Kosmos Energy Ltd. (NASDAQ: KOS) stock declined by 6.07% at the last close whereas the KOS stock price declines by -1.14% in the pre-market trading session. Kosmos is an independent deep water oil and gas exploration and production firm concentrating on the Atlantic Margins.
Kosmos Energy presented an update on its prolific offshore resources in Ghana, Equatorial Guinea, and the United States Gulf of Mexico in 2021 production, development, and exploration operations.
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Due to lower output in Equatorial Guinea, KOS produced net production of 52,000 barrels of oil equivalent per day (boepd) in the second quarter of 2021, somewhat below earlier estimates. In the second quarter, the company’s gross output in Equatorial Guinea was 29,000 barrels of oil per day (bopd), with considerable interruptions due to facility improvements. Kosmos Energy has begun drilling the first of three planned infill wells for 2021, which are projected to contribute 4,000 bopd of gross output.
In Ghana, KOS had a great operational performance. It produced 106,000 bopd gross, including 71,000 bopd at the Jubilee oilfield and 35,000 bopd at the TEN offshore Ghana. Furthermore, KOS’s four-well campaign’s first two wells have been drilled, and the rig has begun completion operations. The wells are projected to add 15,000-20,000 bopd of gross output.
The Greater Tortue Ahmeyim project, which has been built in cooperation with BP Plc BP off the coasts of Mauritania and Senegal, was on schedule to produce first gas in the first half of 2023. However, due to supplier delays and cost increases, the first gas is now scheduled in the third quarter of 2023.
Notably, KOS has maintained its full-year production forecast of 53,000-57,000 barrels per day, with a year-end exit rate of 60,000 barrels once additional wells are operational. In the second quarter, sales volumes averaged almost 66,000 boepd, which was in line with expectations. KOS produced positive operating cash flow while reducing net debt by over $100 million.
Kosmos Energy has a good financial position with over $775 million in cash on hand. For the rest of 2021, KOS is roughly 60% hedged, with increasing exposure to rising oil prices as hedges expire.