Kosmos Energy Announces First Quarter 2013 Results

  Kosmos Energy Announces First Quarter 2013 Results

Business Wire

DALLAS -- May 09, 2013

Kosmos Energy Ltd. (“Kosmos”) (NYSE: KOS) announced today financial and
operating results for the first quarter of 2013, which included net income of
$20 million, or $0.05 per basic and diluted share. For the first quarter of
2012, Kosmos reported a net loss of $38 million, or $0.10 per basic and
diluted share.

Brian F. Maxted, Chief Executive Officer, commented, “Strong production and
momentum at the Jubilee field, where we are experiencing continued high levels
of well deliverability and FPSO uptime, contributed significantly to our
positive results for the quarter. While progressing our upcoming developments
offshore Ghana during the quarter, we also enhanced the build-out of our
exploration portfolio and further matured our existing assets for drilling.
Most recently, we have captured prospective blocks offshore Ireland in the
Porcupine Basin, which represents additional opportunity to explore for our
core geologic plays in a new area along the Atlantic Margin. At the same time,
we have commenced the farm-out process for our Morocco positions and are
sourcing drilling rig capacity in support of a multi-year exploration campaign
designed to deliver substantial new value to Kosmos.”

Oil and gas revenue in the first quarter of 2013 was $228 million versus $116
million in the same quarter of 2012, on the sale of approximately two million
barrels of oil in the 2013 period and one million barrels sold in the 2012
period. The increase in sales volumes was the result of the Company’s
successful production enhancement programs executed in the second half of
2012. Realized pricing was $114.54 per barrel sold in the first quarter of
2013 and $124.30 per barrel in the first quarter of 2012.

Production expense for the first quarter of 2013 was $24 million, which
included certain well workover and rig equipment maintenance costs. Excluding
these amounts, production expense was $6.73 per barrel sold. The first quarter
2012 production expense was $7.87 per barrel, with the per barrel reduction to
the first quarter of 2013 primarily reflecting an efficiency gain associated
with increased field production.

Exploration expenses in the first quarter of 2013 totaled $23 million and
included costs related to the Company’s ongoing seismic acquisition,
processing, and interpretation related to its offshore Mauritania, Morocco,
and Suriname assets, as well as various new venture exploration activities. In
addition, costs related to the Sapele exploration well offshore Ghana were
included in the first quarter 2013 expense. For the first quarter of 2012,
exploration expenses included costs related to the Company’s 3D seismic
acquisition program offshore Morocco.

General and administrative expenses were $40 million in the first quarter of
2013, consistent with the first quarter 2012 amount. Depletion and
depreciation expense was $59 million, or $29.45 per barrel sold. The per
barrel rate represents a 13 percent decline from the first quarter 2012 rate,
primarily resulting from a significant reclassification of proved reserves
from undeveloped to developed at the end of 2012.

Derivative expense for the first quarter of 2013 was $6 million, which
primarily represents the unrealized change in the valuation of the Company’s
oil derivative contracts during the quarter. A lower outstanding average debt
balance contributed to reduced interest expense for the first quarter of 2013
versus the similar period 2012 amount. Income tax expense for the first
quarter of 2013 was $44 million, with the majority of the amount resulting
from the Company’s Ghana operations.

Conference Call and Webcast Information

Kosmos will host a conference call and webcast to discuss first quarter 2013
financial and operating results today at 10:00 a.m. Central time (11:00 a.m.
Eastern time). A live webcast of the event can be accessed on the Investors
page of Kosmos’ website at www.kosmosenergy.com. The dial-in telephone number
for the call is +1.877.407.3982. Callers outside the United States should dial
+1.201.493.6780. A replay of the webcast will be available on the Investors
page of Kosmos’ website for approximately 90 days following the event.

About Kosmos Energy

Kosmos Energy is a leading independent oil and gas exploration and production
company focused on frontier and emerging areas along the Atlantic Margin. The
Company’s asset portfolio includes existing production and other major project
developments offshore Ghana, as well as exploration licenses with significant
hydrocarbon potential offshore Ireland, Mauritania, Morocco and Suriname and
onshore Cameroon. Kosmos is listed on the New York Stock Exchange and is
traded under the ticker symbol KOS. For additional information, visit
www.kosmosenergy.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section27A of the Securities Act of 1933 and Section21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical
facts, included in this press release that address activities, events or
developments that Kosmos expects, believes or anticipates will or may occur in
the future are forward-looking statements.Kosmos’s estimates and
forward-looking statements are mainly based on its current expectations and
estimates of future events and trends, which affect or may affect its
businesses and operations. Although Kosmos believes that these estimates and
forward-looking statements are based upon reasonable assumptions, they are
subject to several risks and uncertainties and are made in light of
information currently available to Kosmos. When used in this press release,
the words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will” or other
similar words are intended to identify forward-looking statements. Such
statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of Kosmos, which may cause actual results
to differ materially from those implied or expressed by the forward-looking
statements. Further information on such assumptions, risks and uncertainties
is available in Kosmos’s Securities and Exchange Commission (“SEC”) filings.
Kosmos undertakes no obligation and does not intend to update or correct these
forward-looking statements to reflect events or circumstances occurring after
the date of this press release, except as required by applicable law. You are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary statement.


Kosmos Energy Ltd.
Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)
                                                
                                                     Three Months Ended
                                                     March 31,
                                                     2013        2012
Revenues and other income:
Oil and gas revenue                                  $ 228,066     $ 115,771
Interest income                                      70            746
Other income                                         254           30
Total revenues and other income                      228,390       116,547
                                                                             
Costs and expenses:
Oil and gas production                               24,401        7,326
Exploration expenses                                 23,296        39,644
General and administrative                           40,030        39,323
Depletion and depreciation                           58,649        31,649
Amortization - deferred financing costs              2,698         2,194
Interest expense                                     8,991         13,058
Derivatives, net                                     5,508         3,860
Other expenses, net                                  632           748
Total costs and expenses                             164,205       137,802
                                                                             
Income (loss) before income taxes                    64,185        (21,255   )
Income tax expense                                   44,091        16,286
                                                                             
Net income (loss)                                    $ 20,094      $ (37,541 )
                                                                             
Net income (loss) per share:
Basic                                                $ 0.05        $ (0.10   )
Diluted                                              $ 0.05        $ (0.10   )
                                                                             
Weighted average number of shares used to
compute net income (loss) per share:
Basic                                                 375,284      369,227
Diluted                                               375,651      369,227
                                                                             

                                                           
Kosmos Energy Ltd.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
                                                                   
                                                 March             December
                                                 31, 2013          31, 2012
                                                                   
Assets
Current assets:
Cash and cash equivalents                        $ 497,289         $ 515,164
Receivables                                      137,267           134,216
Other current assets                             92,353            100,738
Total current assets                             726,909           750,118
                                                                   
Property and equipment, net                      1,542,313         1,525,762
Other non-current assets                         89,456            90,243
Total assets                                     $ 2,358,678       $ 2,366,123
                                                                   
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable                                 $ 48,785          $ 128,855
Accrued liabilities                              58,340            41,021
Other current liabilities                        18,004            20,377
Total current liabilities                        125,129           190,253
                                                                   
Long-term liabilities:
Long-term debt                                   1,000,000         1,000,000
Deferred tax liability                           113,585           104,137
Other non-current liabilities                    52,467            42,827
Total long-term liabilities                      1,166,052         1,146,964
                                                                   
Total shareholders’ equity                       1,067,497         1,028,906
Total liabilities and shareholders’              $ 2,358,678       $ 2,366,123
equity
                                                                     

                                               
Kosmos Energy Ltd.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
                                                                             
                                                   Three Months Ended
                                                   March 31,
                                                   2013          2012
Operating Activities
Net income (loss)                                  $ 20,094        $ (37,541 )
Adjustments to reconcile net income (loss)
to net cash provided by
operating activities:
Depletion, depreciation and amortization           61,347          33,843
Deferred income taxes                              20,915          7,713
Unsuccessful well costs                            9,753           8,270
Change in fair value of derivatives                534             2,045
Cash settlements on derivatives                    (4,850    )     (2,422    )
Equity-based compensation                          18,938          21,290
Other                                              1,396           3,097
Changes in assets and liabilities:
Net changes in working capital                     (61,258   )     108,608
Net cash provided by operating activities          66,869          144,903
                                                                             
Investing activities
Oil and gas assets                                 (83,491   )     (68,070   )
Other property                                     (814      )     (3,110    )
Restricted cash                                    886             72
Net cash used in investing activities              (83,419   )     (71,108   )
                                                                             
Financing activities
Purchase of treasury stock                         (82       )     —
Deferred financing costs                           (1,243    )     (1,599    )
Net cash used in financing activities              (1,325    )     (1,599    )
                                                                             
Net increase (decrease) in cash and cash           (17,875   )     72,196
equivalents
Cash and cash equivalents at beginning of          515,164         673,092
period
Cash and cash equivalents at end of period         $ 497,289       $ 745,288

Contact:

Kosmos Energy
Investor Relations
Brad Whitmarsh, +1-214-445-9772
bwhitmarsh@kosmosenergy.com
 
Press spacebar to pause and continue. Press esc to stop.