Kosmos Narrows Loss, Still Expects LNG in 2021

Kosmos Energy narrowed its net 2Q loss to $8.5mn, compared to a loss in 2Q2016 loss of $108.3mn.

“We are also advancing the development of our large gas discoveries beginning with the low-cost Tortue project, which remains on schedule to reach FID [final investment decision] in 2018 and first gas by 2021,” said CEO Andrew G Inglis, referring to its Mauritania-Senegal joint LNG project with BP.

The company reiterated that its recent Yakaar-1 gas find offshore Senegal, together with the Teranga-1 find last year, could “we believe ….support a second cost-competitive LNG hub.”

Inglis added that Kosmos is generating free cash flow and continues to strengthen its balance sheet, and “over the next 18 months, we plan to drill five prospects that are amongst the industry’s most significant exploration wells in the world’s two most promising offshore basins.” Most of Kosmos’s cash comes from oil sales from producing interests in Ghana, operated by Tullow. It had little new to update on Ghana beyond what Tullow said June 28.

Kosmos also said it has reduced its net capex budget for 2017 to $100mn, from its previously announced $150mn, after reflecting lower capex requirements in Ghana associated with reduced Jubilee field costs and a one-time accrual adjustment in Ghana. Some $25mn of its budget is allocated to Ghana and some $75mn remains allocated to exploration, including seismic and new ventures costs.

Kosmos also said it entered into a farm-in agreement in June 2017 to acquire a 15% non-operated participating interest in Tullow-operated block C18 offshore Mauritania, expected to close in 3Q2017

Mark Smedley