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]

Group 1 - The conference call is regarding Kosmos Energy's Second Quarter 2025 earnings release [2][3] - Key participants in the call include Andrew G. Inglis (Chairman & CEO), Jamie Buckland (VP of Investor Relations), and Neal D. Shah (CFO) [1][3] - The call will include forward-looking statements about the company's estimates, plans, and expectations [4] Group 2 - The earnings release and accompanying slide presentation are available on the company's Investors page [3] - The call is being recorded for future reference [2] - The company emphasizes the potential for actual results to differ materially from forward-looking statements due to various factors [4]

PART I. FINANCIAL INFORMATION [Glossary and Select Abbreviations](index=3&type=section&id=Glossary%20and%20Select%20Abbreviations) This section defines key industry terms and abbreviations, ensuring consistent understanding of specialized language throughout the report [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents Kosmos Energy Ltd.'s unaudited consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, financial instruments, and segment performance for the periods ended June 30, 2025 [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | | :----------------------------- | :------------ | :---------------- | :-------------------- | | Cash and cash equivalents | $51,694 | $84,972 | $(33,278) | | Total current assets | $363,380 | $446,132 | $(82,752) | | Total assets | $5,213,006 | $5,308,988 | $(95,982) | | Total current liabilities | $809,283 | $594,948 | $214,335 | | Total long-term liabilities | $3,385,939 | $3,513,616 | $(127,677) | | Total stockholders' equity | $1,017,784 | $1,200,424 | $(182,640) | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Oil and gas revenue | $392,635 | $450,900 | $682,770 | $870,003 | | Total revenues and other income | $393,518 | $450,936 | $683,949 | $870,075 | | Oil and gas production | $243,118 | $150,733 | $410,426 | $244,351 | | Exploration expenses | $4,069 | $13,235 | $13,738 | $25,295 | | Depletion, depreciation and amortization | $151,268 | $90,094 | $271,935 | $191,022 | | Interest and other financing costs, net | $54,834 | $37,279 | $106,676 | $53,727 | | Derivatives, net | $(21,566) | $(2,852) | $(14,834) | $20,970 | | Net income (loss) | $(87,740) | $59,770 | $(198,346) | $151,456 | | Basic Net income (loss) per share | $(0.18) | $0.13 | $(0.42) | $0.32 | | Diluted Net income (loss) per share | $(0.18) | $0.12 | $(0.42) | $0.32 | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Changes in Stockholders' Equity (In thousands) | Metric | Balance as of December 31, 2024 | Net Loss (Q1 2025) | Net Loss (Q2 2025) | Balance as of June 30, 2025 | | :-------------------------- | :------------------------------ | :----------------- | :----------------- | :---------------------------- | | Total Stockholders' Equity | $1,200,424 | $(110,606) | $(87,740) | $1,017,784 | | Equity-based compensation | | $8,362 | $7,345 | $15,707 (Total 6 months) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, In thousands) | Metric | 2025 | 2024 | | :-------------------------------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $126,280 | $496,220 | | Net cash used in investing activities | $(259,557) | $(555,568) | | Net cash provided by financing activities | $99,999 | $134,705 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(33,278) | $75,357 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Organization](index=11&type=section&id=1.%20Organization) Kosmos Energy Ltd. is a Delaware-incorporated holding company operating as a deepwater exploration and production company, focusing on diversified oil and gas production and listed on the NYSE and LSE - Kosmos Energy is a leading deepwater exploration and production company with diversified oil and gas production from assets offshore Ghana, Equatorial Guinea, Mauritania, Senegal, and the Gulf of America[30](index=30&type=chunk)[31](index=31&type=chunk) [2. Accounting Policies](index=11&type=section&id=2.%20Accounting%20Policies) This section outlines the company's interim financial statement preparation, reclassification practices, and specific accounting treatments for cash, inventories, and revenue recognition, including recently adopted and not yet adopted accounting standards - Facility lenders waived the requirement to maintain a restricted cash balance through **2025**, by which time GTA revenue and expenses are expected to be realized[35](index=35&type=chunk) Inventories Composition (In thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Materials and supplies | $151,500 | $167,500 | | Hydrocarbons | $11,700 | $3,400 | - The company is currently assessing the impact of new accounting standards ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures), and ASU 2024-04 (Induced Conversions of Convertible Debt Instruments) on its financial statements, with no plans for early adoption[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) [3. Receivables](index=13&type=section&id=3.%20Receivables) This note details the company's receivables, including joint interest billings and significant long-term receivables from national oil companies related to financing their share of the GTA Phase 1 project costs Long-term Receivables from GTA Phase 1 (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Principal balance | $355,500 | $280,100 | | Accrued interest | $68,100 | $56,600 | [4. Property and Equipment](index=14&type=section&id=4.%20Property%20and%20Equipment) This section outlines the composition of property and equipment, net, including proved and unproved oil and gas properties, and reports the depletion expense for the current periods, with additions primarily related to GTA Phase 1 development and Ghana's Jubilee Field infill drilling Property and Equipment, Net (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Oil and gas properties, net | $4,354,670 | $4,440,430 | | Other property, net | $3,142 | $3,791 | | Property and equipment, net | $4,357,812 | $4,444,221 | - Depletion expense for the six months ended June 30, 2025, was **$253.1 million**, an increase from **$173.3 million** in the prior year, primarily due to development costs for GTA Phase 1 and Jubilee Field infill drilling[48](index=48&type=chunk) [5. Suspended Well Costs](index=15&type=section&id=5.%20Suspended%20Well%20Costs) This note details the company's capitalized exploratory well costs, including additions and an aging analysis, with significant costs related to the Yakaar, Teranga, and Tiberius discoveries currently undergoing development analysis Capitalized Exploratory Well Costs (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------------------------------------------------------------ | :------------ | :---------------- | | Ending balance of capitalized exploratory well costs | $207,517 | $196,202 | | Exploratory well costs capitalized for a period of one to five years | $69,746 | $63,552 | | Exploratory well costs capitalized for a period of six to ten years | $137,771 | $132,650 | | Number of projects with exploratory well costs capitalized for a period greater than one year | 2 | 2 | - Projects with capitalized exploratory well costs for more than one year include the Yakaar and Teranga discoveries offshore Senegal, where a joint development concept design is being finalized, and the Tiberius discovery in the Gulf of America, where a phased development plan is under discussion[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [6. Debt](index=16&type=section&id=6.%20Debt) This note provides a detailed breakdown of the company's outstanding debt, including the Facility, various Senior Notes, and Convertible Senior Notes, covering their principal balances, maturities, interest terms, and key covenants, such as the recently amended debt cover ratio for the Facility Outstanding Debt Principal Balances (In thousands) | Debt Instrument | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Facility | $1,000,000 | $900,000 | | 7.125% Senior Notes | $250,000 | $250,000 | | 7.750% Senior Notes | $350,000 | $350,000 | | 7.500% Senior Notes | $400,274 | $400,274 | | 8.750% Senior Notes | $500,000 | $500,000 | | 3.125% Convertible Senior Notes | $400,000 | $400,000 | | Total long-term debt | $2,900,274 | $2,800,274 | - The Facility's borrowing base was approved at **$1.35 billion** in March 2025, with **$350.0 million** undrawn availability as of June 30, 2025. The debt cover ratio covenant was amended in July 2025 to be less restrictive for September 2025 (**4.0x**) and March 2026 (**4.25x**), before returning to **3.50x**[54](index=54&type=chunk)[58](index=58&type=chunk) Interest and Other Financing Costs, Net (Six Months Ended June 30, In thousands) | Metric | 2025 | 2024 | | :------------------------------------ | :--------- | :--------- | | Interest and other financing costs, net | $106,676 | $53,727 | | Capitalized interest | $(8,510) | $(83,926) | - The decrease in capitalized interest is primarily due to the achievement of first gas production on the GTA Phase 1 project on **December 31, 2024**, after which interest is no longer capitalized for the project[78](index=78&type=chunk) [7. Derivative Financial Instruments](index=19&type=section&id=7.%20Derivative%20Financial%20Instruments) This note details the company's use of oil and interest rate derivative contracts to manage market exposures, providing tables of outstanding contracts, weighted average prices, and the fair value of these instruments, and reports the gains or losses recognized from derivatives Outstanding Oil Derivative Contracts (June 30, 2025) | Term | Type of Contract | Index | MBbl | Weighted Average Price per Bbl (Floor/Swap/Ceiling) | | :---------- | :--------------- | :---------- | :----- | :-------------------------------------------------- | | Jul - Dec 2025 | Two-way collars | Dated Brent | 4,000 | Floor: $60.00, Ceiling: $74.94 | | Jul - Dec 2025 | Three-way collars | Dated Brent | 1,000 | Put: $55.00, Floor: $70.00, Ceiling: $85.00 | | Jan - Jun 2026 | Two-way collars | Dated Brent | 1,000 | Floor: $60.00, Ceiling: $74.75 | | Jan - Dec 2026 | Three-way collars | Dated Brent | 2,000 | Put: $50.00, Floor: $60.00, Ceiling: $75.51 | | Jan - Jun 2026 | Swaps | Dated Brent | 1,000 | Swap: $72.90, Ceiling: $80.00 | | Jan - Dec 2026 | Swaps | Dated Brent | 1,000 | Swap: $72.46, Ceiling: $80.00 | Derivative Instruments Fair Value (In thousands) | Type of Contract | June 30, 2025 (Asset/Liability) | December 31, 2024 (Asset/Liability) | | :------------------------------------ | :------------------------------ | :-------------------------------- | | Commodity derivatives (current) | $15,120 | $6,714 | | Provisional oil sales | $0 | $2,242 | | Interest rate derivatives (current) | $875 | $2,202 | | Commodity derivatives (long-term) | $3,673 | $512 | | Commodity derivatives (current liability) | $(5,770) | $0 | | Commodity derivatives (long-term liability) | $(626) | $0 | | Total derivatives not designated as hedging instruments | $13,272 | $11,670 | Gain/(Loss) from Derivatives (Six Months Ended June 30, In thousands) | Type of Contract | 2025 (Gain/(Loss)) | 2024 (Gain/(Loss)) | | :------------------------------------ | :----------------- | :----------------- | | Provisional oil sales | $(7,607) | $(136) | | Commodity | $14,834 | $(20,970) | | Interest rate | $656 | $0 | | Total derivatives not designated as hedging instruments | $7,883 | $(21,106) | [8. Fair Value Measurements](index=21&type=section&id=8.%20Fair%20Value%20Measurements) This note describes the fair value hierarchy and presents the fair value measurements for the company's assets and liabilities, including commodity and interest rate derivatives, decommissioning trust fund investments, and debt, detailing the inputs and methodologies used for these valuations Fair Value Measurements (June 30, 2025, In thousands) | Asset/Liability | Level 2 Fair Value | | :------------------------ | :----------------- | | Commodity derivatives | $18,793 | | Interest rate derivatives | $875 | | Decommissioning trust fund: Debt securities | $23,190 | | Commodity derivatives (liabilities) | $(6,396) | - The decommissioning trust fund, established in **April 2024** for Jubilee Field retirement costs, held **$23.19 million** in US Treasury debt securities as of **June 30, 2025**, with **$11.5 million** contributed during the six months ended June 30, 2025[95](index=95&type=chunk)[96](index=96&type=chunk)[98](index=98&type=chunk) Fair Value of Debt (June 30, 2025, In thousands) | Debt Instrument | Carrying Value | Fair Value | | :-------------------------- | :------------- | :--------- | | 7.125% Senior Notes | $249,580 | $241,655 | | 7.750% Senior Notes | $348,326 | $311,279 | | 7.500% Senior Notes | $398,042 | $329,446 | | 8.750% Senior Notes | $495,275 | $377,360 | | 3.125% Convertible Senior Notes | $392,343 | $275,208 | | Facility | $1,000,000 | $1,000,000 | [9. Equity-based Compensation](index=25&type=section&id=9.%20Equity-based%20Compensation) This note details the equity-based compensation expense recognized from LTIP awards, including restricted stock units with service and market vesting criteria, and provides a breakdown of outstanding restricted stock units and the remaining unrecognized compensation Equity-based Compensation Expense (In thousands) | Period | 2025 | 2024 | | :------------------------------------ | :--------- | :--------- | | Three months ended June 30 | $7,300 | $10,500 | | Six months ended June 30 | $15,700 | $17,800 | Outstanding Restricted Stock Units (June 30, 2025, In thousands) | Type of Vesting | Units Outstanding | | :---------------------- | :---------------- | | Service Vesting | 5,442 | | Market / Service Vesting | 8,564 | - As of June 30, 2025, total equity-based compensation of **$35.0 million** is yet to be recognized over a weighted average period of **1.82 years**[107](index=107&type=chunk) [10. Income Taxes](index=26&type=section&id=10.%20Income%20Taxes) This note discusses the company's effective income tax rates, income before taxes by geographic region, and the factors influencing these rates, also mentioning the recent signing of new U.S. tax legislation, 'OBBBA,' whose implications are currently being evaluated Effective Tax Rates | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | Three months ended June 30 | (38)% | 56% | | Six months ended June 30 | (26)% | 45% | - New U.S. tax legislation, the 'One Big Beautiful Bill Act' (OBBBA), was signed in July 2025, and the company is currently evaluating its potential impact on financial statements, with no adjustments made for the six months ended June 30, 2025[111](index=111&type=chunk)[144](index=144&type=chunk) [11. Net Income (Loss) Per Share](index=27&type=section&id=11.%20Net%20Income%20%28Loss%29%20Per%20Share) This note reconciles the basic and diluted net income (loss) per share, detailing the weighted average shares outstanding and the impact of potentially dilutive securities, such as restricted stock units and convertible senior notes Net Income (Loss) Per Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Basic Net income (loss) per share | $(0.42) | $0.32 | | Diluted Net income (loss) per share | $(0.42) | $0.32 | [12. Commitments and Contingencies](index=27&type=section&id=12.%20Commitments%20and%20Contingencies) This note outlines the company's various commitments and contingencies, including legal proceedings, a development well drilling commitment in Equatorial Guinea, carry advance agreements for the GTA Phase 1 project, contributions to the Jubilee Field decommissioning trust, and LNG delivery obligations - The company has a commitment to drill one development well in Equatorial Guinea[117](index=117&type=chunk) - Kosmos' total share of carry advance agreements for the GTA Phase 1 project was **$355.5 million** as of June 30, 2025, an increase from **$280.1 million** at December 31, 2024[118](index=118&type=chunk) - The estimated remaining commitment for the Jubilee Field decommissioning trust is **$126.1 million** (net to Kosmos), to be funded annually over approximately **11 years**[119](index=119&type=chunk) - The company has a commitment to deliver a minimum annual contract quantity of **127,951,000 MMBtu** (approximately **2.45 million tonnes per annum**) of LNG under the Tortue Phase 1 SPA[122](index=122&type=chunk) [13. Additional Financial Information](index=28&type=section&id=13.%20Additional%20Financial%20Information) This note provides further details on accrued liabilities, highlighting an increase in revenue payable due to the timing of a Jubilee lifting, and summarizes the changes in asset retirement obligations, including accretion expense Accrued Liabilities (In thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Exploration, development and production | $75,565 | $78,163 | | Revenue payable | $63,583 | $18,909 | | General and administrative expenses | $13,620 | $39,071 | | Interest | $54,786 | $47,228 | | Income taxes | $21,896 | $52,262 | | Total accrued liabilities | $240,585 | $244,954 | - The increase in revenue payable during the six months ended June 30, 2025, is primarily related to the timing of a Jubilee lifting and receipt of related proceeds[123](index=123&type=chunk) Changes in Asset Retirement Obligations (In thousands) | Metric | June 30, 2025 | | :-------------------------------- | :------------ | | Beginning asset retirement obligations | $407,011 | | Liabilities settled during period | $(374) | | Revisions in estimated retirement obligations | $248 | | Accretion expense | $18,231 | | Ending asset retirement obligations | $425,116 | [14. Business Segment Information](index=30&type=section&id=14.%20Business%20Segment%20Information) This note provides a detailed breakdown of financial performance by the company's four geographic segments: Ghana, Equatorial Guinea, Mauritania/Senegal, and the Gulf of America, including segment-specific revenues, production costs, exploration expenses, and capital expenditures for the three and six months ended June 30, 2025 and 2024 Segment Net Income (Loss) (Three Months Ended June 30, 2025, In thousands) | Segment | Net Income (Loss) | | :----------------- | :---------------- | | Ghana | $38,892 | | Equatorial Guinea | $2,318 | | Mauritania/Senegal | $(72,122) | | Gulf of America | $(7,897) | Segment Net Income (Loss) (Six Months Ended June 30, 2025, In thousands) | Segment | Net Income (Loss) | | :----------------- | :---------------- | | Ghana | $67,925 | | Equatorial Guinea | $(391) | | Mauritania/Senegal | $(134,290) | | Gulf of America | $(23,119) | Consolidated Capital Expenditures, Net (Six Months Ended June 30, In thousands) | Period | 2025 | 2024 | | :----- | :--------- | :--------- | | Total | $172,295 | $501,644 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Kosmos Energy's financial performance and condition, including recent operational developments across its key assets, a detailed analysis of financial results compared to prior periods, and an overview of liquidity, capital resources, and critical accounting policies [Overview](index=34&type=section&id=Overview) - Kosmos Energy is a leading deepwater exploration and production company focused on meeting global energy demand, with diversified oil and gas production and high-quality development opportunities[134](index=134&type=chunk) [Recent Developments](index=34&type=section&id=Recent%20Developments) - Ghana production averaged approximately **87,800 Boepd gross** (**29,100 Boepd net**) in Q2 2025, impacted by a **two-week scheduled shutdown** of the Jubilee FPSO. The Jubilee and TEN licenses were extended to **2040**[135](index=135&type=chunk)[137](index=137&type=chunk) - Gulf of America production averaged approximately **19,600 Boepd net** (**~84% oil**) in Q2 2025. Winterfell-3 was temporarily plugged and abandoned in Q1 2025 due to sand production, while Winterfell-4 is expected online in Q3 2025[138](index=138&type=chunk)[139](index=139&type=chunk) - Equatorial Guinea production averaged approximately **22,000 Bopd gross** (**7,700 Bopd net**) in Q2 2025, below expectations due to subsea multiphase flow pump mechanical failures at Ceiba[140](index=140&type=chunk) - Mauritania and Senegal production averaged approximately **29,200 Boepd gross** (**7,100 Boepd net**) in Q2 2025 as the GTA project ramped up. Key milestones include first gas (**Dec 2024**), first LNG (**Feb 2025**), first LNG cargo export (**Apr 2025**), and Gimi FLNG Commercial Operations Date (**Q2 2025**)[141](index=141&type=chunk)[142](index=142&type=chunk) - The exploration phase for Block 5 offshore Sao Tome and Principe was extended by **twelve months** to **May 2026**[143](index=143&type=chunk) - New U.S. tax legislation, the 'One Big Beautiful Bill Act' (OBBBA), was signed in July 2025, and the company is evaluating its potential implications[144](index=144&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) [Three months ended June 30, 2025 compared to three months ended June 30, 2024](index=39&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20three%20months%20ended%20June%2030%2C%202024) For the three months ended June 30, 2025, the company saw decreased oil and gas revenue due to lower prices, while production costs significantly increased from GTA Phase 1 LNG ramp-up, with exploration expenses decreasing and depletion, depreciation, amortization, and net interest costs rising Key Financial Changes (Three Months Ended June 30, In thousands) | Metric | 2025 | 2024 | Change | | :------------------------------------ | :--------- | :--------- | :--------- | | Oil and gas revenue | $392,635 | $450,900 | $(58,265) | | Average total sales price per Boe | $58.93 | $75.73 | $(16.80) | | Oil and gas production costs | $243,118 | $150,733 | $92,385 | | Exploration expenses | $4,069 | $13,235 | $(9,166) | | Depletion, depreciation and amortization | $151,268 | $90,094 | $61,174 | | Interest and other financing costs, net | $54,834 | $37,279 | $17,555 | | Derivatives, net | $(21,566) | $(2,852) | $(18,714) | | Net income (loss) | $(87,740) | $59,770 | $(147,510) | [Six months ended June 30, 2025 compared to six months ended June 30, 2024](index=40&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20six%20months%20ended%20June%2030%2C%202024) For the six months ended June 30, 2025, the company reported significantly decreased oil and gas revenue from lower prices and reduced Ghana sales, with production costs rising substantially due to GTA Phase 1 LNG ramp-up, while exploration expenses decreased, and depletion, depreciation, amortization, and net interest costs increased Key Financial Changes (Six Months Ended June 30, In thousands) | Metric | 2025 | 2024 | Change | | :------------------------------------ | :--------- | :--------- | :--------- | | Oil and gas revenue | $682,770 | $870,003 | $(187,233) | | Average total sales price per Boe | $61.46 | $74.66 | $(13.20) | | Oil and gas production costs | $410,426 | $244,351 | $166,075 | | Exploration expenses | $13,738 | $25,295 | $(11,557) | | Depletion, depreciation and amortization | $271,935 | $191,022 | $80,913 | | Interest and other financing costs, net | $106,676 | $53,727 | $52,949 | | Derivatives, net | $(14,834) | $20,970 | $(35,804) | | Net income (loss) | $(198,346) | $151,456 | $(349,802) | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) [Sources and Uses of Cash](index=42&type=section&id=Sources%20and%20Uses%20of%20Cash) This section summarizes the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024, highlighting a significant decrease in operating cash flow in 2025 due to lower commodity prices, reduced Ghana sales volumes, and increased production costs from the GTA Phase 1 project Sources and Uses of Cash (Six Months Ended June 30, In thousands) | Metric | 2025 | 2024 | | :-------------------------------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $126,280 | $496,220 | | Net cash used in investing activities | $(259,557) | $(555,568) | | Net cash provided by financing activities | $99,999 | $134,705 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(33,278) | $75,357 | - The decrease in cash provided by operating activities in 2025 is primarily a result of lower average realized oil and gas prices, lower sales volumes in Ghana, and higher oil and gas production costs related to the ramp-up of LNG production at the GTA Phase 1 project[169](index=169&type=chunk) [Capital Expenditures and Investments](index=43&type=section&id=Capital%20Expenditures%20and%20Investments) This section outlines the company's estimated **$350 million** capital expenditure budget for 2025, allocated across maintenance activities, completion of the GTA Phase 1 development, and appraisal/development programs, and discusses various factors that could impact future capital needs and spending - The estimated capital expenditure budget for the year ending December 31, 2025, is approximately **$350 million**, excluding acquisitions or divestitures[173](index=173&type=chunk) 2025 Capital Program Breakdown: - Approximately **$275 million** for maintenance activities across Ghana, Equatorial Guinea, and Gulf of America assets, including infill development drilling and facilities integrity[174](index=174&type=chunk) - Approximately **$50 million** for the completion of the first phase of the GTA development in Mauritania and Senegal[175](index=175&type=chunk) - Approximately **$25 million** for progressing appraisal and development programs in the Gulf of America, Mauritania, and Senegal[175](index=175&type=chunk) [Significant Sources of Capital](index=44&type=section&id=Significant%20Sources%20of%20Capital) This section details the company's primary funding mechanisms, including the Facility and various Senior Notes, highlighting the Facility's borrowing base and recent amendment to the debt cover ratio, along with the outstanding balances, maturities, and ranking of its Senior Notes and Convertible Senior Notes - As of June 30, 2025, borrowings under the Facility totaled **$1.0 billion**, with an undrawn availability of **$350.0 million**. The borrowing base was approved at **$1.35 billion** in March 2025[176](index=176&type=chunk)[177](index=177&type=chunk) - In July 2025, the debt cover ratio covenant for the Facility was amended to be less restrictive for September 2025 (**4.0x**) and March 2026 (**4.25x**), before returning to **3.50x**, to align with business operations, lower oil prices, and GTA Phase 1 pre-production costs[179](index=179&type=chunk) Senior Notes Outstanding (June 30, 2025, In millions) | Senior Note Series | Outstanding Balance | Maturity Date | | :-------------------------- | :------------------ | :------------ | | 7.125% Senior Notes | $250.0 | April 4, 2026 | | 7.750% Senior Notes | $350.0 | May 1, 2027 | | 7.500% Senior Notes | $400.3 | March 1, 2028 | | 8.750% Senior Notes | $500.0 | October 1, 2031 | - The **3.125% Convertible Senior Notes**, with an outstanding balance of **$400.0 million**, mature on **March 15, 2030**. Capped call transactions were entered into to reduce potential dilution upon conversion[183](index=183&type=chunk)[186](index=186&type=chunk) [Contractual Obligations](index=46&type=section&id=Contractual%20Obligations) This section provides a summary of the company's estimated contractual obligations as of June 30, 2025, including principal debt repayments, interest and commitment fees, operating leases, purchase obligations, decommissioning trust fund contributions, and firm transportation commitments Estimated Contractual Obligations (June 30, 2025, In thousands) | Obligation Type | Total | 2025 (Jul-Dec) | 2026 | 2027 | 2028 | 2029 | Thereafter | | :------------------------------------ | :---------- | :------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Total principal debt repayments | $2,900,274 | $0 | $250,000 | $444,086 | $796,761 | $509,427 | $900,000 | | Interest & commitment fee payments on long-term debt | $836,940 | $122,775 | $211,459 | $185,271 | $136,866 | $86,819 | $93,750 | | Operating leases | $17,290 | $2,116 | $4,296 | $4,226 | $3,844 | $2,808 | $0 | | Purchase obligations | $18,654 | $18,654 | $0 | $0 | $0 | $0 | $0 | | Decommissioning Trust Funds | $126,058 | $0 | $11,460 | $11,460 | $11,460 | $11,460 | $80,218 | | Firm transportation commitments | $7,961 | $1,705 | $4,182 | $2,074 | $0 | $0 | $0 | [Critical Accounting Policies](index=47&type=section&id=Critical%20Accounting%20Policies) Critical Accounting Policies: - Revenue recognition - Exploration and development costs - Receivables - Income taxes - Derivative instruments and hedging activities - Estimates of proved oil and gas reserves - Asset retirement obligations - Impairment of long-lived assets[196](index=196&type=chunk) [Cautionary Note Regarding Forward-looking Statements](index=47&type=section&id=Cautionary%20Note%20Regarding%20Forward-looking%20Statements) Key Risk Factors for Forward-looking Statements: - Impact of potential regional or global recession, inflationary pressures, and macroeconomic conditions - Impacts of geopolitical events (e.g., war in Ukraine, Middle East instability) on oil and gas prices and expenditures - Ability to find, acquire, develop, and produce from discoveries and prospects - Uncertainties in estimating oil and natural gas data - Termination of or intervention in concessions, rights, or authorizations by governments - Volatility of oil, natural gas, and LNG prices, and ability to implement hedges - Availability and cost of drilling rigs, production equipment, supplies, personnel, and oilfield services - Current and future government regulation of the oil and gas industry, monetary/foreign exchange sectors, or investment in certain countries - Changes in environmental, health and safety, climate change, or GHG laws and regulations - Geological, geophysical, and other technical and operational problems - Vulnerability to severe weather events and physical effects of climate change - Ability to meet obligations under debt agreements and obtain financing/refinancing - Amount of collateral required for hedging transactions, letters of credit, and performance bonds - Results of legal proceedings, arbitrations, or investigations[197](index=197&type=chunk)[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section provides quantitative and qualitative information about the company's exposure to market risks, specifically commodity price and interest rate fluctuations, detailing how these risks are managed through derivative financial instruments and presenting sensitivity analyses [Commodity Price Risk](index=50&type=section&id=Commodity%20Price%20Risk) - The company's revenues and financial performance are highly dependent on volatile crude oil prices, with Dated Brent prices ranging between **$61.09** and **$83.06 per Bbl** in the first six months of 2025[203](index=203&type=chunk) - To mitigate commodity price risk, the company uses oil derivative contracts, including swaps, collars, put options, and call options. As of June 30, 2025, open commodity derivative instruments were in a net asset position of **$12.4 million**[204](index=204&type=chunk)[209](index=209&type=chunk) - A hypothetical **10% increase** in oil price curves would decrease future pre-tax earnings by approximately **$43.0 million**, while a **10% decrease** would increase pre-tax earnings by approximately **$41.3 million**[209](index=209&type=chunk) [Interest Rate Risk](index=51&type=section&id=Interest%20Rate%20Risk) - Outstanding borrowings under the Facility, totaling **$1.0 billion** with a weighted average interest rate of **8.1%** as of June 30, 2025, are subject to variable interest rates[212](index=212&type=chunk) - A hypothetical **10% increase** in the floating market rate would result in an estimated additional **$4.2 million** in interest expense per year, reduced to **$1.1 million** for the six months ending December 31, 2025, due to fixed interest rate swaps[212](index=212&type=chunk) - As of June 30, 2025, the fair market value of interest rate swaps was a net asset of approximately **$0.9 million**, with a negligible impact from a **10% change** in SOFR[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the most recent fiscal quarter - The company's disclosure controls and procedures were effective as of **June 30, 2025**[214](index=214&type=chunk) - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the most recent fiscal quarter[215](index=215&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) There have been no material changes to the information concerning legal proceedings since the company's annual report on Form 10-K - No material changes from the information concerning legal proceedings discussed in the annual report on Form 10-K[216](index=216&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors discussed in the company's annual report on Form 10-K for the year ended December 31, 2024 - No material changes from the risk factors discussed in the annual report on Form 10-K for the year ended December 31, 2024[217](index=217&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities and use of proceeds[218](index=218&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities[219](index=219&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[220](index=220&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) This section provides information on Rule 10b5-1 and Non-Rule 10b5-1 trading arrangements by officers and directors, noting that Sir John Grant adopted and terminated a Rule 10b5-1 plan for stock sales to cover tax liability from restricted share units - Sir John Grant, a director, adopted and terminated a Rule 10b5-1 trading plan in **February 2025** for the sale of **27,923 shares** to cover income tax liability from vested restricted share units[222](index=222&type=chunk) - No officers or directors adopted or terminated any non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025[223](index=223&type=chunk) [Signatures](index=53&type=section&id=Signatures) This section contains the formal signatures certifying the quarterly report, signed by Neal D. Shah, Senior Vice President and Chief Financial Officer, on behalf of Kosmos Energy Ltd - The report was signed by Neal D. Shah, Senior Vice President and Chief Financial Officer, on **August 4, 2025**[226](index=226&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the quarterly report on Form 10-Q, including certifications required by the Sarbanes-Oxley Act and XBRL taxonomy documents Key Exhibits: - Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 - XBRL Instance Document, Taxonomy Extension Schema Document, Calculation Linkbase Document, Label Linkbase Document, Presentation Linkbase Document, and Definition Linkbase Document[228](index=228&type=chunk)

Financial Data and Key Metrics Changes - The company reported a CapEx of approximately $170 million for 2025, down about 65% from 2024, with a full-year CapEx forecast reduced from around $400 million to approximately $350 million [9][10][33] - Production was higher sequentially due to the ramp-up of the GTA project and strong performance in the Gulf of America, although it was lower than guidance mainly due to timing issues [31][32] Business Line Data and Key Metrics Changes - In the Gulf of America, net production was around 19,600 barrels of oil equivalent per day, driven by strong performance from the Kodiak and Oddjob fields [16] - Jubilee gross production was around 55,000 barrels of oil per day, lower than expected due to planned FPSO shutdowns and underperformance of some wells [14][15] Market Data and Key Metrics Changes - The company has hedged 7 million barrels of oil for 2026 with a floor of $66 per barrel and a ceiling of $75 per barrel, taking advantage of higher prices in late Q2 and early Q3 [12][35] Company Strategy and Development Direction - The company aims to grow production, reduce costs, and enhance the resilience of its balance sheet, with a focus on free cash flow generation [5][37] - Future expansion opportunities are being explored, particularly in the GTA project, which is now fully operational, and in the Jubilee field, where consistent drilling is planned [20][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q2, including production declines and operational issues, but expressed optimism about the potential for recovery through improved data and regular drilling [44][49] - The company is focused on maximizing cash flow and reducing net debt, with expectations of continued production growth into 2026 [33][37] Other Important Information - The company has agreed on indicative terms for a term loan of up to $250 million secured against Gulf of America assets, aimed at addressing upcoming debt maturities [11][34] - A Memorandum of Understanding (MOU) was signed with the government of Ghana to extend licenses, which is expected to facilitate long-term investments in the Jubilee field [15][76] Q&A Session Summary Question: Concerns about Jubilee production decline - Management acknowledged the 40% decline in Jubilee production and emphasized the need for regular drilling to maintain production levels, with plans to bring additional wells online [42][48] Question: Cost reduction strategies for GTA - Management discussed exploring various operating models to reduce costs, including refinancing the FPSO and optimizing operations [50][55] Question: CapEx guidance and sustainability - Management confirmed that the reduced CapEx guidance of $350 million is sustainable, focusing on maximizing free cash flow while progressing key projects [60][64] Question: License extension details - Management clarified that the MOU includes a commitment to increase gas volume while maintaining existing fiscal terms, allowing for a consistent drilling program [75][76] Question: GTA costs and future cash flow - Management provided insights into GTA costs, indicating that they expect to normalize costs and achieve a breakeven of $50 to $55 per barrel, with free cash flow sensitivity linked to oil prices [81][86]

Financial Data and Key Metrics Changes - The company reported a CapEx of approximately $170 million for 2025, down around 65% from 2024, with a revised full-year CapEx forecast reduced from $400 million to $350 million [8][34] - The company is generating free cash flow as production increases and CapEx and NOC funding wind down [34][41] - OpEx per BOE, excluding GTA, was higher in the quarter due to the timing of lifting costs, but G&A expenses were lower due to overhead savings [33][34] Business Line Data and Key Metrics Changes - In the Gulf of America, net production was around 19,600 barrels of oil equivalent per day, driven by strong performance from the Kodiak and Oddjob fields [15] - Jubilee gross production was around 55,000 barrels of oil per day, lower than expected due to planned FPSO shutdowns and underperformance of some wells [13][14] - The GTA project achieved commercial operations with a net production of just over 7,000 barrels of oil equivalent per day in the second quarter [12] Market Data and Key Metrics Changes - The company lifted 3.5 gross LNG cargoes in the second quarter, with expectations to reach a full-year guidance of 20 gross cargoes [12][17] - The company has hedged 7 million barrels of oil production for 2026, with a floor price of $66 per barrel and a ceiling of $75 per barrel [37] Company Strategy and Development Direction - The company aims to grow production, reduce costs, and enhance the resilience of its balance sheet, focusing on free cash flow generation [40][41] - Future expansion opportunities include leveraging existing infrastructure to double gas production at GTA and consistent drilling at Jubilee to access significant reserves [20][41] - The company is exploring alternative lower-cost operating models to drive down costs across projects [10][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in the second quarter, including production declines and operational issues, but expressed optimism about improved data and drilling programs to stabilize and grow production [46][50] - The company is focused on maintaining a regular drilling cadence at Jubilee to offset production declines and maximize field potential [28][76] - Management emphasized the importance of securing gas sales agreements to optimize the GTA project and meet domestic gas demands [97] Other Important Information - The company signed an MOU with the government of Ghana to extend licenses, allowing for long-term investments in the Jubilee field [14][78] - The company is progressing additional financing activities to address upcoming debt maturities and enhance liquidity [10][105] Q&A Session Summary Question: Concerns about Jubilee's production decline - Management acknowledged the 40% decline in Jubilee production and highlighted the need for regular drilling to maintain production levels, with improved data aiding in identifying new drilling opportunities [46][50] Question: Cost reduction strategies for GTA - Management discussed exploring various operating models to reduce costs, emphasizing the need to optimize operations and refinance the FPSO lease [52][56] Question: CapEx guidance and sustainability - Management confirmed that the revised CapEx guidance of $350 million is sustainable, focusing on key projects and maintaining growth without compromising future potential [62][66] Question: Importance of gas sales agreements for GTA - Management stated that securing gas sales agreements is crucial for optimizing the GTA project and meeting domestic gas needs, with ongoing discussions with the government [97] Question: License extension details - Management clarified that the MOU includes a commitment to drill up to 20 wells and a slight decrease in gas prices, but no changes to fiscal terms [78]

Production and Operations - Second quarter net production was approximately 63,500 boepd[11] - Kosmos is targeting 27 mtpa FLNG nameplate capacity for GTA in the fourth quarter of 2025[9] - Jubilee's first producer from the 2025/26 drilling program came online in late July[9] - Winterfell-4 was successfully drilled and is expected to add approximately 1,000 boepd net rate when it comes online at the end of the third quarter of 2025[39] - Gross oil production from Ceiba & Okume averaged approximately 22,000 bopd in the second quarter[17] Financial Performance and Guidance - Kosmos expects fiscal year 2025 capital expenditures to be approximately $350 million, reduced from a previous estimate of $400 million[9,47] - Kosmos is targeting a $25 million overhead reduction by year-end 2025[10] - Kosmos has agreed to indicative terms for a Gulf of America term loan of up to $250 million to repay 2026 maturities[9,41] - Kosmos anticipates operating expenses per barrel of oil equivalent (Opex/boe) to decrease as production increases[9] - Kosmos expects 3Q 2025 net production to be 65,000 – 71,000 boe/day and FY 2025 net production to be 65,000 – 70,000 boe/day[50] Hedging and Risk Management - Kosmos has hedged 5 million barrels of remaining oil production for 2025 with a floor of approximately $62/barrel and a ceiling of approximately $77/barrel[47] - Kosmos has hedged 7 million barrels of oil production for 2026 with a floor of approximately $66/barrel and a ceiling of approximately $75/barrel, targeting approximately 50% of 2026 oil production to be hedged[47]