Kosmos Energy(US:KOS)2022-02-28 21:23Financial Performance - Total revenues and other income for the year ended December 31, 2021, were $1.33 billion, compared to $896.2 million in 2020, marking a 48.7% increase [480]. - Oil and gas revenue for 2021 was $1.33 billion, up from $804 million in 2020, representing a 65.7% increase [480]. - The net loss for the year ended December 31, 2021, was $77.8 million, compared to a net loss of $411.6 million in 2020, indicating a significant improvement [480]. - The Company’s total assets increased to $4.94 billion as of December 31, 2021, from $3.87 billion in 2020, reflecting a growth of 27.6% [479]. - Kosmos Energy's total equity as of December 31, 2021, was $529.2 million, an increase from $440.2 million in 2020 [483]. - The company generated net cash provided by operating activities of $374.3 million in 2021, up from $196.1 million in 2020 [486]. - The company reported a basic net loss per share of $0.19 for 2021, an improvement from a loss of $1.02 per share in 2020 [480]. Debt and Financing - Outstanding borrowings totaled approximately $1.2 billion as of December 31, 2021, with a weighted average interest rate of 4.3%, exposing the company to potential earnings loss due to increases in market interest rates [447]. - Long-term debt, net, rose to $2.59 billion as of December 31, 2021, compared to $2.10 billion in 2020, an increase of 23.1% [479]. - The Company redeemed all of the 7.875% Senior Secured Notes for $543.8 million, resulting in a $22.9 million loss on extinguishment of debt [573]. - The Company issued $650.0 million of 7.125% Senior Notes, receiving net proceeds of approximately $640.0 million, which were used to redeem the 7.875% Senior Secured Notes and repay a portion of the Corporate Revolver [574]. - The Company has estimated debt repayments of $2.675 billion over the next five years, with significant repayments scheduled for 2026 and thereafter [599]. - As of December 31, 2021, the Company had derivative liabilities totaling $72.2 million, reflecting a significant increase from $28.0 million in 2020 [607]. Asset Management - As of December 31, 2021, the net book value of the Company's proved oil and natural gas properties was $4.2 billion, with a depletion expense of $442.3 million for the year [460]. - The Company's asset retirement obligations totaled $325.5 million as of December 31, 2021, reflecting significant estimation complexities [464]. - The company recorded depletion expense of $442.3 million for the year ended December 31, 2021 [545]. - The fair value of assets acquired in the Anadarko WCTP transaction included proved oil and gas properties valued at $718.2 million [532]. - The company evaluated unproved property periodically for impairment, considering exploration results and commodity price outlooks [503]. Risk Management - The company utilizes various oil derivative contracts, including collars, put options, call options, and swaps, to mitigate exposure to commodity price risk associated with anticipated future oil production [443]. - The ongoing COVID-19 pandemic has impacted demand for oil and resulted in significant variations in oil prices, affecting the company's operational projects and supply chain [442]. - The company is subject to various risks, including the volatility of oil and natural gas prices, which may adversely affect its results as indicated in forward-looking statements [22]. - A hypothetical 10% price decrease in commodity futures would increase future pre-tax earnings by approximately $60.6 million [446]. - The Company reported a loss of $277.7 million from derivatives not designated as hedging instruments for the year ended December 31, 2021 [609]. Operational Highlights - The company entered into Dated Brent three-way collar contracts for 2.0 million barrels from January 2023 through December 2023, with an average sold put price of $47.50 per barrel and a ceiling price of $95.25 per barrel [445]. - The company recognized restructuring charges of $2.6 million for the year ended December 31, 2021, compared to $16.5 million in 2020 [520]. - The company incurred $472.6 million in cash used for oil and gas assets in 2021, compared to $345.6 million in 2020 [486]. - The company capitalized interest costs on major projects with an expected construction period of one year or longer, which are added to the cost of the underlying asset [507]. - The Company continued progressing appraisal studies and maturing concept design for the Yakaar and Teranga discoveries in 2021 [550]. Personnel and Governance - The company’s ability to attract and retain qualified technical personnel is crucial for its operations and future growth [22]. - The Company maintained effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria [470]. - The total equity-based compensation expense for the year ended December 31, 2021, was $31.65 million, with a total tax benefit of $5.79 million [629]. - The company had approximately 11.0 million shares available for issuance under the Long-Term Incentive Plan (LTIP) as of December 31, 2021, following the approval of amendments adding 11.0 million shares [623].