2.06, which is also below the industry average of 2.85, reinforcing the notion of undervaluation based on cash flow [6]. Earnings Outlook - The earnings outlook for Kosmos Energy is strong, which, combined with its favorable valuation metrics, positions KOS as one of the strongest value stocks in the market [7].

Production and Revenue - In Q1 2025, total production averaged approximately 49,393 Boepd, a decrease of 21% from 62,645 Boepd in Q1 2024[135] - Oil and gas revenue decreased by $129 million to $290.1 million in Q1 2025, compared to $419.1 million in Q1 2024, primarily due to lower production and prices[139] - Average realized oil sales price per barrel decreased to $73.90 in Q1 2025 from $82.23 in Q1 2024, reflecting a 10% decline[135] - Production in Ghana averaged approximately 99,300 Boepd gross (33,000 Boepd net) in Q1 2025, impacted by a two-week scheduled shutdown[126] Financial Performance and Debt - Net cash used in operating activities for the three months ended March 31, 2025 was $0.9 million, a significant decrease from $272.6 million in the same period of 2024[151] - Total long-term debt as of March 31, 2025 was $2.9 billion, an increase from $2.8 billion as of December 31, 2024[152] - The company has a total principal debt repayment obligation of $2,900.274 million, with significant repayments due in 2025 and 2026[170] - The company has outstanding borrowings totaling $1.0 billion with a weighted average interest rate of 8.4% as of March 31, 2025[191] Capital Expenditures and Budget - The company estimates capital expenditures for 2025 will be $400 million or less, focusing on drilling, exploitation, and production activities[154] - Approximately $275 million of the capital budget is allocated for maintenance activities across producing assets in Ghana, Equatorial Guinea, and the Gulf of America[155] - The company plans to spend less than $75 million on appraisal and development programs in the Gulf of America, Mauritania, and Senegal[156] Projects and Operations - The Greater Tortue Ahmeyim LNG project achieved first gas production on December 31, 2024, with first LNG cargo completed in April 2025[132] - The drilling campaign in the Jubilee Field is expected to commence in Q2 2025, including two in-fill wells[127] - Winterfell-3 well has been temporarily plugged and abandoned while options for restoring production are evaluated[129] - The company has a commitment to drill one development well in Equatorial Guinea as of March 31, 2025[172] Tax and Regulatory Changes - The corporate tax rate in Equatorial Guinea was reduced from 35% to 25%, effective January 1, 2025[130] Commodity Prices and Sensitivity - Oil prices in the first three months of 2025 ranged between $69.83 and $83.06 per Bbl for Dated Brent, indicating significant price volatility[183] - The company's commodity price sensitivity indicates significant exposure to fluctuations in oil prices, impacting earnings projections[188] Derivative Instruments and Interest Rates - The fair value of the company's outstanding derivative contracts as of March 31, 2025, is $3.590 million, down from $11.670 million as of December 31, 2024[181] - The fair market value of the company's interest rate swaps was a net asset of approximately $1.3 million as of March 31, 2025[192] - The company's interest rate derivative instruments are sensitive to changes in market interest rates, affecting future borrowings and payments[191] Financial Covenants and Compliance - The company is in compliance with the financial covenants contained in the Facility as of March 31, 2025[160] Other Financial Commitments - As of March 31, 2025, the company has incurred approximately $312.7 million of its estimated $370.0 million share for the Carry Advance Agreements with national oil companies[173] - The company has a decommissioning trust agreement with estimated total commitments of approximately $126.1 million as of March 31, 2025[172] - The company's liabilities for asset retirement obligations are not included in the purchase obligations, which total $20.3 million[172] Interest Rate Projections - The weighted average interest rate on variable rate debt is projected to increase from 8.32% in 2025 to 9.52% in 2029[170] - If the floating market interest rate increased by 10%, the estimated additional interest expense would be $4.3 million per year, reduced to $1.6 million due to a fixed interest rate swap[191] - The impact of the 2025 fixed interest rate swap would mitigate additional interest expenses associated with floating rate debt[191] Risk Assessment - A hypothetical 10% increase in commodity futures prices would decrease future pre-tax earnings by approximately $18.6 million, while a 10% decrease would increase future pre-tax earnings by approximately $21.6 million[188]

Financial Data and Key Metrics Changes - The company reported a significant reduction in capital expenditures (CapEx), with first quarter CapEx at $86 million, down from $200 million in the same quarter last year, reflecting a year-on-year decrease of over 50% [8][22] - Operating expenses (OpEx) per barrel of oil equivalent were in line with guidance but higher year-on-year due to lower production and higher maintenance costs in Q1 2025 [22] - The company expects second quarter production to be around 15% higher than the first quarter, driven by the ramp-up of the GTA project [22] Business Line Data and Key Metrics Changes - The GTA project achieved first gas and LNG production, with all four liquefaction trains operational and production ramping up towards a contracted sales volume equivalent to 2,450,000 tons of LNG per annum [10][12] - In Ghana, the company plans to drill two Jubilee wells in 2025 and an additional four in 2026, which are expected to enhance production with low-cost, high-margin barrels [6][16] - Production in the Gulf of America was steady, with a planned 30-day shutdown completed, and current production ramping back up to around 20,000 barrels of oil equivalent [18] Market Data and Key Metrics Changes - The company noted heightened volatility in the sector and global markets but remains focused on cash generation and cost control [5][28] - The company has hedged approximately 40% of its remaining 2025 oil production with a floor of approximately $65 per barrel and a ceiling of approximately $80 per barrel [26] Company Strategy and Development Direction - The company is prioritizing cash generation, rigorous cost control, and enhancing financial resilience amid market volatility [4][28] - Future upside potential at the GTA project includes increased production through existing facilities and potential upgrades to the FLNG vessel to increase LNG production capacity beyond 3,000,000 tons per annum [12][13] - The company is exploring alternative operating models to reduce costs and enhance overall project returns [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate free cash flow even in a lower commodity price environment, with a target breakeven of around $50 per barrel Brent [36] - The company is focused on maintaining financial resilience through cash generation and managing capital expenditures effectively [27][28] - Management highlighted a positive outlook for production growth in the second half of the year, driven by the ramp-up of the GTA project and upcoming drilling activities in Ghana and the Gulf of America [28] Other Important Information - The company has minimal near-term maturities and ample liquidity, with a rolling hedging program in place to protect cash flow [9][44] - The company is committed to reducing annual overhead by $25 million by year-end and has made significant progress towards that target [8] Q&A Session Summary Question: Can you talk about the nameplate capacity test at GTA and the timeframe for understanding potential rates? - Management indicated that the nameplate capacity of the FLNG vessel is 2,700,000 tons per annum, and testing is ongoing to determine reliable delivery rates above that level [32] Question: How do you see your breakevens today and how might they evolve in future years? - Management expects a target breakeven of around $50 per barrel Brent in a low price environment, with a focus on high-return Jubilee infill wells [36] Question: How are you thinking about financial leverage in a lower commodity price environment? - Management emphasized the focus on reducing financial leverage and maintaining liquidity, with plans to generate free cash flow to pay down debt [42] Question: What are the steps regarding the obligation offtake physically and financially? - Management clarified that the National Oil Company is responsible for building the necessary infrastructure for gas offtake, and there are no capital liabilities for the company in this regard [83]

Financial Data and Key Metrics Changes - The company reported a significant reduction in capital expenditures (CapEx), with first quarter CapEx at $86 million, down from $200 million in the same quarter last year, and expects CapEx to fall by over 50% year on year [7][21] - Operating expenses (OpEx) per barrel of oil equivalent were in line with guidance but higher year on year due to lower production and higher maintenance costs [21] - The company aims to maintain a free cash flow positive status at current oil prices, with a target breakeven of around $50 per barrel Brent in a low price environment [33] Business Line Data and Key Metrics Changes - The company achieved first gas and LNG production in the GTA project, with all four liquefaction trains operational and production ramping up towards a contracted sales volume equivalent to 2,450,000 tons of LNG per annum [10][12] - In Ghana, the company plans to drill two Jubilee wells in 2025 and an additional four in 2026, which are expected to enhance production with low-cost, high-margin barrels [6][15] - Production in the Gulf of America was steady, with a planned thirty-day shutdown completed, and current production ramping back up to around 20,000 barrels of oil equivalent [17] Market Data and Key Metrics Changes - The company noted heightened volatility in the sector and across global markets, but remains focused on cash generation and cost control [5][9] - The company has hedged around 40% of remaining 2025 oil production with a floor of approximately $65 per barrel and a ceiling of approximately $80 per barrel [24] Company Strategy and Development Direction - The company is prioritizing cash generation, rigorous cost control, and enhancing financial resilience amid market volatility [4][9] - Future upside potential at the GTA project includes increased production through existing facilities and low-cost modifications, with plans to explore upgrades to the FLNG vessel to increase LNG production capacity [12][13] - The company is actively managing its options to maintain financial resilience, including reducing overhead costs and managing capital expenditures [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a volatile market, emphasizing the importance of cash generation and cost discipline [26] - The company anticipates production growth in the second half of the year due to the ramp-up of the GTA project and upcoming drilling activities in Ghana and the Gulf of America [26] Other Important Information - The company has a long-term value proposition supported by a 2P reserves production line of over twenty years [26] - The company is exploring potential upgrades to enhance the overall returns of the GTA project and is working with partners to optimize existing infrastructure [12][13] Q&A Session Summary Question: Can you talk about the nameplate capacity test at GTA and the timeframe for understanding potential rates? - The nameplate capacity of the FLNG vessel is 2,700,000 tons per annum, and testing is ongoing to determine reliable delivery rates above this capacity [30] Question: How do you see your breakevens today and how might they evolve in future years? - The target breakeven is around $50 per barrel Brent, with a focus on high-return Jubilee infill wells that have a low breakeven of around $30 per barrel [33] Question: How are you thinking about financial leverage in a lower commodity price environment? - The company aims to reduce financial leverage and maintain liquidity, with plans to generate free cash flow to pay down debt [40] Question: What are the steps regarding the obligation offtake physically and financially? - The National Oil Company is responsible for building the pipeline infrastructure, and the company does not have capital liability for that [84] Question: Is there any annual quota of volumes of cargoes contracted to sell to BP? - The annual contract quantity is 2,450,000 tons per annum, with a price of 0.9595% slope against Brent FOB [76]

First Quarter 2025 Results May 6, 2025 NYSE/LSE: KOS Strictly Private and Confidential 1 Disclaimer Forward-Looking Statements This presentation 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 presentation that address activities, events or developments that Kosmos Energy Ltd. ("Kosmos" or the "Company") expects, believes or a ...

[Financial & Operating Results Overview](index=1&type=section&id=Financial%20%26%20Operating%20Results%20Overview) [First Quarter 2025 Highlights](index=1&type=section&id=FIRST%20QUARTER%202025%20HIGHLIGHTS) Kosmos Energy reported a Q1 2025 net loss of $111 million due to heavy maintenance, while achieving key operational milestones and prioritizing free cash flow generation Q1 2025 Financial Results | Metric | Value | Per Diluted Share | | :--- | :--- | :--- | | Net Loss | $111 million | $0.23 | | Adjusted Net Loss | $105 million | $0.22 | Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Net Production | ~60,500 boepd | | Revenues | $290 million | | Production Expense | $167 million | | Capital Expenditures | $86 million | - The company's priorities are delivering **free cash flow** from increasing production and a rigorous focus on costs. Production is expected to rise in **Q2** after heavy scheduled maintenance in **Q1**[3](index=3&type=chunk) - Major post-quarter end and Q1 operational milestones include: - Commenced LNG export from the GTA project in **April 2025** - Completed a **4D seismic survey** over the Jubilee and TEN fields in Ghana[4](index=4&type=chunk)[5](index=5&type=chunk) [Financial Update](index=2&type=section&id=FINANCIAL%20UPDATE) [Financial Performance and Position](index=2&type=section&id=Financial%20Performance%20and%20Position) Q1 2025 net capital expenditure was $86 million, resulting in negative free cash flow of $(91) million and increased net debt to $2.85 billion, despite maintained liquidity and expanded hedging - Net capital expenditure for Q1 2025 was **$86 million**, below guidance. The company is working to reduce full-year 2025 capex below the **$400 million** guidance[7](index=7&type=chunk) - The company generated **negative free cash flow of approximately $(91) million** in Q1, impacted by the timing of liftings, scheduled maintenance, and no cash flow from GTA sales during the quarter[10](index=10&type=chunk) Debt and Liquidity Position (as of Q1 2025 exit) | Metric | Value | | :--- | :--- | | Net Debt | ~$2.85 billion | | Available Liquidity | ~$400 million | | RBL Facility Size | $1.35 billion | - Post quarter end, the company added hedges and now has **approximately 40%** of remaining 2025 oil production hedged with a floor of **~$65/boe** and a ceiling of **~$80/boe**[10](index=10&type=chunk) [Operational Update](index=3&type=section&id=OPERATIONAL%20UPDATE) [Production Overview](index=3&type=section&id=Production) Q1 2025 net production averaged 60,500 boepd, below guidance due to shutdowns, but full-year guidance remains unchanged at 70,000–80,000 boepd with no further major shutdowns planned Q1 2025 Production Performance | Metric | Value | | :--- | :--- | | Average Net Production | ~60,500 boepd | | Full Year 2025 Guidance | 70,000 - 80,000 boepd (unchanged) | | Net Underlift Position | ~1.2 mmboe | - Production was impacted by planned shutdowns at Jubilee in Ghana and the Kodiak host facility in the Gulf of America, both of which have been completed[11](index=11&type=chunk) [Mauritania and Senegal](index=3&type=section&id=Mauritania%20and%20Senegal) The GTA project exported its first LNG cargo in April 2025, with Q1 net production at 1,300 boepd, and the partnership is focused on cost reduction, FPSO refinancing, and Phase 1+ expansion - The GTA project successfully exported its first LNG cargo in early **April 2025**, with a second cargo lifting currently[12](index=12&type=chunk) - Q1 2025 production averaged approximately **1,300 boepd net** (**7.8 mmcfd**)[12](index=12&type=chunk) - Work has commenced on Phase 1+, a low-cost brownfield expansion expected to **double gas sales** by leveraging existing infrastructure[14](index=14&type=chunk) - Near-term financial focus includes reducing operating costs and completing the FPSO refinancing in the **second half of the year**[13](index=13&type=chunk) [Ghana](index=3&type=section&id=Ghana) Ghana's Q1 2025 net production was 33,000 boepd, impacted by a Jubilee FPSO shutdown, with a two-well drilling campaign planned for 2025 and four wells in 2026 Q1 2025 Ghana Production | Area | Production (Gross) | Production (Net to Kosmos) | | :--- | :--- | :--- | | **Total Ghana** | - | ~33,000 boepd | | Jubilee (Oil) | ~66,600 bopd | - | | TEN (Oil) | ~16,900 bopd | - | - A scheduled FPSO shutdown at Jubilee occurred from **March 25, 2025, to April 8, 2025**, and was completed safely and on budget[15](index=15&type=chunk) - The Noble Venturer rig is due to arrive to drill **two Jubilee wells in 2025** and a **four-well campaign in 2026**, leveraging new 4D seismic data[16](index=16&type=chunk) [Gulf of America](index=4&type=section&id=Gulf%20of%20America) Gulf of America Q1 production averaged 17,200 boepd net, affected by a Kodiak shutdown, with Winterfell-4 drilling underway for Q3 2025 production and Tiberius development optimization - Q1 production averaged approximately **17,200 boepd net**, with around **85%** being oil[18](index=18&type=chunk) - The Winterfell-3 well remediation was unsuccessful. Drilling of Winterfell-4 is underway and is expected to come online in **Q3 2025**[18](index=18&type=chunk) - The Tiberius development is being progressed with partner Oxy, focusing on cost reduction supported by new seismic data being acquired this year[19](index=19&type=chunk) [Equatorial Guinea](index=4&type=section&id=Equatorial%20Guinea) Equatorial Guinea's Q1 2025 production averaged 9,000 bopd net, with 0.5 cargos lifted, and future production supported by a cost-effective well work program Q1 2025 Equatorial Guinea Production | Metric | Value | | :--- | :--- | | Gross Production | ~25,700 bopd | | Net Production | ~9,000 bopd | - Kosmos lifted **0.5 cargos** from Equatorial Guinea during the quarter, in line with guidance[20](index=20&type=chunk) - A cost-effective well work program is planned to support production for the remainder of the year[21](index=21&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 revenues decreased to $290.4 million, leading to a net loss of $110.6 million ($0.23 per diluted share), a reversal from Q1 2024's net income Consolidated Statements of Operations (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues and other income | $290,431 | $419,139 | | Total costs and expenses | $384,462 | $277,170 | | Income (loss) before income taxes | $(94,031) | $141,969 | | **Net income (loss)** | **$(110,606)** | **$91,686** | | Diluted net income (loss) per share | $(0.23) | $0.19 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $5.27 billion, liabilities increased to $4.17 billion due to debt, and stockholders' equity decreased to $1.10 billion Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $417,139 | $446,132 | | **Total assets** | **$5,269,414** | **$5,308,988** | | Total current liabilities | $547,315 | $594,948 | | Long-term debt, net | $2,847,621 | $2,744,712 | | **Total liabilities** | **$4,171,234** | **$4,108,564** | | **Total stockholders' equity** | **$1,098,180** | **$1,200,424** | [Condensed Consolidated Statements of Cash Flow](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Q1 2025 saw net cash used in operating activities of $0.9 million, with a net decrease in cash of $35.2 million, contrasting with Q1 2024's positive operating cash flow Condensed Consolidated Statements of Cash Flow (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(888) | $272,563 | | Net cash used in investing activities | $(134,293) | $(317,350) | | Net cash provided by financing activities | $100,000 | $203,939 | | **Net increase (decrease) in cash** | **$(35,181)** | **$159,152** | | Cash, cash equivalents and restricted cash at end of period | $50,096 | $257,913 | [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) Q1 2025 non-GAAP metrics show EBITDAX at $103.5 million, an adjusted net loss of $105.4 million, negative free cash flow of $(91.1) million, and net debt increasing to $2.85 billion Q1 2025 Non-GAAP Financial Metrics (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | EBITDAX | $103,478 | $301,650 | | Adjusted net income (loss) | $(105,426) | $99,097 | | Free cash flow | $(91,133) | $(42,259) | Net Debt Calculation (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total long-term debt | $2,900,274 | $2,800,274 | | Less: Cash and cash equivalents | $49,791 | $84,972 | | **Net debt** | **$2,850,178** | **$2,714,997** | [Company Guidance and Outlook](index=14&type=section&id=Company%20Guidance%20and%20Outlook) [2025 Guidance](index=14&type=section&id=2025%20Guidance) Kosmos reaffirms full-year 2025 production guidance of 70,000-80,000 boepd and targets capital expenditures below $400 million, with detailed Q2 and full-year financial outlooks 2025 Guidance Summary | Metric | 2Q 2025 Guidance | FY 2025 Guidance | | :--- | :--- | :--- | | Production | 66,000 - 72,000 boepd | 70,000 - 80,000 boepd | | Opex | $25.00 - $27.00 per boe | $18.00 - $20.00 per boe | | G&A | $20 - $25 million | $80 - $100 million | | Net Interest Expense | ~$50 million | $180 - $200 million | | Capital Expenditure | $120 - $140 million | <$400 million | - Cargo lifting forecasts for FY 2025 are **11-12 for Ghana**, **3.5 for Equatorial Guinea**, and **20-25 (gross) for Mauritania & Senegal**[46](index=46&type=chunk) [Hedging Summary](index=14&type=section&id=Hedging%20Summary) As of March 31, 2025, Kosmos implemented a 2025 hedging strategy using swaps and collars on Dated Brent to mitigate price risk and establish price floors and ceilings 2025 Hedging Position (as of March 31, 2025) | Period | Instrument | Volume (MBbl) | Floor | Ceiling | | :--- | :--- | :--- | :--- | :--- | | 1H25 | Two-way collars | 1,000 | $70.00 | $85.00 | | 1H25 | Swaps | 1,000 | $75.48 | $75.48 | | FY25 | Two-way collars | 1,500 | $70.00 | $85.00 | | FY25 | Three-way collars | 1,500 | $70.00 | $85.00 | | 2H25 | Two-way collars | 2,000 | $55.00 | $70.00 |

Group 1 - The current stock market is experiencing volatility due to earnings season surprises and trade war impacts, making it challenging to predict future directions [1] - The author has extensive experience in investment analysis, focusing on identifying underappreciated companies that can provide value to investors [1] Group 2 - The article does not provide specific company or industry insights, focusing instead on the author's background and investment philosophy [2][3]

Financial Data and Key Metrics Changes - Kosmos Energy Ltd. reported a significant reduction in capital expenditures (CapEx) expected to fall from over $800 million in 2023 and 2024 to $400 million in 2025, representing a decrease of over 50% [10][28] - The company achieved a year-end 2024 2P reserves of 513 million barrels of oil equivalent, with a reserve replacement ratio of 137%, indicating strong reserve growth [13][15] - The company maintained a strong financial position by raising $900 million in new bonds and refinancing its reserve-based lending facility, extending average debt maturity to around four years [20][25] Business Line Data and Key Metrics Changes - Production for Q4 2024 was lower than guidance due to issues at the Jubilee field, but actions have been taken to resolve these issues, and production is expected to stabilize [21][22] - The company achieved first oil at Winterfell in summer 2024 and expects production to rise as new wells come online [18][19] - The Gulf of America business unit is projected to see a 20% year-over-year increase in production, with full-year guidance of 17,000 barrels of oil equivalent per day net [49] Market Data and Key Metrics Changes - The company is focusing on the Gulf of America for exploration efforts, leveraging advanced seismic imaging and reservoir management tools [12][44] - The GTA project is expected to ramp up production in Q1 2025, with first LNG production achieved in early February 2025 [34][36] - The company is actively managing oil price volatility through a rolling hedging program, with around 60% of first-half oil production hedged [26][27] Company Strategy and Development Direction - Kosmos Energy Ltd. aims to prioritize cash generation through maximizing revenue and rigorous cost management, with a focus on reducing overhead costs by $25 million by the end of 2025 [11][28] - The company plans to use generated cash flow primarily for debt paydown until reaching a leverage goal of below 1.5 times at mid-cycle oil prices [12][13] - The strategic focus includes enhancing the reserve base and transitioning 2C resources into 2P reserves through improved technology and drilling [15][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable cash generation due to a strong reserve base and disciplined cost management [15][53] - The company is optimistic about the future potential of the GTA project and its ability to meet local market gas needs while driving low-cost expansions [38][39] - Management acknowledged challenges in production reliability at Jubilee but emphasized ongoing efforts to improve power generation reliability and water injection [111][112] Other Important Information - Kosmos Energy Ltd. achieved zero lost time injuries or total recordable injuries in 2024, maintaining a strong safety performance [17] - The company is not planning to revisit discussions with Tullow, focusing instead on free cash flow accretion and maintaining a strong portfolio [120][121] Q&A Session Summary Question: Discussion on startup costs and their nature - Management indicated that startup and commissioning costs are expected to be one-time in nature, with costs trending lower as production ramps up [56][58] Question: CapEx guidance and potential for lower spending - Management confirmed a CapEx ceiling of $400 million for 2025, emphasizing a focus on capital efficiency and free cash flow generation [63][64] Question: Clarification on GTA phase one plus - Management explained that phase one plus involves fully utilizing existing infrastructure with minimal additional CapEx, aiming for increased production capacity [75][76] Question: Jubilee production assumptions - Management highlighted the importance of achieving 100% voidage replacement and reliable power generation to meet production guidance for Jubilee [82][86] Question: Confidence in Jubilee's performance - Management expressed confidence in addressing past issues and achieving production targets through effective reservoir management and additional drilling [110][112] Question: Future M&A considerations - Management stated that there are no current plans to revisit discussions with Tullow, focusing instead on free cash flow and value accretion [120][121] Question: Timeline for achieving leverage goals - Management anticipates reaching a leverage level of around 1.5 times by the latter half of 2026, with a focus on debt paydown and production growth [127][128] Question: Tortue project CapEx implications - Management indicated that future CapEx for Tortue will be minimal, focusing on sustaining current production levels and maximizing revenue [102][103]

Financial Data and Key Metrics Changes - The company reported a year-end 2024 2P reserves of 513 million barrels of oil equivalent, representing a reserves to production ratio of twenty-two years, with a reserve replacement ratio of 137% [13][15][18] - Total CapEx is expected to fall significantly from over $800 million in 2023 and 2024 to $400 million in 2025, a reduction of over fifty percent [10][28] - The company achieved first LNG production from the GTA project in early February 2025, with first cargo lifting expected shortly [34][36] Business Line Data and Key Metrics Changes - Production for the fourth quarter was lower than guidance, primarily due to lower Jubilee production and delays in ramp-up from infill wells [21][22] - Net production in Ghana for 2024 was just over 41,000 barrels of oil equivalent, below the operator's target, driven by issues with water injection reliability [42][44] - The Gulf of America saw a gradual quarterly ramp-up in production from Q2 onwards, with full year guidance of 17,000 barrels of oil equivalent per day, a 20% increase year over year [49] Market Data and Key Metrics Changes - The company has hedged around 60% of its first half oil production with downside protection of approximately $70 per barrel, providing solid protection for cash flow [26][27] - The GTA project is positioned to deliver growth in revenue with increasing margins as gas and LNG continue to grow in the global energy mix [7][8] Company Strategy and Development Direction - The company aims to focus on cash generation through maximizing revenue and rigorous cost management, with a clear goal of reducing annual overhead by around $25 million by the end of 2025 [11][12][28] - The strategy includes prioritizing cash for debt pay down until leverage goals of below 1.5 times at mid-cycle oil prices are achieved [13][29] - The company is focused on sustainable cash generation, with a diverse reserve base supporting production for many years to come [15][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in addressing production issues and emphasized the importance of power generation reliability for future performance [111][112] - The company is optimistic about the future potential of the GTA project and its ability to meet local market gas needs while driving low-cost expansions [36][38] - Management highlighted the importance of rigorous capital allocation and cost management to sustain free cash flow yield [64][70] Other Important Information - The company achieved zero lost time injuries or total recordable injuries in 2024, maintaining high safety performance [17] - The company raised a total of $900 million in new bonds at competitive rates, enhancing its financial position and extending weighted average maturities [20][25] Q&A Session Summary Question: Discussion on startup costs and their nature - Management indicated that startup and commissioning costs are expected to be one-time in nature, with costs trending lower over time as production ramps up [56][58] Question: CapEx guidance and potential for lower spending - Management confirmed a ceiling of $400 million for CapEx in 2025, emphasizing a focus on free cash flow and disciplined capital allocation [63][65] Question: Clarification on GTA phase one plus - Management explained that phase one plus involves fully utilizing existing infrastructure to increase capacity with minimal additional CapEx [75][78] Question: Assumptions behind Jubilee production guidance - Management highlighted the importance of achieving 100% voidage replacement and reliable power generation as key assumptions for Jubilee's production guidance [82][86] Question: Confidence in Jubilee's performance and future plans - Management expressed confidence in addressing past issues and emphasized a clear set of objectives for field management to ensure future performance [112][114] Question: Thoughts on terminated discussions with Tullow - Management stated that there are no plans to revisit discussions with Tullow, focusing instead on free cash flow generation and maintaining a strong portfolio [120][121] Question: Timeline for achieving leverage goals - Management anticipates reaching a leverage level of around 1.5 times by the back half of 2026, with a focus on debt pay down and growth in EBITDAX [127][128] Question: CapEx implications for Tortue project - Management indicated that future CapEx for the Tortue project will be minor, focusing on sustaining current well counts and maximizing revenue [102][135]