Kosmos Energy(US:KOS)2025-02-24 17:58Financial Performance - Oil and gas revenue for the year ended December 31, 2024, was $1,675.36 million, a decrease of 1.5% from $1,701.61 million in 2023[471]. - Net income for 2024 was $189.85 million, down from $213.52 million in 2023, representing a decline of about 11.1%[471]. - The company's total assets increased to $5,308.99 million as of December 31, 2024, compared to $4,938.13 million in 2023, reflecting a growth of approximately 7.5%[469]. - The company's asset retirement obligations totaled $406.89 million as of December 31, 2024, an increase from $343.98 million in 2023, indicating a rise of approximately 18.3%[469]. - Total current liabilities increased to $594.95 million in 2024 from $554.83 million in 2023, marking an increase of about 7.2%[469]. - The company reported a basic net income per share of $0.40 for 2024, down from $0.46 in 2023, reflecting a decrease of approximately 13.0%[471]. - Long-term debt increased to $2,744.71 million in 2024 from $2,390.91 million in 2023, representing an increase of about 14.8%[469]. - Operating cash flow for 2024 was $678.249 million, down from $765.170 million in 2023, reflecting a decline of 11.4%[478]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $85.277 million, compared to $98.761 million in 2023, a decrease of 13.4%[487]. - The total costs and expenses for 2024 were $1,325.75 million, slightly down from $1,329.80 million in 2023, showing a marginal decrease of about 0.3%[471]. Debt and Financing - Outstanding borrowings under the Facility totaled $900.0 million as of December 31, 2024, with a weighted average interest rate of approximately 8.4%[437]. - The Facility size and borrowing base capacity increased to $1.35 billion from $1.25 billion, with borrowings totaling $900.0 million and undrawn availability of $450 million as of December 31, 2024[550][552]. - The net leverage ratio as of December 31, 2024, was 2.54x, indicating a need to restrict approximately $66.0 million in cash unless waived by lenders[487]. - The Company recognized a loss on debt modifications of approximately $22.0 million during the second quarter of 2024 due to the amendment and restatement of the Facility[550]. - The 7.125% Senior Notes outstanding principal decreased to $250.0 million from $650.0 million, reflecting a significant reduction in debt obligations[548]. - The Company issued $450.0 million of 7.500% Senior Notes in March 2021, receiving net proceeds of approximately $444.4 million after fees, which were used to repay outstanding indebtedness and for general corporate purposes[570]. - The Company completed the repurchase of approximately $49.7 million of the 7.500% Senior Notes on September 24, 2024, pursuant to the Tender Offers[571]. - In September 2024, the Company issued $500.0 million of 8.750% Senior Notes, receiving net proceeds of approximately $494.9 million after fees, which were used to fund Tender Offers and related expenses[577]. - The Company issued $400.0 million of 3.125% Convertible Senior Notes in March 2024, receiving net proceeds of $390.4 million after fees[584]. - The carrying value of total debt as of December 31, 2024, is $2,781,497,000, an increase from $2,414,921,000 in 2023, representing a growth of approximately 15.1%[619]. Commodity and Derivative Instruments - Oil prices during 2024 ranged between $70.56 and $93.35 per barrel for Dated Brent, indicating significant volatility in commodity prices[431]. - The company is exposed to risks from changes in commodity prices and interest rates, which could impact revenues and cash flows[425]. - The company has various oil derivative contracts, including collars, put options, call options, and swaps, to mitigate exposure to commodity price risk[432]. - The company entered into Dated Brent three-way collar contracts for 2.0 million barrels from January 2025 through December 2025, with a sold put price of $55.00 per barrel[435]. - The estimated fair value of derivative assets was $11,670,000, compared to $6,765,000 in 2023[605]. - Total derivatives not designated as hedging instruments resulted in a loss of $14,747,000 for the year ended December 31, 2024[607]. - The company has a notional fixed rate of 3.645% on interest rate swaps with a notional amount of $500,000, effective January to December 2025[603]. - The total fair value of the company's liabilities related to commodity derivatives is $(3,103,000) as of December 31, 2023[611]. - The company’s provisional oil sales derivative is valued at $2,242,000, based on sales volumes and pricing differences over the contract term[613]. Exploration and Development - The company’s ability to find and develop new oil and gas prospects is critical for future growth and operational success[21]. - Exploration expenses rose significantly to $119.91 million in 2024, compared to $42.28 million in 2023, indicating an increase of approximately 183.5%[471]. - The company completed the acquisition of an additional 5.5% interest in the Winterfell area for $9.6 million in March 2022[520]. - The acquisition of an additional 3.2% interest in the Winterfell area was completed for $6.6 million in September 2022, raising the total interest to 25.0%[521]. - Kosmos increased its participating interest in the Tiberius area from 33.3% to 50.0% following the acquisition of an additional 16.7% interest in March 2024[517]. - The company holds a 24% non-operated participating interest in Block EG-01 offshore Equatorial Guinea, covering approximately 59,400 acres[518]. - Kosmos assumed BP's participating interest in the Cayar Offshore Profond Block, increasing its interest to 90% effective January 18, 2024[519]. - The Yakaar and Teranga discoveries in Senegal continue to progress, with a final investment decision for development expected to be made following additional evaluations[541]. Asset Management - The company follows the successful efforts method of accounting for its oil and gas properties, with proved properties being depleted using the unit-of-production method based on estimated proved oil and gas reserves[449]. - Proved oil and gas reserves are estimated by independent petroleum engineering consultants, affecting depletion calculations and impairment assessments[504]. - The company recorded depletion expense of $419.3 million in 2024, compared to $411.6 million in 2023, and no proved property impairments were recorded in 2024[533]. - The company capitalizes asset retirement costs by increasing the carrying amount of the related long-lived asset by the same amount as the liability[497]. - The company recognized tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination[512]. - The company contributed $11.5 million to the decommissioning trust fund in 2024, with investments primarily in US Treasury debt securities valued at $10,653,000[616]. - The estimated fair value of the decommissioning trust fund investments is $10,653,000, with unrealized losses of $55,000 recorded for the year[617]. - The company’s long-lived assets are subject to fair value adjustments based on impairment reviews when circumstances indicate potential recoverability issues[620].