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Kosmos Energy(KOS) - 2025 Q1 - Quarterly Results
Kosmos EnergyKosmos Energy(US:KOS)2025-05-06 10:38

Financial & Operating Results Overview First Quarter 2025 Highlights 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 Q13 - 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 Ghana45 Financial Update Financial Performance and Position 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 guidance7 - 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 quarter10 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 Operational Update Production Overview 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 completed11 Mauritania and Senegal 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 currently12 - Q1 2025 production averaged approximately 1,300 boepd net (7.8 mmcfd)12 - Work has commenced on Phase 1+, a low-cost brownfield expansion expected to double gas sales by leveraging existing infrastructure14 - Near-term financial focus includes reducing operating costs and completing the FPSO refinancing in the second half of the year13 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 budget15 - 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 data16 Gulf of America 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 oil18 - The Winterfell-3 well remediation was unsuccessful. Drilling of Winterfell-4 is underway and is expected to come online in Q3 202518 - The Tiberius development is being progressed with partner Oxy, focusing on cost reduction supported by new seismic data being acquired this year19 Equatorial Guinea 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 guidance20 - A cost-effective well work program is planned to support production for the remainder of the year21 Financial Statements and Reconciliations Consolidated Statements of Operations 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 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 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 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 2025 Guidance 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 & Senegal46 Hedging Summary 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 |