Kosmos Energy announces financial result for Q2 2017, generates revenue of US$136mn

KosmosKosmos Energy is an independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margins. (Image source: Skeeze/Pixabay)The Dallas-based Kosmos Energy announced financial and operating results for the Q2 2017, highlighting that the company generated revenues of US$136mn during the time as compared to the US$46mn in Q2 2016, with the net loss being reduced to US$8.5mn from US$108.3mn in Q2 2016

The production expense reached at US$7.41 per barrel in Q2 2017 from US$34.47 per barrel in Q2 2016. Kosmos said that the decrease in total production expense was attributable to insurance proceeds received related to increased costs due to the Jubilee FPSO turret bearing issue and a one-time accrual adjustment from the Jubilee and TEN fields operator.

Exploration expenses totalled at US$20mn for the second quarter as compared to US$36mn in the same time last year. The decrease is primarily due to lower geologic and geophysical costs, said the company.

Depletion and depreciation expense was US$24.85 per barrel in Q2 2017, an increase from US$17.86 per barrel in Q2 2016, a result of production from the TEN fields coming online, which has a higher depletion rate.

The general and administrative expenses were US$15mn during the Q2 2017, a decrease of 26 per cent from the same period in 2016. Kosmos explained that the decrease is primarily a result of carried costs associated with the BP transactions and a one-time accrual adjustment from the Jubilee and TEN fields’ operators.

The total capital expenditures in the Q2 2017 were US$36mn, which further reflect a one-time accrual adjustment from the Jubilee and TEN fields operator in Ghana. Kosmos also described that during the Q2 2017, gross sales volumes from Ghana averaged approximately 131,000 bopd, including volumes from the Jubilee and TEN fields which averaged approximately 86,000 bopd and 45,000 bopd respectively.

Kosmos has reduced its net capex budget for 2017 to US$100mn, from the previously announced US$150mn, after reflecting lower capex requirements in Ghana associated with reduced Jubilee costs and a one-time accrual adjustment in Ghana. Kosmos allocated approximately US$25mn budget to Ghana and approximately US$75mn to exploration including seismic and new ventures costs.

Commenting on the financial result, Andrew G. Inglis, Kosmos Energy’s chairman and chief executive officer, said, “We are generating significant free cash flow and continuing to strengthen our balance sheet. This solid financial position enables us to execute our planned work program with the potential to drive significant growth.”

“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. 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 in 2018 and first gas by 2021,” Inglis said.

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