Kosmos Energy(US:KOS)2025-11-04 00:30Production and Revenue - In Q3 2025, production from Ghana averaged approximately 93,600 Boepd gross (31,300 Boepd net) and production from the Gulf of America averaged approximately 16,600 Boepd net (~84% oil) [135][138] - The Greater Tortue Ahmeyim project achieved first LNG production in February 2025, with 13.5 gross cargoes lifted through October 2025, and a daily contracted sales volume of approximately 2.45 million tonnes per annum [145] - Total oil and gas revenue for Q3 2025 was $310.96 million, a decrease from $407.79 million in Q3 2024, with oil sales contributing $255.66 million [149] - Oil and gas revenue decreased by $96.8 million to $310.96 million for the three months ended September 30, 2025, compared to $407.79 million in the same period of 2024, primarily due to lower average realized prices and production volumes [155] - For the nine months ended September 30, 2025, oil and gas revenue decreased by $284.1 million to $993.73 million, compared to $1.28 billion in 2024 [165] Costs and Expenses - Total production costs for Q3 2025 were $147.70 million, compared to $133.47 million in Q3 2024, with average cost per Boe rising to $26.78 from $22.97 [149] - Total costs and expenses increased by $116.4 million to $417.7 million for the three months ended September 30, 2025, compared to $301.3 million in 2024 [154] - Oil and gas production costs increased by $180.3 million to $558.12 million for the nine months ended September 30, 2025, compared to $377.82 million in 2024 [166] - Exploration expenses rose by $28.7 million to $68.69 million for the nine months ended September 30, 2025, primarily due to costs associated with the Winterfell-4 well [167] Financial Performance - Net loss for the three months ended September 30, 2025, was $124.3 million, a decrease of $169.3 million compared to a net income of $44.97 million in the same period of 2024 [154] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $98.7 million, a decrease of 80.4% compared to $502.5 million for the same period in 2024 [178] - The company had a net debt of $2.947 billion as of September 30, 2025, compared to $2.715 billion at the end of 2024 [180] Debt and Financing - A senior secured term loan credit agreement was entered into on September 24, 2025, with a first tranche of $150 million funded on October 1, 2025 [148] - Total long-term debt increased to $3.025 billion as of September 30, 2025, up from $2.800 billion at the end of 2024 [180] - The company repurchased $150 million of its 7.125% Senior Notes due 2026, reducing the outstanding balance to $100 million [191] - As of September 30, 2025, borrowings under the Facility totaled approximately $1.1 billion, with undrawn availability of $225 million [177] - The facility's undrawn availability was $225 million as of September 30, 2025, with total borrowings under the facility at approximately $1.1 billion [185] Operational Developments - The partnership in Ghana has prepared amendments to extend the WCTP and DT licenses to 2040, covering the Jubilee and TEN fields [137] - The company received approval for a twelve-month extension for the exploration phase of Block EG-24 in Equatorial Guinea, extending to December 2026 [143] - The company plans to drill additional infill wells and advance development efforts in Ghana, Equatorial Guinea, and the Gulf of America [183] - The company has a commitment to drill one development well in Equatorial Guinea as of September 30, 2025 [205] Market and Price Sensitivity - Average oil sales price per barrel in Q3 2025 was $67.30, down from $76.64 in Q3 2024, while average gas sales price per Mcf increased to $5.54 from $3.54 [149] - Oil prices in the first nine months of 2025 ranged between $61.09 and $83.06 per Bbl for Dated Brent, indicating significant price volatility [216] - A hypothetical 10% increase in oil prices would decrease future pre-tax earnings by approximately $53.6 million, while a 10% decrease would increase future pre-tax earnings by approximately $47.3 million [222] - If oil prices average $50.00 or $60.00 per barrel for the remainder of 2025 and 2026, the average realized pricing after derivatives would be approximately $56.00 and $62.00 per barrel, respectively [222] Derivative Instruments and Risk Management - The company has entered into various oil derivative contracts to mitigate exposure to commodity price risk, including swaps and options [217] - The company’s commodity derivative financial instruments are sensitive to changes in oil prices, with specific contracts outlined for 2025 and 2026 [221] - The fair market value of the company's interest rate swaps was a net asset of approximately $0.2 million as of September 30, 2025 [225] - Changes in market interest rates could impact interest costs associated with future debt issuances or borrowings [224] Commitments and Covenants - The company is subject to a financial covenant under the Facility, which was amended to be less restrictive for the next two assessment dates [188] - The company is subject to a GoA net leverage ratio covenant of not more than 3.50x and a field life coverage ratio of not less than 1.50x [204] - The total commitment for decommissioning trust funds is estimated to be approximately $126.1 million as of September 30, 2025 [209]