Kosmos Energy reports progress in first quarter

Oil and gas explorer and producer Kosmos Energy reported first-quarter net income of $83m on Tuesday, or 17 US cents per diluted share.

The London-listed company said that when adjusted for certain items, however, its net income for the three months totalled $78m, or 16 cents per diluted share.

Its net production for the quarter came in at 58,800 barrels of oil equivalent per day (boepd), with sales of around 61,100 equivalent barrels per day.

Kosmos reported revenues of $394m, or $71.67 per barrel of oil equivalent, excluding the impact of derivative cash settlements.

The firm’s production expenses for the quarter totalled $84m, or $15.26 per barrel of oil equivalent, while capital expenditures came in at $206m.

During the quarter, Kosmos confirmed the development concept for the second phase of the Greater Tortue Ahmeyim LNG project, with the project’s partners agreeing on a gravity-based structure.

The company's net capital expenditures for the period were $206m, in line with guidance.

Its realised pricing was $70.91 per barrel of oil equivalent, including derivative cash settlements, which was lower compared to the fourth quarter due to lower commodity prices during the period.

Kosmos exited the first quarter with around $2.3bn of total long-term debt, and around $2.1bn of net debt, with available liquidity of about $1bn.

The company said it generated net cash from operating activities of $204m, and free cash flow of -$20m in the first quarter.

At the end of the period, Kosmos completed its semi-annual re-determination of the RBL facility, and as expected, the borrowing base decreased by $100m effective 1 April , due to the reduction in loan life.

“Kosmos delivered solid performance in the first quarter and moved the company closer to the expected mid-year free cash flow inflection point,” said chairman and chief executive officer Andrew Inglis.

“We have three development projects underway that aim to increase production by around 50% from current levels.

“New oil production from Jubilee is expected online shortly, with capital expenditure starting to fall through the rest of the year.”

Inglis said the company had also made good progress in the quarter on the first phase of the Tortue project, with drilling at Winterfell is planned to begin in the next quarter.

“Kosmos has a busy year of catalysts ahead, having already delivered key milestones in the first quarter.

“We remain focussed on execution and realising the full potential of our distinctive assets.”

At 0800 BST, shares in Kosmos Energy were unchanged at 504.87p.

Reporting by Josh White for Sharecast.com.