Kosmos Energy Production Hits High End of Guidance, GTA Lifts 9 LNG Cargos

Kosmos Energy reported second-quarter net income of $185 million, or $0.31 a share, as production rose 12% from a year earlier, driven by the ramp-up at Greater Tortue Ahmeyim (GTA) and new wells at Jubilee.

Adjusted net income, which strips out items management said affect comparability, came in at $68 million, or $0.11 a share. Net production averaged 71,400 barrels of oil equivalent per day, above the midpoint of the company's guidance range. Sales volumes ran ahead of production at 77,000 boepd, though Kosmos exited the quarter in a net underlift position of about 500,000 boe.

Kosmos completed the sale of its Equatorial Guinea production assets to Panoro Energy on June 17, receiving final cash consideration of roughly $127 million after closing adjustments. The proceeds repaid borrowings under the company's reserve-based lending facility. Future contingent payments of up to $40 million depend on oil price and production thresholds. Production from Equatorial Guinea averaged 5,100 bopd net through the closing date.

The GTA Phase 1 project lifted nine gross LNG cargoes in the quarter, at the upper end of guidance, bringing total first-half lifts to 18.5. Full-year guidance of 32 to 36 gross LNG cargoes remains unchanged. Production at GTA averaged 15,700 boepd net, slightly below the first quarter due to warmer seasonal temperatures, which Kosmos had flagged in its prior report. Net operating costs per barrel at GTA are on track to fall by more than 50% year-on-year, with further reductions possible in 2027, the company said.

In Ghana, Jubilee gross oil production averaged 72,000 bopd. Two new wells, J76 and J77, came online in June and early July, with initial performance tracking to the high end of expectations. A third well, J50, is due online in the coming days. Kosmos expects Jubilee gross production to exceed 90,000 bopd once that well is flowing. A water injection well will wrap up the current drilling campaign by the end of the third quarter. The partnership is working to secure a rig for a 2027/28 campaign of up to 10 wells, targeted to start in mid-2027. At TEN, gross oil production averaged 14,700 bopd, in line with expectations.

Kosmos and Occidental took final investment decision on the Tiberius project in March. A farm-down process completed in July brought Navitas in as a 33.33% partner alongside Kosmos (33.34%) and Occidental (33.33%), which operates the host facility. The consideration includes upfront cash, carry for future development capital expenditure expected to cover Kosmos' spend through 2026 into mid-2027, and milestone payments.

At Winterfell, the Winterfell-5 well was spud in April but temporarily abandoned in July due to production casing issues. The partnership is evaluating the cause.

Kosmos deepened its Gulf of America inventory through a strategic alliance with Shell in the Norphlet trend, covering ten blocks. Shell plans to drill the Trailblazer prospect, with estimated potential of roughly 200 mmboe gross, in the first quarter of 2027. If successful, Trailblazer could tie back to Shell's Appomattox platform, with Kosmos designated as development operator.

Net capital expenditure for the second quarter was $105 million, in line with the full-year guidance of $350 million. Kosmos generated $175 million in net cash from operations and $89 million in free cash flow. Net debt stood at $2.56 billion at quarter-end, with liquidity above $500 million.

The company added hedges for 2027, covering 7 million barrels with an average floor near $67 a barrel and a ceiling near $84. For the remainder of 2026, 3.25 million barrels are hedged with an average floor of about $66.

Kosmos has commenced the RBL refinancing process, targeting completion by the fourth quarter. The borrowing base was reduced to roughly $1.2 billion following the Equatorial Guinea sale. The company said it is making progress toward its roughly 20% debt reduction target for the year.

Kosmos' NOC stock page Alpha Score is 36/100, reflecting a Mixed label in the Industrials sector. The TEN stock page carries an Alpha Score of 71/100 with a Moderate label in Energy.

The company will hold a conference call at 10 a.m. Central time on Aug. 3.