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What changed in Kosmos Energy Ltd.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Kosmos Energy Ltd.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+459 added−481 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-28)

Top changes in Kosmos Energy Ltd.'s 2023 10-K

459 paragraphs added · 481 removed · 364 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

167 edited+53 added−34 removed157 unchanged
Biggest changeDuring the year ended December 31, 2020, we had an overall proved undeveloped reserves decrease of 3.3 MMBoe as a result of several factors, including adding additional wells to future development of Greater Jubilee (+4.7 MMBoe), a negative revision in TEN (-0.3 MMBoe), drilling of one well in TEN (-3.0 MMBoe), one well in the Kodiak field (-1.6 MMboe) and one well in the Tornado field (-0.9 MMBoe), and loss due to lower SEC pricing (-2.2 MMboe).
Biggest changeDuring the year ended December 31, 2023, we had an overall proved undeveloped reserves decrease of 1.3 MMBoe due to several factors including the addition of sales gas and positive revision of future well forecasts based on improved performance of existing wells in Jubilee (+26.0 MMBoe), positive drilling results in Jubilee (+0.7 MMBoe), offset by a change to the partnership’s development work scope and forecasts of planned wells in TEN (-6.4 MMBoe), removal of one of the planned wells from the Okume drilling plan (-0.3 MMBoe), optimization of the timing of the Greater Tortue Ahmeyim Phase 1 project (+1.3 MMBoe), and changes to the recovery of several U.S.
Kosmos Participating License Fields License Interest Operator Stage Expiration Ghana(1) Jubilee WCTP/DT (2) 38.6 % (2) Tullow Production 2034 TEN DT 20.4 % (4) Tullow Production 2036 U.S.
Kosmos Participating License Fields License Interest Operator Stage Expiration Ghana(1) Jubilee WCTP/DT (2) 38.6 % (2) Tullow Production 2034/2036 TEN DT 20.4 % (4) Tullow Production 2036 U.S.
U.S. Gulf of Mexico In the U.S. Gulf of Mexico, Kosmos maintains: (i) a portfolio of producing assets that Kosmos can continue to exploit, (ii) discovered resource opportunities, and (iii) a high-quality inventory of infrastructure-led exploration prospects across the DeSoto Canyon, Green Canyon, Keathley Canyon, Mississippi Canyon and Walker Ridge protraction areas. We expand our inventory through the U.S.
Gulf of Mexico In the U.S. Gulf of Mexico, Kosmos maintains: (i) a portfolio of producing assets that Kosmos can continue to exploit, (ii) discovered resource opportunities, and (iii) a high-quality inventory of infrastructure-led exploration prospects across the DeSoto Canyon, Green Canyon, Keathley Canyon, Mississippi Canyon and Walker Ridge protraction areas. We expand our inventory through the U.S.
These revisions resulted in the overall decrease in reserves of 16.7 MMBoe. Changes at Equatorial Guinea included a positive revision of 4.0 MMBoe driven by the Block G petroleum license extension and improved commodity prices. An additional positive revision of 0.9 MMBoe due to Ceiba production performance and topsides optimization was offset by net Equatorial Guinea production of 3.7 MMBoe.
These revisions resulted in an overall decrease in reserves of 16.7 MMBoe. Changes at Equatorial Guinea included a positive revision of 4.0 MMBoe driven by the Block G petroleum license extension and improved commodity prices. An additional positive revision of 0.9 MMBoe due to Ceiba production performance and topsides optimization was offset by net Equatorial Guinea production of 3.7 MMBoe.
These revisions resulted in the overall increase in reserves of 1.2 MMBoe and changes in gas reserves were negligible. Changes at Mauritania/Senegal include a positive revision of 4.7 MMBoe of gas due to field extension resulting from the drilling of production wells, as well as a negative revision of 0.7 MMBoe in condensate based on an updated yield estimate.
These revisions resulted in an overall increase in reserves of 1.2 MMBoe and changes in gas reserves were negligible. Changes at Mauritania/Senegal include a positive revision of 4.7 MMBoe of gas due to field extension resulting from the drilling of production wells, as well as a negative revision of 0.7 MMBoe in condensate based on an updated yield estimate.
These revisions resulted in the overall increase in reserves of 4.0 MMBoe. Changes at the U.S. Gulf of Mexico include positive revisions of 3.0 MMBoe associated with the Winterfell discovery and 0.8 MMBoe related to the acquisition of an additional interest in the Kodiak field.
These revisions resulted in an overall increase in reserves of 4.0 MMBoe. Changes at the U.S. Gulf of Mexico include positive revisions of 3.0 MMBoe associated with the Winterfell discovery and 0.8 MMBoe related to the acquisition of an additional interest in the Kodiak field.
International (Non-operated) Tullow, BP, and Trident, our partners and the operators of (i) the Jubilee Unit and the TEN fields offshore Ghana, (ii) the various fields offshore Mauritania and Senegal, and (iii) the Ceiba Field and Okume Complex offshore Equatorial Guinea, respectively, maintain Oil Spill Response Plans (“OSRP”) covering the joint operations.
International (Non-operated) Tullow, BP, and Trident, our partners and the operators of (i) the Jubilee Unit and the TEN Fields offshore Ghana, (ii) various fields offshore Mauritania and Senegal, and (iii) the Ceiba Field and Okume Complex offshore Equatorial Guinea, respectively, maintain Oil Spill Response Plans (“OSRP”) covering the joint operations.
Gulf of Mexico is to develop them via subsea tie-back to existing host facilities with spare capacity, which reduces development costs and the average timeline to first production. The Winterfell discovery (2021) and subsequent appraisal success (early 2022) is an example of this, with development expected to deliver first production in around three years after initial discovery.
Gulf of Mexico is to develop them via subsea tie-back to existing host facilities with spare capacity, which reduces development costs and the average timeline to first production. The Winterfell discovery (2021) and subsequent appraisal success (early 2022) is an example of this approach, with development expected to deliver first production in around three years after initial discovery.
Additionally, to optimize the commercial value of sales for the gas production from the first phase of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our existing Tortue Phase 1 SPA to potentially sell cargos in order to benefit from the robust forward gas price outlook, while meeting our contractual obligations to BPGM.
Additionally, to optimize the commercial value of sales for the gas production from Phase 1 of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our existing Tortue Phase 1 SPA to potentially sell cargos in order to benefit from the robust forward gas price outlook, while meeting our contractual obligations to BPGM.
Additionally, to optimize the commercial value of sales for the gas production from the first phase of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our existing Tortue Phase 1 SPA to potentially sell cargos in order to benefit from the robust forward gas price outlook, while meeting our contractual obligations to BPGM.
Additionally, to optimize the commercial value of sales for the gas production from the Phase 1 of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our existing Tortue Phase 1 SPA to potentially sell cargos in order to benefit from the robust forward gas price outlook, while meeting our contractual obligations to BPGM.
These changes were offset by a negative revision of 2.0 MMBoe based on recent water breakthrough in Odd Job and Tornado, and Kodiak production issues. The U.S. Gulf of Mexico net production for the year ended December 31, 2022 was 6.4 MMBoe. These revisions resulted in the overall decrease in reserves of 4.6 MMBoe.
These changes were offset by a negative revision of 2.0 MMBoe based on recent water breakthrough in Odd Job and Tornado, and Kodiak production issues. The U.S. Gulf of Mexico net production for the year ended December 31, 2022 was 6.4 MMBoe. These revisions resulted in an overall decrease in reserves of 4.6 MMBoe.
Equatorial Guinea The EG-21, EG-24, and S blocks are located in the southern part of the Gulf of Guinea, in the Republic of Equatorial Guinea, west of the Rio Muni petroleum province with water depths up to 2,300 meters. These blocks are located in a proven petroleum system, with our primary targets being Cretaceous sands in structural and stratigraphic traps.
The EG-01, EG-21, EG-24 and S blocks are located in the southern part of the Gulf of Guinea, in the Republic of Equatorial Guinea, west of the Rio Muni petroleum province with water depths up to 2,300 meters. These blocks are located in a proven petroleum system, with our primary targets being Cretaceous sands in structural and stratigraphic traps.
These revisions resulted in the overall decrease in reserves of 7.1 MMBoe. Changes at TEN include a negative revision of 5.5 MMBoe, driven primarily by recent well performance. Additional negative revisions of 9.1 MMBoe resulted from the conclusion of the Tullow pre-emption transaction in March 2022, along with net TEN production of 2.0 MMBoe.
These revisions resulted in an overall decrease in reserves of 7.1 MMBoe. Changes at TEN include a negative revision of 5.5 MMBoe, driven primarily by recent well performance. Additional negative revisions of 9.1 MMBoe resulted from the conclusion of the Tullow pre-emption transaction in March 2022, along with net TEN production of 2.0 MMBoe.
Gulf of Mexico 28 % 5.30 0.40 4.10 6.40 95.80 34.37 7.24 86.09 547,610 16.50 24.12 Total 100 % 22.00 0.40 4.10 23.10 100.00 34.37 7.24 97.13 $ 2,245,355 17.39 21.55 For the year ended December 31, 2021 Jubilee 35 % 7.0 — — 7.0 $ 71.21 — — $ 71.21 $ 500,541 $ 11.12 $ 23.93 TEN 10 % 2.0 — — 2.0 73.82 — — 73.82 143,691 37.47 37.30 Ghana(2) 45 % 9.0 — — 9.0 $ 71.77 — — $ 71.77 $ 644,232 $ 16.83 $ 26.84 Equatorial Guinea 19 % 3.7 — — 3.7 70.39 — — 70.39 260,520 25.13 15.26 Mauritania/Senegal — — — — — — — — — — — — U.S.
Gulf of Mexico 28 % 5.3 0.4 4.1 6.4 95.80 34.37 7.24 86.09 547,610 16.50 24.12 Total 100 % 22.0 0.4 4.1 23.1 $ 100.00 $ 34.37 $ 7.24 $ 97.13 $ 2,245,355 $ 17.39 $ 21.55 For the year ended December 31, 2021 Jubilee 35 % 7.0 — — 7.0 $ 71.21 — — $ 71.21 $ 500,541 $ 11.12 $ 23.93 TEN 10 % 2.0 — — 2.0 73.82 — — 73.82 143,691 37.47 37.30 Ghana(2) 45 % 9.0 — — 9.0 $ 71.77 — — $ 71.77 $ 644,232 $ 16.83 $ 26.84 Equatorial Guinea 19 % 3.7 — — 3.7 70.39 — — 70.39 260,520 25.13 15.26 Mauritania/Senegal — — — — — — — — — — — — U.S.
Furthermore, pursuant to the terms of the operating agreements for our blocks and leases, except in certain circumstances, each block or lease partner is responsible for its share of liabilities in proportion to its participating interest incurred as a result of pollution and environmental damage, containment and clean‑up activities, loss or damage to any well, loss of oil or natural gas resulting from a blowout, crater, fire, or uncontrolled well, loss of stored oil and 32 Table of Contents natural gas, as well as for plugging or bringing under control any well.
Furthermore, pursuant to the terms of the operating agreements for our blocks and 31 Table of Contents leases, except in certain circumstances, each block or lease partner is responsible for its share of liabilities in proportion to its participating interest incurred as a result of pollution and environmental damage, containment and clean‑up activities, loss or damage to any well, loss of oil or natural gas resulting from a blowout, crater, fire, or uncontrolled well, loss of stored oil and natural gas, as well as for plugging or bringing under control any well.
Over the past few years, our business strategy has evolved to focus on production enhancing infill drilling and well work, infrastructure-led exploration as well as value-accretive acquisitions.
Over the past few years, our business strategy has evolved to focus on enhancing production through infill drilling and well work, infrastructure-led exploration, as well as value-accretive acquisitions.
Estimated proved reserves Unless otherwise specifically identified in this report, the summary data with respect to our estimated net proved reserves for the years ended December 31, 2022, 2021 and 2020 has been prepared by RSC, our independent reserve engineering firm for such years, in accordance with the rules and regulations of the SEC applicable to companies involved in oil and natural gas producing activities.
Estimated proved reserves Unless otherwise specifically identified in this report, the summary data with respect to our estimated net proved reserves for the years ended December 31, 2023, 2022 and 2021 has been prepared by RSC, our independent reserve engineering firm for such years, in accordance with the rules and regulations of the SEC applicable to companies involved in oil and natural gas producing activities.
We make available, free of charge, on our website, our annual report on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8‑K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. 35 Table of Contents
We make available, free of charge, on our website, our annual report on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8‑K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. 34 Table of Contents
The RSC technical person primarily responsible for preparing the estimates set forth in the RSC reserves report incorporated herein is Mr. Tosin Famurewa. Mr. Famurewa has been practicing consulting petroleum engineering at RSC since 2006. Mr. Famurewa is a Licensed Professional Engineer in the State of Texas (No. 100569) and has over 19 years of practical experience in petroleum engineering.
The RSC technical person primarily responsible for preparing the estimates set forth in the RSC reserves report incorporated herein is Mr. Tosin Famurewa. Mr. Famurewa has been practicing consulting petroleum engineering at RSC since 2006. Mr. Famurewa is a Licensed Professional Engineer in the State of Texas (No. 100569) and has over 20 years of practical experience in petroleum engineering.
Based on employee scores and feedback, Kosmos was named in the 2022 Top 100 Places to Work by the Dallas Morning News, as well as the Houston Chronicle. The feedback received through this annual survey is used to support continuous improvement and enhance the overall employee experience. In 2022, Kosmos had a retention rate of 95%.
Based on employee scores and feedback, Kosmos was named in the 2023 Top 100 Places to Work by the Dallas Morning News, as well as the Houston Chronicle. The feedback received through this annual survey is used to support continuous improvement and enhance the overall employee experience. In 2023, Kosmos had a retention rate of 95%.
Financial Statements and Supplementary Data—Note 3—Acquisitions and Divestitures” for discussion of pre-emption transaction with Tullow. (3) These reserves include the estimated quantity of gas to be exported as LNG from the Greater Tortue Ahmeyim project, as a result of the Tortue SPA finalized in February of 2020.
Financial Statements and Supplementary Data—Note 3—Acquisitions and Divestitures” for discussion of pre-emption transaction with Tullow. (3) These reserves include the estimated quantity of gas to be exported as LNG from the Greater Tortue Ahmeyim Phase 1 project, as a result of the Tortue SPA finalized in February of 2020.
Finally, our senior management reviews reserve and resource estimates on an annual basis. Gross and Net Undeveloped and Developed Acreage The following table sets forth certain information regarding the developed and undeveloped portions of our license and lease areas as of December 31, 2022 for the countries in which we currently operate.
Finally, our senior management reviews reserve and resource estimates on an annual basis. Gross and Net Undeveloped and Developed Acreage The following table sets forth certain information regarding the developed and undeveloped portions of our license and lease areas as of December 31, 2023 for the countries in which we currently operate.
During the year ended December 31, 2022, we had an overall proved undeveloped reserves decrease of 5.6 MMBoe, as a result of several factors, including the impact of the Tullow pre-emption transaction in March 2022 (-7.9 MMBoe), optimization of future drilling in Jubilee (+4.0 MMBoe) and TEN (+2.1 MMBoe), Greater Tortue field extension that resulted from drilling of production wells and a downward condensate adjustment (+4.0 MMBoe), optimizing future development plans in the U.S.
During the year ended December 31, 2022, we had an overall proved undeveloped reserves decrease of 5.6 MMBoe, as a result of several factors, including the impact of the Tullow pre-emption transaction in March 2022 (-7.9 MMBoe), 24 Table of Contents optimization of future drilling in Jubilee (+4.0 MMBoe) and TEN (+2.1 MMBoe), Greater Tortue field extension that resulted from drilling of production wells and a downward condensate adjustment (+4.0 MMBoe), optimizing future development plans in the U.S.
Our estimated reserves at December 31, 2022, 2021 and 2020 and related future net revenues and PV‑10 at December 31, 2022, 2021 and 2020 are taken from reports prepared by RSC, in accordance with petroleum engineering and evaluation principles which RSC believes are commonly used in the industry and definitions and current regulations established by the SEC.
Our estimated reserves at December 31, 2023, 2022 and 2021 and related future net revenues and PV‑10 at December 31, 2023, 2022 and 2021 are taken from reports prepared by RSC, in accordance with petroleum engineering and evaluation principles which RSC believes are commonly used in the industry and definitions and current regulations established by the SEC.
Such calculations at December 31, 2022 are based on costs in effect at December 31, 2022 and the 12‑month unweighted arithmetic average of the first‑day‑of‑the‑month price for the year ended December 31, 2022, adjusted for anticipated market premium, without giving effect to derivative transactions, and are held constant throughout the life of the assets.
Such calculations at December 31, 2023 are based on costs in effect at December 31, 2023 and the 12‑month unweighted arithmetic average of the first‑day‑of‑the‑month price for the year ended December 31, 2023, adjusted for anticipated market premium, without giving effect to derivative transactions, and are held constant throughout the life of the assets.
RSC professionals subscribe to a code of professional conduct and RSC is a Registered Engineering Firm in the State of Texas. For the years ended December 31, 2022, 2021 and 2020, we engaged RSC to prepare independent estimates of the extent and value of the proved reserves of certain of our oil and gas properties.
RSC professionals subscribe to a code of professional conduct and RSC is a Registered Engineering Firm in the State of Texas. For the years ended December 31, 2023, 2022 and 2021, we engaged RSC to prepare independent estimates of the extent and value of the proved reserves of certain of our oil and gas properties.
RSC issued a report on our proved reserves at December 31, 2022, based upon its evaluation. RSC’s primary economic assumptions in estimates included an ability to sell hydrocarbons at their respective adjusted benchmark prices and certain levels of future capital expenditures.
RSC issued a report on our proved reserves at December 31, 2023, based upon its evaluation. RSC’s primary economic assumptions in estimates included an ability to sell hydrocarbons at their respective adjusted benchmark prices and certain levels of future capital expenditures.
Each member of our team holds a minimum of a Bachelor of Science degree in petroleum engineering or geology. The person primarily responsible for our Reservoir Engineering team is Mr. Douglas Trumbauer. Mr. Trumbauer is a Licensed Professional Engineer in the State of Texas (No. 78735) and has over 37 years of practical experience in petroleum engineering.
Each member of our team holds a minimum of a Bachelor of Science degree in petroleum engineering or geology. The person primarily responsible for our Reservoir Engineering team is Mr. Douglas Trumbauer. Mr. Trumbauer is a Licensed Professional Engineer in the State of Texas (No. 78735) and has over 38 years of practical experience in petroleum engineering.
After the election, our interest in the exploration areas of Block C8 offshore Mauritania and in Saint Louis Offshore Profound offshore Senegal are unchanged, however, our interest in the Greater Tortue Ahmeyim Unit is now 26.8% in Mauritania and 26.7% in Senegal and is subject to redetermination of the participating interests pursuant to the terms of the GTA UUOA.
After the elections, our interest in the exploration areas of Block C8 offshore Mauritania and in Saint Louis Offshore Profound offshore Senegal are unchanged, however, our interest in the Greater Tortue Ahmeyim Unit is now 26.8% in Mauritania and 26.7% in Senegal and is subject to redetermination of the participating interests pursuant to the terms of the GTA UUOA.
We sell the NGLs entrained in the natural gas that we produce. The arrangements to sell these products first requires natural gas to be processed at an onshore gas processing plant. Once the liquids are removed and fractionated (separated into the individual hydrocarbon chains for sale), the products are sold by the processing plant.
We sell the NGLs entrained in the natural gas that we produce. The arrangements to sell these products first require natural gas to be processed at an onshore gas processing plant. Once the liquids are removed and fractionated (separated into the individual hydrocarbon chains for sale), the products are sold by the processing plant.
Our management team members average over 25 years of industry experience and have participated in discovering, developing, and maximizing the value of multiple large-scale upstream projects around the world. Our experience, industry relationships and technical expertise are our core competitive strengths and are crucial to our success.
Our management team members average over 28 years of industry experience and have participated in discovering, developing, and maximizing the value of multiple large-scale upstream projects around the world. Our experience, industry relationships and technical expertise are our core competitive strengths and are crucial to our success.
We and our WCTP Block partners, the Ghana Ministry of 28 Table of Contents Energy and GNPC have agreed such WCTP petroleum contract rights to negotiate extend from July 21, 2011 until such time as either a new petroleum contract is negotiated and entered into with us or we decline to match a bona fide third-party offer GNPC may receive for the WCTP Relinquishment Area.
We and our WCTP Block partners, the Ghana Ministry of Energy and GNPC have agreed such WCTP petroleum contract rights to negotiate extend from July 21, 2011 until such time as either a new petroleum contract is negotiated and entered into with us or we decline to match a bona fide third-party offer GNPC may receive for the WCTP Relinquishment Area.
Our net acreage in Ghana may be affected by any redetermination of interests in the Jubilee Unit and our net acreage in Mauritania and Senegal may be affected by any redetermination of interests in the Greater Tortue Ahmeyim Unit. 25 Table of Contents (2) The Exploration Period of the WCTP petroleum contract and DT petroleum contract has expired.
Our net acreage in Ghana may be affected by any redetermination of interests 27 Table of Contents in the Jubilee Unit and our net acreage in Mauritania and Senegal may be affected by any redetermination of interests in the Greater Tortue Ahmeyim Unit. (2) The Exploration Period of the WCTP petroleum contract and DT petroleum contract has expired.
Shortages of, or increasing costs for, experienced drilling crews and equipment and services may restrict our ability to drill wells and conduct our operations. 31 Table of Contents The oil and gas industry as a whole has experienced continued volatility.
Shortages of, or increasing costs for, experienced drilling crews and equipment and services may restrict our ability to drill wells and conduct our operations. 30 Table of Contents The oil and gas industry as a whole has experienced continued volatility.
The well encountered 101 meters of net gas pay in two excellent quality reservoirs, including 56 meters in the Lower Cenomanian and 45 meters in the underlying Albian, with no water encountered. The Ahmeyim-2 appraisal well is located in Block C8 offshore Mauritania, approximately five kilometers northwest, and 200 meters down-dip of the basin-opening Tortue-1 discovery.
The well encountered 101 meters of net gas pay in two excellent quality reservoirs, including 56 meters in the Lower Cenomanian and 45 meters in the underlying Albian, with no water encountered. 19 Table of Contents The Ahmeyim-2 appraisal well is located in Block C8 offshore Mauritania, approximately five kilometers northwest, and 200 meters down-dip of the basin-opening Tortue-1 discovery.
Greater Tortue Ahmeyim Unitization The Greater Tortue Ahmeyim Field, discovered by the Tortue‑1 well in May 2015, in Mauritania block C8 and by the Guembuel-1 well in January 2016, in the Saint-Louis Offshore Profond Block in Senegal covers an area within both the C8 and Saint-Louis Offshore Profond Blocks.
Greater Tortue Ahmeyim Development The Greater Tortue Ahmeyim Field, discovered by the Tortue‑1 well in May 2015, in Mauritania Block C8 and by the Guembuel-1 well in January 2016, in the Saint-Louis Offshore Profond Block in Senegal covers an area within both the C8 and Saint-Louis Offshore Profond Blocks.
We also offer a strong Employee Assistance Program (EAP), which offers free and confidential assessments, counseling, and follow-up services to employees with personal and/or work-related mental health problems. These benefits are intended to both promote the long-term health and well-being of our employees and increase employee engagement and retention.
We also offer a strong Employee Assistance Program (EAP), which offers free and confidential assessments, counseling, and follow-up services to employees with personal and/or work-related mental health problems. These benefits are intended to both promote the long-term emotional, physical, and financial health and well-being of our employees and increase employee engagement and retention.
The new PSC (named BirAllah) provides up to thirty months to submit a development plan covering the BirAllah and/or Orca discoveries with the terms of the new PSC substantially similar to the former PSC for Block C8 with additional provisions for enhanced back-in rights for the Government of Mauritania, local content, SMH’s capacity building and an environmental fund.
The new Petroleum contract (named BirAllah) provides up to thirty months to submit a development plan covering the BirAllah and/or Orca discoveries with the terms of the new Petroleum contract substantially similar to the former Petroleum contract for Block C8 with additional provisions for enhanced back-in rights for the Government of Mauritania, local content, SMH’s capacity building and an environmental fund.
We have established policies, operating procedures and training programs designed to limit the environmental impact of our operations and to identify and comply with changes in existing laws and regulations, however the cost of compliance with more stringent laws and regulations in the future could have a material adverse effect on our financial condition and results of operations.
We have established policies, operating procedures and training programs designed to limit the environmental impact of our operations and to identify and comply with existing and new laws and regulations, however the cost of compliance with existing or more stringent laws and regulations in the future could have a material adverse effect on our financial condition and results of operations.
BP Mauritania and BP Senegal are co-Unit Operator and will allocate responsibilities for the initial development of the Greater Tortue Ahmeyim Field. During the second quarter of 2019, SMH and PETROSEN elected to increase their respective interest in their portion of the Greater Tortue Ahmeyim Unit to the maximum allowed percentages under the respective petroleum contracts.
BP Mauritania and BP Senegal are co-Unit Operator and allocate responsibilities for the initial development of the Greater Tortue Ahmeyim Field. During the second quarter of 2019, SMH and PETROSEN elected to increase their respective interests in their portion of the Greater Tortue Ahmeyim Unit to the maximum allowed percentages under the respective petroleum contracts.
The location of the Orca-1 well proved both the structural and stratigraphic components of the trap are working, thereby supporting a significant volume. The Orca-1 well was drilled in approximately 2,510 meters of water to a total measured depth of around 5,266 meters.
The location of the Orca-1 well proved both the 20 Table of Contents structural and stratigraphic components of the trap are working, thereby supporting a significant volume. The Orca-1 well was drilled in approximately 2,510 meters of water to a total measured depth of around 5,266 meters.
These laws and regulations may, among other things: • require the acquisition of various permits before operations commence or for operations to continue; • enjoin operations or facilities to comply with applicable regulations and permits; • restrict the types, quantities and concentration of various substances that can be released into the environment in connection with oil and natural gas drilling, production and transportation activities; • limit, cap, tax or otherwise restrict emissions of GHG and other air pollutants or otherwise seek to address or minimize the effects of climate change; • limit or prohibit drilling activities in certain locations lying within protected or otherwise sensitive areas; and • require measures to mitigate or remediate pollution, including pollution resulting from our block partners’ or our contractors’ operations.
These laws and regulations may, among other things: • require the acquisition, renewal and maintenance of various permits before operations commence or for operations to continue; • enjoin operations or facilities to comply with applicable regulations and permits; • restrict the types, quantities and concentration of various substances that can be released into the environment in connection with oil and natural gas drilling, production and transportation activities; • limit, cap, tax or otherwise restrict emissions of GHG and other air pollutants or otherwise seek to address or minimize the effects of climate change, as well as require disclosure of GHG emissions and other climate change-related information; • limit or prohibit drilling activities in certain locations lying within protected or otherwise sensitive areas; and • require measures to mitigate or remediate pollution, including pollution resulting from our block partners’ or our contractors’ operations.
There can be no assurance that the proved reserves will be produced within the periods indicated or prices and costs will remain constant. 23 Table of Contents Independent petroleum engineers Ryder Scott Company, L.P. RSC, our independent reserve engineers for the years ended December 31, 2022, 2021 and 2020, was established in 1937.
There can be no assurance that the proved reserves will be produced within the periods indicated or prices and costs will remain constant. 25 Table of Contents Independent petroleum engineers Ryder Scott Company, L.P. RSC, our independent reserve engineers for the years ended December 31, 2023, 2022 and 2021, was established in 1937.
Following closing of the acquisition, Kosmos’ interest in the Jubilee Unit Area increased from 24.1% to 42.1%, and Kosmos’ interest in the TEN fields increased from 17.0% to 28.1%. In November 2021, we received notice from Tullow Oil plc (“Tullow”) and PetroSA that they were exercising their pre-emption rights in relation to Kosmos’ acquisition of Anadarko WCTP.
Following closing of the acquisition, Kosmos’ interest in the Jubilee Unit Area increased from 24.1% to 42.1%, and Kosmos’ interest in the TEN Fields increased from 17.0% to 28.1%. In 15 Table of Contents November 2021, we received notice from Tullow Oil plc (“Tullow”) that they were exercising their pre-emption rights in relation to Kosmos’ acquisition of Anadarko WCTP.
In addition, our portfolio contains an inventory of prospects, which we plan to continue to mature and high-grade for future drilling and development, providing us access to additional high return growth potential in the coming years.
In addition, our portfolio contains an inventory of infrastructure-led exploration prospects, which we plan to continue to mature and high-grade for future drilling and development, providing us access to additional high return growth potential in the coming years.
(6) Natural gas liquids proved reserves represent an immaterial amount of our total proved reserves. Therefore, we have aggregated natural gas liquids and crude oil/condensate reserves information.
(5) Natural gas liquids proved reserves represent an immaterial amount of our total proved reserves. Therefore, we have aggregated natural gas liquids and crude oil/condensate reserves information.
Also excluded from the table are 15 development wells awaiting completion. These wells are shown as “Wells Suspended or Waiting on Completion” in the table below.
Also excluded from the table are 10 development wells awaiting completion. These wells are shown as “Wells Suspended or Waiting on Completion” in the table below.
The DST results confirmed a connected volume per well consistent with the current development 18 Table of Contents scheme, which together with the high well rate is expected to result in a low number of development wells compared to equivalent schemes.
The DST results confirmed a connected volume per well consistent with the current development scheme, which together with the high well rate is expected to result in a low number of development wells compared to equivalent schemes.
Over the years, we have entered into agreements with multiple oil marketing agents to market our share of the Jubilee and TEN fields oil, and we approve the terms of each sale proposed by such agent.
Over the years, we have entered into 29 Table of Contents agreements with multiple oil marketing agents to market our share of the Jubilee and TEN Fields oil, and we approve the terms of each sale proposed by such agent.
The FPSO is designed to provide water and natural gas injection to support reservoir pressure, to process and store oil and to export gas through a pipeline to the mainland. The Jubilee Field is being developed in a phased approach.
The FPSO is designed to provide water and natural gas injection to support reservoir pressure, to process and store oil and to export gas through a pipeline to the mainland. The Jubilee Field continues to be developed in a phased approach.
BPGM has disagreed with our position, and we have agreed with BPGM to pursue international arbitration to interpret the relevant terms of the SPA. Phase 1 of the project was approximately 90% complete at year-end 2022, with first gas for the project targeted in the fourth quarter of 2023.
BPGM has disagreed with our position, and we have agreed with BPGM to pursue international arbitration to interpret the relevant terms of the SPA. Phase 1 of the project was approximately 90% complete at year-end 2023, with first gas for the project targeted in the third quarter of 2024.
Our executive offices are maintained at 8176 Park Lane, Suite 500, Dallas, Texas 75231, and its telephone number is +1 (214) 445 9600. 34 Table of Contents Available Information Kosmos is listed on the NYSE and LSE and our common stock is traded under the symbol KOS.
Our executive offices are maintained at 8176 Park Lane, Suite 500, Dallas, Texas 75231, and its telephone number is +1 (214) 445 9600. Available Information Kosmos is listed on the NYSE and LSE and our common stock is traded under the symbol KOS.
The December 31, 2022 reserve report was completed on January 20, 2023, and a copy is included as an exhibit to this report. In connection with the preparation of the December 31, 2022, 2021 and 2020 reserves report, RSC prepared its own estimates of our proved reserves.
The December 31, 2023 reserve report was completed on January 15, 2024, and a copy is included as an exhibit to this report. In connection with the preparation of the December 31, 2023, 2022 and 2021 reserves report, RSC prepared its own estimates of our proved reserves.
Santa Cruz MC 563 40.5 % Kosmos Production (8) Tornado GC 281 35.0 % Talos Production (8) Winterfell GC 943 / 944 25.0 % Beacon Appraisal (8) Mauritania Greater Tortue Ahmeyim(1) Block C8 (3) 26.8 % BP Development 2049(9) BirAllah BirAllah 28.0 % (6) BP Appraisal 2025 Orca BirAllah 28.0 % (6) BP Appraisal 2025 Senegal Greater Tortue Ahmeyim(1) Saint Louis Offshore Profond (3) 26.7 % BP Development 2044(10) Teranga Cayar Offshore Profond 30.0 % (7) BP Appraisal 2024 Yakaar Cayar Offshore Profond 30.0 % (7) BP Appraisal 2024 Equatorial Guinea Ceiba Field and Okume Complex(1) Block G 40.4 % Trident Production 2040 Asam Block S 40.0 % Kosmos Appraisal 2024 ______________________________________ (1) For information concerning our estimated proved reserves as of December 31, 2022, see “—Our Reserves.” (2) The Jubilee Field straddles the boundary between the WCTP petroleum contract and the DT petroleum contract offshore Ghana.
Santa Cruz MC 563 40.5 % Kosmos Production (8) Tornado GC 281 35.0 % Talos Production (8) Winterfell GC 943 / 944 25.0 % Beacon Development (8) Tiberius KC 964 33.3 % Kosmos Appraisal (8) Mauritania Greater Tortue Ahmeyim(1) Block C8 (3) 26.8 % BP Development 2049(9) BirAllah BirAllah 28.0 % (6) BP Appraisal 2024 Orca BirAllah 28.0 % (6) BP Appraisal 2024 Senegal Greater Tortue Ahmeyim(1) Saint Louis Offshore Profond (3) 26.7 % BP Development 2044(10) Teranga Cayar Offshore Profond 90.0 % (7) Kosmos Appraisal 2024 Yakaar Cayar Offshore Profond 90.0 % (7) Kosmos Appraisal 2024 Equatorial Guinea Ceiba Field and Okume Complex(1) Block G 40.4 % Trident Production 2040 Asam Block S 34.0 % Kosmos Appraisal 2024 ______________________________________ (1) For information concerning our estimated proved reserves as of December 31, 2023, see “—Our Reserves.” (2) The Jubilee Field straddles the boundary between the WCTP petroleum contract and the DT petroleum contract offshore Ghana.
Grow cash flow, proved reserves and production through exploitation, development and infrastructure-led exploration activities with increasing exposure to natural gas and LNG We plan to grow cash flow, proved reserves and production by further exploiting our fields offshore Equatorial Guinea, Ghana, and the U.S. Gulf of Mexico.
Grow cash flow, proved reserves and production through exploitation and development with increasing exposure to natural gas and LNG We plan to grow cash flow, proved reserves and production by further exploiting our fields offshore Equatorial Guinea, Ghana, and the U.S. Gulf of Mexico.
We aim to act as a force for good by advancing a “Just Energy Transition” in our host countries and communities – namely by supporting economic and social development in the places where we work through supplying affordable and cleaner energy while lowering emissions.
We aim to act as a force for good by advancing a just energy transition in our host countries and communities – namely by supporting economic and social development in the places where we work through supplying affordable and cleaner energy while lowering emissions.
The Greater Tortue Ahmeyim development is also being developed in a capitally efficient phased approach, consistent with our business strategy. This is anticipated to result in first gas approximately eight years after initial discovery. Finally, our approach to discoveries in the U.S.
The Greater Tortue Ahmeyim development is also being developed in a phased approach, consistent with our business strategy. This is anticipated to result in first gas approximately nine years after initial discovery. Finally, our approach to discoveries in the U.S.
Total proved natural gas reserves include fuel gas associated with the Jubilee and TEN fields offshore Ghana of approximately 22.9 Bcf, 30.0 Bcf and 14.0 Bcf for 2022, 2021 and 2020, respectively. Our natural gas reserves in Equatorial Guinea are all associated with fuel gas.
For Ghana, total proved natural gas reserves include fuel gas associated with the Jubilee and TEN Fields offshore Ghana of approximately 19.9 Bcf, 22.9 Bcf and 30.0 Bcf for 2023, 2022 and 2021, respectively. Our natural gas reserves in Equatorial Guinea are all associated with fuel gas.
(6) The new PSC covering the BirAllah and Orca discoveries contains provisions for back-in rights for the Government of Mauritania. Kosmos’ participating interest in the new PSC is currently 28.0% and this interest percentage does not give effect to the exercise of such back-in rights.
(6) The Petroleum Contract covering the BirAllah and Orca discoveries contains provisions for back-in rights for the Government of Mauritania. Kosmos’ participating interest in the Petroleum contract is currently 28.0% and this interest percentage does not give effect to the exercise of such back-in rights.
Beyond the Phase 1 development of Greater Tortue Ahmeyim, growth is also expected to be realized through additional development phases of Greater Tortue Ahmeyim and through the phased development of our other natural gas discoveries in Mauritania and Senegal including the BirAllah and Orca discoveries in Mauritania and the Yakaar and Teranga discoveries in Senegal.
Beyond the Phase 1 development of Greater Tortue Ahmeyim, growth is also expected to be realized through additional development phases of Greater Tortue Ahmeyim and through development of the Yakaar and Teranga natural gas discoveries in Senegal and the BirAllah and Orca discoveries in Mauritania.
Gulf 22 Table of Contents of Mexico included an increase of 4.4 MMBoe related to strong performance of certain fields, offset by net U.S. Gulf of Mexico production of 7.2 MMBoe.
Gulf of Mexico included an increase of 4.4 MMBoe related to strong performance of certain fields, offset by net U.S. Gulf of Mexico production of 7.2 MMBoe.
(8) Our U.S. Gulf of Mexico blocks are held by production/operations, and the lease periods extend as long as production/governmental approved operations continue on the relevant block. (9) License expiration date can be extended by an additional ten years subject to certain conditions being met.
Gulf of Mexico blocks are held by production/operations, and the lease periods extend as long as production/governmental approved operations continue on the relevant block. (9) License expiration date can be extended by an additional ten years subject to certain conditions being met. (10) License expiration date can be extended by an additional twenty years subject to certain conditions being met.
Development of Yakaar-Teranga is being considered in a phased approach with Phase 1 providing domestic gas and data to optimize the development of future phases. It could also support the country’s “Plan Emergent Senegal” launched by the President of Senegal in 2014.
Development of Yakaar-Teranga is being considered in a phased approach with Phase 1 providing domestic gas and data to optimize the development of future phases. It could also support the country’s “Plan Emergent Senegal” launched by the President of Senegal in 2014. The Yakaar and Teranga discoveries continue to be analyzed as a joint development.
GEPetrol , currently has a 20% carried interest during the exploration period. In December 2022, we received formal approval to enter the second sub-period period ending in December 2024. Should a commercial discovery be made, GEPetrol's 20% carried interest will convert to a 20% participating interest for all development and production operations.
In December 2022, we received formal approval to enter the second sub-period of the exploration period ending in December 2024. Should a commercial discovery be made, GEPetrol's 20% carried interest will convert to a 30% participating interest for all development and production operations.
Actively Drilling or Wells Suspended or Completing Waiting on Completion Exploration Development Exploration Development Gross Net Gross Net Gross Net Gross Net Ghana(1) Jubilee Unit — — 1 0.39 — — 9 3.47 TEN — — — — — — 5 1.02 Equatorial Guinea Block S — — — — 1 0.40 — — Okume — — — — — — 1 0.40 U.S.
Actively Drilling or Wells Suspended or Completing Waiting on Completion Exploration Development Exploration Development Gross Net Gross Net Gross Net Gross Net Ghana Jubilee Unit — — 1 0.39 — — 4 1.54 TEN — — — — — — 5 1.02 Equatorial Guinea Block S — — — — 1 0.40 — — Okume — — — — — — 1 0.40 U.S.
The interest percentage does not give effect to the exercise of such option. (5) Our U.S. Gulf of Mexico blocks can be held by operations or commercial production, and the corresponding lease periods extend as long as governmental approved operations continue on the relevant block.
The interest percentage does not give effect to the exercise of such option. (5) Our U.S. Gulf of Mexico blocks can be held by operations or commercial production, and the corresponding lease periods extend as long as governmental approved operations continue on the relevant block. This can extend the lease expiration to a date later than 2033.
In total, we believe that Marsouin-1 and Orca-1 have de-risked more than sufficient resource to support a world-scale LNG project from the Cenomanian and Albian plays in the BirAllah area. The BirAllah and Orca discoveries are being analyzed as a potential joint development.
In total, we believe that Marsouin-1 and Orca-1 have de-risked significant resource in support of a potential world-scale LNG project from the Cenomanian and Albian plays in the BirAllah area. The BirAllah and Orca discoveries are being analyzed as a potential joint development.
In October 2021, Kosmos completed the acquisition of Anadarko WCTP Company which owned a participating interest in the WCTP Block and DT Block offshore Ghana, including an 18.0% participating interest in the Jubilee Unit Area and an 11.1% participating interest in the TEN fields.
In October 2021, Kosmos completed the acquisition of Anadarko WCTP Company (“Anadarko WCTP”), a subsidiary of Occidental Petroleum Corporation, which owned a participating interest in the WCTP Block and DT Block offshore Ghana, including an 18.0% participating interest in the Jubilee Unit Area and an 11.1% participating interest in the TEN Fields.
We achieved this goal in 2021, significantly earlier than expected, and have identified a pathway to maintain it through continual monitoring of emissions, assessment of emission reduction opportunities, and, for residual emissions, investment in high-quality carbon offsets. We recognize most of our production, and the associated GHG emissions, is derived from assets in which we are non-operating partners.
We first achieved this goal in 2021 and have identified a pathway to help maintain it through continual monitoring of emissions, assessment of emission reduction opportunities, and, for residual emissions, investment in high-quality carbon offset projects. We recognize most of our production, and the associated GHG emissions, is derived from assets in which we are non-operating partners.
Senegal Agreements In June 2018, we entered the final renewal of the exploration period for the Senegal Cayar Offshore Profond and Saint Louis Offshore Profond Blocks. In July 2021, the term of the Cayar Offshore Profound license was extended for up to an additional three years, ending in July 2024.
We have drilled three successful exploration wells and two appraisal wells. In June 2018, we entered the final renewal of the exploration period for the Senegal Cayar Offshore Profond and Saint Louis Offshore Profond Blocks. In July 2021, the term of the Cayar Offshore Profound license was extended for up to an additional three years, ending in July 2024.
Our Business Strategy As a full-cycle deepwater E&P company, our mission is to safely deliver production and free cash flow from a portfolio rich in opportunities through a disciplined allocation of capital and optimal portfolio management for the benefit of our shareholders and stakeholders.
Gulf of Mexico in 2022, and the Yakaar and Teranga fields in Senegal in 2023. Our Business Strategy As a full-cycle deepwater E&P company, our mission is to safely deliver production and free cash flow from a portfolio rich in opportunities through a disciplined allocation of capital and optimal portfolio management for the benefit of our shareholders and stakeholders.
Gulf of Mexico 49 39.3% Kosmos, Murphy, Talos, QuarterNorth, Occidental, W&T Offshore, LLOG, Beacon, Houston Energy through 2032 (5) ______________________________________ (1) Should a commercial discovery be made, GEPetrol's 20% carried interest will convert to a 20% participating interest for all development and production operations.
Gulf of Mexico 46 40.6% Kosmos, Occidental, Beacon, LLOG, Murphy, QuarterNorth, Talos, W&T Offshore, Houston Energy through 2033 (5) ______________________________________ (1) Should a commercial discovery be made, GEPetrol's 20% carried interest will convert to a 20% participating interest for all development and production operations.
In October 2022, the partnership and the government of Mauritania executed a new Production Sharing Contract (“PSC”) covering the BirAllah and Orca discoveries.
In October 2022, the partnership and the Government of Mauritania executed a new Petroleum contract covering the BirAllah and Orca discoveries.
We are focused on increasing production, cash flows and reserves from our producing assets in Equatorial Guinea, Ghana, and the U.S. Gulf of Mexico.
We are focused on increasing production, cash flows and reserves from our producing assets in Equatorial Guinea, Ghana, and the U.S. Gulf of Mexico as well as executing our appraisal and development efforts in the U.S. Gulf of Mexico and Equatorial Guinea.
In Mauritania and Senegal, we are progressing our Greater Tortue Ahmeyim development with first gas for the project targeted in the fourth quarter of 2023 while advancing the second phase of the development, as well as advancing first phase development concepts for the BirAllah and Orca discoveries in Mauritania and the Yakaar-Teranga discoveries in Senegal.
In Mauritania and Senegal, we are progressing our Greater Tortue Ahmeyim development with first gas for Phase 1 of the project targeted in the third quarter of 2024, while advancing Phase 2 of the development, as well as advancing phased development concepts for the Yakaar and Teranga discoveries in Senegal and the BirAllah and Orca discoveries in Mauritania.
In addition, in connection with the approval of the Jubilee Phase 1 PoD, the Jubilee Field partners agreed to provide the first 200 Bcf of natural gas produced from the Jubilee Field Phase 1 development to GNPC at no cost.
In addition, in connection with the approval of the Jubilee Phase 1 PoD, the Jubilee Field partners agreed to provide the first 200 Bcf of natural gas produced from the Jubilee Field Phase 1 development to GNPC at no cost. As of January 1, 2023, the Jubilee partners had fulfilled this commitment.
Exploration License and Lease Areas Kosmos Average Number of Participating Current Phase Country Blocks Interest Operator(s) Expiration Range Equatorial Guinea 3 64.7% (1) Kosmos 2024 Mauritania 1 28.0% (2) BP 2025 Sao Tome and Principe 1 58.9% (3) Kosmos 2023 Senegal 1 30.0% (4) BP 2024 U.S.
Exploration License and Lease Areas Kosmos Average Number of Participating Current Phase Country Blocks Interest Operator(s) Expiration Range Equatorial Guinea 4 54.5% (1) Kosmos, Panoro 2024 and 2026 Mauritania 1 28.0% (2) BP 2024 Sao Tome and Principe 1 58.9% (3) Kosmos 2024 Senegal 1 90.0% (4) Kosmos 2024 U.S.
Summary of Oil and Gas Reserves 2022 Net Proved Reserves(1) 2021 Net Proved Reserves(1) 2020 Net Proved Reserves(1) Oil, Condensate, NGLs(6) Natural Gas(3) Total Oil, Condensate, NGLs(6) Natural Gas(3) Total Oil, Condensate, NGLs(6) Natural Gas(3) Total (MMBbl) (Bcf) (MMBoe) (MMBbl) (Bcf) (MMBoe) (MMBbl) (Bcf) (MMBoe) Reserves Category Proved developed Ghana(2) 43 40 50 52 56 61 26 23 30 Equatorial Guinea 20 16 23 20 11 22 21 11 23 Mauritania/Senegal — — — — — — — — — U.S.
Summary of Oil and Gas Reserves 2023 Net Proved Reserves(1) 2022 Net Proved Reserves(1) 2021 Net Proved Reserves(1) Oil, Condensate, NGLs(5) Natural Gas(3) Total Oil, Condensate, NGLs(5) Natural Gas(3) Total Oil, Condensate, NGLs(5) Natural Gas(3) Total (MMBbl) (Bcf) (MMBoe) (MMBbl) (Bcf) (MMBoe) (MMBbl) (Bcf) (MMBoe) Reserves Category Proved developed Ghana(2) 46 79 60 43 40 50 52 56 61 Equatorial Guinea 19 16 22 20 16 23 20 11 22 Mauritania/Senegal — — — — — — — — — U.S.
We have drilled four exploration and appraisal wells within the Greater Tortue Ahmeyim development, Tortue-1, Guembeul-1, Ahmeyim-2 and Greater Tortue Ahmeyim-1 (GTA-1). The wells penetrated multiple, excellent quality gas reservoirs, including the Lower Cenomanian, Upper Cenomanian and underlying Albian.
The Greater Tortue Ahmeyim development straddles Block C8 offshore Mauritania and Saint Louis Offshore Profond Block offshore Senegal. We have drilled four exploration and appraisal wells within the Greater Tortue Ahmeyim development, Tortue-1, Guembeul-1, Ahmeyim-2 and Greater Tortue Ahmeyim-1 (GTA-1). The wells penetrated multiple, excellent quality gas reservoirs, including the Lower Cenomanian, Upper Cenomanian and underlying Albian.
Senegal The Saint Louis Offshore Profond and Cayar Offshore Profond Blocks are located in the Senegal River Cretaceous petroleum system and range in water depth from 300 to 3,100 meters. The area is an extension of the working petroleum system in the Mauritania Salt Basin.
Senegal The Saint Louis Offshore Profond and Cayar Offshore Profond Blocks are located in the Senegal River Cretaceous petroleum system and range in water depth from 300 to 3,100 meters. The area is an extension of the working petroleum system in the Mauritania Salt Basin. We acquired approximately 3,700 square kilometers of 3D seismic data over these Senegal blocks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGulf of Mexico subject us to a risk of loss of revenue or curtailment of production from factors specifically affecting those areas; Our Business and Financial Condition • A substantial or extended decline in oil and natural gas prices may adversely affect our business, financial condition and results of operations; • Our business plan requires substantial additional capital; • We may be required to take write‑downs of the carrying values of our oil and natural gas assets due to decreases in the estimated future net cash flows from our operations, which may occur as a result of decreases in oil and natural gas prices, poor field performance, increased expenditures or changes in timing of investment, among other things, and 36 Table of Contents such decreases could result in reduced availability under our corporate revolver, commercial debt facility, and GoM Term Loan; • We face various risks associated with increased activism against, or change in public sentiment for, oil and gas exploration, development, and production activities and ESG considerations including climate change and the transition to a lower carbon economy; • The continued effects of the COVID-19 pandemic and outbreaks of other diseases may adversely affect our business operations and financial condition; • Deterioration in the credit or equity markets could adversely affect us; • We may incur substantial losses and become subject to liability claims as a result of future oil and natural gas operations, for which we may not have adequate insurance coverage; • Slower global economic growth rates may materially adversely impact our operating results and financial position; • Increased costs and availability of capital could adversely affect our business; • Our derivative activities could result in financial losses or could reduce our income; • Our commercial debt facility, revolving credit facility, indentures governing our Senior Notes and GoM Term Loan contain certain covenants that may inhibit our ability to make certain investments, incur additional indebtedness and engage in certain other transactions; • Provisions of our Senior Notes could discourage an acquisition of us by a third-party; • Our level of indebtedness may increase and thereby reduce our financial flexibility; • We are a holding company and our ability to make payments on our outstanding indebtedness is dependent upon the receipt of funds from our subsidiaries; • We may be subject to risks in connection with acquisitions and the integration of significant acquisitions may be difficult; • If we fail to realize the anticipated benefits of a significant acquisition, our results of operations may be adversely affected; • A cyber incident, including a breach of digital security, could result in information theft, data corruption, operational disruption, and/or financial loss; • Our ability to utilize net operating loss carryforwards may be subject to certain limitations; • Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to outstanding debt; Regulation • Our business, operations and financial condition may be directly and indirectly adversely affected by political, economic, and environmental circumstances; • More comprehensive and stringent regulation in the U.S.
Biggest changeGulf of Mexico subject us to a risk of loss of revenue or curtailment of production from factors specifically affecting those areas; Our Business and Financial Condition • A substantial or extended decline in oil and natural gas prices may adversely affect our business, financial condition and results of operations; • Our business plan requires substantial additional capital; • We may be required to take write‑downs of the carrying values of our oil and natural gas assets due to decreases in the estimated future net cash flows from our operations, which may occur as a result of decreases in oil and natural gas prices, poor field performance, increased expenditures or changes in the timing or amount of investment, among other 35 Table of Contents things, and such decreases could result in reduced availability under our corporate revolver and commercial debt facility; • We face various risks associated with increased activism against, or change in public sentiment for, oil and gas exploration, development, and production activities and ESG considerations including climate change and the transition to a lower carbon economy; • Outbreaks of disease may adversely affect our business operations and financial condition; • Deterioration in the credit or equity markets could adversely affect us; • We may incur substantial losses and become subject to liability claims as a result of future oil and natural gas operations, for which we may not have adequate insurance coverage; • Slower global economic growth rates may materially adversely impact our operating results and financial position; • Increased costs and availability of capital could adversely affect our business; • Our derivative activities could result in financial losses or could reduce our income; • Our commercial debt facility, revolving credit facility and indentures governing our Senior Notes contain certain covenants that may inhibit our ability to make certain investments, incur additional indebtedness and engage in certain other transactions; • Provisions of our Senior Notes could discourage an acquisition of us by a third-party; • Our level of indebtedness may increase and thereby reduce our financial flexibility; • We are a holding company and our ability to make payments on our outstanding indebtedness is dependent upon the receipt of funds from our subsidiaries; • We may be subject to risks in connection with acquisitions and the integration of acquisitions may be difficult; • If we fail to realize the anticipated benefits of acquisitions, our results of operations may be adversely affected; • A cyber incident, including a breach of digital security, could result in information theft, data corruption, operational disruption, and/or financial loss; • Our ability to utilize net operating loss carryforwards may be subject to certain limitations; Regulation • Our business, operations and financial condition may be directly and indirectly adversely affected by political, economic, and environmental circumstances; • More comprehensive and stringent regulation in the U.S.
Gulf of Mexico. Should any event occur which adversely affects such proved reserves, oil production and cash flows from these licenses, including, without limitation, any event resulting from the risks and uncertainties outlined in this “Risk Factors” section, our business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures may be materially and adversely affected.
Gulf of Mexico. Should any event occur which adversely affects such proved reserves, production and cash flows from these licenses, including, without limitation, any event resulting from the risks and uncertainties outlined in this “Risk Factors” section, our business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures may be materially and adversely affected.
These factors include, but are not limited to, the following: • changes in supply and demand for oil and natural gas; • the actions of the Organization of the Petroleum Exporting Countries; • speculation as to the future price of oil and natural gas and the speculative trading of oil and natural gas futures contracts; • global economic conditions; • political and economic conditions, including embargoes in oil‑producing countries or affecting other oil‑producing activities, particularly in the Middle East, Africa, Russia and Central and South America; • the continued threat of terrorism and the impact of military and other action, including U.S. military operations outside the United States; • the level of global oil and natural gas exploration and production activity; • the level of global oil inventories and oil refining capacities; • weather conditions and natural or man‑made disasters; • technological advances affecting energy consumption; • governmental regulations and taxation policies; • proximity and capacity of transportation facilities; 46 Table of Contents • the development and exploitation of alternative fuels or energy sources; • the price and availability of competitors’ supplies of oil and natural gas; and • the price, availability or mandated use of alternative fuels or energy sources.
These factors include, but are not limited to, the following: • changes in supply and demand for oil and natural gas; • the actions of the Organization of the Petroleum Exporting Countries; • speculation as to the future price of oil and natural gas and the speculative trading of oil and natural gas futures contracts; • global economic conditions; • political and economic conditions, including embargoes in oil‑producing countries or affecting other oil‑producing activities, particularly in the Middle East, Africa, Russia and Central and South America; • the continued threat of terrorism and the impact of military and other action, including U.S. military operations outside the United States; • the level of global oil and natural gas exploration and production activity; • the level of global oil inventories and oil refining capacities; • weather conditions and natural or man‑made disasters; • technological advances affecting energy consumption; • governmental regulations and taxation policies; • proximity and capacity of transportation facilities; 45 Table of Contents • the development and exploitation of alternative fuels or energy sources; • the price and availability of competitors’ supplies of oil and natural gas; and • the price, availability or mandated use of alternative fuels or energy sources.
Additionally, to optimize the commercial value of sales for the gas production from the first phase of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our existing Tortue Phase 1 SPA to potentially sell cargos in order to benefit from the robust gas price outlook, while meeting our contractual obligations to BPGM.
Additionally, to optimize the commercial value of sales for the gas production from Phase 1 of Greater Tortue Ahmeyim, Kosmos has commenced a process with prospective buyers to utilize existing contractual rights under our existing Tortue Phase 1 SPA to potentially sell cargos in order to benefit from the robust gas price outlook, while meeting our contractual obligations to BPGM.
Significant acquisitions and other strategic transactions may involve other risks, including: • diversion of our management’s attention to evaluating, negotiating and integrating significant acquisitions and strategic transactions; • the challenge and cost of integrating acquired operations, information management and other technology systems and business cultures with those of ours while carrying on our ongoing business; • difficulty associated with coordinating geographically separate organizations; and • the challenge of attracting and retaining personnel associated with acquired operations.
Acquisitions and other strategic transactions may involve other risks, including: • diversion of our management’s attention to evaluating, negotiating and integrating acquisitions and strategic transactions; • the challenge and cost of integrating acquired operations, information management and other technology systems and business cultures with those of ours while carrying on our ongoing business; • difficulty associated with coordinating geographically separate organizations; and • the challenge of attracting and retaining personnel associated with acquired operations.
Moreover, it is possible that other developments, such as increasingly strict environmental, climate 43 Table of Contents change, and health and safety laws, regulations and executive orders and enforcement policies thereunder and claims for damages to property or persons resulting from our operations, could result in substantial costs and liabilities, delays, an inability to complete the development of our discoveries or the abandonment of such discoveries, which could cause a material adverse effect on our financial condition and results of operations.
Moreover, it is possible that other developments, such as increasingly strict environmental, climate 42 Table of Contents change, and health and safety laws, regulations and executive orders and enforcement policies thereunder and claims for damages to property or persons resulting from our operations, could result in substantial costs and liabilities, delays, an inability to complete the development of our discoveries or the abandonment of such discoveries, which could cause a material adverse effect on our financial condition and results of operations.
For a discussion of recent drilling and climate change executive orders signed by President Biden, see the risk factor earlier in this 10-K titled “ Our business, operations and financial condition may be directly and indirectly adversely affected by political, economic and environmental circumstances, and changes in laws and regulations, in the countries and regions in which we operate .” In addition to the array of new or revised safety, permitting and certification requirements developed and implemented by the DOI in the past few years, there have been a variety of proposals to change existing laws and regulations that could affect offshore development and production, such as, for example, a proposal to significantly increase the minimum financial responsibility demonstration required under the Oil Pollution Act of 1990.
For a discussion of recent drilling and climate change executive orders signed by President 55 Table of Contents Biden, see the risk factor earlier in this 10-K titled “ Our business, operations and financial condition may be directly and indirectly adversely affected by political, economic and environmental circumstances, and changes in laws and regulations, in the countries and regions in which we operate .” In addition to the array of new or revised safety, permitting and certification requirements developed and implemented by the DOI in the past few years, there have been a variety of proposals to change existing laws and regulations that could affect offshore development and production, such as, for example, a proposal to significantly increase the minimum financial responsibility demonstration required under the Oil Pollution Act of 1990.
Offshore operations are subject to a variety of operating risks specific to the marine environment, such as capsizing, sinking, collisions and damage or loss to pipeline, subsea or other facilities or from weather conditions.
Offshore operations are subject to a variety of special operating risks specific to the marine environment, such as capsizing, sinking, collisions and damage or loss to pipeline, subsea or other facilities or from weather conditions.
Gulf of Mexico subject us to a risk of loss of revenue or curtailment of production from factors specifically affecting those areas. 45 Table of Contents A large portion of our current exploration licenses are located in Africa and, following our acquisition of Anadarko WCTP, a significant proportion of our total production comes from the Jubilee Unit Area and TEN fields offshore Ghana.
Gulf of Mexico subject us to a risk of loss of revenue or curtailment of production from factors specifically affecting those areas. 44 Table of Contents A large portion of our current exploration licenses are located in Africa and, following our acquisition of Anadarko WCTP, a significant proportion of our total production comes from the Jubilee Unit Area and TEN Fields offshore Ghana.
Our commercial debt facility, revolving credit facility, the indentures governing our Senior Notes and our GoM Term Loan include certain covenants that, among other things, restrict: • our investments, loans and advances and certain of our subsidiaries’ payment of dividends and other restricted payments; • our incurrence of additional indebtedness; • the granting of liens, other than liens created pursuant to the commercial debt facility, revolving credit facility, the indentures governing our Senior Notes or the GoM Term Loan and certain permitted liens; • mergers, consolidations and sales of all or a substantial part of our business or licenses; • the hedging, forward sale or swap of our production of crude oil or natural gas or other commodities; • the sale of assets (other than production sold in the ordinary course of business); and • in the case of the commercial debt facility, the revolving credit facility and the GoM Term Loan, our capital expenditures that we can fund with the proceeds of our commercial debt facility, revolving credit facility and GoM Term Loan.
Our commercial debt facility, revolving credit facility and the indentures governing our Senior Notes include certain covenants that, among other things, restrict: • our investments, loans and advances and certain of our subsidiaries’ payment of dividends and other restricted payments; • our incurrence of additional indebtedness; • the granting of liens, other than liens created pursuant to the commercial debt facility, revolving credit facility, or the indentures governing our Senior Notes and certain permitted liens; • mergers, consolidations and sales of all or a substantial part of our business or licenses; • the hedging, forward sale or swap of our production of crude oil or natural gas or other commodities; • the sale of assets (other than production sold in the ordinary course of business); and • in the case of the commercial debt facility and the revolving credit facility, our capital expenditures that we can fund with the proceeds of our commercial debt facility and revolving credit facility.
Obtaining seismic data, as well as exploration, appraisal, development and production activities entail considerable costs, and we may need to raise substantial additional capital through additional debt financing, strategic alliances or future private or public equity offerings if our cash flows from operations, or the timing of, are not sufficient to cover such costs.
Obtaining seismic data, as well as exploration, appraisal, development and production activities entail considerable costs, and we may need to raise substantial additional capital through additional debt financing, asset sales, strategic alliances or future private or public equity offerings if our cash flows from operations, or the timing of, are not sufficient to cover such costs.
Companies in the oil and gas industry are often the target of activist efforts from both individuals and non‑governmental organizations and other stakeholders regarding safety, human rights, climate change, environmental matters, sustainability, and business practices. Anti‑development activists are working to, among other things, delay or cancel certain operations such as offshore drilling and development.
Companies in the oil and gas industry are often the target of activist efforts from both individuals and non‑governmental organizations and other stakeholders regarding safety, human rights, climate change, environmental matters, sustainability, and business practices. Certain of these activists are working to, among other things, delay or cancel certain operations such as offshore drilling and development.
Our future will depend on the success of our exploration and production activities and on the development of an infrastructure that will allow us to take advantage of our discoveries.
Our future will depend on the success of our exploration and production activities and on the development of infrastructure that will allow us to take advantage of our discoveries.
The global spread of the COVID-19 pandemic, travel restrictions, “shelter-in-place” and various quarantine measures and other governmental actions taken to inhibit its spread, created significant volatility, uncertainty and economic disruption in the markets in which we operate, which affected our business and operations and those of our suppliers, contractors and partners.
Likewise, the global spread of the COVID-19 pandemic resulted in travel restrictions, “shelter-in-place” and various quarantine measures and other governmental actions taken to inhibit its spread and created significant volatility, uncertainty and economic disruption in the markets in which we operate, which affected our business and operations and those of our suppliers, contractors and partners.
In addition, any losses we experience as a result of such outbreaks of disease which impact sales or delay production may not be covered by our insurance policies. An epidemic of the Ebola virus disease occurred in parts of West Africa in 2014 and continued through 2015.
In addition, any losses we experience as a result of such outbreaks of disease which impact sales or delay production may not be covered by our insurance policies. For example, an epidemic of the Ebola virus disease occurred in parts of West Africa in 2014 and continued through 2015.
Under certain petroleum contracts, we have work commitments to perform exploration and other related activities. Failure to do so may result in our loss of the licenses. As of December 31, 2022, we have unfulfilled drilling obligations for three development wells and one exploration well in Equatorial Guinea.
Under certain petroleum contracts, we have work commitments to perform exploration and other related activities. Failure to do so may result in our loss of the licenses. As of December 31, 2023, we have unfulfilled drilling obligations for three development wells and one exploration well in Equatorial Guinea.
Should another Ebola or other virus outbreak occur, including to the countries in which we operate, or not be satisfactorily contained, our exploration, development and production plans for our operations could be delayed, or interrupted after commencement. Any changes to these operations could significantly increase costs of operations.
Should another Ebola, COVID-19 or other virus outbreak occur, including to the countries in which we operate, or not be satisfactorily contained, our exploration, development and production plans for our operations could be delayed, or interrupted after commencement. Any changes to these operations could significantly increase costs of operations.
If our senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business could suffer. If we fail to realize the anticipated benefits of a significant acquisition, our results of operations may be adversely affected.
If our senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business could suffer. If we fail to realize the anticipated benefits of acquisitions, our results of operations may be adversely affected.
We could incur 44 Table of Contents substantial expenses that could reduce or eliminate the funds available for exploration, development or license acquisitions, or result in loss of equipment and license interests. Deepwater exploration generally involves greater operational and financial risks than exploration in shallower waters.
We could 43 Table of Contents incur substantial expenses that could reduce or eliminate the funds available for exploration, development or license acquisitions, or result in loss of equipment and license interests. Deepwater exploration generally involves greater operational and financial risks than exploration in shallower waters.
We continue to actively seek to expand our business through complementary or strategic acquisitions, and we may issue additional shares of common stock in connection with those acquisitions. We also issue restricted shares to our executive officers, employees and independent directors as part of their compensation.
We continue to actively seek to expand our business through complementary or strategic acquisitions, and we may issue additional shares of common stock in connection with those acquisitions. We also issue restricted share units to our executive officers, employees and independent directors as part of their compensation.
Anticipated benefits of an acquisition may be offset by operating losses relating to changes in commodity prices, increased interest expense associated with debt incurred or assumed in connection with the transaction, adverse changes in oil and gas industry conditions, or by risks and uncertainties relating to the exploratory prospects of the combined assets or operations, or an increase in operating or other costs or other difficulties, including the 53 Table of Contents assumption of health, safety, and environmental or other liabilities in connection with the acquisition.
Anticipated benefits of an acquisition may be offset by operating losses relating to changes in commodity prices, increased interest expense associated with debt incurred or assumed in connection with the transaction, adverse changes in oil and gas industry conditions, or by risks and uncertainties relating to the exploratory prospects of the combined assets or operations, or an increase in operating or other costs or other difficulties, including the assumption of health, safety, and environmental or other liabilities in connection with the acquisition.
The breach of any of these covenants could result in a default under our commercial debt facility, revolving credit facility, the indentures governing our Senior Notes and our GoM Term Loan, in which case, depending on the actions taken by the lenders thereunder or their successors or assignees, such lenders could elect to declare all amounts borrowed under such debt instruments, together with accrued interest, to be due and payable.
The breach of any of these covenants could result in a default under our commercial debt facility, revolving credit facility and the indentures governing our Senior Notes, in which case, depending on the actions taken by the lenders thereunder or their successors or assignees, such lenders could elect to declare all amounts borrowed under such debt instruments, together with accrued interest, to be due and payable.
We may be required to make large expenditures to comply with governmental laws and regulations, particularly in respect of the following matters: • licenses for drilling operations; • tax increases, including retroactive claims; • unitization of oil accumulations; • local content requirements (including the mandatory use of local partners and vendors); and 57 Table of Contents • safety, health and environmental requirements, liabilities and obligations, including those related to remediation, investigation or permitting.
We may be required to make large expenditures to comply with governmental laws and regulations, particularly in respect of the following matters: • licenses for drilling operations; • tax increases, including retroactive claims; • unitization of oil accumulations; • local content requirements (including the mandatory use of local partners and vendors); and • safety, health and environmental requirements, liabilities and obligations, including those related to remediation, investigation or permitting.
Any delays may increase the costs of the projects, requiring additional capital, and such capital may not be available in a timely and cost‑effective fashion. Our offshore and deepwater operations involve specific risks that could adversely affect our results of operations.
Any delays may increase the costs of the projects, requiring additional capital, and such capital may not be available in a timely and cost‑effective fashion. Our offshore and deepwater operations involve special risks that could adversely affect our results of operations.
If we are not successful in raising additional capital, we may be unable to continue our exploration and production activities or successfully exploit our license areas, and we may lose the rights to develop these 47 Table of Contents areas.
If we are not successful in raising additional capital, we may be unable to continue our exploration and production activities or successfully exploit our license areas, and we may lose the rights to develop these 46 Table of Contents areas.
Currently, we are not the operator of the Jubilee Unit, the TEN fields, Ceiba and Okume, the Greater Tortue Ahmeyim Unit or certain producing fields in the U.S. Gulf of Mexico and do not hold operatorship in certain other offshore blocks.
Currently, we are not the operator of the Jubilee Unit, the TEN Fields, the Ceiba Field and Okume Complex, the Greater Tortue Ahmeyim Unit or certain producing fields in the U.S. Gulf of Mexico and do not hold operatorship in certain other offshore blocks.
Derivative arrangements also expose us to the risk of financial loss in some circumstances, including when: • production is less than the volume covered by the derivative instruments; • the counter‑party to the derivative instrument defaults on its contract obligations; or • there is an increase in the differential between the underlying price and actual prices received in the derivative instrument.
Derivative arrangements also expose us to the risk of financial loss in some circumstances, including when: • production is less than the volume covered by the derivative instruments; • the counter‑party to the derivative instrument defaults on its contract obligations; or 49 Table of Contents • there is an increase in the differential between the underlying price and actual prices received in the derivative instrument.
It cannot be determined at this time what effect the Paris Agreement, COP27, the EPA’s proposed methane emission rules, the SEC’s proposed climate change disclosure rules and any other related GHG emissions targets, regulations, executive orders or other requirements, will have on our business, results of operations and financial condition.
It cannot be determined at this time what effect the Paris Agreement, COP28, the EPA’s final methane emission rules, the SEC’s proposed climate change disclosure rules and any other related GHG emissions targets, regulations, executive orders or other requirements, will have on our business, results of operations and financial condition.
We may be required to take write‑downs of the carrying values of our oil and natural gas assets due to decreases in the estimated future net cash flows from our operations, which may occur as a result of decreases in oil and natural gas prices, poor field performance, increased expenditures or changes in timing of investment, among other things, and such decreases could result in reduced availability under our corporate revolver, commercial debt facility, and GoM Term Loan.
We may be required to take write‑downs of the carrying values of our oil and natural gas assets due to decreases in the estimated future net cash flows from our operations, which may occur as a result of decreases in oil and natural gas prices, poor field performance, increased expenditures or changes in the timing or amount of investment, among other things, and such decreases could result in reduced availability under our corporate revolver and commercial debt facility.
Although to date we have not experienced any significant cyber‑attacks, there can be no assurance that we will not be the target of cyber‑attacks in the future or suffer such losses related to any cyber‑incident.
Although to date we have not experienced any material cyber‑attacks, there can be no assurance that we will not be the target of cyber‑attacks in the future or suffer such losses related to any cyber‑incident.
There can be no assurance that other regulatory bodies will not make further regulatory inquiries or take other actions. Federal regulatory law could have an adverse effect on our ability to use derivatives to reduce the effect of commodity price, interest rate and other risks associated with our business.
There can be no assurance that other regulatory bodies will not make further regulatory inquiries or take other actions. 58 Table of Contents Federal regulatory law could have an adverse effect on our ability to use derivatives to reduce the effect of commodity price, interest rate and other risks associated with our business.
If we were unable to repay such borrowings or interest, our lenders, successors or assignees could proceed against their collateral. If the indebtedness under our commercial debt facility, revolving credit facility, the indentures governing our Senior Notes and our GoM Term Loan were to be accelerated, our assets may not be sufficient to repay in full such indebtedness.
If we were unable to repay such borrowings or interest, our lenders, successors or assignees could proceed against their collateral. If the indebtedness under our commercial debt facility, revolving credit facility and the indentures governing our Senior Notes were to be accelerated, our assets may not be sufficient to repay in full such indebtedness.
Gulf of Mexico has materially increased costs and delays in offshore oil and natural gas exploration and production operations; • The oil and gas industry is intensely competitive and many of our competitors possess and employ substantially greater resources than us; • Participants in the oil and gas industry are subject to numerous laws, regulations, and other legislative instruments that can affect the cost, manner or feasibility of doing business; • We are subject to numerous health, safety and environmental laws and regulations which may result in material liabilities and costs; • We may be exposed to assertions concerning or liabilities under anti‑corruption laws; • Federal regulatory law could have an adverse effect on our ability to use derivative instruments; General Matters • We are dependent on certain members of our management and technical team; • We operate in a litigious environment; • We face various risks associated with global populism; • Our share price may be volatile, and purchasers of our common stock could incur substantial losses; • A substantial portion of our total issued and outstanding common stock may be sold into the market at any time; and • Holders of our common stock will be diluted if additional shares are issued. 37 Table of Contents Risks Relating to our Oil and Natural Gas Operations We have limited proved reserves and areas that we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all.
Gulf of Mexico has materially increased costs and delays in offshore oil and natural gas exploration and production operations; • The oil and gas industry is intensely competitive and many of our competitors possess and employ substantially greater resources than us; • Participants in the oil and gas industry are subject to numerous laws, regulations, and other legislative instruments that can affect the cost, manner or feasibility of doing business; • We are subject to numerous health, safety and environmental laws and regulations which may result in material liabilities and costs; • We may be exposed to assertions concerning or liabilities under anti‑corruption laws; • Federal regulatory law could have an adverse effect on our ability to use derivative instruments; General Matters • We are dependent on certain members of our management and technical team; • We operate in a litigious environment; • We face various risks associated with global populism; • Our share price may be volatile, and purchasers of our common stock could incur substantial losses; and • Holders of our common stock will be diluted if additional shares are issued. 36 Table of Contents Risks Relating to our Oil and Natural Gas Operations We have limited proved reserves and areas that we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all.
By discouraging an acquisition of us by a third-party, these provisions could have the effect of depriving the holders of our common stock of an opportunity to sell their common stock at a premium over prevailing market prices. Our level of indebtedness may increase and thereby reduce our financial flexibility.
By discouraging an acquisition of us by a third-party, these provisions could have the effect of depriving the holders of our common stock of an opportunity to sell their common stock at a premium over prevailing market prices. 50 Table of Contents Our level of indebtedness may increase and thereby reduce our financial flexibility.
The Department of Interior (“DOI”) through the BOEM and the Bureau of Safety and 56 Table of Contents Environmental Enforcement (“BSEE”), has issued a variety of regulations and Notices to Lessees and Operators (“NTLs”), intended to impose additional safety, permitting and certification requirements applicable to exploration, development and production activities in the U.S. Gulf of Mexico.
The Department of Interior (“DOI”) through the BOEM and the Bureau of Safety and Environmental Enforcement (“BSEE”), has issued a variety of regulations and Notices to Lessees and Operators (“NTLs”), intended to impose additional safety, permitting and certification requirements applicable to exploration, development and production activities in the U.S. Gulf of Mexico.
Our commercial debt facility, revolving credit facility and GoM Term Loan require us to maintain certain financial ratios, such as debt service coverage ratios and cash flow coverage ratios. All of these restrictive covenants may limit our ability to move funds among our subsidiaries, operate our business, or expand or pursue our business strategies.
Our commercial debt facility and revolving credit facility require us to maintain certain financial ratios, such as debt service coverage ratios and cash flow coverage ratios. All of these restrictive covenants may limit our ability to move funds among our subsidiaries, operate our business, or expand or pursue our business strategies.
Unless they are guarantors, our subsidiaries will not have any obligation to pay amounts due on the Senior Notes or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of the Senior Notes or the commercial debt facility.
Unless they are guarantors, our subsidiaries will not have any obligation to pay amounts due on the Senior Notes or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of the Senior Notes.
Any resulting liabilities, penalties, suspensions or terminations could have a material adverse effect on our financial condition and results of operations. For example, Ghana’s Parliament has enacted the Petroleum Revenue Management Act, the Petroleum Commission Act of 2011, and the 2016 Ghanaian Petroleum Law.
Any resulting liabilities, penalties, suspensions or terminations could have a material adverse effect on our financial condition and results of operations. 56 Table of Contents For example, Ghana’s Parliament has enacted the Petroleum Revenue Management Act, the Petroleum Commission Act of 2011, and the 2016 Ghanaian Petroleum Law.
Our commercial debt facility, revolving credit facility, the indentures governing our Senior Notes and our GoM Term Loan contain certain covenants that may inhibit our ability to make certain investments, incur additional indebtedness and engage in certain other transactions, which could adversely affect our ability to meet our future goals.
Our commercial debt facility, revolving credit facility and the indentures governing our Senior Notes contain certain covenants that may inhibit our ability to make certain investments, incur additional indebtedness and engage in certain other transactions, which could adversely affect our ability to meet our future goals.
In addition, the limitations imposed by such 51 Table of Contents debt instruments on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. Provisions of our Senior Notes could discourage an acquisition of us by a third-party.
In addition, the limitations imposed by such debt instruments on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. Provisions of our Senior Notes could discourage an acquisition of us by a third-party.
Our ability to comply with these and other provisions of our commercial debt facility, revolving credit facility, the indentures governing our Senior Notes and our GoM Term Loan may be impacted by changes in economic or business conditions, our results of operations or events beyond our control.
Our ability to comply with these and other provisions of our commercial debt facility, revolving credit facility and the indentures governing our Senior Notes may be impacted by changes in economic or business conditions, our results of operations or events beyond our control.
In addition, should an Ebola or other virus outbreak spread to the countries in which we operate, access to the FPSOs could be restricted and/or terminated.
In addition, should an Ebola, COVID-19 or other virus outbreak spread to the countries in which we operate, access to the FPSOs could be restricted and/or terminated.
The market price for our common stock may be influenced by many factors, including, but not limited to: • the price of oil and natural gas; • the success of our exploration and development operations, and the marketing of any oil and natural gas we produce; • operational incidents; • regulatory developments in the United States and foreign countries where we operate; • the recruitment or departure of key personnel; • quarterly or annual variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the industries in which we compete and issuance of new or changed securities; • analysts’ reports or recommendations; • the failure of securities analysts to cover our common stock or changes in financial estimates by analysts; • the inability to meet the financial estimates of analysts who follow our common stock; • the issuance or sale of any additional securities of ours; • investor perception of our company and of the industry in which we compete; and 61 Table of Contents • general economic, political and market conditions.
The market price for our common stock may be influenced by many factors, including, but not limited to: • the price of oil and natural gas; • the success of our exploration and development operations, and the marketing of any oil and natural gas we produce; • operational incidents; • regulatory developments in the United States and foreign countries where we operate; • the recruitment or departure of key personnel; • quarterly or annual variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the industries in which we compete and issuance of new or changed securities; • analysts’ reports or recommendations; • the failure of securities analysts to cover our common stock or changes in financial estimates by analysts; • the inability to meet the financial estimates of analysts who follow our common stock; • the issuance or sale of any additional securities of ours; • investor perception of our company and of the industry in which we compete; and • general economic, political and market conditions. 60 Table of Contents Holders of our common stock will be diluted if additional shares are issued.
Consequently, our Unit Interest (participating interest in the Jubilee Unit) was increased from 23.5% to 24.1% upon completion of the initial redetermination process. Following the acquisition of Anadarko WCTP Company, which owned a participating interest in the WCTP Block and DT Block, our Unit Interest (participating interest in the Jubilee Unit) increased from 24.1% to 42.1%.
Consequently, our Unit Interest (participating interest in the Jubilee Unit) was increased from 39 Table of Contents 23.5% to 24.1% upon completion of the initial redetermination process. Following the acquisition of Anadarko WCTP Company, which owned a participating interest in the WCTP Block and DT Block, our Unit Interest (participating interest in the Jubilee Unit) increased from 24.1% to 42.1%.
Future activist efforts could result in the following: • delay or denial of drilling permits; • shortening of lease terms or reduction in lease size; • restrictions or delays on our ability to obtain additional seismic data; • restrictions on installation or operation of gathering or processing facilities; • restrictions on the use of certain operating practices; • legal challenges or lawsuits; • pressure or requirements for more analysis and disclosure of environmental and climate change-related risks; 48 Table of Contents • damaging publicity about us; • increased regulation; • increased costs of doing business; • reduced access to financing and hedging; • reduction in demand for our products; and • other adverse effects on our ability to develop our properties and/or undertake production operations.
Future activist efforts could result in the following: • delay or denial of drilling permits; • shortening of lease terms or reduction in lease size; • restrictions or delays on our ability to obtain additional seismic data; • restrictions on installation or operation of gathering or processing facilities; • restrictions on the use of certain operating practices; • legal challenges or lawsuits; • pressure or requirements for more analysis and disclosure of environmental and climate change-related risks and data, such as greenhouse gas emissions data; 47 Table of Contents • damaging publicity about us; • increased regulation; • increased costs of doing business; • reduced access to financing and hedging; • reduction in demand for our products; and • other adverse effects on our ability to develop our properties and/or undertake production operations.
In this report we provide numerical and other measures of the characteristics of our discoveries and prospects. These measures may be incorrect, as the accuracy of these measures is a function of available data, geological interpretation and judgment. To date, a limited number of our prospects have been drilled.
We report numerical and other measures of the characteristics of our discoveries and prospects. These measures may be incorrect, as the accuracy of these measures is a function of available data, geological interpretation and judgment. To date, a limited number of our prospects have been drilled.
These or any further political or governmental developments or health concerns could result in social, economic and labor instability. These uncertainties could have a material impact on our business operations and financial condition. Deterioration in the credit or equity markets could adversely affect us. We have exposure to different counterparties.
These or any further political or governmental developments or health concerns could result in social, economic and labor instability. These uncertainties could have a material impact on our business operations and financial condition. 48 Table of Contents Deterioration in the credit or equity markets could adversely affect us. We have exposure to different counterparties.
A significant reduction in the availability of credit could materially and adversely affect our ability to achieve our planned growth and operating results. 50 Table of Contents Our derivative activities could result in financial losses or could reduce our income.
A significant reduction in the availability of credit could materially and adversely affect our ability to achieve our planned growth and operating results. Our derivative activities could result in financial losses or could reduce our income.
As noted in our statement, Kosmos conducted extensive pre-transaction due diligence, and we believe we acquired our interests in the blocks in compliance with applicable laws. After the program aired, certain government agencies requested that Kosmos voluntarily 59 Table of Contents provide information related to the Senegal blocks and other blocks.
As noted in our statement, Kosmos conducted extensive pre-transaction due diligence, and we believe we acquired our interests in the blocks in compliance with applicable laws. After the program aired, certain government agencies requested that Kosmos voluntarily provide information related to the Senegal blocks and other blocks.
The initial redetermination process was completed on October 14, 2011. As a result of the initial redetermination process, the tract participation was determined to be 54.4% for the WCTP Block 40 Table of Contents and 45.6% for the DT Block.
The initial redetermination process was completed on October 14, 2011. As a result of the initial redetermination process, the tract participation was determined to be 54.4% for the WCTP Block and 45.6% for the DT Block.
We granted the Government of Ghana the first 200 Bcf of natural gas exported from the Jubilee Field to shore at zero cost. As of January 1, 2023, the Jubilee partners have fulfilled this commitment, providing 200 Bcf of zero cost natural gas to the Government of Ghana.
We granted the Government of Ghana the first 200 Bcf of natural gas exported from the Jubilee Field to shore at zero cost. As of January 1, 2023, the Jubilee partners had fulfilled this commitment.
In 2012, the Kyoto Protocol was extended by amendment through 2020 in the so-called Doha Amendment, which entered into force in late December 2020 after the requisite number of parties ratified it in October 2020.
In 2012, the Kyoto Protocol was extended by amendment through 2020 in the so-called Doha Amendment, which 57 Table of Contents entered into force in late December 2020 after the requisite number of parties ratified it in October 2020.
Gulf of Mexico or lead to limitations or delays on our ability to secure additional permits to drill 55 Table of Contents and develop our acreage and leases or otherwise lead to limitations on the scope of our operations, or may lead to increases to our compliance costs.
Gulf of Mexico or lead to limitations or delays on our ability to secure additional permits to drill and develop our acreage and leases or otherwise lead to limitations on the scope of our operations, or may lead to increases to our compliance costs.
In general, unless we make and declare discoveries within certain time periods specified in certain of our petroleum contracts and licenses, our interests in the undeveloped parts of our license areas may lapse.
In general, unless we make and declare discoveries within certain time periods specified 38 Table of Contents in certain of our petroleum contracts and licenses, our interests in the undeveloped parts of our license areas may lapse.
Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of reserves shown in this report. See “Item 1.
Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present 40 Table of Contents value of reserves shown in this report. See “Item 1.
We may issue additional shares of common stock, preferred shares, warrants, rights, units and debt securities for general corporate purposes, including, but not limited to, repayment or refinancing of borrowings, working capital, capital expenditures, investments and acquisitions.
We may issue additional shares of common stock, securities that are convertible into shares of common stock, preferred shares, warrants, rights, units and debt securities for general corporate purposes, including, but not limited to, repayment or refinancing of borrowings, working capital, capital expenditures, investments and acquisitions.
All costs of development drilling and other development activities are capitalized, even if the activities do not result in commercially productive quantities of hydrocarbon reserves. This puts a property at higher risk for future impairment if commodity prices significantly decrease or operating or development costs significantly increase.
All costs of development drilling and other development activities are capitalized, even if the activities do not result in commercially productive quantities of hydrocarbon reserves. This puts a property at higher risk for future impairment if commodity prices significantly decrease, operating or development costs significantly increase or reservoir performance is below expectations.
In addition, we are subject both to uncertainties in the application of the tax laws in the countries in which we operate and to possible changes in such tax laws (or the application thereof), each of which could result in an increase in our tax liabilities.
In addition, we are subject both to uncertainties in the application of the tax laws in the countries in which we operate and where we are resident for tax purposes and to possible changes in such tax laws (or the application thereof), each of which could result in an increase in our tax liabilities.
Recent and continuing disruptions and volatility in the global financial markets and a potential global recession which have lead to an increase in interest rates during 2022 or a contraction in credit availability impacting our ability to finance our operations. We require continued access to capital.
Recent and continuing disruptions and volatility in the global financial markets and a potential regional or global recession which have led to an increase in interest rates during 2023 or a contraction in credit availability impacting our ability to finance our operations. We require continued access to capital.
In the competitive market for our license areas, failure to declare any discoveries and thereby establish development areas may result in substantial license renewal costs or loss of our interests in the undeveloped parts of our license areas, which may include certain of our prospects or undeveloped discoveries.” All of our proved reserves, oil production and cash flows from operations are currently associated with our licenses offshore Ghana, Equatorial Guinea, Mauritania, Senegal and the U.S.
In the competitive market for our license areas, failure to drill these wells or declare any discoveries may result in substantial license renewal costs or loss of our interests in the undeveloped parts of our license areas, which may include certain of our prospects or undeveloped discoveries.” All of our proved reserves, oil and natural gas production and cash flows from operations are currently associated with our licenses offshore Ghana, Equatorial Guinea, Mauritania, Senegal and the U.S.
We may be liable for certain costs if third parties who contract with us are unable to meet their commitments under such agreements. We are currently exposed to credit risk through joint interest receivables from our block and/or unit partners.
We may be liable for certain costs if third parties who contract with us or with the operators of our license and lease areas are unable to meet their commitments under such agreements. We are currently exposed to credit risk through joint interest receivables from our block and/or unit partners.
See “—Under the terms of certain of our license agreements, we are contractually obligated to drill wells and declare any discoveries in order to retain exploration and production rights.
See “—Under the terms of certain of our petroleum contracts, we are contractually obligated to drill wells and declare any discoveries in order to retain exploration and production rights.
The inability or failure of our significant customers or counterparties to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results. In addition, our oil and natural gas derivative arrangements expose us to credit risk in the event of nonperformance by counterparties. Joint interest receivables arise from our block partners.
In addition, our oil and natural gas derivative arrangements expose us to credit risk in the event of nonperformance by counterparties. Joint interest receivables arise from our block partners. The inability or failure of third parties we contract with to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.
As of December 31, 2022, we had $1.5 billion principal amount of Senior Notes outstanding and $145 million outstanding under the GoM Term Loan. In the future, we also may incur significant off-balance sheet obligations and/or significant indebtedness in order to make investments or acquisitions or to explore, appraise or develop our oil and natural gas assets.
As of December 31, 2023, we had $1.5 billion principal amount of Senior Notes outstanding. In the future, we also may incur significant off-balance sheet obligations and/or significant indebtedness in order to make investments or acquisitions or to explore, appraise or develop our oil and natural gas assets.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the Senior Notes and the commercial debt facility. We may be subject to risks in connection with acquisitions and the integration of significant acquisitions may be difficult.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the Senior Notes. 51 Table of Contents We may be subject to risks in connection with acquisitions and the integration of acquisitions may be difficult.
At December 31, 2022, we had $0.6 billion outstanding and $618.0 million of committed undrawn available capacity under our commercial debt facility, subject to borrowing base availability. As of December 31, 2022, there were no borrowings outstanding under the Corporate Revolver and the undrawn availability was $250.0 million.
At December 31, 2023, we had $925.0 million outstanding and $325.0 million of committed undrawn available capacity under our commercial debt facility, subject to borrowing base availability. As of December 31, 2023, there were no borrowings outstanding under the Corporate Revolver and the undrawn availability was $250.0 million.
If we issue additional shares of common stock in the future, it may have a dilutive effect on our current outstanding shareholders. Item 1B. Unresolved Staff Comments Not applicable.
If we issue additional shares of common stock or securities that are convertible into shares of common stock in the future, it may have a dilutive effect on our current outstanding shareholders. Item 1B. Unresolved Staff Comments Not applicable.
See “—Our operations may be adversely affected by political and economic circumstances in the countries in which we operate.” Furthermore, if our actual drilling and development costs are significantly more than our estimated costs, we may not be able to continue our business operations as proposed and could be forced to modify our plan of operation.
See “—Our business, operations and financial condition may be directly and indirectly adversely affected by political, economic, and environmental circumstances, and changes in laws and regulations, in the countries and regions in which we operate.” Furthermore, if our actual drilling and development costs are significantly more than our estimated costs, we may not be able to continue our business operations as proposed and could be forced to modify our plan of operation.
We are a holding company and our ability to make payments on our outstanding indebtedness, including our Senior Notes and our commercial debt facility, is dependent upon the receipt of funds from our subsidiaries by way of dividends, fees, interest, loans or otherwise.
We are a holding company and our ability to make payments on our outstanding indebtedness, including our Senior Notes, is dependent upon the receipt of funds from our subsidiaries by way of dividends, fees, interest, loans or otherwise. We are a holding company, and our subsidiaries own all of our assets and conduct all of our operations.
Accordingly, our ability to make payments of interest and principal on the Senior Notes and the commercial debt facility will be dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt 52 Table of Contents repayment or otherwise.
Accordingly, our ability to make payments of interest and principal on our outstanding indebtedness, including the Senior Notes, will be dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise.
In addition, a change in public sentiment regarding the oil and gas industry could result in a reduction in the demand for our products or otherwise affect our results of operations or financial condition. The continued effects of the COVID-19 pandemic has, and outbreaks of other diseases may, adversely affect our business operations and financial condition.
In addition, a change in public sentiment regarding the oil and gas industry could result in a reduction in the demand for our products or otherwise affect our results of operations or financial condition. Outbreaks of disease may adversely affect our business operations and financial condition.
In order to prepare our estimates, we must project production rates and the timing of development expenditures. We must also analyze available geological, geophysical, production and engineering data. The process also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.
We must also analyze available geological, geophysical, production and engineering data. The process also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.
A lack of drilling opportunities or projects that cease production may cause us to incur significant costs associated with an idle rig and/or related services, particularly if we cannot contract out rig slots to other parties.
A variety of factors, including geologic and market‑related, can cause a field to become uneconomic or only marginally economic. A lack of drilling opportunities or projects that cease production may cause us to incur significant costs associated with an idle rig and/or related services, particularly if we cannot contract out rig slots to other parties.
The success of a significant acquisition (such as our 2018 acquisition of Deep Gulf Energy) will depend, in part, on our ability to realize anticipated growth opportunities from combining the acquired assets or operations with those of ours.
The success of an acquisition will depend, in part, on our ability to realize anticipated growth opportunities from combining the acquired assets or operations with those of ours.
We depend on digital technology, including information systems and related infrastructure as well as cloud application and services, to process and record financial and operating data, communicate with our employees and business partners, analyze seismic and drilling information, estimate quantities of oil and gas reserves and for many other activities related to our business.
For example, software programs are used to interpret seismic data, manage drilling rigs, conduct reservoir modeling and reserves estimation, and to process and record financial and operating data. 52 Table of Contents We depend on digital technology, including information systems and related infrastructure as well as cloud application and services, to process and record financial and operating data, communicate with our employees and business partners, analyze seismic and drilling information, estimate quantities of oil and gas reserves and for many other activities related to our business.
We cannot predict the occurrence or outcome of these proceedings with certainty, and if we are unsuccessful in these disputes and any loss exceeds our available insurance, this could have a material adverse effect on our results of operations.
From time to time, we may become involved in various legal and regulatory proceedings arising in the normal course of business. We cannot predict the occurrence or outcome of these proceedings with certainty, and if we are unsuccessful in these disputes and any loss exceeds our available insurance, this could have a material adverse effect on our results of operations.
Additionally, monetary sector reform initiatives in the West African Monetary Union and the Central African Economic and Monetary Union, such as through the implementation of Regulation 02/18/ECMAC/UMAC/CM by the Bank of Central African States could restrict or prevent payments being made in a foreign currency; impose restrictions on offshore and onshore foreign currency accounts; and/or restrict or prevent the repatriation of revenues and debt proceeds.
We have faced, and continue to face, similar tax related disputes with the Senegal, Mauritania, and Equatorial Guinea Tax Administration. 54 Table of Contents Additionally, monetary sector reform initiatives in the West African Monetary Union and the Central African Economic and Monetary Union, such as through the implementation of Regulation 02/18/ECMAC/UMAC/CM by the Bank of Central African States could restrict or prevent payments being made in a foreign currency; impose restrictions on offshore and onshore foreign currency accounts; and/or restrict or prevent the repatriation of revenues and debt proceeds.
Furthermore, the drilling equipment, facilities and infrastructure owned and operated by the third parties we contract with is highly complex and subject to malfunction and breakdown. Any malfunctions or breakdowns may be outside our control and result in delays, which could be substantial.
Such third parties may not perform the services they provide us on schedule or within budget. Furthermore, the drilling equipment, facilities and infrastructure owned and operated by such third parties is highly complex and subject to malfunction and breakdown. Any malfunctions or breakdowns may be outside our control and result in delays, which could be substantial.
For additional detail regarding the status of our operations with respect to our various petroleum contracts, please see “Item 1. Business—Operations by Geographic Area.” The inability of one or more third parties who contract with us to meet their obligations to us may adversely affect our financial results.
Business—Operations by Geographic Area.” The inability of one or more third parties who contract with us to meet their obligations to us may adversely affect our financial results.
If our federal net operating losses become subject to the limitation under Section 382 of the Code, we may be unable to fully utilize our federal net operating loss carryforwards to offset our taxable income, if any, in future years, which could have a negative impact on our financial position and results of operations. 54 Table of Contents In addition to the aforementioned federal income tax implications pursuant to Section 382 of the Code, most states follow the general provisions of Section 382 of the Code, either explicitly or implicitly resulting in separate state net operating loss limitations.
If our federal net operating losses become subject to the limitation under Section 382 of the Code, we may be unable to fully utilize our federal net operating loss carryforwards to offset our taxable income, if any, in future years, which could have a negative impact on our financial position and results of operations.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 4. Mine Safety Disclosures Not applicable. 62 Table of Contents PART II
Biggest changeItem 4. Mine Safety Disclosures Not applicable. 61 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 62 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 63 Item 6. Selected Financial Data 65 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 66 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 81 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 61 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 62 Item 6. Selected Financial Data 64 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 65 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 77 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCertain of our subsidiaries are currently restricted in their ability to pay dividends to us pursuant to the terms of the Senior Notes, the Facility, the Corporate Revolver, and the GoM Term Loan unless we meet certain conditions, financial and otherwise.
Biggest changeCertain of our subsidiaries are currently restricted in their ability to pay dividends to us pursuant to the terms of the Senior Notes, the Facility, and the Corporate Revolver unless we meet certain conditions, financial and otherwise. Issuer Purchases of Equity Securities Under the terms of our LTIP, we have issued restricted share units to our employees.
The repurchased share units are reallocated to the number of share units available for issuance under the LTIP. 63 Table of Contents Share Performance Graph The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filings.
The repurchased share units are reallocated to the number of share units available for issuance under the LTIP. 62 Table of Contents Share Performance Graph The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filings.
The following graph illustrates changes over the five-year period ended December 31, 2022, in cumulative total stockholder return on our common stock as measured against the cumulative total return of the S&P 500 Index and the Dow Jones U.S. Exploration & Production Index.
The following graph illustrates changes over the five-year period ended December 31, 2023, in cumulative total stockholder return on our common stock as measured against the cumulative total return of the S&P 500 Index and the Dow Jones U.S. Exploration & Production Index.
The Company may repurchase the restricted share units sold by the grantees to settle their tax liability.
Alternatively, the Company may repurchase the restricted share units sold by the grantees to settle their tax liability.
As of February 23, 2023, based on information from the Company’s transfer agent, Computershare Trust Company, N.A., the number of holders of record of Kosmos’ common stock was 120. On February 23, 2023, the last reported sale price of Kosmos’ common stock, as reported on the NYSE, was $7.50 per share. Kosmos does not currently pay a dividend.
As of February 22, 2024, based on information from the Company’s transfer agent, Computershare Trust Company, N.A., the number of holders of record of Kosmos’ common stock was 122. On February 22, 2024, the last reported sale price of Kosmos’ common stock, as reported on the NYSE, was $5.93 per share. Kosmos does not currently pay a dividend.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends). December 31, 2017 2018 2019 2020 2021 2022 Kosmos Energy Ltd. (KOS) $ 100.00 $ 59.40 $ 85.80 $ 36.00 $ 53.00 $ 97.30 S&P 500 (SPX) 100.00 95.60 125.70 148.80 191.50 156.80 Dow Jones U.S.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends). December 31, 2018 2019 2020 2021 2022 2023 Kosmos Energy Ltd. (KOS) $ 100.00 $ 144.30 $ 60.50 $ 89.10 $ 163.80 $ 172.80 S&P 500 (SPX) 100.00 131.50 155.60 200.30 164.00 207.00 Dow Jones U.S.
Exploration & Production Index (DWCEXP) 100.00 80.70 89.00 58.90 101.60 159.80 64 Table of Contents
Exploration & Production Index (DWCEXP) 100.00 110.30 73.00 125.90 198.10 206.90 63 Table of Contents
Removed
Issuer Purchases of Equity Securities Under the terms of our LTIP, we have issued restricted share units to our employees.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Selected Financial Data See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” for consolidated financial information as of and for the three years ended December 31, 2022. 65 Table of Contents
Biggest changeItem 6. Selected Financial Data See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” for consolidated financial information as of and for the three years ended December 31, 2023. 64 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in cash provided by operating activities in the year ended December 31, 2021 when compared to the same period in 2020 is primarily a result of higher oil prices. 74 Table of Contents The following table presents our liquidity and financial position as of December 31, 2022 and 2021: Years Ended December 31, 2022 2021 (In thousands) 7.125% Senior Notes $ 650,000 $ 650,000 7.750% Senior Notes 400,000 400,000 7.500% Senior Notes 450,000 450,000 Borrowings under the Facility 625,000 1,000,000 GoM Term Loan 145,000 175,000 Total long-term debt 2,270,000 2,675,000 Cash and cash equivalents 183,405 131,620 Total restricted cash 3,416 43,276 Net debt $ 2,083,179 $ 2,500,104 Availability under the Facility $ 618,034 $ 235,155 Availability under the Corporate Revolver $ 250,000 $ 400,000 Available borrowings plus cash and cash equivalents $ 1,051,439 $ 766,775 Capital Expenditures and Investments We expect to incur capital costs as we: • drill additional infill wells and execute exploitation and production activities in Ghana, Equatorial Guinea and the U.S.
Biggest changeThe following table presents our liquidity and financial position as of December 31, 2023 and 2022: Years Ended December 31, 2023 2022 (In thousands) Borrowings under the Facility $ 925,000 $ 625,000 7.125% Senior Notes 650,000 650,000 7.750% Senior Notes 400,000 400,000 7.500% Senior Notes 450,000 450,000 GoM Term Loan — 145,000 Total long-term debt $ 2,425,000 $ 2,270,000 Cash and cash equivalents 95,345 183,405 Total restricted cash 3,416 3,416 Net debt $ 2,326,239 $ 2,083,179 Availability under the Facility $ 325,000 $ 618,034 Availability under the Corporate Revolver $ 250,000 $ 250,000 Available borrowings plus cash and cash equivalents $ 670,345 $ 1,051,439 71 Table of Contents Capital Expenditures and Investments We expect to incur capital costs as we: • drill additional infill wells and execute exploitation and production activities in Ghana, Equatorial Guinea and the U.S.
The host contract is the receivable from oil sales at the spot price on the date of sale. The embedded derivative, which is not designated as a hedge, is marked to market through oil and gas revenue each period until the final settlement occurs, which generally is limited to the month after the sale. Exploration and Development Costs.
The host contract is the receivable from oil sales at the spot price on the date of sale. The derivative, which is not designated as a hedge, is marked to market through oil and gas revenue each period until the final settlement occurs, which generally is limited to the month after the sale. Exploration and Development Costs.
When evaluating the need for a valuation allowance, we consider all available positive and negative evidence, including the following: • the status of our operations in the particular taxing jurisdiction, including whether we have commenced production from a commercial discovery; • whether a commercial discovery has resulted in significant proved reserves that have been independently verified; 79 Table of Contents • the amounts and history of taxable income or losses in a particular jurisdiction; • projections of future income, including the sensitivity of such projections to changes in production volumes and prices; • the existence, or lack thereof, of statutory limitations on the period that net operating losses may be carried forward in a jurisdiction; and • the creation and timing of future income associated with the reversal of deferred tax liabilities in excess of deferred tax assets.
When evaluating the need for a valuation allowance, we consider all available positive and negative evidence, including the following: • the status of our operations in the particular taxing jurisdiction, including whether we have commenced production from a commercial discovery; • whether a commercial discovery has resulted in significant proved reserves that have been independently verified; • the amounts and history of taxable income or losses in a particular jurisdiction; • projections of future income, including the sensitivity of such projections to changes in production volumes and prices; • the existence, or lack thereof, of statutory limitations on the period that net operating losses may be carried forward in a jurisdiction; and • the creation and timing of future income associated with the reversal of deferred tax liabilities in excess of deferred tax assets.
We were in compliance with the financial covenants contained in the Corporate Revolver as of September 30, 2022 (the most recent assessment date). The Corporate Revolver contains customary cross default provisions. The U.S. and many foreign economies continue to experience uncertainty driven by varying macroeconomic conditions. Although some of these economies have shown signs of improvement, macroeconomic recovery remains uneven.
We were in compliance with the financial covenants contained in the Corporate Revolver as of September 30, 2023 (the most recent assessment date). The Corporate Revolver contains customary cross default provisions. The U.S. and many foreign economies continue to experience uncertainty driven by varying macroeconomic conditions. Although some of these economies have shown signs of improvement, macroeconomic recovery remains uneven.
A receivable or liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves on such property. As of December 31, 2022 and 2021, we had no oil and gas imbalances recorded in our consolidated financial statements.
A receivable or liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves on such property. As of December 31, 2023 and 2022, we had no oil and gas imbalances recorded in our consolidated financial statements.
The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations. 2023 Capital Program We estimate we will spend approximately $700-$750 million of capital for the year ending December 31, 2023, excluding any acquisitions or divestiture of oil and gas properties during the year.
The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations. 2024 Capital Program We estimate we will spend approximately $700-$750 million of capital for the year ending December 31, 2024, excluding any acquisitions or divestiture of oil and gas properties during the year.
These include the number of wells we plan to drill, our participating, paying and carried interests in our prospects including disproportionate payment amounts, the costs involved in developing or participating in the development of a prospect, the timing of third‑party projects, the availability of suitable equipment and qualified personnel and our cash flows from operations.
These include the number of wells we plan to drill, our paying interests in our operations including disproportionate payment amounts, the costs involved in developing or participating in the development of a prospect, the timing of third‑party projects, the availability of suitable equipment and qualified personnel and our cash flows from operations.
For the years ended December 31, 2022 and December 31, 2021, our overall effective tax rates were impacted by the difference in our 21% U.S. income tax reporting rate and the 35% statutory tax rates applicable to our Ghanaian and Equatorial Guinean operations, jurisdictions that have a 0% statutory tax rate or where we have incurred losses and have recorded valuation allowances against the corresponding deferred tax assets and other non-deductible expenses, primarily in the U.S.
For the years ended December 31, 2023 and December 31, 2022, our overall effective tax rates were impacted by the difference in our 21% U.S. income tax reporting rate and the 35% statutory tax rates applicable to our Ghanaian and Equatorial Guinean operations, jurisdictions that have a 0% statutory tax rate, jurisdictions where we have incurred losses and have recorded valuation allowances against the corresponding deferred tax assets, and other non-deductible expenses, primarily in the U.S.
(2) Includes activity related to the pre-emption transaction with Tullow on March 13, 2022. 71 Table of Contents The discussion of the results of operations and the period‑to‑period comparisons presented below analyze our historical results. The following discussion may not be indicative of future results.
(2) Includes activity related to the pre-emption transaction with Tullow on March 13, 2022. 68 Table of Contents The discussion of the results of operations and the period‑to‑period comparisons presented below analyze our historical results. The following discussion may not be indicative of future results.
For a discussion of the year ended December 31, 2021 compared to the year ended December 31, 2020, please refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.
The scheduled maturities of debt related to the Facility are based on the level of borrowings and the available borrowing base as of December 31, 2022. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter.
The scheduled maturities of debt related to the Facility are based on the level of borrowings and the available borrowing base as of December 31, 2023. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter.
The increase in cash provided by operating activities in the year ended December 31, 2022 when compared to the same period in 2021 is primarily a result of increased oil prices and increased production.
The increase in cash provided by operating activities in the year ended December 31, 2022 when compared to the same period in 2021 is primarily a result of higher realized oil prices and increased production.
This capital expenditure budget consists of: • Approximately $250-$300 million related to maintenance activities across our Ghana, Equatorial Guinea and U.S. Gulf of Mexico assets, including infill development drilling and integrity spend • Approximately $350-$400 million related to the developments of Jubilee Southeast in Ghana, Phase 1 of Greater Tortue Ahmeyim in Mauritania and Senegal, and Winterfell in the U.S.
This capital expenditure budget consists of: • Approximately $250-$300 million related to maintenance activities across our Ghana, Equatorial Guinea and U.S. Gulf of Mexico assets, including infill development drilling and integrity spend; • Approximately $350-$400 million related to the development of Phase 1 of Greater Tortue Ahmeyim in Mauritania and Senegal and Winterfell in the U.S.
Our federal, state and international tax returns are generally not prepared or filed before the consolidated financial statements are prepared; therefore, we estimate the tax basis of our assets and liabilities at the end of each period as well as the effects of changes in tax laws or tax rates, tax credits, and net operating loss carryforwards.
Our federal, state and international tax returns are generally not prepared or filed before the consolidated financial statements are prepared; therefore, we estimate the tax basis of our assets and 75 Table of Contents liabilities at the end of each period as well as the effects of changes in tax laws or tax rates, tax credits, and net operating loss carryforwards.
(2) Primarily relates to corporate office and foreign office leases. (3) Represents gross contractual obligations to execute planned future capital projects. Other joint owners in the properties operated by Kosmos will be billed for their working interest share of such costs.
(2) Primarily relates to corporate office and foreign office leases. 74 Table of Contents (3) Represents gross contractual obligations to execute planned future capital projects. Other joint owners in the properties operated by Kosmos will be billed for their working interest share of such costs.
As of December 31, 2022 and 2021, we have a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized.
As of December 31, 2023 and 2022, we have a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized.
The expected future cash flows used for impairment reviews and related fair value measurements are typically based on judgmental assessments of future production, pricing estimates, capital and operating costs, market-based weighted average cost of capital, 80 Table of Contents and risk adjustment factors applied to reserves.
The expected future cash flows used for impairment reviews and related fair value measurements are typically based on judgmental assessments of future production, pricing estimates, capital and operating costs, market-based weighted average cost of capital, and risk adjustment factors applied to reserves.
Gulf of Mexico and Equatorial Guinea. Certain operating results and statistics for the years ended December 31, 2022, 2021 and 2020 are included in the following tables.
Gulf of Mexico and Equatorial Guinea. Certain operating results and statistics for the years ended December 31, 2023, 2022 and 2021 are included in the following tables.
In Mauritania and Senegal, we have a $200.2 million FPSO Contract Liability related to the deferred sale of the Greater Tortue FPSO. In February 2019, Kosmos and BP signed Carry Advance Agreements with the national oil companies of Mauritania and Senegal, which obligate us separately to finance the respective national oil companies’ share of certain development costs.
We have a $200.2 million FPSO Contract Liability in Other long-term liabilities related to the deferred sale of the Greater Tortue FPSO. In February 2019, Kosmos and BP signed Carry Advance Agreements with the national oil companies of Mauritania and Senegal, which obligate us separately to finance the respective national oil companies’ share of certain development costs.
The Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equally in right of payment with all of its existing and future senior indebtedness (including all borrowings under the Corporate Revolver) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility and the GoM Term Loan).
The Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equally in right of payment with all of its existing and future senior indebtedness (including all borrowings under the Corporate Revolver) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility).
See Note 11 of Notes to the Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for additional information regarding these liabilities. We currently have a commitment to drill three development wells and one exploration well in Equatorial Guinea.
See Note 11—Asset Retirement Obligations of Notes to the Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for additional information regarding these liabilities. We have a commitment to drill three development wells and one exploration well in Equatorial Guinea.
Our future financial condition and liquidity will be impacted by, among other factors, our level of production of oil and the prices we receive from the sale of oil, our ability to effectively hedge future production volumes, the success of our multi-faceted infrastructure-led exploration and appraisal drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, our partners’ alignment with respect to capital plans, and the actual cost of exploitation, exploration, appraisal and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.
Our future financial condition and liquidity will be impacted by, among other factors, our level of production of oil and the prices we receive from the sale of oil, our ability to effectively hedge future production volumes, the success of our multi-faceted infrastructure-led exploration and appraisal drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, our partners’ alignment with respect to capital plans, and the actual cost of exploitation, exploration, appraisal and development of our oil and natural gas assets, and coverage of any claims under our insurance policies. 72 Table of Contents Significant Sources of Capital Facility The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities.
Our oil and gas revenues are recognized when hydrocarbons have been sold to a purchaser at a fixed or determinable price, title has transferred and collection is probable. Certain revenues are based on provisional price contracts which contain an embedded derivative that is required to be separated from the host contract for accounting purposes.
Our oil and gas revenues are recognized when hydrocarbons have been sold to a purchaser at a fixed or determinable price, title has transferred and collection is probable. Certain revenues are based on contracts with provisional pricing and quantity optionality which contain a derivative that is required to be separated from the host contract for accounting purposes.
The Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's U.S. Gulf of Mexico assets and the interests acquired in the Anadarko WCTP Acquisition, and on a subordinated, unsecured basis by entities that borrow under, or guarantee, our Facility.
The Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's U.S. Gulf of Mexico assets, and on a subordinated, unsecured basis by entities that borrow under, or guarantee, our Facility.
Derivatives, net. During the years ended December 31, 2022 and 2021, we recorded a loss of $260.9 million and $270.2 million, respectively, on our outstanding hedge positions. The changes recorded were a result of changes in the forward curve of oil prices during the respective periods. Other expenses, net.
During the years ended December 31, 2023 and 2022, we recorded a loss of $11.1 million and $260.9 million, respectively, on our outstanding hedge positions. The changes recorded were a result of changes in the forward curve of oil prices during the respective periods. Other expenses, net.
We sold 23,117 MBoe at an average realized price per barrel of oil equivalent of $97.13 in 2022 and 19,850 MBoe at an average realized price per barrel of oil equivalent of $67.10 in 2021. Gain on sale of assets. During the fourth quarter of 2022, we received $50.0 million from Shell under the terms of our 2020 farm-out agreement.
We sold 23,057 MBoe at an average realized price per barrel of oil equivalent of $73.80 in 2023 and 23,117 MBoe at an average realized price per barrel of oil equivalent of $97.13 in 2022. Gain on sale of assets. During the fourth quarter of 2022, we received $50.0 million from Shell under the terms of our 2020 farm-out agreement.
Sao Tome and Principe In the second quarter of 2022, we received approval for a six month extension to May 2023 for the current exploration phase for Block 5 offshore Sao Tome and Principe. 70 Table of Contents Results of Operations All of our results, as presented in the table below, represent operations from the Jubilee and TEN fields in Ghana, the U.S.
Sao Tome and Principe In the second quarter of 2023, we received approval for a twelve month extension to May 2024 for the current exploration phase for Block 5 offshore Sao Tome and Principe. 67 Table of Contents Results of Operations All of our results, as presented in the table below, represent operations from Ghana, the U.S.
Net cash provided by operating activities in 2022 was $1.1 billion compared with net cash provided by operating activities of $374.3 million in 2021 and $196.1 million in 2020, respectively.
Net cash provided by operating activities in 2023 was $765.2 million compared with net cash provided by operating activities of $1.1 billion in 2022 and $374.3 million in 2021, respectively.
Our future financial condition and liquidity can be impacted by, among other factors, the success of our exploitation, exploration and appraisal drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the reliability of our oil and gas production facilities, our ability to continuously export oil and gas, our ability to secure and maintain partners and their alignment with respect to capital plans, the actual cost of exploitation, exploration, appraisal and development of our oil and natural gas assets, and coverage of any claims under our insurance policies. 73 Table of Contents In March 2022, we refinanced the Corporate Revolver by replacing it with a new revolving credit facility agreement.
Our future financial condition and liquidity can be impacted by, among other factors, the success of our exploitation, exploration and appraisal drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the reliability of our oil and gas production facilities, our ability to continuously export oil and gas, our ability to secure and maintain partners and their alignment with respect to capital plans, the actual cost of exploitation, exploration, appraisal and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.
The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets’ reserves and/or resources in the Jubilee and TEN fields in Ghana and the Ceiba and Okume fields in Equatorial Guinea, however, excludes the additional interests in Jubilee and TEN acquired in the October 2021 acquisition of Anadarko WCTP.
The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets’ reserves and/or resources in the Jubilee and TEN Fields in Ghana and the Ceiba Field and Okume Complex in Equatorial Guinea.
In October 2022, during the Fall 2022 redetermination, the Company’s lending syndicate approved a borrowing base of approximately $1.24 billion. As of December 31, 2022, borrowings under the Facility totaled $625.0 million and the undrawn availability under the facility was $618.0 million.
In October 2023, during the Fall 2023 redetermination, the Company’s lending syndicate approved a borrowing base of $1.25 billion. As of December 31, 2023, borrowings under the Facility totaled $925.0 million and the undrawn availability under the facility was $325.0 million.
Globally, the impacts of Russia’s invasion of Ukraine, a potential recession, COVID-19 and other varying macroeconomic conditions has impacted supply and demand for oil and gas, which also resulted in significant variability in oil and gas prices.
Globally, the impacts of Russia’s war in Ukraine, potential instability in the Middle East, a potential recession, inflationary pressures and other varying macroeconomic conditions has impacted supply and demand for oil and gas, which also resulted in significant variability in oil and gas prices.
We are required to repay certain amounts due under the Corporate Revolver with sales of certain subsidiaries or sales of certain assets.
We have the right to cancel all the undrawn commitments under the Corporate Revolver. We are required to repay certain amounts due under the Corporate Revolver with sales of certain subsidiaries or sales of certain assets.
Effective January 1, 2023, the volume of approximately 19 Bcf of Jubilee gas (in restoration of the amount originally substituted from TEN) will be sold to Ghana under the terms of the TAG GSA at $0.50 per mmbtu over a period of approximately six months.
Commencing on January 1, 2023, the volume of approximately 19 Bcf of Jubilee gas (in restoration of the amount originally substituted from TEN) was sold to Ghana under the terms of the TAG GSA at $0.50 per MMBtu.
The letter of credit facility expires on the final maturity date. The available facility amount is subject to borrowing base constraints and, beginning on March 31, 2024, outstanding borrowings will be constrained by an amortization schedule. The Facility has a final maturity date of March 31, 2027.
The available facility amount is subject to borrowing base constraints and, beginning on October 1, 2024, outstanding borrowings will be constrained by an amortization schedule. The Facility has a final maturity date of March 31, 2027. As of December 31, 2023, we had no letters of credit issued under the Facility.
Years ended December 31, 2022(2) 2021(1) 2020 (In thousands, except per volume data) Sales volumes: Oil (MBbl) 22,012 18,525 20,531 Gas (MMcf) 4,076 4,904 5,867 NGL (MBbl) 426 508 602 Total (MBoe) 23,117 19,850 22,111 Total (Boepd) 63,335 54,384 60,412 Revenues: Oil sales $ 2,201,199 $ 1,298,577 $ 786,159 Gas sales 29,504 18,898 11,706 NGL sales 14,652 14,538 6,168 Total revenues $ 2,245,355 $ 1,332,013 $ 804,033 Average oil sales price per Bbl $ 100.00 $ 70.10 $ 38.29 Average gas sales price per Mcf 7.24 3.85 2.00 Average NGL sales price per Bbl 34.39 28.62 10.25 Average total sales price per Boe 97.13 67.10 36.36 Costs: Oil and gas production, excluding workovers $ 387,888 $ 332,203 $ 336,662 Oil and gas production, workovers 15,168 13,803 1,815 Total oil and gas production costs $ 403,056 $ 346,006 $ 338,477 Depletion, depreciation and amortization $ 498,256 $ 467,221 $ 485,862 Average cost per Boe: Oil and gas production, excluding workovers $ 16.78 $ 16.74 $ 15.23 Oil and gas production, workovers 0.66 0.70 0.08 Total oil and gas production costs 17.44 17.44 15.31 Depletion, depreciation and amortization 21.55 23.54 21.97 Total oil and gas production costs, depletion, depreciation and amortization $ 38.99 $ 40.98 $ 37.28 (1) Includes activity related to our acquisition of additional interests in Ghana commencing October 13, 2021, the acquisition date.
Years ended December 31, 2023 2022(2) 2021(1) (In thousands, except per volume data) Sales volumes: Oil (MBbl) 20,385 22,012 18,525 Gas (MMcf) 13,737 4,076 4,904 NGL (MBbl) 382 426 508 Total (MBoe) 23,057 23,117 19,850 Total (Boepd) 63,168 63,335 54,384 Revenues: Oil sales $ 1,658,421 $ 2,201,199 $ 1,298,577 Gas sales 35,307 29,504 18,898 NGL sales 7,880 14,652 14,538 Total revenues $ 1,701,608 $ 2,245,355 $ 1,332,013 Average oil sales price per Bbl $ 81.35 $ 100.00 $ 70.10 Average gas sales price per Mcf 2.57 7.24 3.85 Average NGL sales price per Bbl 20.61 34.39 28.62 Average total sales price per Boe 73.80 97.13 67.10 Costs: Oil and gas production, excluding workovers $ 367,375 $ 387,888 $ 332,203 Oil and gas production, workovers 22,722 15,168 13,803 Total oil and gas production costs $ 390,097 $ 403,056 $ 346,006 Depletion, depreciation and amortization $ 444,927 $ 498,256 $ 467,221 Average cost per Boe: Oil and gas production, excluding workovers $ 15.93 $ 16.78 $ 16.74 Oil and gas production, workovers 0.99 0.66 0.70 Total oil and gas production costs 16.92 17.44 17.44 Depletion, depreciation and amortization 19.30 21.55 23.54 Total oil and gas production costs, depletion, depreciation and amortization $ 36.22 $ 38.99 $ 40.98 (1) Includes activity related to our acquisition of additional interests in Ghana commencing October 13, 2021, the acquisition date.
As of January 1, 2023, the Jubilee partners have fulfilled this commitment, providing 200 Bcf of natural gas to the Government of Ghana. From 2018 through 2022, approximately 19 Bcf of the first 200 Bcf of natural gas was substituted from the TEN fields in order to maintain consistent gas volumes to shore for Ghana domestic power purposes.
From 2018 through 2022, approximately 19 Bcf of the first 200 Bcf of natural gas was substituted from the TEN Fields in order to maintain consistent gas volumes to shore for Ghana domestic power purposes.
These amounts will be repaid through the national oil companies’ share of future revenues. 78 Table of Contents Critical Accounting Policies This discussion of financial condition and results of operations is based upon the information reported in our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
Critical Accounting Policies This discussion of financial condition and results of operations is based upon the information reported in our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
Senior Notes We have three series of senior notes outstanding, which we collectively referred to as the “Senior Notes.” Our 7.125% Senior Notes mature on April 4, 2026, and interest is payable on the 7.125% Senior Notes each April 4 and October 4.
Based on our monitoring activities, we currently believe our banks will be able to perform on their commitments. 73 Table of Contents Senior Notes We have three series of senior notes outstanding, which we collectively referred to as the “Senior Notes.” Our 7.125% Senior Notes mature on April 4, 2026, and interest is payable on the 7.125% Senior Notes each April 4 and October 4.
Inherent in the present value calculation are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments.
Additionally, asset removal technologies and costs are constantly changing, as are regulatory, political, environmental, safety and public relations considerations. 76 Table of Contents Inherent in the present value calculation are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments.
Exploration expenses increased by $68.8 million during the year ended December 31, 2022, as compared to the year ended December 31, 2021 primarily as a result of the $64.2 million of previously capitalized costs related to the BirAllah and Orca discoveries incurred under the Block C8 license offshore Mauritania that were written off to exploration expense in 2022 with the expiration of the exploration period of Block C8, approximately $15.8 million related to the exit of leases in the U.S.
Exploration expenses decreased by $92.0 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022 primarily as a result of the $64.2 million of previously capitalized costs related to the BirAllah and Orca discoveries incurred under the Block C8 license offshore Mauritania that were written off to exploration expense with the expiration of the exploration period of Block C8 during the year ended December 31, 2022, along with $13.7 million of exploration expense recorded in 2022 related to two abandoned Ntomme step out wells in Ghana.
Sources and Uses of Cash The following table presents the sources and uses of our cash and cash equivalents for the years ended December 31, 2022, 2021 and 2020: Years Ended December 31, 2022 2021 2020 (In thousands) Sources of cash, cash equivalents and restricted cash: Net cash provided by operating activities $ 1,130,476 $ 374,344 $ 196,145 Net proceeds from issuance of senior notes — 839,375 — Net proceeds from issuance of common stock — 136,006 — Borrowings under long-term debt — 725,000 300,000 Advances under production prepayment agreement — — 50,000 Proceeds on sale of assets 168,703 6,354 99,118 1,299,179 2,081,079 645,263 Uses of cash, cash equivalents and restricted cash: Oil and gas assets 787,297 472,631 379,593 Acquisition of oil and gas properties 22,078 465,367 — Notes receivable from partners 63,183 41,733 65,112 Payments on long-term debt 405,000 1,050,000 250,000 Tax withholdings on restricted stock units 2,753 1,100 4,947 Dividends 655 512 19,271 Deferred financing costs 6,288 24,604 5,922 1,287,254 2,055,947 724,845 Increase (decrease) in cash, cash equivalents and restricted cash $ 11,925 $ 25,132 $ (79,582) Net cash provided by operating activities.
As of December 31, 2023, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was $250.0 million. 70 Table of Contents Sources and Uses of Cash The following table presents the sources and uses of our cash and cash equivalents for the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 2022 2021 (In thousands) Sources of cash, cash equivalents and restricted cash: Net cash provided by operating activities $ 765,170 $ 1,130,476 $ 374,344 Net proceeds from issuance of senior notes — — 839,375 Net proceeds from issuance of common stock — — 136,006 Borrowings under long-term debt 300,000 — 725,000 Advances under production prepayment agreement — — — Proceeds on sale of assets — 168,703 6,354 1,065,170 1,299,179 2,081,079 Uses of cash, cash equivalents and restricted cash: Oil and gas assets 932,603 787,297 472,631 Acquisition of oil and gas properties — 22,078 465,367 Notes receivable from partners 62,247 63,183 41,733 Payments on long-term debt 145,000 405,000 1,050,000 Dividends 166 655 512 Other financing costs 13,214 9,041 25,704 1,153,230 1,287,254 2,055,947 Increase (decrease) in cash, cash equivalents and restricted cash $ (88,060) $ 11,925 $ 25,132 Net cash provided by operating activities.
Significant Sources of Capital Facility The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September.
The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September.
As of December 31, 2022, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was $250.0 million. The available amount is not subject to borrowing base constraints. We have the right to cancel all the undrawn commitments under the Corporate Revolver.
On November 23, 2022, the Company amended the Corporate Revolver to update the interest rate benchmark from compounded SOFR to term SOFR. As of December 31, 2023, there were no outstanding borrowings under the Corporate Revolver and the undrawn availability was $250.0 million. The available amount is not subject to borrowing base constraints.
Estimating the future restoration and removal costs requires management to make estimates and judgments because most of the removal obligations are many years in the future and contracts and regulations often have vague descriptions of what constitutes removal. Additionally, asset removal technologies and costs are constantly changing, as are regulatory, political, environmental, safety and public relations considerations.
Estimating the future restoration and removal costs requires management to make estimates and judgments because most of the removal obligations are many years in the future and the regulations in some countries that we operate often have vague descriptions of what constitutes removal.
Well results and initial production were in line with expectations, however well productivity declined through the end of the fourth quarter of 2022 and workover plans have been developed for remediation in the second half of 2023.
Well results and initial production were in line with expectations, however well productivity declined through the end of the third quarter of 2022. Workover plans have been developed and are now expected to commence around the middle of 2024 given the better than forecast performance of the well in 2023.
Oil and gas production. Oil and gas production costs increased by $57.1 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021 as a result of our acquisition of additional interests and sales volumes in Ghana. Exploration expenses.
Oil and gas production. Oil and gas production costs decreased by $13.0 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022 as a result of changes to the production mix across our portfolio. Exploration expenses.
Gulf of Mexico • Approximately $50-$100 million related to progressing our infrastructure-led exploration and appraisal programs in the U.S. Gulf of Mexico and Equatorial Guinea, as well as the appraisal plans of our greater gas 75 Table of Contents resources in Mauritania and Senegal, including Phase 2 of Greater Tortue Ahmeyim, BirAllah and Yakaar-Teranga.
Gulf of Mexico, including Tiberius appraisal activities, and the drilling of the ILX prospect Akeng Deep in Equatorial Guinea, as well as the appraisal plans of our greater gas resources in Mauritania and Senegal, including Phase 2 of Greater Tortue Ahmeyim, Yakaar-Teranga and BirAllah.
On November 23, 2022, the Company amended the Facility to update the interest rate benchmark from LIBOR to term SOFR, to be effective as of April 19, 2023. The Facility provides a revolving credit and letter of credit facility. The availability period for the revolving credit facility expires one month prior to the final maturity date.
The Facility provides a revolving credit and letter of credit facility. The availability period for the revolving credit facility expires one month prior to the final maturity date. The letter of credit facility expires on the final maturity date.
In November 2022, we amended the Corporate Revolver and the Facility to update the interest rate benchmark under the Facility from LIBOR to term SOFR and to update the interest rate benchmark under the Corporate Revolver from compounded SOFR to term SOFR, each change to be effective as of April 19, 2023.
On November 23, 2022, the Company amended the Facility to update the interest rate benchmark from LIBOR to term SOFR, to be effective as of April 19, 2023. On September 29, 2023, the Company amended the Facility to accede Kosmos Energy Ghana Investments and Kosmos Energy Ghana Holdings Limited to the Facility as obligors.
Kosmos’ total share for the two agreements combined is currently estimated at approximately $240.0 million, of which $196.9 million has been incurred through December 31, 2022, excluding accrued interest.
Kosmos’ total share for the two agreements combined originally estimated at approximately $300.0 million, of which $259.2 million has been incurred through December 31, 2023, excluding accrued interest. These amounts are expected to be repaid through the national oil companies’ share of future revenues.
Interest and other financing costs, net decreased by $10.1 million during the year ended December 31, 2022, as compared to the year ended December 31, 2021 primarily as a result of $15.2 million for loss on extinguishment of debt during 2021 related to the Facility amendment, $4.4 million loss on extinguishment of debt during 2021 related to the Bridge Notes and increased capitalized interest in 2022 related to the Greater Tortue Ahmeyim project, offset by increased interest expense on the 7.750% Senior Notes and the 7.500% Senior Notes and guarantee fees on the Greater Tortue FPSO transaction.
Interest and other financing costs, net decreased by $22.4 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022 primarily as a result of increased capitalized interest related to the Greater Tortue Ahmeyim project partially offset by increased interest expenses related to higher interest rates. Derivatives, net.
If an event of default exists under the Facility, the lenders can accelerate the maturity and exercise other rights and remedies, including the enforcement of security granted pursuant to the Facility over certain asset. We were in compliance with the financial covenants contained in the Facility as of September 30, 2022 (the most recent assessment date).
We have the right to cancel all the undrawn commitments under the amended and restated Facility. If an event of default exists under the Facility, the lenders can accelerate the maturity and exercise other rights and remedies, including the enforcement of security granted pursuant to the Facility over certain assets held by our subsidiaries.
Production for the fourth quarter of 2022 was impacted by planned and unplanned facilities shutdowns as well as loop currents in the Gulf of Mexico. In March 2022, the Company commenced operations to plug back and side-track the original Kodiak-3 infill well located in Mississippi Canyon.
The Kodiak #3 infill well located in Mississippi Canyon was brought online in April 2021. The well experienced production issues and was shut-in. In March 2022, the Company commenced operations to plug back and side-track the original Kodiak #3 infill well. The Kodiak-3ST well was brought online in early September 2022.
Depletion, depreciation and amortization increased $31.0 million during the year ended December 31, 2022, as compared to the year ended December 31, 2021 as a result of higher sales volumes in the current year. Impairment of long-lived assets.
Impairment of long-lived assets. Impairment of long-lived assets decreased $227.7 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022.
The difference in the net book value of the proved property, net liabilities transferred and adjusted purchase price was treated as a recovery of cost and normal retirement, which resulted in no gain or loss being recognized. 67 Table of Contents In connection with the approval of the Jubilee Phase 1 PoD in 2009, the Jubilee Field partners agreed to provide the first 200 Bcf of natural gas produced from the Jubilee Field Phase 1 development to the Government of Ghana at no cost.
In connection with the approval of the Jubilee Phase 1 PoD in 2009, the Jubilee Field partners agreed to provide the first 200 Bcf of natural gas produced from the Jubilee Field Phase 1 development to the Government of Ghana at no cost. As of January 1, 2023, the Jubilee partners had fulfilled this commitment.
Oil and gas revenue increased by $913.3 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021 as a result of higher production rates at Jubilee and our acquisition of additional interests in Ghana during the fourth quarter of 2021 which drove increased sales volumes in Ghana as well as higher average oil prices.
Oil and gas revenue decreased by $543.7 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily as a result of lower average oil prices and lower oil production across our portfolio due to natural field decline, partially offset by increased natural gas sales in Ghana for the year ended December 31, 2023.
If there is an event of default, all or any portion of the outstanding indebtedness may be immediately due and payable and other rights may be exercised including against the collateral. 77 Table of Contents Contractual Obligations The following table presents maturities by expected debt maturity dates, the weighted-average interest rates expected to be paid on the Facility, Corporate Revolver and GoM Term Loan given current contractual terms and market conditions, and the instrument’s estimated fair value.
Contractual Obligations The following table presents maturities by expected debt maturity dates, the weighted-average interest rates expected to be paid on the Facility and Corporate Revolver given current contractual terms and market conditions, and the instrument’s estimated fair value. Weighted‑average interest rates are based on implied forward rates in the yield curve at the reporting date.
Kosmos’ average working interest in the Odd Job field is approximately 54.9%. In the second half of 2023, Kosmos plans to drill the Tiberius infrastructure-led exploration prospect, which is located in block 964 of Keathley Canyon (33% working interest) in the prolific outer Wilcox play.
In July 2023, Kosmos spud the Tiberius infrastructure-led exploration prospect, which is located in Block 964 of Keathley Canyon (33% working interest) in the Outer Wilcox play. In October 2023, we announced the well encountered approximately 75 meters (250 feet) of net oil pay in the primary Wilcox target.
Impairment of long-lived assets increased $450.0 million during the year ended December 31, 2022, as compared to the year ended December 31, 2021 as a result of a negative proved oil and gas reserve revision at TEN, primarily driven by recent well performance, which resulted in impairment charges of $450.0 million for the year ended December 31, 2022.
We recorded an impairment charge of $450.0 million 69 Table of Contents in the year ended December 31, 2022 for the TEN Fields as a result of negative proved oil and gas reserve revisions.
Other expenses, net decreased $19.2 million during the year ended December 31, 2022, as compared to the year ended December 31, 2021 primarily as a result of $7.0 million insurance settlements and approximately $3.0 million gain on asset retirement obligations. Income tax expense (benefit).
Other expenses, net increased $32.7 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022 primarily as a result of approximately $7.4 million of inventory impairments and $7.5 million of other asset write downs in the year ended December 31, 2023 and $11.9 million of insurance proceeds in the year ended December 31, 2022.
Work is focused on completing the remaining flowline installation and completing the subsea structures currently under construction. 69 Table of Contents • Drilling: successfully drilled and completed all four wells and demobilized the rig in February 2023. Expected production capacity is significantly more than what is required for first gas.
The following milestones were achieved through the year-end and filing date: • Drilling: The operator has successfully drilled and completed all four wells with expected production capacity significantly higher than what is required for first gas. 66 Table of Contents • Hub Terminal: Construction work is complete, and handover to operations was completed in August 2023. • Subsea: Significant progress has been made on the installation of the infield flowlines and subsea structures.
Year Ended December 31, 2022 vs. 2021 Years Ended December 31, Increase 2022(2) 2021(1) (Decrease) (In thousands) Revenues and other income: Oil and gas revenue $ 2,245,355 $ 1,332,013 $ 913,342 Gain on sale of assets 50,471 1,564 48,907 Other income, net 3,949 262 3,687 Total revenues and other income 2,299,775 1,333,839 965,936 Costs and expenses: Oil and gas production 403,056 346,006 57,050 Facilities insurance modifications, net 6,243 (1,586) 7,829 Exploration expenses 134,230 65,382 68,848 General and administrative 100,856 91,529 9,327 Depletion, depreciation and amortization 498,256 467,221 31,035 Impairment of long-lived assets 449,969 — 449,969 Interest and other financing costs, net 118,260 128,371 (10,111) Derivatives, net 260,892 270,185 (9,293) Other expenses, net (9,054) 10,111 (19,165) Total costs and expenses 1,962,708 1,377,219 585,489 Income (loss) before income taxes 337,067 (43,380) 380,447 Income tax expense (benefit) 110,516 34,456 76,060 Net income (loss) $ 226,551 $ (77,836) $ 304,387 (1) Includes activity related to our acquisition of additional interests in Ghana commencing October 13, 2021, the acquisition date.
Year Ended December 31, 2023 vs. 2022 Years Ended December 31, Increase 2023 2022(1) (Decrease) (In thousands) Revenues and other income: Oil and gas revenue $ 1,701,608 $ 2,245,355 $ (543,747) Gain on sale of assets — 50,471 (50,471) Other income, net (73) 3,949 (4,022) Total revenues and other income 1,701,535 2,299,775 (598,240) Costs and expenses: Oil and gas production 390,097 403,056 (12,959) Facilities insurance modifications, net — 6,243 (6,243) Exploration expenses 42,278 134,230 (91,952) General and administrative 99,532 100,856 (1,324) Depletion, depreciation and amortization 444,927 498,256 (53,329) Impairment of long-lived assets 222,278 449,969 (227,691) Interest and other financing costs, net 95,904 118,260 (22,356) Derivatives, net 11,128 260,892 (249,764) Other expenses, net 23,656 (9,054) 32,710 Total costs and expenses 1,329,800 1,962,708 (632,908) Income before income taxes 371,735 337,067 34,668 Income tax expense (benefit) 158,215 110,516 47,699 Net income $ 213,520 $ 226,551 $ (13,031) (1) Includes activity related to the pre-emption transaction with Tullow on March 13, 2022.
The Winterfell development project continues to make progress. Drilling of the wells for the first phase of the development is expected to start in the third quarter of 2023 with first production for the project targeted to be around the end of the first quarter of 2024.
The Winterfell development project continued to make good progress during 2023 with first oil for Phase 1A of the project targeted for early in the second quarter of 2024 with production from the first two wells. The Winterfell-3 well is expected to commence drilling later in 2024. The host facility production handling agreement and oil export agreements have been executed.
Years Ending December 31, Asset (Liability) Fair Value at December 31, 2023 2024 2025 2026 2027 Thereafter Total 2022 (In thousands, except percentages) Fixed rate debt: 7.125% Senior Notes $ — $ — $ — $ 650,000 $ — $ — $ 650,000 $ 558,201 7.750% Senior Notes — — — — 400,000 — 400,000 335,592 7.500% Senior Notes — — — — — 450,000 450,000 361,958 Variable rate debt: Weighted average interest rate 8.81 % 8.71 % 8.35 % 8.46 % 8.68 % — % Facility(1) $ — $ — $ 177,548 $ 268,880 $ 178,572 $ — $ 625,000 $ 625,000 GoM Term Loan 30,000 30,000 85,000 — — — 145,000 145,000 Total principal debt repayments (1) $ 30,000 $ 30,000 $ 262,548 $ 918,880 $ 578,572 $ 450,000 $ 2,270,000 Interest & commitment fees on long-term debt 199,756 185,465 163,115 115,704 53,124 16,875 734,039 Operating leases(2) 4,032 4,104 4,175 4,246 4,192 6,652 27,401 Purchase obligations(3) 68,198 34,976 — — — — 103,174 ______________________________________ (1) The amounts included in the table represent principal maturities only.
Years Ending December 31, Asset (Liability) Fair Value at December 31, 2024 2025 2026 2027 2028 Thereafter Total 2023 (In thousands, except percentages) Fixed rate debt: 7.125% Senior Notes $ — $ — $ 650,000 $ — $ — $ — $ 650,000 $ 622,824 7.750% Senior Notes — — — 400,000 — — 400,000 374,764 7.500% Senior Notes — — — — 450,000 — 450,000 412,461 Variable rate debt: Weighted average interest rate 8.91 % 7.69 % 7.85 % 8.19 % — % — % Facility(1) $ — $ 300,000 $ 416,667 $ 208,333 $ — $ — $ 925,000 $ 925,000 Total principal debt repayments (1) $ — $ 300,000 $ 1,066,667 $ 608,333 $ 450,000 $ — $ 2,425,000 Interest & commitment fees on long-term debt 203,273 173,370 121,070 53,517 16,875 — 568,105 Operating leases(2) 4,124 4,195 4,266 4,205 3,844 2,808 23,442 Purchase obligations(3) 55,790 — — — — — 55,790 ______________________________________ (1) The amounts included in the table represent principal maturities only.
Weighted‑average interest rates are based on implied forward rates in the yield curve at the reporting date. This table does not take into account amortization of deferred financing costs.
This table does not take into account amortization of deferred financing costs.
The total size of the Corporate Revolver reduced from $400 million to $250 million and the maturity date extended from May 2022 to December 31, 2024. In October 2022, during the Fall 2022 redetermination, the Company’s lending syndicate approved a borrowing base for the facility of approximately $1.24 billion.
In October 2023, during the Fall 2023 redetermination, the Company’s lending syndicate approved a borrowing base for the facility of $1.25 billion increasing undrawn availability. As of December 31, 2023, borrowings under the Facility totaled $925.0 million and the undrawn availability under the facility was $325.0 million.
The Company’s revenues, earnings, cash flows, capital investments, debt capacity and, ultimately, future rate of growth are highly dependent on these commodity prices. 66 Table of Contents Recent Developments Corporate In March 2022, we refinanced the Corporate Revolver by replacing it with a new revolving credit facility agreement.
The Company’s revenues, earnings, cash flows, capital investments, debt capacity and, ultimately, future rate of growth are highly dependent on these commodity prices. Recent Developments Corporate In September 2023, the Company repaid the remaining outstanding principal amount of the GoM Term Loan in the amount of $137.5 million plus accrued interest using cash on hand, constituting payment in full.
General and administrative. General and administrative costs increased by $9.3 million during the year ended December 31, 2022, as compared to the year ended December 31, 2021 primarily as a result of increased compensation and benefits, travel costs and professional fees during the year ended December 31, 2022. Depletion, depreciation and amortization.
Depletion, depreciation and amortization decreased $53.3 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022 as a result of lower depletion per barrel in the current year resulting from a lower cost basis in our TEN Fields due to the impairment loss recorded in the year ended December 31, 2022.
Gulf of Mexico and Equatorial Guinea, and our appraisal and development activities in the U.S. Gulf of Mexico, Mauritania and Senegal.
Gulf of Mexico; • Approximately $50-$100 million related to progressing our infrastructure-led exploration and appraisal programs in the U.S.
Greater Tortue Ahmeyim Unit Phase 1 of the Greater Tortue project continued to make good progress in 2022 with first gas for the project targeted to be in the fourth quarter of 2023.
The critical path to first gas on Phase 1 of the Greater Tortue Ahmeyim project, now targeted in the third quarter of 2024, continues to be through the arrival, hookup and commissioning of the FPSO. Timely execution of this workstream is expected to allow for first LNG in the fourth quarter of 2024.
The Jubilee and TEN partners are currently in discussions with the Government of Ghana regarding a future gas sales agreement. U.S. Gulf of Mexico During the year ended December 31, 2022, U.S. Gulf of Mexico production averaged approximately 17,400 Boepd (net) (~83% oil).
If the amended plan of 65 Table of Contents development for TEN is delayed or not approved, it could lead to a curtailment or delay of investment and development activity in TEN. U.S. Gulf of Mexico During the year ended December 31, 2023, U.S. Gulf of Mexico production averaged approximately 15,400 Boepd (net) (~81% oil).
Removed
The new revolving credit facility decreases the borrowing capacity from $400 million to $250 million and extends the maturity date from May 2022 to the end of 2024. In anticipation of the cessation of the LIBOR, as part of the refinancing, interest for the Corporate Revolver was linked to the SOFR administered by the Federal Reserve Bank of New York.
Added
The GoM Term Loan was subsequently terminated pursuant to, and subject to the terms of, the GoM Term Loan. In September 2023, the Company amended the Facility to accede Kosmos Energy Ghana Investments and Kosmos Energy Ghana Holdings Limited, to the Facility as obligors.
Removed
The Company expects the reduced borrowing capacity of the Corporate Revolver to offset an increase in the margin, resulting in slightly lower interest expenses going forward.
Added
As a result, the additional interests in Jubilee and TEN that were acquired in the October 2021 acquisition of Anadarko WCTP are now included when calculating the borrowing base amount for the Facility.
Removed
The Corporate Revolver was also amended to reflect that The Standard Bank of South Africa Limited has been appointed as the new Facility Agent. Under the terms of our 2020 farm-out agreement with Shell, potential contingent consideration is payable by Shell depending on the results of the first four exploration wells Shell drills in the purchased assets, excluding South Africa.
Added
In October 2023, the Company amended the Facility to modify the amortization schedule in order to reduce the number of repayment installments from seven to six equal installments, with the first repayment installment scheduled on October 1, 2024, rather than March 31, 2024. There was no change to the final maturity date or final repayment date.
Removed
Upon approval of the relevant operating committee of an appraisal plan for submission to the relevant governmental authority for any of those first four exploration wells, Shell will be required to pay Kosmos $50.0 million of consideration for each discovery for which an appraisal plan is approved by the relevant operating committee, capped in the aggregate at a maximum of $100.0 million total.
Added
Ghana During the year ended December 31, 2023, Ghana production averaged approximately 118,200 Boepd gross (38,600 Boepd net). The phased development of the Jubilee Field continued during 2023 successfully bringing four production wells and two injection wells online which included three wells (two production wells and one injection well) as part of the successful startup of the Jubilee Southeast project.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWeighted Average Price per Bbl Term Type of Contract Index MBbl Net Deferred Premium Payable/(Receivable) Sold Put Floor Ceiling Asset (Liability) Fair Value at December 31, 2022(1) 2023: (In thousands) Jan — Dec Three-way collars Dated Brent 6,000 $ 1.34 $ 49.17 $ 71.67 $ 107.58 (2,975) Jan — Dec Two-way collars Dated Brent 4,000 1.90 — 72.50 117.50 4,492 ______________________________________ (1) Fair values are based on the average forward oil prices on December 31, 2022.
Biggest changeWeighted Average Price per Bbl Term Type of Contract Index MBbl Net Deferred Premium Payable/(Receivable) Sold Put Floor Ceiling Asset (Liability) Fair Value at December 31, 2022(1) 2024: (In thousands) Jan - Dec Three-way collars Dated Brent 4,000 1.31 45.00 70.00 96.25 $ 4,477 Jan - Jun Two-way collars Dated Brent 2,000 1.24 — 65.00 85.00 $ (3,103) Jan - Dec Two-way collars Dated Brent 2,000 0.46 — 70.00 100.00 $ 5,463 ______________________________________ (1) Fair values are based on the average forward oil prices on December 31, 2023.
Commodity Price Sensitivity The following table provides information about our oil derivative financial instruments that were sensitive to changes in oil prices as of December 31, 2022. Volumes and weighted average prices are net of any offsetting derivatives entered into.
Commodity Price Sensitivity The following table provides information about our oil derivative financial instruments that were sensitive to changes in oil prices as of December 31, 2023. Volumes and weighted average prices are net of any offsetting derivatives entered into.
In accordance with these policies and guidelines, our management determines the appropriate timing and extent of derivative transactions. See “Item 8. Financial Statements and Supplementary Data—Note 2—Accounting Policies, Note 9—Derivative Financial Instruments and Note 10—Fair Value Measurements” for a description of the accounting procedures we follow relative to our derivative financial instruments.
In accordance with these policies and guidelines, our management determines the appropriate timing and extent of derivative transactions. See “Item 8. Financial Statements and Supplementary Data—Note 2—Accounting Policies, Note 9—Derivative Financial Instruments and Note 10— 77 Table of Contents Fair Value Measurements” for a description of the accounting procedures we follow relative to our derivative financial instruments.
If the floating market rate increased 10% at this level of floating rate debt, we would pay an estimated additional $3.6 million interest expense per year. The commitment fees on the undrawn availability under the Facility and the Corporate Revolver are not subject to changes in interest rates.
If the floating market rate increased 10% at this level of floating rate debt, we would pay an estimated additional $5.0 million interest expense per year. The commitment fees on the undrawn availability under the Facility and the Corporate Revolver are not subject to changes in interest rates.
In January 2023, we entered into Dated Brent three-way collar contracts for 1.0 MMBbl from January 2024 through December 2024 with a sold put price of $45.00 per barrel, a floor price of $70.00 per barrel and a ceiling price of $100.00 per barrel.
In January 2024, we entered into Dated Brent three-way collar contracts for 2.0 MMBbl from July 2024 through December 2024 with a sold put price of $45.00 per barrel, a floor price of $70.00 per barrel and a ceiling price of $90.00 per barrel.
The following table reconciles the changes that occurred in fair values of our open derivative contracts during the year ended December 31, 2022: Derivative Contracts Assets (Liabilities) Commodities (In thousands) Fair value of contracts outstanding as of December 31, 2021 $ (66,315) Changes in contract fair value (275,465) Contract maturities 344,468 Fair value of contracts outstanding as of December 31, 2022 $ 2,688 Commodity Price Risk The Company’s revenues, earnings, cash flows, capital investments and, ultimately, future rate of growth are highly dependent on the prices we receive for our crude oil, which have historically been very volatile.
The following table reconciles the changes that occurred in fair values of our open derivative contracts during the year ended December 31, 2023: Derivative Contracts Assets (Liabilities) Commodities (In thousands) Fair value of contracts outstanding as of December 31, 2022 $ 2,688 Changes in contract fair value (28,349) Contract maturities 32,426 Fair value of contracts outstanding as of December 31, 2023 $ 6,765 Commodity Price Risk The Company’s revenues, earnings, cash flows, capital investments and, ultimately, future rate of growth are highly dependent on the prices we receive for our crude oil, which have historically been very volatile.
At December 31, 2022, our open commodity derivative instruments were in a net asset position of $1.5 million. As of December 31, 2022, a hypothetical 10% price increase in the commodity futures price curves would decrease future pre‑tax earnings by approximately $30.8 million. Similarly, a hypothetical 10% price decrease would increase future pre‑tax earnings by approximately $31.1 million.
At December 31, 2023, our open commodity derivative instruments were in a net asset position of $6.8 million. As of December 31, 2023, a hypothetical 10% price increase in the commodity futures price curves would decrease future pre‑tax earnings by approximately $22.2 million.
Outstanding borrowings under the Facility, Corporate Revolver and GoM Term Loan, which as of December 31, 2022 total approximately $770.0 million and have a weighted average interest rate of 8.3%, are subject to variable interest rates, which expose us to the risk of earnings or cash flow loss due to potential increases in market interest rates.
Outstanding borrowings under the Facility, which as of December 31, 2023 total approximately $925.0 million and has a weighted average interest rate of 9.2%, are subject to variable interest rates, which expose us to the risk of earnings or cash flow loss due to potential increases in market interest rates.
Substantially all of our oil sales 81 Table of Contents are indexed against Dated Brent and Heavy Louisiana Sweet. Oil prices during 2022 ranged between $76.36 and $137.64 per Bbl for Dated Brent, with Heavy Louisiana Sweet experiencing similar volatility during 2022.
Substantially all of our oil sales are indexed against Dated Brent and Heavy Louisiana Sweet. Oil prices during 2023 ranged between $71.71 and $97.92 per Bbl for Dated Brent, with Heavy Louisiana Sweet experiencing similar volatility during 2023.
All of our other long-term indebtedness is fixed rate and does not expose us to the risk of cash flow loss due to changes in market interest rates. Additionally, a change in the market interest rates could impact interest costs associated with future debt issuances or any future borrowings. 82 Table of Contents
All of our other long-term indebtedness is fixed rate and does not expose us to the risk of cash flow loss due to changes in market interest rates.
Interest Rate Sensitivity Changes in market interest rates affect the amount of interest we pay on certain of our borrowings.
Similarly, a hypothetical 10% price decrease would increase future pre‑tax earnings by approximately $23.4 million. 78 Table of Contents Interest Rate Sensitivity Changes in market interest rates affect the amount of interest we pay on certain of our borrowings.
Added
Additionally, a change in the market interest rates could impact interest costs associated with future debt issuances or any future borrowings and future lease payments associated with the Tortue FPSO lease arrangement. 79 Table of Contents

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