Kosmos Energy(KOS)2024-11-04 20:48Financial Data and Key Metrics Changes - Gross Jubilee production in Q3 was approximately 87,600 barrels of oil per day, with year-to-date production just under 90,000 barrels of oil per day, reflecting a 5% increase compared to the prior quarter [12][26] - CapEx for the year is expected to be around 100 million anticipated in Q4, indicating a significant reduction from previous quarters in 2024 [28][33] - The company achieved a high FPSO uptime of 99% during the quarter, although voidage replacement was approximately 90% below the 100% target due to lower than planned uptime of generators [12][13] Business Line Data and Key Metrics Changes - In Equatorial Guinea, gross production averaged around 23,000 barrels of oil per day, with an infill drilling campaign underway that is expected to increase production to around 30,000 barrels of oil per day [16][17] - In the U.S. Gulf of Mexico, production was ahead of expectations at 17,000 barrels of oil equivalent net to the company, with current production increasing to approximately 20,000 barrels of oil equivalent per day [18][21] - The TEN field performed slightly ahead of expectations with gross oil production of 18,500 barrels of oil per day in the quarter [16] Market Data and Key Metrics Changes - The company is actively managing future price volatility through a rolling hedging program, currently hedging around 45% of first half 2025 oil production with downside protection of approximately 500 million of outstanding senior notes, resulting in no maturities in 2025 and only a small stub in 2026 [31] - The company is working on refinancing the FPSO leaseback arrangement with BP, which is expected to reduce operational expenses significantly [86] Q&A Session Summary Question: 2025 CapEx outlook and changes - Management clarified that the $550 million CapEx indication was a guideline, with a focus on free cash flow delivery and a primary delta related to the Tiberius project sliding to the second half of 2025 [39][42] Question: Jubilee drilling priorities for 2025 - Management indicated that the 4D seismic data will inform the next phase of drilling, balancing the need to start drilling while incorporating new information [44][46] Question: Implications of Akeng Deep success on 2025 capital - Success in the Akeng Deep well will open new opportunities but will primarily impact capital allocation decisions in 2026 rather than 2025 [50] Question: Commissioning process for the FLNG vessel - Management explained that the commissioning process is being accelerated, with production recognition expected to occur shortly after gas introduction [57][60] Question: Current production levels in the U.S. Gulf of Mexico - Current production levels are around 20,000 barrels of oil per day, excluding the two Winterfell wells that are being restarted [65] Question: Target leverage point for shareholder returns - Management aims to reduce leverage to less than 1.5 times before considering shareholder returns or buybacks [68][69] Question: Update on discussions with Senegalese authorities - Management noted that the transition of power has slowed discussions but emphasized that ongoing projects like GTA are progressing well [88][90]