Promising developments from hydrocarbon operations in Ghana, Mauritania and Senegal have generated optimism among senior executives at Kosmos Energy, despite the company reporting a net loss of US$108.3 mn in the second quarter of 2016
Andrew G. Inglis, chairman and CEO of Kosmos Energy, said their Ghanaian asset "continues to be a solid foundation" for the company, "delivering near-term production and cash flow growth". He said that operating procedures at the Jubilee location are "working as anticipated". The soon-to-be started TEN project, as well as hedging and insurance programmes were also cited by Mr Inglis as reasons for Kosmos being in a strong financial position despite the net loss. The TEN project remains on schedule and on budget.
Other African assets will also help the company going forward, according to Mr Inglis.
"Kosmos is well positioned to deliver value from both our discovered gas resource offshore Mauritania and Senegal, as well as from new high-graded opportunities our team has identified," Mr Inglis said.
Second quarter oil revenues for 2016 were US$46 mn versus US$119 mn in the same quarter of 2015, on the sales of one cargo of 0.9 mn barrels of oil for 2016, compared to two cargos totalling US$1.9 mn barrels last year. Production expense for the current quarter was US$33 mn, or US$34.47 per barrel. In the second quarter of 2015, production expense was US$20 mn or US$10.40 per barrel. Exploration expenses were also up, costing US$36 mn for the second quarter, compared with US$15 mn for last year. The increase in total capital expenditure to US$184 mn primarily reflects the company's spend on exploration and appraisal, as well as the TE£N project. Additionally, administration expenses increased by 52 per cent on the same period in 2015.
Kosmos Energy also provided an update of operations in its second quarter statement. In May, the Teranga-1 well, 65km off the Senegalese coast, made a significant discovery. Results from the well confirmed a prolific gas fairway extending 200km from the Marsouin-1 well in Mauritania through the Greater Tortue area on the maritime boundary to the Teranga-1 well in Senegal. During the second quarter, gross sales volumes from the Jubilee field averaged approximately 45,000 bopd. Production during this quarter was impacted by downtime associated with turret-bearing issues on the Jubilee FPSO in February, resulting in a shutdown. New procedures are now working effectively and production is set to increase. Kosmos and its partners are looking to a long-term solution to convert the FPSO to a moored facility.