Financial Data and Key Metrics Changes - The company reported a CapEx of approximately $170 million for 2025, down about 65% from 2024, with a full-year CapEx forecast reduced from around $400 million to approximately $350 million [9][10][33] - Production was higher sequentially due to the ramp-up of the GTA project and strong performance in the Gulf of America, although it was lower than guidance mainly due to timing issues [31][32] Business Line Data and Key Metrics Changes - In the Gulf of America, net production was around 19,600 barrels of oil equivalent per day, driven by strong performance from the Kodiak and Oddjob fields [16] - Jubilee gross production was around 55,000 barrels of oil per day, lower than expected due to planned FPSO shutdowns and underperformance of some wells [14][15] Market Data and Key Metrics Changes - The company has hedged 7 million barrels of oil for 2026 with a floor of $66 per barrel and a ceiling of $75 per barrel, taking advantage of higher prices in late Q2 and early Q3 [12][35] Company Strategy and Development Direction - The company aims to grow production, reduce costs, and enhance the resilience of its balance sheet, with a focus on free cash flow generation [5][37] - Future expansion opportunities are being explored, particularly in the GTA project, which is now fully operational, and in the Jubilee field, where consistent drilling is planned [20][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q2, including production declines and operational issues, but expressed optimism about the potential for recovery through improved data and regular drilling [44][49] - The company is focused on maximizing cash flow and reducing net debt, with expectations of continued production growth into 2026 [33][37] Other Important Information - The company has agreed on indicative terms for a term loan of up to $250 million secured against Gulf of America assets, aimed at addressing upcoming debt maturities [11][34] - A Memorandum of Understanding (MOU) was signed with the government of Ghana to extend licenses, which is expected to facilitate long-term investments in the Jubilee field [15][76] Q&A Session Summary Question: Concerns about Jubilee production decline - Management acknowledged the 40% decline in Jubilee production and emphasized the need for regular drilling to maintain production levels, with plans to bring additional wells online [42][48] Question: Cost reduction strategies for GTA - Management discussed exploring various operating models to reduce costs, including refinancing the FPSO and optimizing operations [50][55] Question: CapEx guidance and sustainability - Management confirmed that the reduced CapEx guidance of $350 million is sustainable, focusing on maximizing free cash flow while progressing key projects [60][64] Question: License extension details - Management clarified that the MOU includes a commitment to increase gas volume while maintaining existing fiscal terms, allowing for a consistent drilling program [75][76] Question: GTA costs and future cash flow - Management provided insights into GTA costs, indicating that they expect to normalize costs and achieve a breakeven of $50 to $55 per barrel, with free cash flow sensitivity linked to oil prices [81][86]

Financial Data and Key Metrics Changes - The company reported a CapEx of approximately $170 million for 2025, down around 65% from 2024, with a revised full-year CapEx forecast reduced from $400 million to $350 million [8][34] - The company is generating free cash flow as production increases and CapEx and NOC funding wind down [34][41] - OpEx per BOE, excluding GTA, was higher in the quarter due to the timing of lifting costs, but G&A expenses were lower due to overhead savings [33][34] Business Line Data and Key Metrics Changes - In the Gulf of America, net production was around 19,600 barrels of oil equivalent per day, driven by strong performance from the Kodiak and Oddjob fields [15] - Jubilee gross production was around 55,000 barrels of oil per day, lower than expected due to planned FPSO shutdowns and underperformance of some wells [13][14] - The GTA project achieved commercial operations with a net production of just over 7,000 barrels of oil equivalent per day in the second quarter [12] Market Data and Key Metrics Changes - The company lifted 3.5 gross LNG cargoes in the second quarter, with expectations to reach a full-year guidance of 20 gross cargoes [12][17] - The company has hedged 7 million barrels of oil production for 2026, with a floor price of $66 per barrel and a ceiling of $75 per barrel [37] Company Strategy and Development Direction - The company aims to grow production, reduce costs, and enhance the resilience of its balance sheet, focusing on free cash flow generation [40][41] - Future expansion opportunities include leveraging existing infrastructure to double gas production at GTA and consistent drilling at Jubilee to access significant reserves [20][41] - The company is exploring alternative lower-cost operating models to drive down costs across projects [10][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in the second quarter, including production declines and operational issues, but expressed optimism about improved data and drilling programs to stabilize and grow production [46][50] - The company is focused on maintaining a regular drilling cadence at Jubilee to offset production declines and maximize field potential [28][76] - Management emphasized the importance of securing gas sales agreements to optimize the GTA project and meet domestic gas demands [97] Other Important Information - The company signed an MOU with the government of Ghana to extend licenses, allowing for long-term investments in the Jubilee field [14][78] - The company is progressing additional financing activities to address upcoming debt maturities and enhance liquidity [10][105] Q&A Session Summary Question: Concerns about Jubilee's production decline - Management acknowledged the 40% decline in Jubilee production and highlighted the need for regular drilling to maintain production levels, with improved data aiding in identifying new drilling opportunities [46][50] Question: Cost reduction strategies for GTA - Management discussed exploring various operating models to reduce costs, emphasizing the need to optimize operations and refinance the FPSO lease [52][56] Question: CapEx guidance and sustainability - Management confirmed that the revised CapEx guidance of $350 million is sustainable, focusing on key projects and maintaining growth without compromising future potential [62][66] Question: Importance of gas sales agreements for GTA - Management stated that securing gas sales agreements is crucial for optimizing the GTA project and meeting domestic gas needs, with ongoing discussions with the government [97] Question: License extension details - Management clarified that the MOU includes a commitment to drill up to 20 wells and a slight decrease in gas prices, but no changes to fiscal terms [78]

Production and Operations - Second quarter net production was approximately 63,500 boepd[11] - Kosmos is targeting 27 mtpa FLNG nameplate capacity for GTA in the fourth quarter of 2025[9] - Jubilee's first producer from the 2025/26 drilling program came online in late July[9] - Winterfell-4 was successfully drilled and is expected to add approximately 1,000 boepd net rate when it comes online at the end of the third quarter of 2025[39] - Gross oil production from Ceiba & Okume averaged approximately 22,000 bopd in the second quarter[17] Financial Performance and Guidance - Kosmos expects fiscal year 2025 capital expenditures to be approximately $350 million, reduced from a previous estimate of $400 million[9,47] - Kosmos is targeting a $25 million overhead reduction by year-end 2025[10] - Kosmos has agreed to indicative terms for a Gulf of America term loan of up to $250 million to repay 2026 maturities[9,41] - Kosmos anticipates operating expenses per barrel of oil equivalent (Opex/boe) to decrease as production increases[9] - Kosmos expects 3Q 2025 net production to be 65,000 – 71,000 boe/day and FY 2025 net production to be 65,000 – 70,000 boe/day[50] Hedging and Risk Management - Kosmos has hedged 5 million barrels of remaining oil production for 2025 with a floor of approximately $62/barrel and a ceiling of approximately $77/barrel[47] - Kosmos has hedged 7 million barrels of oil production for 2026 with a floor of approximately $66/barrel and a ceiling of approximately $75/barrel, targeting approximately 50% of 2026 oil production to be hedged[47]

Group 1 - U.S. stock futures are higher, with Dow futures gaining over 200 points [1] - Kosmos Energy Ltd. reported a quarterly loss of 19 cents per share, worse than the expected loss of 7 cents per share [1] - Kosmos Energy's quarterly sales were $393.518 million, missing the analyst consensus estimate of $415.094 million [1] Group 2 - Kosmos Energy shares dipped 2.9% to $1.89 in pre-market trading [2] - Replimune Group, Inc. shares tumbled 38% to $4.75 in pre-market trading [4] - VerifyMe, Inc. fell 8.2% to $1.11 in pre-market trading after a 13% decline on Friday [4] - Microvast Holdings, Inc. declined 5.3% to $2.86 in pre-market trading [4] - PROS Holdings, Inc. fell 5.2% to $14.12 in pre-market trading [4] - KT Corporation fell 3.4% to $19.68 in pre-market trading [4] - HilleVax, Inc. fell 2% to $2.00 in pre-market trading after agreeing to be acquired by XOMA Royalty for $1.95 in cash per share [4]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) Kosmos Energy recorded a net loss of $88 million and an adjusted net loss of $93 million in Q2 2025, with revenue of $393 million and an average sales price of $58.93 per boe Financial Metrics | Indicator | Amount (million USD) | Per Share (USD) | | :------------------- | :-------------- | :---------- | | Net Loss | 88 | 0.18 | | Adjusted Net Loss | 93 | 0.19 | Revenue and Production Costs | Indicator | Amount (million USD) | Per Boe (USD) | | :------ | :-------------- | :---------------- | | Revenue | 393 | 58.93 | | Production Expenses | 243 | 28.22 (excluding GTA) | [Q2 2025 Operational Highlights](index=1&type=section&id=Q2%202025%20Operational%20Highlights) The company achieved approximately 63,500 boepd net production and 73,200 boepd sales volume, with the GTA LNG project reaching COD and Jubilee's first well producing 10,000 bopd Operational Metrics | Indicator | Value | | :------------------- | :---------------- | | Net Production | ~63,500 boepd | | Sales Volume | ~73,200 boepd | | Capital Expenditure | $86 million | | Operating Cash Flow | $127 million | | Free Cash Flow | $45 million | - The GTA project's Gimi FLNG vessel successfully achieved **Commercial Operations Date (COD)**[2](index=2&type=chunk) - 3.5 LNG cargoes were offloaded from the GTA project in the second quarter[2](index=2&type=chunk) - The first production well at the Jubilee field was drilled and brought online, with initial production of approximately **10,000 bopd**[2](index=2&type=chunk) [CEO Commentary & Strategic Priorities](index=2&type=section&id=CEO%20Commentary%20%26%20Strategic%20Priorities) CEO Andrew G. Inglis highlighted progress in increasing production, reducing costs, and enhancing balance sheet resilience, with GTA ramp-up, capital budget reduction, and overhead cuts - The company's three priorities are: increasing production, reducing costs, and enhancing balance sheet resilience[3](index=3&type=chunk) - GTA project production is ramping up smoothly, with the FLNG achieving Commercial Operations Date, and **6.5 LNG cargoes** offloaded year-to-date[3](index=3&type=chunk) - Full-year capital budget reduced from **$400 million** to approximately **$350 million**[4](index=4&type=chunk) - Targeting **$25 million** in overhead cost reductions by year-end[4](index=4&type=chunk) [Financial Update](index=2&type=section&id=Financial%20Update) [Q2 2025 Financial Overview](index=2&type=section&id=Q2%202025%20Financial%20Overview) Net capital expenditure for Q2 2025 was $86 million, below expectations due to reduced spending in Mauritania, Senegal, and the Gulf of Mexico, while operating costs were slightly higher Financial Summary | Indicator | Amount (million USD) | | :------------------- | :-------------- | | Net Capital Expenditure | 86 | | Net Cash Provided by Operating Activities | 127 | | Free Cash Flow | 45 | | Net Debt (period-end) | 2,850 | | Available Liquidity (period-end) | 400 | - Operating costs were higher than expected, primarily due to lower-than-anticipated production and a one-off lifting at the Ghana TEN project[6](index=6&type=chunk) [Capital Expenditure & Cost Reduction](index=2&type=section&id=Capital%20Expenditure%20%26%20Cost%20Reduction) The company reduced its full-year capital expenditure guidance to approximately $350 million and aims to achieve $25 million in overhead cost reductions by year-end - Full-year capital expenditure guidance reduced to approximately **$350 million** (previously **$400 million**)[5](index=5&type=chunk) - On track to achieve **$25 million** in overhead cost reductions by year-end[5](index=5&type=chunk) [Cash Flow & Liquidity](index=2&type=section&id=Cash%20Flow%20%26%20Liquidity) The company generated $127 million in net cash from operating activities and $45 million in free cash flow, with net debt of $2.85 billion and available liquidity of $400 million at quarter-end Cash Flow and Liquidity Metrics | Indicator | Amount (million USD) | | :------------------- | :-------------- | | Net Cash Provided by Operating Activities | 127 | | Free Cash Flow | 45 | | Net Debt (period-end) | 2,850 | | Available Liquidity (period-end) | 400 | [Hedging Strategy](index=2&type=section&id=Hedging%20Strategy) Kosmos increased hedging during periods of rising oil prices, with 5 million barrels hedged for 2025 at a floor of $62/barrel and 7 million barrels for 2026 at a floor of $66/barrel Hedging Positions | Year | Hedged Volume (million barrels) | Floor Price (USD/barrel) | Cap Price (USD/barrel) | | :--- | :-------------- | :--------------- | :--------------- | | 2025 | 5 | ~62 | ~77 | | 2026 | 7 | ~66 | ~75 | - The target is to hedge approximately **50%** of 2026 oil production by year-end[7](index=7&type=chunk) [Debt Management](index=3&type=section&id=Debt%20Management) The company revised its RBL facility's debt coverage calculation to address GTA project timing and secured preliminary terms for a $250 million senior secured term loan to repay 2026 unsecured notes - Successfully revised the debt coverage calculation for the Reserve Based Lending (RBL) facility to accommodate the impact of the GTA project's start-up timing[8](index=8&type=chunk) - Preliminary terms agreed for a senior secured term loan facility of up to **$250 million** for general corporate purposes, including repayment of unsecured notes due in 2026[9](index=9&type=chunk) - The term loan facility is expected to close by the end of Q3 2025[9](index=9&type=chunk) [Operational Update](index=3&type=section&id=Operational%20Update) [Overall Production & Guidance](index=3&type=section&id=Overall%20Production%20%26%20Guidance) Total net production in Q2 2025 was approximately 63,500 boepd, below guidance due to GTA project timing and Jubilee field decline, with full-year guidance adjusted to 65,000 – 70,000 boepd Production and Guidance Summary | Indicator | Value | | :------------------- | :---------------- | | Q2 2025 Total Net Production | ~63,500 boepd | | Full-Year 2025 Production Guidance | 65,000 – 70,000 boepd | | Net Underlift (as of Q2 end) | ~0.3 million boe | - Production was below guidance, primarily due to slower GTA project start-up timing and declining production at the Jubilee field[10](index=10&type=chunk) [Mauritania and Senegal (GTA Project)](index=3&type=section&id=Mauritania%20and%20Senegal%20(GTA%20Project)) The GTA FLNG vessel achieved COD in June, with production reaching contracted volumes, and Kosmos ceased funding national oil companies' GTA capital expenditure share, while partners work on cost reduction and ramp-up - The GTA FLNG vessel successfully achieved **Commercial Operations Date (COD)** in June[11](index=11&type=chunk) - Kosmos has ceased carrying the national oil companies' share of GTA capital expenditure[11](index=11&type=chunk) GTA Project Metrics | Indicator | Value | | :------------------- | :---------------- | | Q2 2025 Net Production | ~7,100 boepd | | Q2 2025 LNG Cargoes Offloaded | 3.5 (total) | | Target Production (Q4) | 2.7 mtpa (FLNG nameplate capacity) | - Partners are implementing various measures to reduce GTA Phase 1 operating costs and plan for a future low-cost Phase 1+ expansion[12](index=12&type=chunk)[14](index=14&type=chunk) [Ghana (Jubilee & TEN)](index=4&type=section&id=Ghana%20(Jubilee%20%26%20TEN)) Ghana's Q2 net production was approximately 29,100 boepd, with Jubilee impacted by FPSO downtime and well performance, while a new well (J-72) is producing 10,000 bopd and a license extension to 2040 was signed Ghana Production Summary | Indicator | Value | | :------------------- | :---------------- | | Q2 2025 Ghana Net Production | ~29,100 boepd | | Q2 2025 Jubilee Gross Production | ~55,300 bopd | | J-72 Initial Gross Production | ~10,000 bopd | | Q2 2025 TEN Gross Production | ~15,900 bopd | - Jubilee field production was affected by FPSO downtime, riser instability, and underperforming wells[16](index=16&type=chunk) - A Memorandum of Understanding was signed with the Government of Ghana to extend the production license to **2040**, expected to significantly increase **2P reserves**[19](index=19&type=chunk) - Planned Ocean Bottom Node (OBN) seismic data acquisition later this year to further improve imaging and support future drilling activities[18](index=18&type=chunk) [Gulf of Mexico](index=5&type=section&id=Gulf%20of%20America) Gulf of Mexico net production in Q2 was approximately 19,600 boepd, with the Winterfell-4 well expected online in Q3 2025, and Tiberius and Gettysburg projects evaluating development options Gulf of Mexico Production | Indicator | Value | | :------------------- | :---------------- | | Q2 2025 Gulf of Mexico Net Production | ~19,600 boepd | | Oil Percentage | ~84% | - The Winterfell-4 well is expected to come online by the end of Q3 2025[21](index=21&type=chunk) - The Tiberius project aims for a **Final Investment Decision (FID)** in 2026[22](index=22&type=chunk) - The Gettysburg project plans a low-cost single-well tie-back development with Shell[23](index=23&type=chunk) [Equatorial Guinea](index=5&type=section&id=Equatorial%20Guinea) Equatorial Guinea's Q2 gross production was approximately 22,000 bopd, impacted by subsea pump mechanical issues, with a replacement pump expected in Q4 to restore production Equatorial Guinea Production | Indicator | Value | | :------------------- | :---------------- | | Q2 2025 Equatorial Guinea Gross Production | ~22,000 bopd | | Q2 2025 Equatorial Guinea Net Production | ~7,700 bopd | - Production was affected by mechanical failure of a subsea pump[24](index=24&type=chunk) - The first replacement pump is expected to be installed in Q4, with production anticipated to recover thereafter[24](index=24&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) In Q2 2025, total revenues and other income were $393.5 million, a 12.7% decrease year-over-year, while total costs and expenses increased by 44.8% to $457.3 million, resulting in a net loss of $87.7 million Consolidated Statements of Operations | Indicator (thousand USD) | Q2 2025 | Q2 2024 | YoY Change | | :----------------------- | :------- | :------- | :------- | | Oil and Gas Revenue | 392,635 | 450,900 | -12.9% | | Total Revenues and Other Income | 393,518 | 450,936 | -12.7% | | Oil and Gas Production Costs | 243,118 | 150,733 | +61.3% | | Exploration Expenses | 4,069 | 13,235 | -69.2% | | Depletion, Depreciation and Amortization | 151,268 | 90,094 | +67.9% | | Interest and Other Financing Costs | 54,834 | 37,279 | +47.1% | | Derivatives, Net | (21,566) | (2,852) | -656.2% | | Total Costs and Expenses | 457,278 | 315,812 | +44.8% | | Net Income (Loss) | (87,740) | 59,770 | -246.8% | | Diluted Net Income (Loss) Per Share | (0.18) | 0.12 | -250.0% | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $5.213 billion, a slight decrease from $5.309 billion at December 31, 2024, with total liabilities at $4.195 billion and total shareholders' equity at $1.018 billion Condensed Consolidated Balance Sheets | Indicator (thousand USD) | June 30, 2025 | December 31, 2024 | Change Rate | | :----------------------- | :------------- | :------------- | :----- | | Cash and Cash Equivalents | 51,694 | 84,972 | -39.16% | | Total Current Assets | 363,380 | 446,132 | -18.56% | | Property and Equipment, Net | 4,357,812 | 4,444,221 | -1.94% | | Total Assets | 5,213,006 | 5,308,988 | -1.81% | | Total Current Liabilities | 809,283 | 594,948 | +36.02% | | Long-Term Debt, Net | 2,600,553 | 2,744,712 | -5.39% | | Total Liabilities | 4,195,222 | 4,108,564 | +2.11% | | Total Shareholders' Equity | 1,017,784 | 1,200,424 | -15.21% | [Condensed Consolidated Statements of Cash Flow](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) In Q2 2025, net cash provided by operating activities was $127.2 million, net cash used in investing activities was $125.3 million, and net cash used in financing activities was $1 thousand, resulting in a net increase of $1.903 million in cash and restricted cash Condensed Consolidated Statements of Cash Flow | Indicator (thousand USD) | Q2 2025 | Q2 2024 | YoY Change | | :----------------------- | :------- | :------- | :------- | | Net Cash Provided by Operating Activities | 127,168 | 223,657 | -43.1% | | Net Cash Used in Investing Activities | (125,264) | (238,218) | +47.4% | | Net Cash Provided by (Used in) Financing Activities | (1) | (69,234) | +99.99% | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 1,903 | (83,795) | +102.3% | | Cash, Cash Equivalents and Restricted Cash at End of Period | 51,999 | 174,118 | -70.1% | [Non-GAAP Financial Measures & Reconciliations](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [EBITDAX](index=12&type=section&id=EBITDAX) EBITDAX for Q2 2025 was $149.5 million, representing a 46.8% decrease compared to $281 million in the prior year period EBITDAX Reconciliation | Indicator (thousand USD) | Q2 2025 | Q2 2024 | YoY Change | | :-------------- | :------- | :------- | :------- | | Net Income (Loss) | (87,740) | 59,770 | -246.8% | | Exploration Expenses | 4,069 | 13,235 | -69.2% | | Depletion, Depreciation and Amortization | 151,268 | 90,094 | +67.9% | | Derivatives, Net | (21,566) | (2,852) | -656.2% | | Interest and Other Financing Costs, Net | 54,834 | 37,279 | +47.1% | | Income Tax Expense | 23,980 | 75,354 | -68.2% | | EBITDAX | 149,486 | 281,040 | -46.8% | [Adjusted Net Income (Loss)](index=13&type=section&id=Adjusted%20Net%20Income%20(Loss)) Adjusted net loss for Q2 2025 was $92.7 million, compared to an adjusted net income of $80.48 million in the prior year, resulting in a diluted adjusted net loss per share of $0.19 Adjusted Net Income (Loss) Reconciliation | Indicator (thousand USD) | Q2 2025 | Q2 2024 | YoY Change | | :----------------------- | :------- | :------- | :------- | | Net Income (Loss) | (87,740) | 59,770 | -246.8% | | Derivatives, Net | (21,566) | (2,852) | -656.2% | | Debt Modification and Extinguishment | — | 22,531 | -100.0% | | Adjusted Net Income (Loss) | (92,697) | 80,482 | -215.1% | | Diluted Adjusted Net Income (Loss) Per Share | (0.19) | 0.17 | -211.8% | [Free Cash Flow](index=14&type=section&id=Free%20Cash%20Flow) Free cash flow for Q2 2025 significantly improved to $44.65 million from a negative $14.51 million in the prior year, with underlying business free cash flow at $58.28 million Free Cash Flow Reconciliation | Indicator (thousand USD) | Q2 2025 | Q2 2024 | YoY Change | | :----------------------- | :------- | :------- | :------- | | Net Cash Provided by Operating Activities | 127,168 | 223,657 | -43.1% | | Net Cash Used for Oil and Gas Properties - Underlying Business | (68,886) | (120,525) | +42.8% | | Underlying Business Free Cash Flow | 58,282 | 103,132 | -43.5% | | Net Cash Used for Oil and Gas Properties - Mauritania/Senegal | (13,635) | (117,646) | +88.4% | | Free Cash Flow | 44,647 | (14,514) | +407.6% | [Net Debt](index=12&type=section&id=Net%20Debt) As of June 30, 2025, the company's net debt increased to $2.848 billion from $2.715 billion at December 31, 2024 Net Debt Reconciliation | Indicator (thousand USD) | June 30, 2025 | December 31, 2024 | Change Rate | | :----------------------- | :------------- | :------------- | :----- | | Total Long-Term Debt | 2,900,274 | 2,800,274 | +3.57% | | Cash and Cash Equivalents | 51,694 | 84,972 | -39.16% | | Total Restricted Cash | 305 | 305 | 0.00% | | Net Debt | 2,848,275 | 2,714,997 | +4.91% | [Operational Summary & Guidance](index=15&type=section&id=Operational%20Summary%20%26%20Guidance) [Q2 2025 Operational Summary](index=15&type=section&id=Q2%202025%20Operational%20Summary) In Q2 2025, net sales volume was 6.663 million boe, with average daily sales of 73,216 boepd, total oil and gas revenue of $392.6 million, and an average sales price of $58.93/boe Q2 2025 Operational Summary | Indicator | Q2 2025 | Q2 2024 | YoY Change | | :----------------------- | :------- | :------- | :------- | | Net Sales Volume (MMBoe) | 6.663 | 5.954 | +11.9% | | Average Daily Sales Volume (Mboepd) | 73.216 | 65.423 | +11.9% | | Total Oil and Gas Revenue (thousand USD) | 392,635 | 450,900 | -12.9% | | Realized Revenue (thousand USD) | 404,049 | 446,411 | -9.5% | | Average Realized Sales Price (USD/Boe) | 58.93 | 75.73 | -22.2% | | Oil and Gas Production Costs (USD/Boe) | 36.49 | 25.31 | +44.2% | - As of June 30, 2025, Kosmos was net underlifted by approximately **0.3 million boe**[48](index=48&type=chunk) [Hedging Summary](index=16&type=section&id=Hedging%20Summary) As of June 30, 2025, the company hedged 4 million barrels of crude for 2025 and 7 million barrels for 2026, utilizing various options and swap contracts to manage price exposure Hedging Positions as of June 30, 2025 | Year | Type | Index | MBbl | Floor Price (USD) | Put Strike Price (USD) | Cap Price (USD) | | :--- | :--- | :--- | :--- | :--------- | :----------------- | :--------- | | 2025 | Two-Way Collar | Dated Brent | 4,000 | 60.00 | — | 74.94 | | 2025 | Three-Way Collar | Dated Brent | 1,000 | 70.00 | 55.00 | 85.00 | | 2026 | Two-Way Collar | 1H26 Dated Brent | 1,000 | 60.00 | — | 74.75 | | 2026 | Three-Way Collar | FY26 Dated Brent | 2,000 | 60.00 | 50.00 | 75.51 | | 2026 | Swap | 1H26 Dated Brent | 1,000 | 72.90 | — | — | | 2026 | Swap | FY26 Dated Brent | 3,000 | 70.62 | — | — | [2025 Guidance](index=16&type=section&id=2025%20Guidance) The company updated its full-year 2025 guidance, projecting production between 65,000 - 70,000 boepd, operating expenses (excluding GTA) of $22.00 - $24.00/boe, and capital expenditure of approximately $350 million 2025 Guidance Summary | Indicator | Q3 2025 Guidance | Full-Year 2025 Guidance | | :------------------- | :------------- | :------------- | | Production (boepd) | 65,000 - 71,000 | 65,000 - 70,000 | | Operating Expenses (USD/boe) | $18.50 - $20.50 | $22.00 - $24.00 | | Depletion, Depreciation and Amortization (USD/boe) | $22.00 - $24.00 | $22.00 - $24.00 | | General and Administrative Expenses (million USD) | ~$20 | $80 - $100 | | Exploration Expenses (million USD) | ~$10 | $25 - $45 | | Net Interest Expense (million USD) | ~$55 | ~$200 | | Taxes (USD/boe) | $3.00 - $5.00 | $4.00 - $6.00 | | Capital Expenditure (million USD) | $75 - $100 | ~$350 | - Full-year 2025 operating expenses exclude GTA project operating costs, estimated at **$225 million - $245 million** net[57](index=57&type=chunk) [Company Information & Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) [Conference Call and Webcast Information](index=5&type=section&id=Conference%20Call%20and%20Webcast%20Information) Kosmos Energy will host a conference call and webcast on August 4, 2025, to discuss its Q2 2025 financial and operational results, accessible via the company website or phone - The conference call and webcast will be held on **August 4, 2025**[26](index=26&type=chunk) - The webcast can be accessed through the company's investor page[26](index=26&type=chunk) [About Kosmos Energy](index=6&type=section&id=About%20Kosmos%20Energy) Kosmos Energy is a leading deepwater exploration and production company focused on global energy demand, with diverse assets in Ghana, Equatorial Guinea, Mauritania, Senegal, and the Gulf of Mexico - Kosmos Energy is a leading deepwater exploration and production company[27](index=27&type=chunk) - Possesses diverse oil and gas production assets in Ghana, Equatorial Guinea, Mauritania, Senegal, and the Gulf of Mexico[27](index=27&type=chunk) - Listed on the New York Stock Exchange and London Stock Exchange under the ticker symbol **KOS**[27](index=27&type=chunk) - Committed to business principles including transparency, ethics, human rights, safety, and environmental stewardship[27](index=27&type=chunk) [Non-GAAP Financial Measures Explanation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) This report uses non-GAAP financial measures like EBITDAX, adjusted net income, free cash flow, and net debt, which management and external users employ to assess performance and provide comparability within the oil and gas industry - Non-GAAP financial measures include **EBITDAX**, **adjusted net income (loss)**, **adjusted net income (loss) per share**, **free cash flow**, and **net debt**[28](index=28&type=chunk) - These metrics are used by management and external users to evaluate company performance in the oil and gas industry and provide a useful tool for period-to-period and company-to-company comparability[29](index=29&type=chunk) - Forward-looking non-GAAP financial measures cannot be reliably reconciled to the most directly comparable GAAP financial measures[30](index=30&type=chunk)[31](index=31&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding future expectations, beliefs, or activities, which are subject to risks and uncertainties that may cause actual results to differ materially from projections - This press release contains forward-looking statements concerning the company's future expectations, beliefs, or activities[32](index=32&type=chunk) - Forward-looking statements are based on current expectations and estimates of future events and trends but are subject to various risks and uncertainties that could cause actual results to differ materially[32](index=32&type=chunk) - The company undertakes no obligation to update or revise these statements unless required by applicable law[32](index=32&type=chunk)

Group 1 - The article suggests that Kosmos Energy (NYSE: KOS) is a strong substitute for a previously favored oil investment that was acquired by Whitecap Resources [1] - The author emphasizes a diverse investment strategy that includes cyclical industries, bonds, commodities, and forex, aiming for significant returns during economic recovery [1] - The analysis reflects a global perspective on market dynamics, influenced by the author's international education and career experiences [1] Group 2 - The author holds a beneficial long position in Kosmos Energy shares, indicating confidence in the company's future performance [2] - The article is presented as an independent opinion, with no compensation received from any company mentioned, ensuring an unbiased viewpoint [2]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Kosmos Energy (KOS) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][3][7]. Valuation Metrics - Kosmos Energy has a Price-to-Book (P/B) ratio of 0.89, which is lower than the industry average of 1.03, indicating potential undervaluation [4]. - The Price-to-Sales (P/S) ratio for KOS is 0.62, compared to the industry's average P/S of 0.79, further suggesting that the stock may be undervalued [5]. - KOS's Price-to-Cash Flow (P/CF) ratio stands at 2.06, which is also below the industry average of 2.85, reinforcing the notion of undervaluation based on cash flow [6]. Earnings Outlook - The earnings outlook for Kosmos Energy is strong, which, combined with its favorable valuation metrics, positions KOS as one of the strongest value stocks in the market [7].

Production and Revenue - In Q1 2025, total production averaged approximately 49,393 Boepd, a decrease of 21% from 62,645 Boepd in Q1 2024[135] - Oil and gas revenue decreased by $129 million to $290.1 million in Q1 2025, compared to $419.1 million in Q1 2024, primarily due to lower production and prices[139] - Average realized oil sales price per barrel decreased to $73.90 in Q1 2025 from $82.23 in Q1 2024, reflecting a 10% decline[135] - Production in Ghana averaged approximately 99,300 Boepd gross (33,000 Boepd net) in Q1 2025, impacted by a two-week scheduled shutdown[126] Financial Performance and Debt - Net cash used in operating activities for the three months ended March 31, 2025 was $0.9 million, a significant decrease from $272.6 million in the same period of 2024[151] - Total long-term debt as of March 31, 2025 was $2.9 billion, an increase from $2.8 billion as of December 31, 2024[152] - The company has a total principal debt repayment obligation of $2,900.274 million, with significant repayments due in 2025 and 2026[170] - The company has outstanding borrowings totaling $1.0 billion with a weighted average interest rate of 8.4% as of March 31, 2025[191] Capital Expenditures and Budget - The company estimates capital expenditures for 2025 will be $400 million or less, focusing on drilling, exploitation, and production activities[154] - Approximately $275 million of the capital budget is allocated for maintenance activities across producing assets in Ghana, Equatorial Guinea, and the Gulf of America[155] - The company plans to spend less than $75 million on appraisal and development programs in the Gulf of America, Mauritania, and Senegal[156] Projects and Operations - The Greater Tortue Ahmeyim LNG project achieved first gas production on December 31, 2024, with first LNG cargo completed in April 2025[132] - The drilling campaign in the Jubilee Field is expected to commence in Q2 2025, including two in-fill wells[127] - Winterfell-3 well has been temporarily plugged and abandoned while options for restoring production are evaluated[129] - The company has a commitment to drill one development well in Equatorial Guinea as of March 31, 2025[172] Tax and Regulatory Changes - The corporate tax rate in Equatorial Guinea was reduced from 35% to 25%, effective January 1, 2025[130] Commodity Prices and Sensitivity - Oil prices in the first three months of 2025 ranged between $69.83 and $83.06 per Bbl for Dated Brent, indicating significant price volatility[183] - The company's commodity price sensitivity indicates significant exposure to fluctuations in oil prices, impacting earnings projections[188] Derivative Instruments and Interest Rates - The fair value of the company's outstanding derivative contracts as of March 31, 2025, is $3.590 million, down from $11.670 million as of December 31, 2024[181] - The fair market value of the company's interest rate swaps was a net asset of approximately $1.3 million as of March 31, 2025[192] - The company's interest rate derivative instruments are sensitive to changes in market interest rates, affecting future borrowings and payments[191] Financial Covenants and Compliance - The company is in compliance with the financial covenants contained in the Facility as of March 31, 2025[160] Other Financial Commitments - As of March 31, 2025, the company has incurred approximately $312.7 million of its estimated $370.0 million share for the Carry Advance Agreements with national oil companies[173] - The company has a decommissioning trust agreement with estimated total commitments of approximately $126.1 million as of March 31, 2025[172] - The company's liabilities for asset retirement obligations are not included in the purchase obligations, which total $20.3 million[172] Interest Rate Projections - The weighted average interest rate on variable rate debt is projected to increase from 8.32% in 2025 to 9.52% in 2029[170] - If the floating market interest rate increased by 10%, the estimated additional interest expense would be $4.3 million per year, reduced to $1.6 million due to a fixed interest rate swap[191] - The impact of the 2025 fixed interest rate swap would mitigate additional interest expenses associated with floating rate debt[191] Risk Assessment - A hypothetical 10% increase in commodity futures prices would decrease future pre-tax earnings by approximately $18.6 million, while a 10% decrease would increase future pre-tax earnings by approximately $21.6 million[188]

Financial Data and Key Metrics Changes - The company reported a significant reduction in capital expenditures (CapEx), with first quarter CapEx at $86 million, down from $200 million in the same quarter last year, reflecting a year-on-year decrease of over 50% [8][22] - Operating expenses (OpEx) per barrel of oil equivalent were in line with guidance but higher year-on-year due to lower production and higher maintenance costs in Q1 2025 [22] - The company expects second quarter production to be around 15% higher than the first quarter, driven by the ramp-up of the GTA project [22] Business Line Data and Key Metrics Changes - The GTA project achieved first gas and LNG production, with all four liquefaction trains operational and production ramping up towards a contracted sales volume equivalent to 2,450,000 tons of LNG per annum [10][12] - In Ghana, the company plans to drill two Jubilee wells in 2025 and an additional four in 2026, which are expected to enhance production with low-cost, high-margin barrels [6][16] - Production in the Gulf of America was steady, with a planned 30-day shutdown completed, and current production ramping back up to around 20,000 barrels of oil equivalent [18] Market Data and Key Metrics Changes - The company noted heightened volatility in the sector and global markets but remains focused on cash generation and cost control [5][28] - The company has hedged approximately 40% of its remaining 2025 oil production with a floor of approximately $65 per barrel and a ceiling of approximately $80 per barrel [26] Company Strategy and Development Direction - The company is prioritizing cash generation, rigorous cost control, and enhancing financial resilience amid market volatility [4][28] - Future upside potential at the GTA project includes increased production through existing facilities and potential upgrades to the FLNG vessel to increase LNG production capacity beyond 3,000,000 tons per annum [12][13] - The company is exploring alternative operating models to reduce costs and enhance overall project returns [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate free cash flow even in a lower commodity price environment, with a target breakeven of around $50 per barrel Brent [36] - The company is focused on maintaining financial resilience through cash generation and managing capital expenditures effectively [27][28] - Management highlighted a positive outlook for production growth in the second half of the year, driven by the ramp-up of the GTA project and upcoming drilling activities in Ghana and the Gulf of America [28] Other Important Information - The company has minimal near-term maturities and ample liquidity, with a rolling hedging program in place to protect cash flow [9][44] - The company is committed to reducing annual overhead by $25 million by year-end and has made significant progress towards that target [8] Q&A Session Summary Question: Can you talk about the nameplate capacity test at GTA and the timeframe for understanding potential rates? - Management indicated that the nameplate capacity of the FLNG vessel is 2,700,000 tons per annum, and testing is ongoing to determine reliable delivery rates above that level [32] Question: How do you see your breakevens today and how might they evolve in future years? - Management expects a target breakeven of around $50 per barrel Brent in a low price environment, with a focus on high-return Jubilee infill wells [36] Question: How are you thinking about financial leverage in a lower commodity price environment? - Management emphasized the focus on reducing financial leverage and maintaining liquidity, with plans to generate free cash flow to pay down debt [42] Question: What are the steps regarding the obligation offtake physically and financially? - Management clarified that the National Oil Company is responsible for building the necessary infrastructure for gas offtake, and there are no capital liabilities for the company in this regard [83]

Financial Data and Key Metrics Changes - The company reported a significant reduction in capital expenditures (CapEx), with first quarter CapEx at $86 million, down from $200 million in the same quarter last year, and expects CapEx to fall by over 50% year on year [7][21] - Operating expenses (OpEx) per barrel of oil equivalent were in line with guidance but higher year on year due to lower production and higher maintenance costs [21] - The company aims to maintain a free cash flow positive status at current oil prices, with a target breakeven of around $50 per barrel Brent in a low price environment [33] Business Line Data and Key Metrics Changes - The company achieved first gas and LNG production in the GTA project, with all four liquefaction trains operational and production ramping up towards a contracted sales volume equivalent to 2,450,000 tons of LNG per annum [10][12] - In Ghana, the company plans to drill two Jubilee wells in 2025 and an additional four in 2026, which are expected to enhance production with low-cost, high-margin barrels [6][15] - Production in the Gulf of America was steady, with a planned thirty-day shutdown completed, and current production ramping back up to around 20,000 barrels of oil equivalent [17] Market Data and Key Metrics Changes - The company noted heightened volatility in the sector and across global markets, but remains focused on cash generation and cost control [5][9] - The company has hedged around 40% of remaining 2025 oil production with a floor of approximately $65 per barrel and a ceiling of approximately $80 per barrel [24] Company Strategy and Development Direction - The company is prioritizing cash generation, rigorous cost control, and enhancing financial resilience amid market volatility [4][9] - Future upside potential at the GTA project includes increased production through existing facilities and low-cost modifications, with plans to explore upgrades to the FLNG vessel to increase LNG production capacity [12][13] - The company is actively managing its options to maintain financial resilience, including reducing overhead costs and managing capital expenditures [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a volatile market, emphasizing the importance of cash generation and cost discipline [26] - The company anticipates production growth in the second half of the year due to the ramp-up of the GTA project and upcoming drilling activities in Ghana and the Gulf of America [26] Other Important Information - The company has a long-term value proposition supported by a 2P reserves production line of over twenty years [26] - The company is exploring potential upgrades to enhance the overall returns of the GTA project and is working with partners to optimize existing infrastructure [12][13] Q&A Session Summary Question: Can you talk about the nameplate capacity test at GTA and the timeframe for understanding potential rates? - The nameplate capacity of the FLNG vessel is 2,700,000 tons per annum, and testing is ongoing to determine reliable delivery rates above this capacity [30] Question: How do you see your breakevens today and how might they evolve in future years? - The target breakeven is around $50 per barrel Brent, with a focus on high-return Jubilee infill wells that have a low breakeven of around $30 per barrel [33] Question: How are you thinking about financial leverage in a lower commodity price environment? - The company aims to reduce financial leverage and maintain liquidity, with plans to generate free cash flow to pay down debt [40] Question: What are the steps regarding the obligation offtake physically and financially? - The National Oil Company is responsible for building the pipeline infrastructure, and the company does not have capital liability for that [84] Question: Is there any annual quota of volumes of cargoes contracted to sell to BP? - The annual contract quantity is 2,450,000 tons per annum, with a price of 0.9595% slope against Brent FOB [76]