Kosmos Refinances Loan, Finds more Savings
US producer Kosmos Energy has successfully completed the re-determination of its reserve based lending (RBL) credit facility, it said April 8. It has also identified a further $75mn in cost reductions across capital and operating expenditures, adding up in all to about $233mn since mid-March.
The company's lenders have approved an RBL borrowing base capacity of $1.5bn. In conjunction with the re-determination, Kosmos has voluntarily reduced its facility commitments from $1.6bn to $1.5bn which includes value related to the Jubilee and TEN fields in Ghana and the Ceiba and Okume fields in Equatorial Guinea.
Kosmos' producing assets in the Gulf of Mexico and its gas assets in Mauritania and Senegal have no debt secured against them.
As of April 1, 2020, following the RBL re-determination, Kosmos has about $0.6bn of available liquidity from the RBL, its revolving credit facility and cash on the balance sheet. It is now targeting total capital expenditure of $200-225mn in 2020.
The additional operational expenditure reductions shave about $1-2/barrel and include the earlier termination of drilling activity and the removal of non-critical work that does not impact safety and asset integrity. Production guidance for the full year remains intact.
Offshore Senegal and Mauretania, it said "ongoing restrictions have had an impact on time-critical workstreams, including the construction of the breakwater during the 2020 weather window. As a result, the Phase 1 project timeline is expected to be delayed by approximately 12 months, with first gas now expected in the first half of 2023. Phase 1 of the project is currently over 30% complete."
The re-phasing of the project allows a new budget, but Kosmos is also continuing with the Tortue sell down process to support a self-funded gas business. Operator BP recently served Golar LNG a force majeure notice on the Gimi, a tanker it had chartered, seeking a delay of one year.
Kosmos CEO Andrew Inglis said that the "underlying quality of our reserve base has allowed the company to successfully execute the RBL re-determination in a volatile environment. We thank our banks for their continued support."