10q10k10q10k.net

What changed in Kosmos Energy Ltd.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Kosmos Energy Ltd.'s 2023 and 2024 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 2024 report.

+499 added−538 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-26)

Top changes in Kosmos Energy Ltd.'s 2024 10-K

499 paragraphs added · 538 removed · 386 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

162 edited+43 added−82 removed133 unchanged
Biggest changeGeographic Area Percentage of BOE Sales Volumes Sales Volumes (Net to Kosmos) Average Sales Price Production Depletion, depreciation and amortization per Boe Oil NGL Gas Total Oil NGL Gas Total Revenue costs per (MMBbls) (Bcf) (MMBoe) (per Bbl) (per Bcf) (per Boe) (in Thousands) Boe(3) For the year ended December 31, 2023 Jubilee 54 % 11.4 — 5.8 12.4 83.33 — 3.74 78.62 $ 974,627 8.74 17.30 TEN 7 % 1.0 — 3.9 1.7 85.72 — 0.64 53.06 87,855 40.40 15.97 Ghana 61 % 12.4 — 9.7 14.1 83.52 — 2.48 75.61 $ 1,062,482 12.47 17.15 Equatorial Guinea 15 % 3.4 — — 3.4 78.71 — — 78.71 267,494 33.67 15.23 Mauritania/Senegal — — — — — — — — — — — — U.S.
Biggest changeGeographic Area Percentage of BOE Sales Volumes Sales Volumes (Net to Kosmos) Average Sales Price Production Depletion, depreciation and amortization per Boe Oil NGL Gas Total Oil NGL Gas Total Revenue costs per (MMBbls) (Bcf) (MMBoe) (per Bbl) (per Bcf) (per Boe) (in Thousands) Boe(2) For the year ended December 31, 2024 Jubilee 57 % 11.5 — 12.5 13.5 $ 80.30 — 3.80 $ 71.47 $ 967,673 $ 7.94 $ 14.84 TEN 4 % 1.0 — — 1.0 77.31 — — 77.31 76,889 57.14 2.43 Ghana 62 % 12.5 — 12.5 14.5 $ 80.06 $ — $ 3.80 $ 71.87 $ 1,044,562 $ 11.31 $ 14.00 Equatorial Guinea 14 % 3.4 — — 3.4 77.66 — — 77.66 260,675 40.63 19.42 Mauritania/Senegal — — — — — — — — — — — — Gulf of America 24 % 4.6 0.4 3.7 5.6 75.82 20.53 2.67 65.89 370,121 24.27 32.95 Total 100 % 20.5 0.4 16.2 23.5 $ 78.70 $ 20.53 $ 3.54 $ 71.27 $ 1,675,358 $ 22.57 (3) $ 19.43 For the year ended December 31, 2023 Jubilee 54 % 11.4 — 5.8 12.4 $ 83.33 — 3.74 $ 78.62 $ 974,627 $ 8.74 $ 17.30 TEN 7 % 1.0 — 3.9 1.7 85.72 — 0.64 53.06 87,855 40.40 15.97 Ghana 61 % 12.4 — 9.7 14.1 $ 83.52 $ — $ 2.48 $ 75.61 $ 1,062,482 $ 12.47 $ 17.15 Equatorial Guinea 15 % 3.4 — — 3.4 78.71 — — 78.71 267,494 33.67 15.23 Mauritania/Senegal — — — — — — — — — — — — Gulf of America 24 % 4.6 0.4 4.0 5.6 77.41 20.61 2.79 66.29 371,632 17.91 26.67 Total 100 % 20.4 0.4 13.7 23.1 $ 81.35 $ 20.61 $ 2.57 $ 73.80 $ 1,701,608 $ 16.92 $ 19.30 For the year ended December 31, 2022 Jubilee 49 % 11.4 — — 11.4 $ 101.23 — — $ 101.23 $ 1,162,416 $ 9.93 $ 20.32 TEN 9 % 2.0 — — 2.0 96.83 — — 96.83 188,546 47.48 28.57 Ghana(1) 58 % 13.4 — — 13.4 $ 100.59 $ — $ — $ 100.59 $ 1,350,962 $ 15.37 $ 21.52 Equatorial Guinea 14 % 3.3 — — 3.3 104.24 — — 104.24 346,783 27.23 16.16 Mauritania/Senegal — — — — — — — — — — — — Gulf of America 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 ______________________________________ (1) Our sales volumes during 2022 includes activity related to the interest pre-empted by Tullow prior to the March 17, 2022 closing date of the Tullow pre-emption transaction.
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.
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 GTA development, Tortue-1, Guembeul-1, Ahmeyim-2 and Greater Tortue Ahmeyim-1. The wells penetrated multiple, excellent quality gas reservoirs, including the Lower Cenomanian, Upper Cenomanian and underlying Albian.
These rules require SEC reporting companies to prepare their reserve estimates using reserve definitions and pricing based on 12‑month historical unweighted first‑day‑of‑the‑month average prices, rather than year‑end prices. For a definition of proved reserves under the SEC rules, see the “Glossary and Selected Abbreviations.” For more information regarding our independent reserve engineers, please see “—Independent petroleum engineers” below.
These rules require SEC reporting companies to prepare their reserve estimates using reserve definitions and pricing based on 12‑month historical unweighted first‑day‑of‑the‑month average prices, rather than year‑end prices. For a definition of proved reserves under the SEC rules, see the “Glossary and Selected Abbreviations.” For more information regarding our independent petroleum engineers, please see “—Independent petroleum engineers” below.
For capping and containment, Kosmos joined the HWCG, LLC consortium whose capabilities include; (i) one dual ram capping stack rated to 15,000 psi and one valve capping stack rated to 20,000 psi, (ii) intervention equipment to cap and contain a well with the mechanical and structural integrity to be shut in at depths up to 10,000 feet, and (iii) the ability to capture and process 130,000 barrels of fluid per day and 220 MMcf of gas per day.
For capping and containment, Kosmos joined the HWCG, LLC consortium whose capabilities include; (i) one dual ram capping stack rated to 15,000 psi and one valve capping stack rated to 20,000 psi, (ii) intervention equipment to cap and contain a well with the mechanical and structural integrity to be shut in at water depths up to 10,000 feet, and (iii) the ability to capture and process 130,000 barrels of fluid per day and 220 MMcf of gas per day.
Our business strategy is designed to accomplish this mission by focusing on three key objectives: (1) maximize the value of our producing assets; (2) progress our discovered resources toward project sanction and into proved reserves, production, and cash flow through efficient appraisal, development and exploitation; and (3) add new lower carbon resources through an efficient low cost exploration program in proven basins or acquisitions.
Our business strategy is designed to accomplish this mission by focusing on three key objectives: (1) maximize the value of our producing assets; (2) progress our discovered resources toward project sanction and into proved reserves, production, and cash flow through efficient appraisal, development and exploitation; and (3) add new lower carbon resources through acquisitions and an efficient low cost exploration program in proven basins.
Changes during the year ended December 31, 2023 at Greater Jubilee include a positive revision of 35.1 MMBoe primarily due to positive field performance, the addition of gas sales recognition and positive drilling results, offset by Jubilee net production of 12.8 MMBoe. There were no changes related to the commodity price effect in Jubilee.
Changes during the year ended December 31, 2023 at Jubilee include a positive revision of 35.1 MMBoe primarily due to positive field performance, the addition of gas sales recognition and positive drilling results, offset by Jubilee net production of 12.8 MMBoe. There were no changes related to the commodity price effect in Jubilee.
Changes during the year ended December 31, 2022, at Greater Jubilee include a positive revision of 11.7 MMBoe primarily due to positive drilling results and field performance, offset by a negative revision of 7.5 MMBoe resulting from the conclusion of the Tullow pre-emption transaction in March 2022, as well as Jubilee net production of 11.3 MMBoe.
Changes during the year ended December 31, 2022, at Jubilee include a positive revision of 11.7 MMBoe primarily due to positive drilling results and field performance, offset by a negative revision of 7.5 MMBoe resulting from the conclusion of the Tullow pre-emption transaction in March 2022, as well as Jubilee net production of 11.3 MMBoe.
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.
The EG-01, 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.
In Greater Jubilee, we converted 21.5 MMBoe of proved undeveloped reserves to proved developed with the drilling of five wells at a cost of approximately $98.0 million as well as approximately $91.3 million in subsea costs. In addition, we spent approximately $40.5 million on wells that are expected to convert in future years.
In Jubilee, we converted 21.5 MMBoe of proved undeveloped reserves to proved developed with the drilling of five wells at a cost of approximately $98.0 million as well as approximately $91.3 million in subsea costs. In addition, we spent approximately $40.5 million on wells that are expected to convert in future years.
Tiberius 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.
Tiberius In July 2023, Kosmos spud the Tiberius infrastructure-led exploration prospect, which is located in block 964 of Keathley Canyon (33.3% 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.
The continued economic disruption resulting from Russia’s war in Ukraine, potential instability in the Middle East, a potential regional or global recession, inflationary pressures and other varying macroeconomic conditions could further materially impact the Company’s business in future periods.
The economic disruption resulting from Russia’s continued war in Ukraine, ongoing instability in the Middle East, a potential regional or global recession, inflationary pressures and other varying macroeconomic conditions could further materially impact the Company’s business in future periods.
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.
Greater Tortue Ahmeyim (GTA) 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 Senegal Saint-Louis Offshore Profond Block covers an area within both the C8 and Saint-Louis Offshore Profond Blocks.
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
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. 32 Table of Contents
(3) ANP-STP's carried interest may be converted to a full participating interest at any time. ANP-STP will reimburse any costs, expenses and any amount incurred on its behalf prior to the election. (4) PETROSEN has the right to increase its participating interest after final investment decision and issuance of an exploitation authorization to up to 35%.
(2) ANP-STP's carried interest may be converted to a full participating interest at any time. ANP-STP will reimburse any costs, expenses and any amount incurred on its behalf prior to the election. (3) PETROSEN has the right to increase its participating interest after final investment decision and issuance of an exploitation authorization to up to 35%.
The Ghanaian Petroleum Exploration and Production Law of 1984 (PNDCL 84) (the “1984 Ghanaian Petroleum Law”) and the WCTP and DT petroleum contracts form the basis of our exploration, development and production operations on the WCTP and DT blocks.
The Ghanaian Petroleum Exploration and Production Law of 1984 (PNDCL 84) (the “1984 Ghanaian Petroleum Law”) and the WCTP and DT petroleum contracts form the basis of exploration, development and production operations on the WCTP and DT blocks.
Initial analysis of fluid samples collected during the test indicate Tortue gas is well suited for liquefaction given low levels of liquids and minimal impurities. In December 2018, we and our partners announced that a final investment decision for Phase 1 of the Greater Tortue Ahmeyim project had been agreed.
Initial analysis of fluid samples collected during the test indicated Tortue gas is well suited for liquefaction given low levels of liquids and minimal impurities. In December 2018, we and our partners announced that a final investment decision for Phase 1 of the Greater Tortue Ahmeyim project had been agreed.
Due to federal regulations, all of the HWCG and CGA equipment is dedicated to U.S. operations and cannot be utilized outside the country. In addition, Kosmos is also a member of the Marine Spill Response Corporation (“MSRC”) which also provides various oil spill response services for coastal and inland environments in the U.S. Gulf of Mexico.
Due to federal regulations, all of the HWCG and CGA equipment is dedicated to U.S. operations and cannot be utilized outside the country. In addition, Kosmos is also a member of the Marine Spill Response Corporation (“MSRC”) which also provides various oil spill response services for coastal and inland environments in the Gulf of America.
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.
Our estimated reserves at December 31, 2024, 2023 and 2022 and related future net revenues and PV‑10 at December 31, 2024, 2023 and 2022 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.
In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
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.
Such calculations at December 31, 2024 are based on costs in effect at December 31, 2024 and the 12‑month unweighted arithmetic average of the first‑day‑of‑the‑month price for the year ended December 31, 2024, adjusted for anticipated market premium, without giving effect to derivative transactions, and are held constant throughout the life of the assets.
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.
RSC issued a report on our proved reserves at December 31, 2024, 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.
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.
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 natural gas, as well as for plugging or bringing under control any well.
However, if in the course of the examination something came to the attention of RSC which brought into question the validity or sufficiency of any such information or data, RSC did not rely on such information or data until it had satisfactorily resolved its questions relating thereto or had independently verified such information or data.
However, if in the course of the examination something came to the attention of RSC which brought into question the validity or sufficiency of any such information or data, RSC would not rely on such information or data until it had satisfactorily resolved its questions relating thereto or had independently verified such information or data.
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.
Our management team members average over 26 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.
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.
The December 31, 2024 reserve report was completed on January 15, 2025, and a copy is included as an exhibit to this report. In connection with the preparation of the December 31, 2024, 2023 and 2022 reserves report, RSC prepared its own estimates of our proved reserves.
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.
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 Greater Tortue Ahmeyim project is designed to produce gas from a deepwater subsea system to a mid-water FPSO, which processes the gas to make it liquefaction ready, and sends the gas through a pipeline to a FLNG facility.
The Greater Tortue Ahmeyim Phase 1 project is designed to produce gas from a deepwater subsea system to a mid-water FPSO, which processes the gas to make it liquefaction ready, and sends the gas through a pipeline to a FLNG facility.
The Greater Tortue Ahmeyim-1 (GTA-1) appraisal well was drilled on the eastern anticline within the unit development area of Greater Tortue Ahmeyim field. The GTA-1 well encountered approximately 30 meters of net gas pay in high quality Albian reservoir.
The Greater Tortue Ahmeyim-1 appraisal well, drilled on the eastern anticline within the unit development area of Greater Tortue Ahmeyim field, encountered approximately 30 meters of net gas pay in high quality Albian reservoir.
During 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.
During 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 Gulf of America fields (-0.3 MMBoe).
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.
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”) that they were exercising their pre-emption rights in relation to Kosmos’ acquisition of Anadarko WCTP.
In May 2022, Kosmos and its joint venture partners agreed with the Ministry of Mines and Hydrocarbons of Equatorial Guinea to extend the Block G petroleum contract term; harmonizing the expiration of the Ceiba Field and Okume Complex production licenses (from 2029 and 2034 respectively) to 2040. The license extensions support the next phase of investment in the licenses.
In May 2022, Kosmos and its joint venture partners agreed with the Ministry of Hydrocarbons and Mining Development of Equatorial Guinea to extend the Block G petroleum contract term; harmonizing the expiration of the Ceiba Field and Okume Complex production licenses (from 2029 and 2034 respectively) to 2040. The license extensions support the next phase of investment in the licenses.
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.
These revisions 22 Table of Contents 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.
These interest percentages are subject to redetermination of the participating interests in the Greater Tortue Ahmeyim Field pursuant to the terms of the GTA UUOA. (4) Our paying interest on development activities in the TEN Fields is 22.8%. 14 Table of Contents (5) Our interests in blocks MC 214 and MC 215 are 61.1% and 54.9%, respectively.
These interest percentages are subject to redetermination of the participating interests in the Greater Tortue Ahmeyim Field pursuant to the terms of the GTA UUOA. (4) Our paying interest on development activities in the TEN Fields is 22.8%. (5) Our interests in blocks MC 214 and MC 215 are 61.1% and 54.9%, respectively.
These natural gas reserves also include the estimated quantities of fuel gas required to operate the Jubilee and TEN FPSOs, the Equatorial Guinea facilities and the Greater Tortue Ahmeyim facilities during normal field operations.
These natural gas reserves also include the estimated quantities of fuel gas required to operate the Jubilee and TEN FPSOs, the Equatorial Guinea facilities and the Greater Tortue Ahmeyim Phase 1 facilities during normal field operations.
Our participating interest in the Jubilee Unit is based on these allocations and any event of redetermination in the future would impact Jubilee Unit participating interest. 16 Table of Contents The Jubilee Field is located approximately 60 kilometers offshore Ghana in water depths of approximately 1,000 to 1,800 meters, which led to the decision to implement an FPSO based development.
Our participating interest in the Jubilee Unit is based on these allocations and any event of redetermination in the future would impact Jubilee Unit participating interest. The Jubilee Field is located approximately 60 kilometers offshore Ghana in water depths of approximately 1,000 to 1,800 meters, which led to the decision to implement an FPSO based development.
We actively market our crude oil and natural gas to purchasers, and sales prices for purchased oil and natural gas volumes are negotiated with purchasers and are based on certain published indices. Since most of the oil and natural gas contracts are generally month-to-month and at varying physical locations, there are very few dedications of production to any one purchaser.
We actively market our crude oil and natural gas to purchasers, and sales prices for purchased oil and natural gas volumes are negotiated with purchasers and are based on certain published indices. Since most of the oil and natural gas contracts are generally month-to-month and at varying physical locations, there are limited dedications of production to any one purchaser.
Gulf of Mexico, we sell crude oil to purchasers typically through monthly contracts, with the sale taking place at multiple points offshore, depending on the particular property. Natural gas is sold to purchasers monthly through long-term contracts, with the sale taking place either offshore or at an onshore gas processing plant after the removal of NGLs.
In the Gulf of America, we sell crude oil to purchasers typically through monthly contracts, with the sale taking place at multiple points offshore, depending on the particular property. Natural gas is sold to purchasers monthly through long-term contracts, with the sale taking place either offshore or at an onshore gas processing plant after the removal of NGLs.
Management, including the CIO, and our information technology team, regularly update the Audit Committee on the Company’s cybersecurity programs, material cybersecurity risks and mitigation strategies and provide cybersecurity reports quarterly that cover, among other topics, results of third-party testing and assessments of the Company’s cybersecurity programs, developments in cybersecurity and updates to the Company’s cybersecurity programs and mitigation strategies.
Management, including the CIO, and our information technology team, 30 Table of Contents regularly update the Audit Committee on the Company’s cybersecurity programs, material cybersecurity risks and mitigation strategies and provide cybersecurity reports quarterly that cover, among other topics, results of third-party testing and assessments of the Company’s cybersecurity programs, developments in cybersecurity and updates to the Company’s cybersecurity programs and mitigation strategies.
In addition, Kosmos develops an emergency response plan and subscribes to a response organization to prepare and demonstrate our readiness to respond to a subsea well control incident in the event we are the operator. U.S. Gulf of Mexico (Operated and Non-operated) After the major well control incident and oil release in the U.S.
In addition, Kosmos develops an emergency response plan and subscribes to a response organization to prepare and demonstrate our readiness to respond to a subsea well control incident in the event we are the operator. Gulf of America (Operated and Non-operated) After the major well control incident and oil release in the Gulf of America in 2010, the U.S.
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.
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, 2024, 2023 and 2022 has been prepared by RSC, our independent petroleum 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.
The following table shows the number of wells that are in the process of being drilled or are in active completion stages, and the number of wells suspended or waiting on completion as of December 31, 2023.
The following table shows the number of wells that are in the process of being drilled or are in active completion stages, and the number of wells suspended or waiting on completion as of December 31, 2024.
The Audit Committee is responsible for ensuring that 32 Table of Contents management has processes in place designed to identify and evaluate cybersecurity risks to which the company is exposed and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents. The Audit Committee also reports material cybersecurity risks to our full board of directors.
The Audit Committee is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks to which the company is exposed and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents. The Audit Committee also reports material cybersecurity risks to our full board of directors.
Sao Tome and Principe We are the operator for the petroleum contract covering Block 5, offshore Sao Tome and Principe in the Gulf of Guinea. The block covers an area of approximately 0.5 million acres (gross) in water depths ranging from 2,150 to 3,000 meters.
Sao Tome and Principe We are the operator for the petroleum contract covering Block 5, offshore Sao Tome and Principe in the Gulf of Guinea. The block covers an area of approximately 527,000 acres (gross) in water depths ranging from 2,150 to 3,000 meters.
This strategic evolution was initially enabled by our acquisition of the Ceiba Field and Okume Complex assets offshore Equatorial Guinea in 2017, together with access to surrounding exploration licenses, and bolstered by the 2018 acquisition of Deep Gulf Energy, a deepwater company operating in the U.S. Gulf of Mexico, which further enhanced our production, exploitation and infrastructure-led exploration capabilities.
This strategic evolution was initially enabled by our acquisition of the Ceiba Field and Okume Complex assets offshore Equatorial Guinea in 2017, together with access to surrounding exploration licenses, and bolstered by the 2018 acquisition of Deep Gulf Energy, a deepwater company operating in the Gulf of America, which further enhanced our production, exploitation and infrastructure-led exploration capabilities.
In its relatively brief history, we have successfully opened two new hydrocarbon basins through the discovery of the Jubilee Field offshore Ghana in 2007 and the Greater Tortue Ahmeyim Field in 2015 (which includes the Ahmeyim and Guembeul-1 discovery wells offshore Mauritania and Senegal in 2015 and 2016, respectively).
In its relatively brief history, we have successfully opened two new hydrocarbon basins through the discovery of the Jubilee Field offshore Ghana in 2007 and the Greater Tortue Ahmeyim Field in 2015 (which includes the Ahmeyim and Guembeul discoveries offshore Mauritania and Senegal in 2015 and 2016, respectively).
The well intersected a gross hydrocarbon column of 120 meters in three pools within the primary Lower Cenomanian objective and encountered 45 meters of net pay. In September 2019, we completed the Yakaar-2 appraisal well, which encountered approximately 30 meters of net gas pay.
The well intersected a gross hydrocarbon column of 120 meters in three pools within the primary Lower Cenomanian objective and encountered 45 meters of net pay. In September 2019, we completed the Yakaar-2 appraisal 18 Table of Contents well, which encountered approximately 30 meters of net gas pay.
Processing has been completed and the 3D seismic data has been integrated into our geological evaluation. We 22 Table of Contents continue to mature an inventory of prospects on the license area in Sao Tome and Principe and will continue to refine and assess the prospectivity.
Processing has been completed and the 3D seismic data has been integrated into our geological evaluation. We continue to mature an inventory of prospects on the license area in Sao Tome and Principe and will continue to refine and assess the prospectivity.
Changes in Mauritania and Senegal include a small positive revision of 1.3 MMBoe due to optimization of the timing of the Greater Tortue Ahmeyim Phase 1 project. There were no changes related to the commodity price effect on reserves in Mauritania and Senegal. Changes at the U.S.
Changes in Mauritania and Senegal include a small positive revision of 1.3 MMBoe due to optimization of the timing of the Greater Tortue Ahmeyim Phase 1 project. There were no changes related to the commodity price effect on reserves in Mauritania and Senegal.
The undeveloped area reflected in the table above represents acreage within our discovery areas that were not subject to relinquishment on the expiry of the Exploration Period. (3) Our developed 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.
The undeveloped area reflected in the table above represents acreage within our discovery areas that were not subject to relinquishment on the expiry of the Exploration Period. (3) Our developed Gulf of America blocks are held by production/operations, and the lease periods extend as long as production/governmental approved operations continue on the relevant block.
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.
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 Gulf of America 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.
Kosmos also has an OSRP which is approved by the Bureau of Safety and Environmental Enforcement (“BSEE”). This OSRP would be activated if needed in the event of an oil spill or containment event in the U.S. Gulf of Mexico where Kosmos is the operator. Kosmos joined several cooperatives that were established to meet the requirements of the new regulations.
Kosmos also has an OSRP which is approved by the Bureau of Safety and Environmental Enforcement (“BSEE”). This OSRP would be activated if needed in the event of an oil spill or containment event in the Gulf of America where Kosmos is the operator. Kosmos joined several cooperatives that were established to meet the requirements of the new regulations.
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.
Also excluded from the table are 9 development wells awaiting completion. These wells are shown as “Wells Suspended or Waiting on Completion” in the table below.
Kosmos is also a member of the Clean Gulf Associate (“CGA”) Oil Spill Cooperative, which provides oil spill response capabilities to meet regulatory requirements.
Kosmos is also a member of the Clean Gulf Associates (“CGA”) Oil Spill Cooperative, which provides oil spill response capabilities to meet regulatory requirements.
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%.
Based on employee scores and feedback, Kosmos was named in the 2024 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 2024, Kosmos had a retention rate of 94%.
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.
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. (2) The Exploration Period of the WCTP petroleum contract and DT petroleum contract has expired.
We currently have crude oil marketing sales agreements with oil marketers to market our share of the Jubilee, TEN and Ceiba Field and Okume Complex oil, and we approve the terms of each sale proposed by such agents. In the U.S.
We currently have crude oil marketing sales agreements with oil marketers to market our share of the Jubilee, TEN and Ceiba Field and Okume Complex oil, and we approve the terms of each sale proposed by such agents.
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.
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.
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.
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 27 Table of Contents hydrocarbon chains for sale), the products are sold by the processing plant.
Trumbauer worked for DeGolyer and MacNaughton for 20 years prior to joining Kosmos Energy, and we believe he is proficient in applying industry standard practices to engineering and geoscience evaluations as well as understanding and applying SEC and other industry reserves definitions and guidelines.
Trumbauer worked for DeGolyer and MacNaughton for 20 years prior to joining 24 Table of Contents Kosmos Energy, and we believe he is proficient in applying industry standard practices to engineering and geoscience evaluations as well as understanding and applying SEC and other industry reserves definitions and guidelines.
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.
These revisions resulted in an overall increase in reserves of 4.0 MMBoe. Changes at the Gulf of America 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.
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 professionals subscribe to a code of professional conduct and RSC is a Registered Engineering Firm in the State of Texas. 23 Table of Contents For the years ended December 31, 2024, 2023 and 2022, we engaged RSC to prepare independent estimates of the extent and value of the proved reserves of certain of our oil and gas properties.
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.
Santa Cruz MC 563 40.5 % Kosmos Production (7) Tornado GC 281 35.0 % Talos Production (7) Winterfell GC 943 / 944 25.0 % Beacon Production (7) Tiberius KC 964 50.0 % Kosmos Appraisal (7) Mauritania Greater Tortue Ahmeyim(1) Block C8 (3) 26.8 % BP Production/Development 2049(8) Senegal Greater Tortue Ahmeyim(1) Saint Louis Offshore Profond (3) 26.7 % BP Production/Development 2044(9) Teranga Cayar Offshore Profond 90.0 % (6) Kosmos Appraisal 2026 Yakaar Cayar Offshore Profond 90.0 % (6) Kosmos Appraisal 2026 Equatorial Guinea Ceiba Field and Okume Complex(1) Block G 40.4 % Trident Production 2040 ______________________________________ (1) For information concerning our estimated proved reserves as of December 31, 2024, see “—Our Reserves.” (2) The Jubilee Field straddles the boundary between the WCTP petroleum contract and the DT petroleum contract offshore Ghana.
These acquisitions were targeted to increase and complement our existing properties, providing production diversification while increasing the quality of investment opportunities in our portfolio.
These acquisitions were targeted to increase and complement our existing properties, providing production diversification while increasing the quality of 10 Table of Contents investment opportunities in our portfolio.
For undeveloped areas, the licenses are immaterial with various exploration phases, with all ending by 2033. Productive Wells Productive wells consist of producing wells and wells capable of production, including wells awaiting connections. For wells that produce both oil and gas, the well is classified as an oil well.
For undeveloped areas, the licenses are immaterial with various exploration phases, with all ending by 2034. 25 Table of Contents Productive Wells Productive wells consist of producing wells and wells capable of production, including wells awaiting connections. For wells that produce both oil and gas, the well is classified as an oil well.
Gulf of Mexico in 2010, the U.S. Department of Interior updated regulations which govern the type, amount and capabilities of response equipment that needs to be available to operators to respond to similar incidents. These regulations also dictate the type and frequency of training that operating personnel need to receive and demonstrate proficiency in.
Department of Interior updated regulations which govern the type, amount and capabilities of response equipment that needs to be available to operators to respond to similar incidents. These regulations also dictate the type and frequency of training that operating personnel need to receive and demonstrate proficiency in.
In the second quarter of 2023, we received approval to extend the exploration phase for Block 5 offshore Sao Tome and Principe through May 2024. Our Reserves The following table sets forth summary information about our estimated proved reserves as of December 31, 2023. See “Item 8. Financial Statements and Supplementary Data—Supplemental Oil and Gas Data (Unaudited)” for additional information.
In April 2024, we received approval to extend the current exploration phase for Block 5 offshore Sao Tome and Principe to May 2025. Our Reserves The following table sets forth summary information about our estimated proved reserves as of December 31, 2024. See “Item 8. Financial Statements and Supplementary Data—Supplemental Oil and Gas Data (Unaudited)” for additional information.
Gulf of Mexico fields (-0.3 MMBoe). Conversion of proved undeveloped volumes to proved developed related to drilling during 2023 includes the drilling of five wells in Jubilee (-21.5 MMBoe) and one well in Marmalard (-0.8 MMBoe).
Conversion of proved undeveloped volumes to proved developed related to drilling during 2023 includes the drilling of five wells in Jubilee (-21.5 MMBoe) and one well in Marmalard (-0.8 MMBoe).
Following a competitive tender process, BP Gas Marketing (“BPGM”) was selected as the buyer for the LNG offtake for Greater Tortue Ahmeyim Phase 1, and the Tortue Phase 1 SPA was executed in February 2020 with an initial term of 10 years with a seller’s option to extend the term for an additional 10 years.
Following a competitive tender process, BP Gas Marketing (“BPGM”) was selected as the buyer for the LNG offtake for GTA Phase 1, and the Tortue Phase 1 SPA was executed in February 2020 with an initial term through the end of 2033 with a seller’s option to extend the term for an additional 10 years.
The well encountered 31 meters of net gas pay in good quality reservoir in the Lower Cenomanian objective. Well results confirm that a prolific inboard gas fairway extends approximately 200 kilometers south from the Marsouin-1 well in Mauritania through the Greater Tortue Ahmeyim area on the maritime boundary to the Teranga-1 well in Senegal.
The well encountered 31 meters of net gas pay in good quality reservoir in the Lower Cenomanian objective. Well results confirm that a prolific inboard gas fairway extends south from the Greater Tortue Ahmeyim area on the maritime boundary to the Teranga-1 well in Senegal.
As part of this effort, the Health, Safety, Environment and Sustainability Board Committee oversees our response to climate change. A Chief Executive Officer led, cross functional, Climate Change Task force manages climate-related risks and opportunities, and is responsible for implementing our climate change strategy.
As part of this effort, the Health, Safety, Environment and Sustainability Board Committee oversees our response to climate change. A Chief Executive Officer led, cross functional, Climate Change Task force monitors climate-related risks, opportunities and mitigation measures. This group is also responsible for implementing our climate change strategy.
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.
There can be no assurance that the proved reserves will be produced within the periods indicated or prices and costs will remain constant. Independent petroleum engineers Ryder Scott Company, L.P. RSC, our independent petroleum engineers for the years ended December 31, 2024, 2023 and 2022, was established in 1937.
Excluding the impact of hedges, our realized oil price for 2023 was $81.35 per barrel. Title to Property We believe that we have satisfactory title to our oil and natural gas assets in accordance with standards generally accepted in the international oil and gas industry.
Excluding the impact of hedges, our realized oil price for 2024 was $78.70 per barrel. Title to Property We believe that we have satisfactory title to our oil and natural gas assets in accordance with standards generally accepted in the international oil and gas industry.
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.
For Ghana, total proved natural gas reserves include fuel gas associated with the Jubilee and TEN Fields offshore Ghana of approximately 18.5 Bcf, 19.9 Bcf and 22.9 Bcf for 2024, 2023 and 2022, respectively. Our natural gas reserves in Equatorial Guinea are all associated with fuel gas.
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.
The interest percentage does not give effect to the exercise of such option. (4) Our Gulf of America 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 2034.
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.
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 Ghana, Equatorial Guinea, Mauritania, Senegal, and the Gulf of America.
Maintain financial discipline Execution of our strategy requires us to maintain a conservative financial approach with a strong balance sheet, ample liquidity, and a commitment to low leverage. As of December 31, 2023, our liquidity was approximately $670 million. Additionally, we use derivative instruments to partially limit our exposure to fluctuations in oil prices.
Maintain financial discipline Execution of our strategy requires us to maintain a conservative financial approach with a strong balance sheet, ample liquidity, and a commitment to low leverage. As of December 31, 2024, our liquidity was approximately $535 million. Additionally, we use derivative instruments to partially limit our exposure to fluctuations in oil prices and changes in market interest rates.
Gulf of Mexico Federal lease sales and farm-in transactions. The following is a brief discussion of our key fields in the U.S. Gulf of Mexico. Odd Job The Odd Job Field is producing from three Middle Miocene wells through the Delta House FPS, operated by Murphy.
We expand our inventory through the Gulf of America Federal lease sales and farm-in transactions. The following is a brief discussion of our key fields in the Gulf of America. Odd Job The Odd Job Field is producing from three Middle Miocene wells through the Delta House FPS, operated by Murphy.
Globally, the impact 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 variations in oil and gas prices.
The oil and gas industry as a whole has experienced continued volatility. Globally, the impact of Russia’s continued war in Ukraine, ongoing 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 variations in oil and gas prices.
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.
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 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.
(7) Our Gulf of America blocks are held by production/operations, and the lease periods extend as long as production/governmental approved operations continue on the relevant block. (8) License expiration date can be extended by an additional ten years subject to certain conditions being met.

… 207 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

138 edited+12 added−26 removed216 unchanged
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.
Biggest changeThese risks are discussed more fully below and include, but are not limited to, risks related to: Our Oil and Natural Gas Operations • We have limited proved reserves; • We face substantial uncertainties in estimating the characteristics of our discoveries and our prospects; • Drilling wells is speculative and may not result in any discoveries; • Development wells may not result in commercially productive quantities of oil and gas reserves; • Our identified drilling and infrastructure locations are scheduled out over time, making them susceptible to uncertainties; • We are contractually obligated to drill wells and declare any discoveries in order to retain exploration and production rights; • Inability of third parties who contract with us to meet their obligations may adversely affect our financial results; • The unit partners’ respective interests in the Jubilee Unit and Greater Tortue Ahmeyim Unit are subject to redetermination; • We are not the operator on all of our license areas and facilities and do not hold all of the working interests in certain of our license areas; • Our estimated proved reserves are based on many assumptions that may turn out to be inaccurate; • The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and gas reserves; • We may not be able to commercialize our interests in some of the natural gas produced from our license areas; • Our inability to access appropriate equipment and infrastructure in a timely manner may hinder our access to oil and natural gas markets or delay our oil and natural gas production; • We are subject to numerous risks inherent to the exploration, development, and production of oil and natural gas; • We are subject to drilling and other operational and environmental risks and hazards; • Our operations may be materially adversely affected by weather-related events, including, but not limited to, tropical storms and hurricanes, and the physical effects of climate change; • The development schedule of oil and natural gas projects is subject to delays and cost overruns; • Our offshore and deepwater operations involve special risks that could adversely affect our results of operations; • We had, and continue to have, disagreements with certain host governments and contractual counterparties regarding certain of our rights and responsibilities and may have future disagreements with our host governments and/or contractual counterparties; • The geographic locations of our licenses in Africa and the Gulf of America 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, natural gas and LNG 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, natural gas, and 33 Table of Contents LNG 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 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 and indentures governing our Senior Notes and Convertible 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 and Convertible 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 cybersecurity 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 Gulf of America 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 activism; • 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. 34 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.
Our future capital requirements will depend on many factors, including: • the scope, rate of progress and cost of our exploration, appraisal, development and production activities; • the success of our exploration, appraisal, development and production activities; • oil and natural gas prices; • our ability to locate and acquire hydrocarbon reserves; • our ability to produce oil or natural gas from those reserves; • the terms and timing of any drilling and other production‑related arrangements that we may enter into; • the cost and timing of governmental approvals and/or concessions; • the effects of competition by other companies operating in the oil and gas industry; and • potential changes in investor and public preferences and sentiment towards ESG considerations including climate change and the transition to a lower carbon economy.
Our future capital requirements will depend on many factors, including: • the scope, rate of progress and cost of our exploration, appraisal, development and production activities; • the success of our exploration, appraisal, development and production activities; • oil, natural gas, and LNG prices; • our ability to locate and acquire hydrocarbon reserves; • our ability to produce oil or natural gas from those reserves; • the terms and timing of any drilling and other production‑related arrangements that we may enter into; • the cost and timing of governmental approvals and/or concessions; • the effects of competition by other companies operating in the oil and gas industry; and • potential changes in investor and public preferences and sentiment towards ESG considerations including climate change and the transition to a lower carbon economy.
These factors include, but are not limited to, market fluctuations of prices (such as recent significant variations in oil and natural gas prices), proximity, capacity and availability of drilling rigs and related equipment, qualified personnel and support vessels, processing facilities, transportation vehicles and pipelines, equipment availability, access to markets and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, allowable production, domestic supply requirements, importing and exporting of oil and natural gas, the ability to flare or vent natural gas, health and safety matters, environmental protection and climate change).
These factors include, but are not limited to, market fluctuations of prices (such as recent significant variations in oil, natural gas and LNG prices), proximity, capacity and availability of drilling rigs and related equipment, qualified personnel and support vessels, processing facilities, transportation vehicles and pipelines, equipment availability, access to markets and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, allowable production, domestic supply requirements, importing and exporting of oil and natural gas, the ability to flare or vent natural gas, health and safety matters, environmental protection and climate change).
If the interim gas sales agreement is not extended or a long-term gas sales agreement in Ghana is not approved, our ability to continuously extract and process natural gas may be harmed and we may be required to re-inject or flare such natural gas in order to maintain crude oil production and or reduce our overall crude oil production, which may adversely impact our results of operations, financial condition and prospects.
If the interim gas sales agreement is not extended again or a long-term gas sales agreement in Ghana is not approved, our ability to continuously extract and process natural gas may be harmed and we may be required to re-inject or flare such natural gas in order to maintain crude oil production and or reduce our overall crude oil production, which may adversely impact our results of operations, financial condition and prospects.
Any significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. The process of estimating oil and natural gas reserves is technically complex. It requires interpretations of available technical data and many assumptions, including those relating to current and future economic conditions and commodity prices.
Any significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. The process of estimating oil and gas reserves is technically complex. It requires interpretations of available technical data and many assumptions, including those relating to current and future economic conditions and commodity prices.
Lower oil prices may not only reduce our revenues but also may limit the amount of oil that we can produce economically. A substantial or extended decline in oil and natural gas prices may materially and adversely affect our future business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures.
Lower oil prices may not only reduce our revenues but also may limit the amount of oil and LNG that we can produce economically. A substantial or extended decline in oil, natural gas, and LNG prices may materially and adversely affect our future business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures.
Based on specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of appraisal and development plans, production data, oil and natural gas prices, economics and other factors, we may be required to write down the carrying value of our oil and natural gas assets. A write‑down constitutes a non‑cash charge to earnings.
Based on specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of appraisal and development plans, production data, oil, natural gas, and LNG prices, economics and other factors, we may be required to write down the carrying value of our oil and natural gas assets. A write‑down constitutes a non‑cash charge to earnings.
For example, if there is a significant and sustained drop in oil and natural gas prices, field performance is not as expected, or we encounter increased expenditures, we may incur future write‑downs and charges. In addition, our borrowing base under the commercial debt facility is subject to periodic redeterminations.
For example, if there is a significant and sustained drop in oil, natural gas, and LNG prices, field performance is not as expected, or we encounter increased expenditures, we may incur future write‑downs and charges. In addition, our borrowing base under the commercial debt facility is subject to periodic redeterminations.
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.
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; • damaging publicity about us; • increased regulation; 45 Table of Contents • 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.
Our principal exposure to credit risk will be through receivables resulting from the sale of our oil and natural gas as well as our commodity derivatives contracts. 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.
Our principal exposure to credit risk will be through receivables resulting from the sale of our oil, natural gas and LNG as well as our commodity derivatives contracts. 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.
Additionally, a substantial or extended decline in oil and natural gas prices could result in surety companies seeking additional collateral to support existing surety or performance bonds, such as cash or letters of credit, and we cannot provide assurance that we will be able to satisfy such collateral demands.
Additionally, a substantial or extended decline in oil, natural gas and LNG prices could result in surety companies seeking additional collateral to support existing surety or performance bonds, such as cash or letters of credit, and we cannot provide assurance that we will be able to satisfy such collateral demands.
To achieve more predictable cash flows and to reduce our exposure to adverse fluctuations in the prices of oil and natural gas, we have and may in the future enter into derivative arrangements for a portion of our oil and natural gas production, including, but not limited to, puts, collars and fixed‑price swaps.
To achieve more predictable cash flows and to reduce our exposure to adverse fluctuations in the prices of oil, natural gas and LNG, we have and may in the future enter into derivative arrangements for a portion of our oil and natural gas production, including, but not limited to, puts, collars and fixed‑price swaps.
Actual future net revenues from our oil and natural gas assets will be affected by factors such as: • actual prices we receive for oil and natural gas; • actual cost of development and production expenditures; • derivative transactions; • the amount and timing of actual production; and • changes in governmental regulations or taxation.
Actual future net revenues from our oil and natural gas assets will be affected by factors such as: • actual prices we receive for oil, natural gas and LNG; • actual cost of development and production expenditures; • derivative transactions; • the amount and timing of actual production; and • changes in governmental regulations or taxation.
Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves will vary from our estimates. Any significant variance could materially affect the estimated quantities and present value of reserves shown in this report.
Actual future production, oil, natural gas and LNG prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and gas reserves will vary from our estimates. Any significant variance could materially affect the estimated quantities and present value of reserves shown in this report.
Our level of indebtedness could affect our operations in several ways, including the following: • a significant portion or all of our cash flows, when generated, could be used to service our indebtedness; • a high level of indebtedness could increase our vulnerability to general adverse economic and industry conditions; • the covenants contained in the agreements governing our outstanding indebtedness will limit our ability to borrow additional funds, dispose of assets, pay dividends and make certain investments; • a high level of indebtedness may place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore, may be able to take advantage of opportunities that our indebtedness could prevent us from pursuing; • our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry; • additional hedging instruments may be required as a result of our indebtedness; • a high level of indebtedness may make it more likely that a reduction in our borrowing base following a periodic redetermination could require us to repay a portion of our then‑outstanding bank borrowings; and • a high level of indebtedness may impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes.
Our level of indebtedness could affect our operations in several ways, including the following: 48 Table of Contents • a significant portion or all of our cash flows, when generated, could be used to service our indebtedness; • a high level of indebtedness could increase our vulnerability to general adverse economic and industry conditions; • the covenants contained in the agreements governing our outstanding indebtedness will limit our ability to borrow additional funds, dispose of assets, pay dividends and make certain investments; • a high level of indebtedness may place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore, may be able to take advantage of opportunities that our indebtedness could prevent us from pursuing; • our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry; • additional hedging instruments may be required as a result of our indebtedness; • a high level of indebtedness may make it more likely that a reduction in our borrowing base following a periodic redetermination could require us to repay a portion of our then‑outstanding bank borrowings; and • a high level of indebtedness may impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes.
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.
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 and Convertible Senior Notes could discourage an acquisition of us by a third-party.
Even when properly used and interpreted, 2D and 3D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures.
Even when properly used and interpreted, 2D, 3D and 4D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures.
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.
Accordingly, our ability to make payments of interest and principal on our outstanding indebtedness, including the Senior Notes and Convertible 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.
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, natural gas and LNG prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.
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.
These factors include, but are not limited to, the following: • changes in supply and demand for oil, natural gas, and LNG; • 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; • the development and exploitation of alternative fuels or energy sources; • the price and availability of competitors’ supplies of oil and natural gas; and 43 Table of Contents • the price, availability or mandated use of alternative fuels or energy sources.
In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and natural gas prices and other factors, many of which are beyond our control.
In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil, natural gas and LNG prices and other factors, many of which are beyond our control.
General economic conditions, risks associated with exploring for and producing oil and natural gas, oil and natural gas prices and financial, business and other factors affect our operations and our future economic performance. Many of these factors are beyond our control.
General economic conditions, risks associated with exploring for and producing oil and natural gas, oil, natural gas, and LNG prices and financial, business and other factors affect our operations and our future economic performance. Many of these factors are beyond our control.
The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and natural gas reserves. You should not assume that the present value of future net revenues from our proved reserves is the current market value of our estimated oil and natural gas reserves.
The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and gas reserves. You should not assume that the present value of future net revenues from our proved reserves is the current market value of our estimated oil and gas reserves.
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.
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.
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.
Our commercial debt facility and the indentures governing our Senior Notes and Convertible 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 or the indentures governing our Senior Notes and Convertible 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, our capital expenditures that we can fund with the proceeds of our commercial debt facility.
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.
Moreover, it is possible that other developments, such as increasingly strict environmental, climate 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.
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.
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.
Market volatility and reduced consumer demand due to inflationary pressures or otherwise may increase economic uncertainty. Global economic growth drives demand for energy from all sources, including hydrocarbons. A lower future economic growth rate is likely to result in decreased demand growth for crude oil and natural gas production.
Market volatility and reduced consumer demand due to inflationary pressures, increased tariffs or otherwise may increase economic uncertainty. Global economic growth drives demand for energy from all sources, including hydrocarbons. A lower future economic growth rate is likely to result in decreased demand growth for crude oil and natural gas production.
If we fail to realize the benefits we anticipate from an 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.
If we fail to realize the benefits we anticipate from an acquisition, our results of operations may be adversely affected. A cybersecurity incident, including a breach of digital security, could result in information theft, data corruption, operational disruption, and/or financial loss.
Legal proceedings could result in a substantial liability and/or negative publicity about us and adversely affect the price of our common stock. In addition, legal proceedings distract management and other personnel from their primary responsibilities. We face various risks associated with global populism.
Legal proceedings could result in a substantial liability and/or negative publicity about us and adversely affect the price of our common stock. In addition, legal proceedings distract management and other personnel from their primary responsibilities. We face various risks associated with global activism.
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.
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, natural gas, and LNG 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 commercial debt facility.
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%.
Consequently, our Unit Interest (participating interest in the Jubilee Unit) was increased from 37 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%.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. Our ability to utilize net operating loss carryforwards may be subject to certain limitations.
As cybersecurity threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. Our ability to utilize net operating loss carryforwards may be subject to certain limitations.
Some or all of these licenses could be affected should any region experience any of the following factors (among others): • severe weather, natural or man‑made disasters or acts of God; • delays or decreases in production, the availability of equipment, facilities, personnel or services; • delays or decreases in the availability of capacity to transport, gather or process production; • military conflicts, civil unrest or political strife; and/or • international border disputes.
Some or all of these licenses could be affected should any region experience any of the following factors (among others): • severe weather, natural or man‑made disasters or acts of God; 42 Table of Contents • delays or decreases in production, the availability of equipment, facilities, personnel or services; • delays or decreases in the availability of capacity to transport, gather or process production; • military conflicts, civil unrest or political strife; and/or • international border disputes.
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.
The breach of any of these covenants could result in a default under our commercial debt facility and the indentures governing our Senior Notes and Convertible 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.
Before a well is spud, we incur significant geological and geophysical (seismic) costs, which are incurred whether or not a well eventually produces commercial quantities of hydrocarbons or is drilled at all. Drilling may be unsuccessful for many reasons, including geologic conditions, weather, cost overruns, equipment shortages and mechanical difficulties or force 37 Table of Contents majeure events.
Before a well is spud, we incur significant geological and geophysical (seismic) costs, which are incurred whether or not a well eventually produces commercial quantities of hydrocarbons or is drilled at all. Drilling may be unsuccessful for many reasons, including geologic conditions, weather, cost overruns, equipment shortages and mechanical difficulties or force majeure events.
Business—Our Reserves” for information about our estimated oil and natural gas reserves and the present value of our net revenues at a 10% discount rate (“PV‑10”) and Standardized Measure of discounted future net revenues (as defined herein) as of December 31, 2023. In order to prepare our estimates, we must project production rates and the timing of development expenditures.
Business—Our Reserves” for information about our estimated oil and gas reserves and the present value of our net revenues at a 10% discount rate (“PV‑10”) and Standardized Measure of discounted future net revenues (as defined herein) as of December 31, 2024. In order to prepare our estimates, we must project production rates and the timing of development expenditures.
If any of our partners in the blocks or unit in which we hold interests are unable to fund their share of the exploration, development and decommissioning expenses, we may be liable for such costs.
If any of our partners in the blocks or units in which we hold interests are unable to fund their share of the exploration, development and decommissioning expenses, we may be liable for such costs.
In addition, the U.S. government may seek to hold us liable for successor liability for FCPA violations committed by companies in which we invest in (for example, by way of acquiring equity interests in, participating as a joint venture partner with, acquiring the assets of, or entering into certain commercial transactions with) or that we acquire.
In addition, the U.S. government may seek to hold us liable for 55 Table of Contents successor liability for FCPA violations committed by companies in which we invest in (for example, by way of acquiring equity interests in, participating as a joint venture partner with, acquiring the assets of, or entering into certain commercial transactions with) or that we acquire.
Actual future prices and costs may differ materially from those used in the present value estimates included in this report. Oil prices have recently experienced significant volatility. See “Item 1. Business—Our Reserves.” We may not be able to commercialize our interests in any natural gas produced from our license areas.
Actual future prices and costs may differ materially from those used in the present value estimates included in this report. Oil prices have recently experienced significant volatility. See “Item 1. Business—Our Reserves.” We may not be able to commercialize our interests in some of the natural gas produced from our license areas.
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.
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.
For example, a shutdown of the U.S. federal government could delay the regulatory review and approval process associated with drilling or developmental activities within our license areas in the U.S. Gulf of Mexico.
For example, a shutdown of the U.S. federal government could delay the regulatory review and approval process associated with drilling or developmental activities within our license areas in the Gulf of America.
Certain provisions of the indentures governing our Senior Notes could make it more difficult or more expensive for a third-party to acquire us, or may even prevent a third-party from acquiring us.
Certain provisions of the indentures governing our Senior Notes and Convertible Senior Notes could make it more difficult or more expensive for a third-party to acquire us, or may even prevent a third-party from acquiring us.
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.
Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value 38 Table of Contents of reserves shown in this report. See “Item 1.
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.
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.
Our operations may also be adversely affected by laws and policies of the jurisdictions, including the jurisdictions where our oil and gas operating activities are located as well as the United Kingdom and the Cayman Islands and other jurisdictions in which we do business, that affect foreign trade and taxation.
Our operations may also be adversely affected by laws and policies of the jurisdictions, including the jurisdictions where our oil and gas operating activities are located as well as the United Kingdom and the Cayman Islands and other 52 Table of Contents jurisdictions in which we do business, that affect foreign trade and taxation.
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.
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 and the indentures governing our Senior Notes and Convertible Senior Notes were to be accelerated, our assets may not be sufficient to repay in full such indebtedness.
If the interim gas sales agreement is not extended or a long-term gas sales agreement in Ghana is not approved, we may not be able to commercialize our natural gas resources in Ghana.
If the interim gas sales agreement is not extended again or a long-term gas sales agreement in Ghana is not approved, we may not be able to commercialize our natural gas resources in Jubilee.
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.
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.
We operate in a litigious environment. 59 Table of Contents Some of the jurisdictions within which we operate have proven to be litigious environments. Oil and gas companies, such as us, can be involved in various legal proceedings, such as title or contractual disputes, in the ordinary course of business.
We operate in a litigious environment. Some of the jurisdictions within which we operate have proven to be litigious environments. Oil and gas companies, such as us, can be involved in various legal proceedings, such as title or contractual disputes, in the ordinary course of business.
It is impossible to predict the effect and potential spread of new outbreaks of the Ebola virus, COVID-19 or other viruses in West Africa and surrounding areas.
It is impossible to predict the effect and potential spread of new outbreaks of the Ebola virus or other viruses in West Africa and surrounding areas.
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.
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.
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 could 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.
For example, Russia’s war in Ukraine, potential instability in the Middle East, a potential regional or global recession, inflationary pressures and other varying macroeconomic conditions and the effects on demand for oil and natural gas has resulted in significant variations in oil and natural gas prices.
For example, Russia’s continued war in Ukraine, ongoing instability in the Middle East, a potential regional or global recession, inflationary pressures and other varying macroeconomic conditions and the effects on demand for oil and natural gas has resulted in significant variations in oil, natural gas and LNG prices.
If any of these officers or other key personnel retires, resigns or becomes unable to continue in their present roles and is not adequately replaced, our results of operations and financial condition could be materially adversely affected.
If any of these officers or other key personnel retires, resigns or becomes unable to continue in their present roles and is not adequately replaced, our results of operations and financial 56 Table of Contents condition could be materially adversely affected.
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.
Our ability to comply with these and other provisions of our commercial debt facility and the indentures governing our Senior Notes and Convertible Senior Notes may be impacted by changes in economic or business conditions, our results of operations or events beyond our control.
To the extent we are unable to secure adequate financing or obtain surety or performance bonds on commercially reasonable terms, we may be forced to reduce our capital expenditures. These factors may make it more difficult for us to obtain the financial assurances required by the BOEM to conduct operations in the U.S. Gulf of Mexico.
To the extent we are unable to secure adequate financing or obtain surety or performance bonds on commercially reasonable terms, we may be forced to reduce our capital expenditures. These factors may make it more difficult for us to obtain the financial assurances required by the BOEM to conduct operations in the Gulf of America.
Discoveries may become uneconomic as a result of an increase in operating costs to produce oil and natural gas, among other factors. Our actual operating costs and rates of production may differ materially from our current estimates.
Discoveries may become uneconomic as a result of an increase in operating costs to produce oil and natural gas, among other factors. Our actual operating costs and rates of production may differ materially from 40 Table of Contents our current estimates.
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.
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 regulatory initiatives effectively slowed down the pace of drilling and production operations in the U.S. Gulf of Mexico as adjustments were being made in operating procedures, certification requirements and lead times for inspections, drilling applications and permits, and exploration and production plan reviews, and as the federal agencies evolved into their present-day bureaus.
These regulatory initiatives effectively slowed down the pace of drilling and production operations in the Gulf of America as adjustments were being made in operating procedures, certification requirements and lead times for inspections, drilling applications and permits, and exploration and production plan reviews, and as the federal agencies evolved into their present-day bureaus.
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.
The market price for our common stock may be influenced by many factors, including, but not limited to: • the price of oil, natural gas and LNG; • 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; 57 Table of Contents • investor perception of our company and of the industry in which we compete; and • general economic, political and market conditions.
We do not currently have any commitments for future external funding beyond the capacity of our commercial debt facility and revolving credit facility. Additional financing may not be available on favorable terms, or at all.
We do not currently have any commitments for future external funding beyond the capacity of our commercial debt facility. Additional financing may not be available on favorable terms, or at all.
The indentures governing our Senior Notes limits the ability of our subsidiaries to incur consensual encumbrances or restrictions on their ability to pay dividends or make other intercompany payments to us, with significant qualifications and exceptions.
The indentures governing our Senior Notes and Convertible Senior Notes limit the ability of our subsidiaries to incur consensual encumbrances or restrictions on their ability to pay dividends or make other intercompany payments to us, with significant qualifications and exceptions.
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.
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, 2024, we have unfulfilled drilling obligations for one development well in Equatorial Guinea.
Changes in any of these laws or policies or the implementation thereof could materially and adversely affect our financial position, results of operations and cash flows. More comprehensive and stringent regulation in the U.S. Gulf of Mexico has materially increased costs and delays in offshore oil and natural gas exploration and production operations. In the U.S.
Changes in any of these laws or policies or the implementation thereof could materially and adversely affect our financial position, results of operations and cash flows. More comprehensive and stringent regulation in the Gulf of America has materially increased costs and delays in offshore oil and natural gas exploration and production operations.
The successful acquisition of these assets or businesses requires an assessment of several factors, including: • recoverable reserves; • future oil and natural gas prices and their appropriate differentials; • development and operating costs; and • potential environmental and other liabilities. The accuracy of these assessments is inherently uncertain.
The successful acquisition of these assets or businesses requires an assessment of several factors, including: • recoverable reserves; • future oil, natural gas and LNG prices and their appropriate differentials; 49 Table of Contents • development and operating costs; and • potential environmental and other liabilities. The accuracy of these assessments is inherently uncertain.
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.
For a discussion of recent drilling and climate change executive orders signed by former President Biden and the potential impact of the new Trump Administration on these orders, 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.
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.
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 Gulf of America.
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.
Our commercial debt facility requires 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.
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.
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 Convertible Senior Notes. We may be subject to risks in connection with acquisitions and the integration of acquisitions may be difficult.
For example, in 2021, the Colonial Pipeline was subject to a ransomware attack that disabled the pipeline for several days, affecting consumers throughout the eastern coast of the United States. A number of U.S. companies have also been subject to cyber-attacks in recent years resulting in unauthorized access to sensitive information and operational disruptions.
For example, in 2021, the Colonial Pipeline was subject to a ransomware attack that disabled the pipeline for several days, affecting consumers throughout the eastern coast of the United States. A number of U.S. companies have also been subject to cyber-attacks in recent years resulting in unauthorized access to personal, confidential or proprietary information and operational disruptions.
Should the prospects yield discoveries, we cannot assure you that we will not face delays in the appraisal and development of these prospects or otherwise have to relinquish these prospects.
Should 36 Table of Contents the prospects yield discoveries, we cannot assure you that we will not face delays in the appraisal and development of these prospects or otherwise have to relinquish these prospects.
Weather events have caused significant disruption to the operations of offshore and coastal facilities in the U.S. Gulf of Mexico region. In the future, during a shutdown period, we may be unable to access well sites and our services may be shut down.
Weather events have caused significant disruption to the operations of offshore and coastal facilities in the Gulf of America region. In the future, during a shutdown period, we may be unable to access well sites and our services may be shut down.
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.
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.” 44 Table of Contents 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 Gulf of America.
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.
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 Gulf of America and do not hold operatorship in certain other offshore blocks.
For a discussion of recent environmental 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. ” Health, safety and environmental laws and regulations are complex, change frequently and have tended to become increasingly stringent over time.
For a discussion of environmental and climate change executive orders signed by former President Biden and the potential impact of the Trump Administration on these orders, 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. ” Health, safety and environmental laws and regulations are complex, change frequently and have tended to become increasingly stringent over time.
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.
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 areas.
In addition, we may in the future, hold swaps designed to hedge our interest rate risk. We do not currently designate any of our derivative instruments as hedges for accounting purposes and record all derivative instruments on our balance sheet at fair value. Changes in the fair value of our derivative instruments are recognized in earnings.
In addition, we have and may in the future enter into derivative arrangements designed to hedge our interest rate risk. We do not currently designate any of our derivative instruments as hedges for accounting purposes and record all derivative instruments on our balance sheet at fair value. Changes in the fair value of our derivative instruments are recognized in earnings.
Gulf of Mexico, regulatory initiatives are continually developed and implemented at the federal level to prevent major well control incidents.
In the Gulf of America, regulatory initiatives are continually developed and implemented at the federal level to prevent major well control incidents.
Our inability to continuously export associated natural gas from the Jubilee and TEN Fields could eventually impact our oil production and could cause us to re-inject or flare any natural gas we cannot export. 41 Table of Contents In Mauritania and Senegal, we plan to export the majority of our gas resource to the LNG market.
Our inability to export associated natural gas from the Jubilee Field could eventually impact our oil production and could cause us to re-inject or flare any natural gas we cannot export. 39 Table of Contents In Mauritania and Senegal, we plan to export the majority of our gas resource to the LNG market.

… 96 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeItem 4. Mine Safety Disclosures Not applicable. 61 Table of Contents PART II
Biggest changeItem 4. Mine Safety Disclosures Not applicable. 58 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
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.
Biggest changeItem 4. Mine Safety Disclosures 58 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 59 Item 6. Selected Financial Data 61 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 76 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed4 unchanged
Biggest changeThe 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.
Biggest changeThe graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends). December 31, 2019 2020 2021 2022 2023 2024 Kosmos Energy Ltd. (KOS) $ 100.00 $ 41.90 $ 61.80 $ 113.50 $ 119.80 $ 61.00 S&P 500 (SPX) 100.00 118.40 152.30 124.70 157.50 196.80 Dow Jones U.S.
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 repurchased share units are reallocated to the number of share units available for issuance under the LTIP. 59 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.
Certain 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.
Certain of our subsidiaries are currently restricted in their ability to pay dividends to us pursuant to the terms of the Senior Notes and the Facility, 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 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 following graph illustrates changes over the five-year period ended December 31, 2024, 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.
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.
As of February 20, 2025, 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 132. On February 20, 2025, the last reported sale price of Kosmos’ common stock, as reported on the NYSE, was $3.35 per share. Kosmos does not currently pay a dividend.
Exploration & Production Index (DWCEXP) 100.00 110.30 73.00 125.90 198.10 206.90 63 Table of Contents
Exploration & Production Index (DWCEXP) 100.00 66.20 114.10 179.60 187.60 185.20 60 Table of Contents

Item 6. [Reserved]

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

1 edited+0 added−0 removed0 unchanged
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
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, 2024. 61 Table of Contents

Item 7. Management's Discussion & Analysis

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

66 edited+57 added−43 removed41 unchanged
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.
Biggest changeThe decrease in cash provided by operating activities in the year ended December 31, 2023 when compared to the same period in 2022 is primarily a result of lower average realized oil prices. 68 Table of Contents The following table presents our liquidity and financial position as of December 31, 2024 and 2023: Years Ended December 31, 2024 2023 (In thousands) Outstanding debt principal balances: Facility $ 900,000 $ 925,000 7.125% Senior Notes 250,000 650,000 7.750% Senior Notes 350,000 400,000 7.500% Senior Notes 400,274 450,000 8.750% Senior Notes 500,000 — 3.125% Convertible Senior Notes 400,000 — Total long-term debt $ 2,800,274 $ 2,425,000 Cash and cash equivalents 84,972 95,345 Total restricted cash(1) 305 3,416 Net debt $ 2,714,997 $ 2,326,239 Availability under the Facility $ 450,000 $ 325,000 Availability under the Corporate Revolver $ — $ 250,000 Available borrowings plus cash and cash equivalents $ 534,972 $ 670,345 (1) When our net leverage ratio exceeds 2.50x, we are required under the Facility to maintain a restricted cash balance that is sufficient to meet the payment of interest and fees for the next six-month period on the 7.125% Senior Notes, the 7.750% Senior Notes, the 7.500% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes or the Facility, whichever is greater.
Estimates of Proved Oil and Natural Gas Reserves. Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and assessment of impairment of our oil and natural gas properties.
Estimates of Proved Oil and Gas Reserves. Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and assessment of impairment of our oil and natural gas properties.
Proved oil and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions.
Proved oil and gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions.
Therefore, while the consideration to be paid may be fixed, the fair value of the assets acquired, and liabilities assumed is subject to change during the period between the announcement date and the acquisition date. The most significant estimates in the allocation typically relate to the value assigned to future recoverable oil and natural gas reserves and unproved properties.
Therefore, while the consideration to be paid may be fixed, the fair value of the assets acquired, and liabilities assumed is subject to change during the period between the announcement date and the acquisition date. The most significant estimates in the allocation typically relate to the value assigned to future recoverable oil and gas reserves and unproved properties.
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.
For the years ended December 31, 2024 and 2023, 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.
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.
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; 74 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.
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.
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 separated from the host contract for accounting purposes.
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.
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, 2024 and 2023, we had no oil and gas imbalances recorded in our consolidated financial statements.
We actively monitor all of the financial institutions participating in our Facility and Corporate Revolver. None of the financial institutions have indicated to us that they may be unable to perform on their commitments. In addition, we periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of the relationships.
We actively monitor all of the financial institutions participating in our Facility. None of the financial institutions have indicated to us that they may be unable to perform on their commitments. In addition, we periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of the relationships.
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.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, 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, 2023.
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 scheduled maturities of debt related to the Facility are based on the level of borrowings and the available borrowing base as of December 31, 2024. 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.
Liquidity and Capital Resources We are actively engaged in an ongoing process of anticipating and meeting our funding requirements related to our strategy as a full-cycle exploration and production company. We have historically met our funding requirements through cash flows generated from our operating activities and obtained additional funding from issuances of equity and debt, as well as partner carries.
Liquidity and Capital Resources We are actively engaged in an ongoing process of anticipating and meeting our funding requirements related to our strategy as a deepwater exploration and production company. We have historically met our funding requirements through cash flows generated from our operating activities and obtained additional funding from issuances of equity and debt, as well as partner carries.
Uncertainty in the macroeconomic environment and associated global economic conditions have resulted in extreme volatility in credit, equity, and foreign currency markets, including the European sovereign debt markets and volatility in various other markets. If any of the financial institutions within our Facility or Corporate Revolver are unable to perform on their commitments, our liquidity could be impacted.
Uncertainty in the macroeconomic environment and associated global economic conditions have resulted in extreme volatility in credit, equity, and foreign currency markets, including the European sovereign debt markets and volatility in various other markets. If any of the financial institutions within our Facility are unable to perform on their commitments, our liquidity could be impacted.
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.
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.
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.
Additionally, asset removal technologies and costs are constantly changing, as are regulatory, political, environmental, safety and public relations considerations. 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.
(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.
(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.
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.
As of December 31, 2024 and 2023, 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, 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 75 Table of Contents assessments of future production, pricing estimates, capital and operating costs, market-based weighted average cost of capital, and risk adjustment factors applied to reserves.
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 future financial condition and liquidity will be impacted by, among other factors, our level of production of oil, natural gas and LNG and the prices we receive from the sale of oil, natural gas and LNG, and our ability to effectively hedge future production volumes, the success of our multi-faceted infrastructure-led exploration, appraisal, and development 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.
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).
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 the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility).
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.
The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations. 2025 Capital Program We estimate we will spend $400 million or less of capital for the year ending December 31, 2025, excluding any acquisitions or divestiture of oil and gas properties during the year.
In accordance with the provisions of the Contract for Exploration and Production Sharing of Hydrocarbons for the Cayar Offshore Profond Block (the “Contract”) and the related Joint Operating Agreement (the “JOA”), BP has waived its rights in respect of the Yakaar and Teranga discoveries.
During 2023, BP decided not to participate in the development of the Yakaar and Teranga discoveries. In accordance with the provisions of the Contract for Exploration and Production Sharing of Hydrocarbons for the Cayar Offshore Profond Block (the “Contract”) and the related Joint Operating Agreement (the “JOA”), BP has waived its rights in respect of the Yakaar and Teranga discoveries.
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.
Net cash provided by operating activities in 2024 was $678.2 million compared with net cash provided by operating activities of $765.2 million in 2023 and $1.1 billion in 2022, respectively.
As additional proved reserves are discovered, reserve quantities and future cash flows will be estimated by independent petroleum consultants and prepared in accordance with guidelines established by the SEC and the FASB.
Proved reserve quantities and future cash flows are estimated by independent petroleum engineering consultants and prepared in accordance with guidelines established by the SEC and the FASB.
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.
Certain operating results and statistics for the years ended December 31, 2024, 2023 and 2022 are included in the following tables.
Risk Factors.” The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this annual report on Form 10‑K. Overview Kosmos is a full-cycle, deepwater, independent oil and gas exploration and production company focused along the offshore Atlantic Margins.
Risk Factors.” The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this annual report on Form 10‑K. Overview Kosmos Energy is a leading deepwater exploration and production company focused on meeting the world’s growing demand for energy.
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.
In October 2024, during the Fall 2024 borrowing base redetermination, the Company’s lending syndicate approved a borrowing base of $1.35 billion. As of December 31, 2024, borrowings under the Facility totaled $900.0 million and the undrawn availability under the facility was $450.0 million. The Facility provides a revolving credit and letter of credit facility.
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.
Sao Tome and Principe In April 2024, we received approval for a twelve month extension to May 2025 for the current exploration phase for Block 5 offshore Sao Tome and Principe. 64 Table of Contents Results of Operations All of our results, as presented in the table below, represent operations from Ghana, the Gulf of America, Equatorial Guinea, Mauritania and Senegal.
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.
Oil and gas revenue decreased by $26.3 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily as a result of lower average realized oil and gas prices partially offset by increased natural gas sales volumes in Ghana for the year ended December 31, 2024.
The participating interests in the Cayar Offshore Profond Block are now: Kosmos 90% and PETROSEN 10%, with PETROSEN having the right to increase its participating interest after issuance of an exploitation authorization to up to 35%.
The participating interests in the Cayar Offshore Profond Block are: Kosmos 90% and PETROSEN 10%, with PETROSEN having the right to increase its participating interest after issuance of an exploitation authorization to up to 35%. In March 2024, the current phase of the Cayar Block exploration license was extended an additional two years to July 2026.
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.
The Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's Gulf of America assets, and on a subordinated, unsecured basis by entities that borrow under, or guarantee, our Facility. 3.125% Convertible Senior Notes due 20230 We have one series of senior convertible notes outstanding.
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.
Workover operations were completed in July 2024 and successfully restored the well productivity. In October 2023, we announced the Tiberius infrastructure-led exploration well, located in Keathley Canyon Block 964 in the Outer Wilcox play, encountered approximately 75 meters (250 feet) of net oil pay in the primary Wilcox target.
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.
These amounts are expected to be repaid through the national oil companies’ share of future revenues. 73 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.
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.
Senior Notes We have four 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.
The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September.
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.
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.
Other expenses, net decreased $6.0 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023 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 partially offset by an increase in arbitration costs during the year ended December 31, 2024.
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.
Impairment of long-lived assets. Impairment of long-lived assets decreased $222.3 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023. We recorded an impairment charge of $222.3 million in the year ended December 31, 2023 for the TEN Fields as a result of negative proved oil and gas reserve revisions.
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.
Years ended December 31, 2024 2023 2022(1) (In thousands, except per volume data) Sales volumes: Oil (MBbl) 20,472 20,385 22,012 Gas (MMcf) 16,180 13,737 4,076 NGL (MBbl) 338 382 426 Total (MBoe) 23,507 23,057 23,117 Total (Boepd) 64,226 63,168 63,335 Revenues: Oil sales $ 1,611,169 $ 1,658,421 $ 2,201,199 Gas sales 57,243 35,307 29,504 NGL sales 6,946 7,880 14,652 Total revenues $ 1,675,358 $ 1,701,608 $ 2,245,355 Average oil sales price per Bbl $ 78.70 $ 81.35 $ 100.00 Average gas sales price per Mcf 3.54 2.57 7.24 Average NGL sales price per Bbl 20.55 20.61 34.39 Average total sales price per Boe 71.27 73.80 97.13 Costs: Oil and gas production, excluding workovers $ 490,860 $ 367,375 $ 387,888 Oil and gas production, workovers 39,654 22,722 21,411 Total oil and gas production costs $ 530,514 $ 390,097 $ 409,299 Depletion, depreciation and amortization $ 456,774 $ 444,927 $ 498,256 Average cost per Boe: Oil and gas production, excluding workovers $ 20.88 $ 15.93 $ 16.78 Oil and gas production, workovers 1.69 0.99 0.93 Total oil and gas production costs 22.57 (2) 16.92 17.71 Depletion, depreciation and amortization 19.43 19.30 21.55 Total oil and gas production costs, depletion, depreciation and amortization $ 42.00 $ 36.22 $ 39.26 (1) Includes activity related to the pre-emption transaction with Tullow on March 13, 2022.
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.
This capital expenditure budget consists of: 69 Table of Contents • Approximately $275 million related to maintenance activities across our Ghana, Equatorial Guinea and Gulf of America assets, including infill development drilling and facilities integrity spend; • Approximately $50 million related to the completion of the first phase of the Greater Tortue Ahmeyim development in Mauritania and Senegal; • Less than $75 million related to progressing our appraisal and development programs in the Gulf of America, Mauritania and Senegal.
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.
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. We were in compliance with the financial covenants contained in the Facility as of September 30, 2024 (the most recent assessment date).
Oil prices are historically volatile and could negatively impact our ability to generate sufficient operating cash flows to meet our funding requirements. This volatility could result in wide fluctuations in future oil prices, which could impact our ability to comply with our financial covenants.
Oil prices are historically volatile and could negatively impact our ability to generate sufficient operating cash flows to meet our funding requirements. This oil price volatility could impact our ability to comply with our financial covenants. To partially mitigate this price volatility, we maintain an active hedging program and review our capital spending program on a regular basis.
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.
As of December 31, 2024, we have a commitment to drill one development well in Equatorial Guinea. 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 GTA Phase 1 development costs.
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.
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. The available facility amount is subject to borrowing base constraints and, beginning on April 1, 2027, outstanding borrowings will be constrained by an amortization schedule.
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.
Depletion, depreciation and amortization increased $11.8 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023 due to a higher depletion rate per boe in the Gulf of America and Equatorial Guinea business units as a result of the increased cost basis related to the respective development activities in 2024, partially offset by lower depletion in the current year in our TEN Fields due to the impairment loss recorded during the year ended December 31, 2024.
Current commodity prices, combined with our hedging program and our current liquidity position is expected to support our capital program for 2024.
Our investment decisions are based on longer-term commodity prices based on the nature of our projects and development plans. Current commodity prices, combined with our hedging program and our current liquidity position is expected to support our capital program for 2025.
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.
In October 2024, pursuant to a voluntary cancellation notice sent by the Company, the Corporate Revolver was terminated. 67 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, 2024, 2023 and 2022: Years Ended December 31, 2024 2023 2022 (In thousands) Sources of cash, cash equivalents and restricted cash: Net cash provided by operating activities $ 678,249 $ 765,170 $ 1,130,476 Net proceeds from issuance of senior notes 885,285 — — Borrowings under long-term debt 325,000 300,000 — Proceeds on sale of assets — — 168,703 1,888,534 1,065,170 1,299,179 Uses of cash, cash equivalents and restricted cash: Oil and gas assets 933,659 932,603 787,297 Acquisition of oil and gas properties — — 22,078 Notes receivable and other investing activities 32,397 62,247 63,183 Payments on long-term debt 350,000 145,000 405,000 Purchase of capped call transactions 49,800 — — Repurchase of senior notes 499,515 — — Dividends — 166 655 Other financing costs 36,647 13,214 9,041 1,902,018 1,153,230 1,287,254 Increase (decrease) in cash, cash equivalents and restricted cash $ (13,484) $ (88,060) $ 11,925 Net cash provided by operating activities.
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.
The Kodiak #3 infill well located in Mississippi Canyon was brought online in April 2021. The well experienced production issues and was side-tracked. The Kodiak-3ST well was brought online in early September 2022. Well results and initial production were in line with expectations, however well productivity declined thereafter.
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.
Kosmos’ total share for the two agreements combined currently estimated at approximately $370.0 million, of which $280.1 million has been incurred through December 31, 2024, excluding accrued interest.
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.
Interest and other financing costs, net decreased by $7.3 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023 primarily as a result of increased capitalized 66 Table of Contents interest related to the Greater Tortue Ahmeyim Phase 1 project partially offset by increased interest expenses related to higher interest rates and $25.2 million loss on debt modifications and extinguishments for the year ended December 31, 2024 primarily related to the amendment and restatement of the Facility during the second quarter of 2024 and the repurchase of aggregate principal amounts of the 7.125% Senior Notes, the 7.750% Senior Notes, and the 7.500% Senior Notes during the third quarter of 2024.
The decrease in cash provided by operating activities in the year ended December 31, 2023 when compared to the same period in 2022 is primarily a result of lower average realized oil prices.
The decrease in cash provided by operating activities in the year ended December 31, 2024 when compared to the same period in 2023 is primarily a result of increased oil and gas production costs for the year ended December 31, 2024 as a result of pre-production operating costs associated with Phase 1 of the GTA project, planned workovers in the Gulf of America business unit and increased production costs in Equatorial Guinea, together with lower average realized oil prices, offset by changes in working capital.
Initial fluid and core analysis supports the production potential of the wells, with characteristics analogous with similar nearby discoveries in the Wilcox trend. We are now working with partners on development options for the discovery. During the fourth quarter of 2024, Kosmos was named the apparent high bidder on five blocks in the U.S.
Initial fluid and core analysis supports the production potential of the well, with characteristics analogous with similar nearby discoveries in the Wilcox trend. During the first quarter of 2024, Kosmos was awarded five blocks in the Gulf of America Lease Sale 261, including three blocks nearby to our Tiberius discovery.
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.
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. (4) In April 2024, a decommissioning trust agreement with the Jubilee unit partners to cash fund future retirement costs associated with the Jubilee Field was finalized.
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.
In October 2024, pursuant to a voluntary cancellation notice sent by the Company, the Corporate Revolver was terminated. 70 Table of Contents 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.
Gulf of Mexico; • execute appraisal and development activities in Ghana, the U.S. Gulf of Mexico, Mauritania and Senegal; and • execute infrastructure-led exploration and appraisal efforts in the U.S. Gulf of Mexico and Equatorial Guinea. We have relied on a number of assumptions in budgeting for our future activities.
We have relied on a number of assumptions in budgeting for our future activities.
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.
The Capped Call Transactions cover, initially, the number of shares of our common stock underlying the 3.125% Convertible Senior Notes, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 3.125% Convertible Senior Notes. 72 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 given current contractual terms and market conditions, and the instrument’s estimated fair value.
This table does not take into account amortization of deferred financing costs.
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.
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.
Oil and gas production costs increased by $140.4 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023 as a result of pre-production operating costs associated with Phase 1 of the GTA project, planned workovers in the Gulf of America business unit and increased production costs in Equatorial Guinea. Exploration expenses.
(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.
(2) Includes $93.4 million of oil and gas production costs incurred during 2024 before production commenced at the GTA Phase 1 project in Mauritania and Senegal. 65 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.
The Odd Job Field subsea pump installation project was approximately 90% complete as of the end of 2023 with an expected online date in the middle of 2024. The project is expected to sustain long-term production from the Odd Job Field.
Additional development drilling is expected to re-commence in 2025 with the drilling and completion of the Winterfell-4 well, which is expected to be online in the second half of 2025. The Odd Job Field subsea pump was successfully brought online in July 2024. The project is expected to help sustain long-term production from the Odd Job Field.
Our key assets include production offshore Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, as well as world-class gas projects offshore Mauritania and Senegal. We also pursue a proven basin exploration program in Equatorial Guinea and the U.S. Gulf of Mexico.
We have diversified oil and gas production from assets offshore Ghana, Equatorial Guinea, Mauritania, Senegal and the Gulf of America (formerly the U.S. Gulf of Mexico). Additionally, in the proven basins where we operate we are advancing high-quality development opportunities, which have come from our exploration success.
During 2023, the Jubilee partners reached an interim agreement to sell Jubilee Field gas at a price of $2.95 per MMBtu to the Government of Ghana beyond the 19 Bcf from the Jubilee Field through May 2024 while the partners continue on-going discussions with the Government of Ghana regarding a long-term future gas sales agreement.
The rig will then undergo scheduled maintenance before returning for a planned four-well drilling campaign on Jubilee in 2026. 62 Table of Contents During 2023, the Jubilee partners reached an interim agreement to sell Jubilee Field gas at a price of $2.95 per MMBtu to the Government of Ghana.
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.
Exploration expenses increased by $77.6 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023 primarily as a result of approximately $28.0 million related to the S-6 “Akeng Deep” ILX prospect in Block S offshore Equatorial Guinea which encountered sub-commercial quantities of hydrocarbons and was plugged and abandoned in the fourth quarter of 2024 and approximately $37.2 million of previously capitalized costs related to the Asam discovery in Block S offshore Equatorial Guinea that were written off to exploration expense.
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.
In September 2024, we added two new lenders to the Facility syndicate, increasing current total commitments by approximately $145.0 million to the full Facility size and borrowing base capacity of $1.35 billion. As of December 31, 2024, borrowings under the Facility totaled $900.0 million and the undrawn availability under the facility was $450.0 million.
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.
Year Ended December 31, 2024 vs. 2023 Years Ended December 31, Increase 2024 2023 (Decrease) (In thousands) Revenues and other income: Oil and gas revenue $ 1,675,358 $ 1,701,608 $ (26,250) Gain on sale of assets — — — Other income, net 204 (73) 277 Total revenues and other income 1,675,562 1,701,535 (25,973) Costs and expenses: Oil and gas production 530,514 390,097 140,417 Exploration expenses 119,907 42,278 77,629 General and administrative 100,155 99,532 623 Depletion, depreciation and amortization 456,774 444,927 11,847 Impairment of long-lived assets — 222,278 (222,278) Interest and other financing costs, net 88,598 95,904 (7,306) Derivatives, net 12,099 11,128 971 Other expenses, net 17,703 23,656 (5,953) Total costs and expenses 1,325,750 1,329,800 (4,050) Income before income taxes 349,812 371,735 (21,923) Income tax expense (benefit) 159,961 158,215 1,746 Net income $ 189,851 $ 213,520 $ (23,669) Oil and gas revenue.
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.
We sold 23,507 MBoe at an average realized price per barrel of oil equivalent of $71.27 in 2024 and 23,057 MBoe at an average realized price per barrel of oil equivalent of $73.80 in 2023. Oil and gas production.
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.
Years Ending December 31, Asset (Liability) Fair Value at December 31, 2025 2026 2027 2028 2029 Thereafter Total 2024 (In thousands, except percentages) Fixed rate debt: 7.125% Senior Notes $ — $ 250,000 $ — $ — $ — $ — $ 250,000 $ 246,565 7.750% Senior Notes — — 350,000 — — — 350,000 339,927 7.500% Senior Notes — — — 400,274 — — 400,274 379,404 8.750% Senior Notes — — — — — 500,000 500,000 470,965 3.125% Convertible Senior Notes — — — — — 400,000 400,000 332,792 Variable rate debt: Weighted average interest rate 8.51 % 8.93 % 9.14 % 9.66 % 9.88 % — % Facility(1) $ — $ — $ — $ 346,045 $ 553,955 $ — $ 900,000 900,000 Total principal debt repayments $ — $ 250,000 $ 350,000 $ 746,319 $ 553,955 $ 900,000 $ 2,800,274 Interest & commitment fees on long-term debt 264,315 231,889 193,525 148,044 90,639 93,750 1,022,162 Operating leases(2) 4,189 4,260 4,201 3,844 2,808 — 19,302 Purchase obligations(3) 20,821 — — — — — 20,821 Decommissioning trust funds(4) 11,460 11,460 11,460 11,460 11,460 80,218 137,518 Firm transportation commitments 3,472 4,413 2,222 — — — 10,107 ______________________________________ (1) The amounts included in the table represent principal maturities only.
Removed
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.
Added
Recent Developments Corporate In March 2024, the Company issued $400.0 million of 3.125% Convertible Senior Notes and received net proceeds of $390.4 million after deducting fees. The 3.125% Convertible Senior Notes mature on March 15, 2030, unless earlier converted, redeemed or repurchased.
Removed
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.
Added
The conversion rate for the 3.125% Convertible Senior Notes is initially 142.4501 shares of our common stock per $1,000 principal amount of 3.125% Convertible Senior Notes (which is equivalent to an initial conversion price of approximately $7.02 per share of our common stock), subject to adjustments.
Removed
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.
Added
In connection with the issuance of the 3.125% Convertible Senior Notes, the Company used $49.8 million of the net proceeds from the issuance of the 3.125% Convertible Senior Notes to enter into the Capped Call Transactions.
Removed
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.
Added
The Capped Call Transactions are generally expected to reduce potential dilution to holders of our common stock upon any conversion of the 3.125% Convertible Senior Notes and/or offset any cash payments that we are required to make in excess of the principal amount of any 3.125% Convertible Senior Notes that are converted, as the case may be, with such reduction and/or offset subject to a cap.
Removed
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.
Added
In April 2024, in conjunction with the Spring borrowing base redetermination, the Company executed an amendment and restatement of the Facility. As amended and restated, the Facility size and borrowing base capacity is approximately $1.35 billion (increased from $1.25 billion) and was capped by total commitments of approximately $1.21 billion as of June 30, 2024.
Removed
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.
Added
In September 2024, we added two new lenders to the Facility syndicate, increasing current total commitments by approximately $145.0 million to the full Facility size and borrowing base capacity of $1.35 billion. In September 2024, the Company issued $500.0 million of 8.750% Senior Notes and received net proceeds of approximately $494.9 million after deducting fees.
Removed
The Jubilee Southeast project also included the installation of a new subsea production manifold. The development drilling campaign is planned to continue in 2024. One new injection well and one new production well were brought online early in the first quarter of 2024.
Added
We used the net proceeds, together with cash on hand, to complete the repurchase of an aggregate principal amount of $400.0 million of the 7.125% Senior Notes, $50.0 million of the 7.750% Senior Notes, and approximately $49.7 million of the 7.500% Senior Notes and to pay expenses related to the issuance of the 8.750% Senior Notes.

… 86 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+1 added−1 removed4 unchanged
Biggest changeIf 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.
Biggest changeIf the floating market rate increased 10% at this level of floating rate debt, we would pay an estimated additional $3.9 million of interest expense per year on the Facility. The impact of the 2025 fixed interest rate swap would reduce the estimated additional interest expense to $1.7 million for the twelve months ending December 31, 2025.
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.
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, 2024. 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— 77 Table of Contents 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—Fair Value Measurements” for a description of the accounting procedures we follow relative to our derivative financial instruments.
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
Additionally, a change in the market interest rates could impact interest costs associated with future debt issuances or any future borrowings and future payments associated with the Tortue FPSO arrangement. 77 Table of Contents
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.
In January 2025, we entered into Dated Brent three-way collar contracts for 2.0 MMBbl from January 2025 through December 2025 with a sold put price of $55.00 per barrel, a floor price of $70.00 per barrel and a ceiling price of $85.00 per barrel.
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.
At December 31, 2024, our open commodity derivative instruments were in a net asset position of $7.2 million. As of December 31, 2024, a hypothetical 10% price increase in the commodity futures price curves would decrease future pre‑tax earnings by approximately $27.3 million. Similarly, a hypothetical 10% price decrease would increase future pre‑tax earnings by approximately $30.5 million.
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.
The commitment fees on the undrawn availability under the Facility are not subject to changes in interest rates. 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.
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.
Substantially all of our oil sales are indexed against Dated Brent and Heavy Louisiana Sweet. Oil prices during 2024 ranged between $70.56 and $93.35 per Bbl for Dated Brent, with Heavy Louisiana Sweet experiencing similar volatility during 2024.
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.
The following table reconciles the changes that occurred in fair values of our open derivative contracts during the year ended December 31, 2024: Derivative Contracts Assets (Liabilities) Commodities Interest Rates Total (In thousands) Fair value of contracts outstanding as of December 31, 2023 $ 6,765 $ — $ 6,765 Changes in contract fair value (16,949) 2,202 (14,747) Contract maturities 19,652 — 19,652 Fair value of contracts outstanding as of December 31, 2024 $ 9,468 $ 2,202 $ 11,670 76 Table of Contents 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.
Weighted 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.
Weighted Average Price per Bbl Term Type of Contract Index MBbl Net Deferred Premium Payable/(Receivable) Swap Sold Put Floor Ceiling Asset (Liability) Fair Value at December 31, 2024(1) 2025: Jan - Jun Two-way collars Dated Brent 2,000 0.50 — — 70.00 85.00 $ 1,592 Jan - Jun Swaps Dated Brent 2,000 — 75.48 — — — $ 2,919 Jan - Dec Two-way collars Dated Brent 2,000 1.00 — — 70.00 85.00 $ 2,715 ______________________________________ (1) Fair values are based on the average forward oil prices on December 31, 2024.
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.
The weighted average interest rate on this indebtedness was approximately 8.4%, and is 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.
Removed
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
Interest Rate Sensitivity Changes in market interest rates affect the amount of interest we pay on certain of our borrowings. Outstanding borrowings under the Facility as of December 31, 2024 totaled $900.0 million, of which $400.0 million bore interest at floating rates after consideration of our fixed interest rate swap.

Other KOS 10-K year-over-year comparisons