Kosmos Energy announces fourth quarter and full year 2019 results
Kosmos Energy has announced its financial and operating results for the fourth quarter of 2019. For the quarter, the Company generated a net loss of $36 million, or $0.09 per diluted share. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net loss(1) of $37 million or $0.09 per diluted share for the fourth quarter of 2019.
FOURTH QUARTER 2019 HIGHLIGHTS
- Net cash provided by operating activities – $228 million; free cash flow1 (non-GAAP) – $139 million
- Sales – 7.5 million barrels of oil equivalent (boe)
- Revenues – $450 million
- Realized oil and gas revenues, excluding the impact of hedging program – $59.76 per boe
- Production expense – $136 million, or $18.12 per boe
- General and administrative expenses – $21 million, $16 million cash expense and $5 million non-cash equity based compensation expense
- Capital expenditure – $122 million
At quarter end, the Company was in a net overlift position of approximately 0.3 million barrels of oil.
Fourth quarter results included a mark-to-market loss of $36 million related to the Company’s oil derivative contracts. As of the quarter end and including recently executed hedges, Kosmos has approximately 18.0 million barrels of Brent oil hedged covering 2020 and 2021.
Kosmos exited the fourth quarter of 2019 with approximately $825 million of liquidity, total debt of $2.05 billion, and $1.82 billion of net debt.
Commenting on the company’s 2019 performance, Chairman and Chief Executive Officer Andrew G. Inglis said:
‘2019 was a strong year for Kosmos with the business generating approx. $250 million of free cash flow, the third successive year of material organic cash generation. Our free cash flow enabled us to reduce our leverage and initiate the payment of our dividend, in line with our strategy of protecting the balance sheet and delivering shareholder returns.
It was also one of the most active years in the company’s history with over 1.7 million man hours operating five wells. Importantly, this activity was executed with zero lost time or recordable incidents, a best-in-class safety performance. Our exploration and appraisal program delivered five successes from seven wells drilled and we continue to make excellent progress with our developments in Mauritania and Senegal with Tortue Phase 1 around 25 percent complete at year-end.
Kosmos is integrating climate risk into its business strategy and we see the energy transition as a major opportunity for progressive companies like Kosmos to play an important role. Today, we will present our climate policy as part of our wider environmental, social and governance responsibilities, with a commitment to both transparency and emissions reduction. With a diverse portfolio of advantaged oil and gas assets, Kosmos is well-positioned to deliver shareholder value while advancing the societies in which we work.’
Total net production in the fourth quarter of 2019 averaged approx. 65,200 barrels of oil equivalent per day (boepd)(2).
During the fourth quarter of 2019, net production from Ghana averaged approximately 27,800 barrels of oil per day (bopd). As forecast, Kosmos lifted four cargos from Ghana during the fourth quarter. The Jubilee gas enhancement work program that was rescheduled from the fourth quarter of 2019 into the first quarter of 2020, was completed in early February with production rates of around 90,000 bopd now being achieved.
Production in Equatorial Guinea averaged approximately 11,400 bopd net in the fourth quarter of 2019 and Kosmos lifted one and a half cargos from Equatorial Guinea during the quarter.
In late October, the S-5 well encountered approximately 39 meters of net oil pay in good-quality Santonian reservoir. The well is located within tieback range of the Ceiba FPSO and work is currently ongoing to establish the scale of the discovered resource and evaluate the optimal development solution. The well was drilled in approximately 800 meters of water to a total measured depth of around 4,400 meters.
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