Kosmos Energy posts 3Q loss

Oil and gas explorer Kosmos Energy on Monday reported a net loss of $63.4 million for the third quarter of the year, on revenues of $151.3 million.

This is compared to a net loss of $59 million in the third quarter of 2016, and revenues of $66.6 million a year ago, which included a $20 million gain not related to oil revenues.

According to Kosmos, third quarter 2017 oil revenues were $151.2 million versus $46.6 million in the same quarter of 2016, on sales of 2.9 million barrels of oil in 2017 as compared to 0.9 million barrels in 2016.

Third quarter 2017 oil revenues exclude $12.1 million of derivative settlements. Realized oil revenues, including the impact of the company’s hedging program, were $55.57 per barrel of oil sold in the third quarter of 2017. At the end of the quarter, the company was in a net underlift position of approximately 0.4 million barrels of oil.

When adjusted for certain items that impact the comparability of results, the company generated an adjusted net loss of $36.9 million, Kosmos said.

Growing costs

The company’s costs grew in the quarter to $216 million, up from $118 million in the corresponding quarter a year ago, mostly on depletion and depreciation, derivatives, and dry well costs.

Exploration expenses totaled $37 million for the third quarter, compared to $66 million in the same period of 2016 primarily the result of lower geologic and geophysical costs. While Kosmos was carried for the Hippocampe-1 exploration well by BP, $21 million of expenses related to the drilling rig that are not eligible for reimbursement were expensed during the quarter.

Depletion and depreciation expense for the quarter was $73 million, or $25.01 per barrel. This was an increase from $18.84 per barrel in the third quarter of 2016, primarily a result of production from the TEN fields in Ghana coming online, which has a higher depletion rate.

Third quarter results included a mark-to-market loss of $27 million related to the company’s oil derivative contracts. At September 30, 2017, the company’s hedging position had a total commodity net asset value of $1.6 million. As of quarter end, Kosmos had approximately 14 million barrels of oil hedged from 2017 to 2019, Kosmos said.

 

160 kbopd from Ghana

 

During the third quarter of 2017, Kosmos said, gross sales volumes from Ghana averaged approximately 160,000 barrels of oil per day (bopd), including volumes from the Jubilee and TEN fields which averaged approximately 100,000 bopd and 60,000 bopd, respectively.

“The Jubilee FPSO turret remediation project has continued to make good progress during the year. Following the spread mooring of the FPSO at its current heading in late February, optimization of the offtake procedures has allowed the Jubilee field to regularly produce in excess of 100,000 bopd,” Kosmos said.

To remind, the damage on the FPSO turret was found early in 2016 prompting a change to operating procedures at FPSO. 

Kosmos exited the third quarter of 2017 with approximately $1.3 billion of liquidity and $890 million of net debt, including a year-to-date voluntary repayment of $250 million on our reserves-based lending facility in 2017.

Offshore Energy Today Staff

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