Q4 2024 Kosmos Energy Ltd Earnings Call
At this time, let me turn the call over to Jamie Buckland, Vice President of Investor Relations at Cosmos Energy. Please go ahead.
Speaker Change: Operator, and thanks to everyone for joining US today. This morning, we issued our fourth quarter and full year 2024 earnings release.
Speaker Change: This release and the slide presentation to accompany today's call are available on the investors page of our website.
Andy: Joining me on the call today to go through the materials are Andy.
Andy: <unk>, chairman and CEO and.
Speaker Change: Good day, everyone, and welcome to Cosmos Energy's fourth quarter and full year 2024 conference call. As a reminder, today's call is being recorded. At this time, let me turn the call over to Jamie Buckland, Vice President of Investor Relations at Cosmos Energy.
Neil Shah: Neil Shah CFO.
Neil Shah: During today's presentation, we will make forward looking statements that refer to our estimates.
Neil Shah: <unk>.
Neil Shah: Spectation.
Neil Shah: Actual results and outcomes could differ materially due to factors. We note in this presentation and in our U K and SEC filings.
Neil Shah: Please refer to our annual report stock exchange announcement, and SEC filings for more details.
Neil Shah: These documents are available on our website.
Neil Shah: At this time I will turn the call over to one day.
Speaker Change: Thanks, Jamie and good morning, and afternoon to everyone. Thank you for joining us today for our fourth quarter and full year results call.
Speaker Change: I'd like to begin today's call by talking about what differentiates Kosmos is strategy and the ability of the portfolio to deliver sustainable cash generation.
Speaker Change: I will then provide an update on the operational and financial progress. We made in 2024 before discussing the outlook for 2025, and how we will focus on cash generation through maximizing revenue and rigorous cost management.
Speaker Change: Starting on slide three.
Speaker Change: Cosmos has a unique portfolio for a company of our size with a diverse set of world scale oil and gas assets.
Speaker Change: Quality of the portfolio can be seen in the longevity of the asset base with a growing <unk> reserve life of more than 20 years.
Speaker Change: I'd like to begin today's call by talking about what differentiates Kosmos is strategy and the ability of the portfolio to deliver sustainable cash generation.
Speaker Change: Our oil assets are characterized by low operating costs and high cash margins, while our gas assets are positioned to deliver growth in revenue with increasing margins targeting long term sustainable cash flow, particularly as gas and LNG continued to grow in the global energy mix two.
Speaker Change: I will then provide an update on the operational and financial progress. We made in 2020 full before discussing the outlook for 2025, and how we will focus on cash generation through maximizing revenue and rigorous cost management.
Speaker Change: Starting on slide three.
Speaker Change: <unk> 2025 is an important year for cosmos with increased production and reduced capital expected to drive an attractive free cash flow yield which can be seen on the chart on the right hand side of the slide with Cosmos plotted against our U S and international peers as well as the majors.
Speaker Change: Cosmos has a unique portfolio that for a company of our size with a diverse set of world scale oil and gas assets.
Speaker Change: Quality of the portfolio can be seen in the longevity of the asset base with a growing to your P reserve life of more than 20 years.
Speaker Change: Because march given the ongoing ramp of GTA and planned maintenance at other fields in the first quarter of the year.
Speaker Change: Oh, all aspects are characterized by low operating costs and high cash margins, while our gas assets are positioned to deliver growth in revenue with increasing margins.
Speaker Change: Reviews, and annual free cash flow from <unk> 25 forward, which we believe is sustainable in the medium term in.
Speaker Change: Getting long term sustainable cash flow, particularly as gas and LNG continued to grow in the global energy mix.
Speaker Change: In addition to our strong cash generation potential the portfolio also has significant future optionality with material discovered oil and gas opportunities such as Tiberius and jackets Ranga alongside of quality Hopper infrastructure led exploration prospects in the Gulf of America.
Speaker Change: 2025 is an important year for cosmos with increased production and reduced capital expects you to drive an attractive free cash flow yield which can be seen on the chart on the right hand side of the slide with Cosmos plotted against our U S and international peers as well as the majors.
Speaker Change: Turning to slide four.
Speaker Change: In the second half of 2022, we set a target to grow production capacity by around 50% through several projects across the portfolio.
Speaker Change: Small given the ongoing ramp of the GTA and planned maintenance at other fields in the first quarter well have use in annual free cash flow and <unk> 25 forward, which we believe is sustainable in the medium term.
Speaker Change: Chart on this slide shows the foundation, we've built to achieve our targets, which can be achieved with the ramp up of GTA and winterfell of new wells in Ghana.
Speaker Change: In addition to our strong cash generation potential the portfolio also has significant future optionality with material discovered oil and gas opportunities such as Tiberius and yakka charanga alongside of quality Hopper and the infrastructure led exploration prospects in the Gulf of America.
Speaker Change: Importantly, as these projects start up the capex associated with them is ending.
Speaker Change: In 2025 total Capex is expected to fall significantly from over $800 million on average in 2023, and 2000 $24 million to $400 million. This year a reduction of over 50% will.
Speaker Change: Turning to slide four.
Speaker Change: In the second half of 2022 we set a target to grow production capacity by around 50% through several projects across the portfolio.
Speaker Change: We'll be working on ways to potentially reduce it further where possible.
Speaker Change: We're not just refining the work scope, but the associated costs are also being managed rigorously the resources needed to build and grow the portfolio.
Speaker Change: Chart on this slide shows the foundation, we've built to achieve that target, which can be achieved with a ramp up of GTA and winterfell, our new wells in Guyana.
Speaker Change: At the same to sustain it and therefore, we are targeting a reduction in the annual overhead around $25 million by the end of 2025 largely from a reduction in contract as an external consultants and having the right workforce focused on the right things.
Speaker Change: Importantly, as these projects start up the capex associated with them is ending.
Speaker Change: In 2025 total Capex is expected to fall significantly.
Speaker Change: The 800 million on average in 2023 and 'twenty 'twenty four to 400 million this year a reduction of over 50% will.
Speaker Change: This includes focusing our exploration effort in the Gulf of America, given the depth of the discovered resource space, we have across the rest of the portfolio with.
Speaker Change: We'll be working on ways to potentially reduce it further where possible.
Speaker Change: With growing production and a lower cost base, our focus is on free cash flow generation.
Speaker Change: We're not just refining the work scope, but the associated costs are also being managed rigorously the resources needed to build and grow the portfolio and at the same to sustain it and therefore, we're targeting a reduction in the annual overhead around $25 million by the end of 2025.
Speaker Change: In the near term, we intend to prioritize cash for debt Paydown until we reach our leverage go below one five times at mid cycle oil prices after which we will balance cash across further debt paydown and shareholder returns.
Speaker Change: Turning now to slide five underpinned.
Speaker Change: So from a reduction in contract as an external consultants and having the right work full focus on the right things.
Speaker Change: Underpinning the company's cash generation potential is a strong and diverse reserve base with diversity across multiple geographies spread broadly 50, 50 across oil and gas.
Speaker Change: This includes focusing our exploration effort in the Gulf of America, given the depth of the discovered resource space, we have across the rest of the portfolio.
Speaker Change: At the end of 2024, we saw a <unk> reserve replacement ratio of 137%, replacing last year's production and adding more reserves during the year with the upward revision is largely driven by gas as we continued to progress the GTA project.
Speaker Change: With growing production and a lot of cost space. Our focus is on free cash flow generation.
Speaker Change: In the near term, we intend to prioritize cash for debt pay down until we reach our leverage go below one and a half times at mid cycle oil prices after which we will balance cash across further debt pay down and shareholder returns.
Speaker Change: With the projected amount of ship its first cargo and more drilling in Winchester LNG really later this year there is scope for further upward revisions in 2025.
Speaker Change: Turning now to slide five underpinning the company's cash generation potential is a strong and diverse reserve base with diversity across multiple geographies spread broadly 50, 50 across oil and gas.
Speaker Change: Year end 2000, 2040, <unk> reserves of 530 million barrels of oil equivalent represents.
Speaker Change: To production ratio of 22 years, a major differentiator for cosmos versus our U S and international peers as can be seen in the chart on the bottom of the slide.
Speaker Change: At the end of 'twenty 'twenty four we saw a two P reserve replacement ratio of 137%, replacing last year's production and adding more reserves joined the yeah with the upward revision is largely driven by gas as we continue to progress the GTA project.
Speaker Change: Including the extensive to see resource base beyond that the number is closer to 30 years, highlighting the organic running room, we have for many years to come.
Speaker Change: With the projected amount of ship its first cargo and more drilling in Winchester LNG really likes. It is yeah. There is scope for further upward revisions in 2025.
Speaker Change: Overtime through enhanced seismic imaging further infill drilling and project sanctions, we expect to migrate <unk> resources into <unk> reserves and <unk> reserves into one P reserves.
Speaker Change: Year end 2020 for two P reserves of 530 million barrels of oil equivalent represents.
Speaker Change: The takeaway message from this important slide as well many companies across the sector faced declining inventory and reserve lives, we have the reserves and resources to support sustainable cash generation for many years to come.
Speaker Change: So production ratio of 22 years, a major differentiator for Cosmos. This is all U S and international peers as can be seen in the chart on the bottom of the slide.
Speaker Change: Including the extensive to see resource space beyond that the number is closer to 30 years, highlighting the organic running room, we have for many years to come.
Speaker Change: Turning to slide six.
Speaker Change: I'd like to briefly touch on some of the highlights from 2024.
Speaker Change: We achieved a lot in 2024, ending the year with a better more resilient company looking at some of the achievements.
Speaker Change: Over time through enhanced seismic imaging further infill drilling and project sanctions, we expect to migrate to see resources into two P reserves and two P reserves into one P reserves.
Speaker Change: <unk> is a key focus at Cosmos and we continue to operate safely during the year with zero lost time injuries or total recordable injuries.
Speaker Change: The takeaway message from this important slide as well many companies across the sector face declining inventory and reserves lives, we have the reserves and resources to support sustainable cash generation for many years to come.
Speaker Change: Safety is a key focus at Cosmos and we continue to operate safely during the year with zero lost time injuries or total recordable injuries. This high safety performance with incident rates well below industry averages is a trend we maintained for many years.
Speaker Change: Turning to slide six where I'd like to briefly touch on some of the highlights from 2024.
Speaker Change: As previously mentioned, our <unk> reserves grew year on year to 530 million barrels of oil equivalent a reserve replacement ratio of 137% highlighting the longevity of the portfolio.
Speaker Change: We achieved a lot in 2024, ending the year with a better more resilient company looking at some of the achievements.
Speaker Change: <unk> is a key focus at Cosmos and we continue to operate safely joined the a well is there a lost time injuries or total recordable injuries.
Speaker Change: We achieved first oil at windfall in the summer of 2024, and I expect production to rise later this quarter as Winterfell III comes back online with a fourth while expected online early in the second half of the year.
Speaker Change: He is a key focus at Cosmos and we continue to operate safely joined the ER with zero lost time injuries or total recordable injuries.
Speaker Change: Late in the fourth quarter. The partnership achieved first gas production. The GTA project with first LNG production achieved earlier this month and first cargo lifting expected shortly.
Speaker Change: Hi, safety performance with incident rates well below industry averages. It is a trend we maintained for many years.
Speaker Change: As previously mentioned, our two pre reserves grew year on year to 530 million barrels of oil equivalent a reserve replacement ratio of 137% highlighting the longevity of the portfolio.
Through the year, we raised a total of $900 million of new bonds are competitive rates and we refinance and increase the capacity of our ABL facility.
Speaker Change: These activities significantly enhance our financial position and extended our weighted average maturities with minimal near term maturities over the next two years.
Speaker Change: We achieved first oil at Windsor filed in December of 2024, and I expect production to rise leg to this quarter as Winterfell III comes back online with a full squad I expected online early in the second half of the.
Speaker Change: Neil will now provide some color on the last point I will take you through the financial results for the quarter and the year.
Speaker Change: Late in the fourth quarter the partnership achieved first gas production the GTA project.
Speaker Change: Sure.
Andy: Thanks, Andy turning now to slide seven.
Speaker Change: LNG production achieved earlier this month and first cargo lifting I expected shortly.
Andy: Production for the fourth quarter was lower than guidance, partly due to lower <unk> production just flagged last month by the operator.
Speaker Change: Through the we raised a total of $900 million of new bonds at competitive rates and we refinance that increase the capacity of our ABL facility.
Andy: Actions have been taken to resolve the water injection and reliability issues at Jubilee voltage replacement over 100% so far year to date.
Speaker Change: These activities significantly enhance our financial position and extended our weighted average maturities with minimal near term maturities over the next two years.
Andy: We also saw a slight delay in the production ramp up from the EG infill wells and Winterfell, one and two were down most of the quarter prior to being brought back online late in the year.
Speaker Change: Neil will now provide some color on the last point, Jim will take you through the financial results for the quarter and the year.
Andy: The <unk> production issues have been largely addressed.
Andy: With several planned maintenance programs in the current quarter production is expected to be broadly flat quarter on quarter.
Neil: Thanks, Andy turning now to slide seven.
Speaker Change: Production for the fourth quarter was lower than guidance, partly due to lower Jubilee production just flag last month by the operator.
Andy: Detailed guidance is provided as an appendix to the slides.
Andy: The <unk> planned maintenance program clearly the shutdown of the Jubilee at PSL, a one month turnaround of Devils tower, which has the Kodiak field and some other scheduled maintenance in Equatorial Guinea.
Speaker Change: Actions have been taken to resolve the water injection and reliability issues at Jubilee is what is replacement over 100% so far year to date.
Speaker Change: We also saw a slight delay in the production ramp up from the EG infill wells.
Andy: We're also seeing GTA ramp up during <unk> and expect to end the quarter near full capacity.
Speaker Change: And I wonder if that one and two were down most of the quarter prior to being brought back online late in the year.
Andy: Looking at the cost side costs were largely in line with budget with Capex slightly higher due to GTA startup cost.
Speaker Change: The fourth key production issues have been largely addressed but with several planned maintenance programs in the current quarter production is expected to be broadly flat quarter on quarter.
Andy: Turning to slide eight.
Andy: 2024, it was an important year in enhancing the financial resilience of the company.
Speaker Change: Detailed guidance is provided as an appendix to the slides.
Andy: As Andy mentioned, we issued $900 million of new bonds refinanced and increase the capacity of our reserve base lending facility, bringing in two new banks.
Speaker Change: The <unk> planned maintenance program clearly the shutdown of the Jubilee at P. S. L. A one month turnaround of Devils tower, which has the Kodiak field and some other scheduled maintenance in Equatorial Guinea.
Andy: Collectively these transactions increased our average debt maturity to around four years.
Speaker Change: We're also seeing GTA ramp up during <unk> and expect to end the quarter near full capacity.
Andy: The top right chart shows our current maturity schedule.
Andy: Had minimal near term maturities with only $250 million due in 2026, which we anticipate repaying from cash flow.
Speaker Change: Looking at the cost side costs were largely in line with budget with Capex slightly higher due to GTA startup cost.
Andy: It's also important to note we have managed our debt to ensure we don't have any large single maturity in any given year.
Speaker Change: Turning to slide eight.
Speaker Change: 2024, it was an important year in enhancing the financial resilience of the company.
Andy: Willing us to repay the debt from future cash flow further derisking the balance sheet.
Speaker Change: As Andy mentioned, we issued $900 million of new bonds refinancing increased the capacity of our reserve base lending facility, bringing in two new banks.
Andy: The chart on the bottom right shows how we continue to actively manage future price volatility through our rolling hedging program.
Speaker Change: Collectively these transactions increased our average debt maturity to around four years.
Andy: We currently have around 60% of our first half oil production hedged with downside protection of approximately $70 per barrel, providing solid protection for our cash flow.
Speaker Change: The top right chart shows our current maturity schedule they.
Speaker Change: We had minimal near term maturities with only $250 million due in 2026, which we anticipate repaying from cash flow.
Andy: We will continue to be proactive in the management of oil price volatility through 2025 and into 2026.
Speaker Change: It's also important to note we have managed our debt to ensure we don't have any large single maturity in any given year, enabling us to repay the debt from future cash flow further derisking the balance sheet.
Andy: Turning to slide nine our financial priorities for the year.
Andy: And it was clear in his opening remarks that cash generation is a key financial priority in 2025 and beyond.
Speaker Change: The chart on the bottom right shows how we continue to actively manage future price volatility through our rolling hedging program.
Andy: We therefore intend to be very disciplined in our cost management targeting meaningful reductions in both capex and overhead.
Andy: As we come to the end of the capital intensive period for the company.
Speaker Change: We currently have around 60% of our first half oil production hedged with downside protection at approximately $70 per barrel, providing solid protection for our cash flow.
Andy: <unk> capital spending to fall sharply with a 2025 capital budget of $400 million or below a reduction of more than 50% year on year.
Speaker Change: We will continue to be proactive in the management of oil price volatility through 2025 and into 2026.
Andy: We're also working hard to decrease overhead targeting a reduction of around $25 million by year end 2025.
Turning to slide nine our financial priorities for the year.
Andy: As we generate cash flow expected from the second quarter onwards, we will prioritize debt paydown initially focusing on the RVO as our highest cost pre payable debt as well as the outstanding 2026, and 2027 notes.
Speaker Change: Andy was clear in his opening remarks that cash generation is a key financial priority in 2025 and beyond.
Speaker Change: We therefore intend to be very disciplined in our cost management targeting a meaningful reductions in those capex and overhead.
Andy: And the final deliverable for the year from a financial perspective is the refinancing of the GTA Fpss.
Speaker Change: As we come to the end of the capital intensive period for the company, we expect capital spending to fall sharply with a 2025 capital budget of $400 million or below.
The financing was initially put in place with the operator during Covid and we're working with them on bringing down the overall cost, which should lower our unit operating costs on the project.
More than 50% year on year.
Speaker Change: We're also working hard to decrease overhead targeting a reduction of around $25 million by year end 2025.
Andy: So in summary.
Andy: <unk> five our goals are clear growing production and lowering cost to prioritize cash generation.
As we generate cash flow expected from the second quarter onwards.
Andy: With that I'll hand, it back to Andy to take you through the assets and the outlook for the year ahead.
Speaker Change: <unk> debt pay down initially focusing on the RV L. As our highest cost pre payable debt as well as the outstanding 2026, and 2027 notes.
Andy: Thanks, Neal turning now to slide 10.
Speaker Change: Want to start with GTI and talk about the journey, we've been on to create a new Atlantic Basin LNG hub and why we're excited about the future.
Speaker Change: And the final deliverable for the year from a financial perspective is the refinancing of the G. T. A S. P. S F.
Speaker Change: Timeline on the top of the slide starts in 2015, when Cosmos is the operator has the initial exploration success of torture discovering a failed with around 25 tcf of gas in place, making it the second largest hydrocarbon discovery in the world not yet.
Speaker Change: The financing was initially put in place with the operator during Covid and we're working with them on bringing down the overall cost, which should lower our unit operating costs on the project.
Speaker Change: So in summary, 25, our goals are clear growing production and lowering cost to prioritize cash generation.
Speaker Change: Later, we ran a farmout process with BP coming in as operator for total consideration cosmos of around $950 million, which.
Speaker Change: With that I'll hand, it back to Andy to take you through the assets and the outlook for the year ahead.
Andy: Thanks, Neal turning now to slide 10.
Speaker Change: <unk> funding the first $550 million of our development Capex on the GTA project.
Speaker Change: Want to start with GTI and talk about the journey, we've been on to create a new Atlantic Basin LNG hub and why we're excited about the future.
Speaker Change: In late 2018, the project took final investment decision with first gas production announced at the end of 2024.
Speaker Change: The timeline on the top of the slide starting 2015, when Cosmos is the operator have the initial exploration success it towards you're discovering a failed with around 25 tcf of gas in place, making it the second largest hydrocarbon discovery in the world not yet.
Speaker Change: While there have been some challenges along the way, including Covid related delays and a major typhoon in China that damage the Fps.
Speaker Change: The project has taken around five years to develop.
Speaker Change: Earlier this month, we announced the first of a series of important milestones related to the delivery of the project.
Speaker Change: Later, we ran a farm out process with BP coming in as operator for total consideration cosmos of around $950 million, which includes funding the first $550 million of our development Capex on the GTA project.
First LNG production was delivered in early February and we are very close early in the first cargo from the project with LNG tankers standing by at the hub terminal.
Speaker Change: In late 2018, the project took final investment decision with first gas production announced at the end of 2024.
Speaker Change: This new Atlantic Basin LNG hub is ideally located to serve markets in Europe, we show a sailing distances and low transportation costs.
Speaker Change: While there have been some challenges along the way, including Covid related delays and a major typhoon in China that damage the F. P. S.
Speaker Change: So advantage because the GTA gas contains minimal come dioxide or hydrogen sulfide important for both the environment and ongoing maintenance of the infrastructure.
Speaker Change: <unk> taken around five years to develop.
Speaker Change: Turning now to slide 11, which looks at the future.
Speaker Change: Earlier this month, we announced the first of a series of important milestones related to the delivery of the project.
Speaker Change: With the first cargo loading shortly the partners will soon start to receive revenue from the projects another key milestone.
Speaker Change: First LNG production was delivered in early February and we are very close to loading the first cargo from the project with LNG tanker standing by at the hub terminal.
Speaker Change: Once fully ramped up expected in the second quarter, producing LNG offtake as contracted volume of 245 million tonnes per annum requires around 400 million standard cubic feet of gas per day.
This new Atlantic Basin LNG hub is ideally located to serve markets in Europe, we show a sailing distances and low transportation costs.
Speaker Change: This equates to approximately 30 gross cargoes a year.
Speaker Change: Also advantage because the GTA gas contains minimal comed outside of hydrogen sulfide important for both the environment and ongoing maintenance of the infrastructure.
Speaker Change: <unk> partners will coalesce, the cargos, which should result in a steady revenue stream with a limited under lyft or Uber lyft impact quarter on quarter.
Speaker Change: Turning now to slide 11, which looks at the future with.
Speaker Change: With the first cargo loading shortly the partners will soon start to receive revenue from the projects another key milestone.
Speaker Change: With GTA phase one starting up the partnership has been working collaboratively on the expansion of future phases. The operator national oil companies and Cosmos of a shared vision to fully utilize the existing infrastructure to drive our low cost brownfield expansion that increases future LNG.
Once fully ramped up expected in the second quarter, producing LNG the offtake as contracted volume of $2 four 5 million tons per annum. We cry is around 400 million standard cubic feet of gas per day.
Speaker Change: Output, while ensuring the local markets gas needs are met.
Speaker Change: This equates to approximately 30 gross cargo so yeah the <unk>.
Speaker Change: The chart on the bottom left shows there is more than enough recoverable gas in place to build out multiple future phases, each capable of producing for over 20 years.
Speaker Change: <unk> partners will coalesce, the cargos, which should result in a steady revenue stream with a limited under lift or a over last impact quarter on quarter.
Speaker Change: Initial data from the producing GTA wells has been positive providing confidence in our reserve base for future expansion phases.
Speaker Change: With GTA phase one starting up the partnership has been working collaboratively on the expansion in future phases. He on Friday national oil companies and Cosmos have a shared vision to fully utilize the existing infrastructure to drive our low cost brownfield expansion that increases future LNG.
Speaker Change: Partnership is initially focused on phase, one plus a brownfield expansion, which leverages the infrastructure, we've put in place for the first phase.
Speaker Change: On phase one cost year, one is really a transition year and we will see higher operating costs as we complete the commissioning phase and ramp up volumes to full capacity.
Speaker Change: Output, while ensuring the local markets gas needs are met.
Speaker Change: There's a chart on the bottom left shows there is more than enough recoverable gas in place to build out multiple future phases, each capable of producing for over 20 years.
Speaker Change: The unit cost should trend lower over time as the facility ramps up to the facility's limit and the startup costs are behind us.
Speaker Change: Initial data from the producing G. T. A wells has been positive providing confidence in our reserve base for future expansion phases.
Speaker Change: While we have sold 245 million tons per annum under the BP sales contracts the floating LNG vessel should be able to achieve a nameplate production of around $2 7 million tons per annum or higher is typically seen on LNG plants in.
Partnership is initially focused on phase, one plus a brownfield expansion, which leverages the infrastructure, we've put in place for the first phase.
Neil Shah: In addition, as Neil mentioned, we're working with our partners to refinance the <unk> lease we should further reduce operating costs.
Speaker Change: On phase one cost you one is it really a transition year and we will see higher operating costs as we complete the commissioning phase and ramp up volumes to full capacity.
Neil Shah: In the medium term, adding growth from the phase one plus expansion and additional <unk> volumes should continue to drive higher margins.
Speaker Change: The unit cost should trend lower over time as that facility ramps up to the facility's limit and the startup costs are behind us.
Neil Shah: So in summary, it's been a journey to get where we are today with the project has a lot more running room and we're excited about the future potential.
Speaker Change: While we have sold $2 four 5 million tons per annum under the BP sales contracts the floating LNG vessel should be able to give a name plate production of around $2 7 million tonnes per annum, Ohio is typically seen on LNG plants in.
Neil Shah: Yeah.
Neil Shah: Turning to slide 12, which looks at operations in Ghana.
Neil Shah: Net production in 2024 was just over 41000 barrels of oil equivalent which was below the operators target for the year, primarily driven by the <unk> nine well in Jubilee, coupled with insufficient voltage replacement or water injection due to reliability issues primarily.
Speaker Change: In addition, as Neil mentioned, we're working with our partners to refinance the F. P. S. O lease we should further reduce operating costs.
In the medium term, adding growth from the phase one plus expansion and additional <unk> volumes should continue to drive higher margins.
Neil Shah: Related to power generation.
Neil Shah: We have worked with the operator to address these field management issues.
Speaker Change: So in summary, it's been a journey to get where we are today, but the project has a lot more running room and we're excited about the future potential.
Neil Shah: The moderate decline ahead of the upcoming drilling campaign improve power reliability, delivering <unk> replacement in excess of 100% as required consistent with what has been delivered through the first two months of 2025 as can be seen on the chart on this slide.
Speaker Change: Turning to slide 12, which looks at operations in Ghana.
Speaker Change: Net production in 2024 was just over 41000 barrels of oil equivalent which was below the operate as target for the year, primarily driven by the J 69, well in Jubilee, coupled with insufficient voltage replacement of water injection due to reliability issues primarily.
Neil Shah: Looking ahead, we have an active year in Ghana, beginning with the <unk> seismic campaign, which is ongoing.
Neil Shah: This is more than 40 data will be processed with the latest technology, giving us a much better understanding of the subsurface, particularly in terms of fluid migration, allowing the partnership to choose the best future drilling locations.
Speaker Change: Related to power generation.
Speaker Change: We have worked with the operators to address these field management issues.
Speaker Change: The moderate decline ahead of the upcoming drilling campaign improve power reliability delivering bodies replacement of in excess of 100% as required consistent with what has been delivered through the first two months of 2025 as can be seen on the chart on this slide.
Neil Shah: We continue to believe <unk> has significant upside therefore focused on accessing the best technology to increase the recovery factor of more than 2 billion barrels of oil in place.
Neil Shah: We're looking to leverage our position in the Gulf of America accessing the latest seismic processing techniques and reservoir management tools, including AI.
Speaker Change: Looking ahead, we have an active year in Ghana, beginning with the 40 seismic campaign, which is ongoing.
Neil Shah: We're also planning two new wells in Jubilee this year with a rig that is returning to Ghana, and we will continue with a four well program in 2026.
Speaker Change: It's Martin 40 data will be processed with the latest technologies, giving us a much better understanding of the subsurface, particularly in terms of fluid migration, allowing the partnership to choose the best future drilling locations. We continue to believe <unk> has significant upside therefore focused on accessing.
Neil Shah: In terms of guidance for the operator didn't provide specific guidance for the fields in its recent trading update but we expect gross jubilee production of between 70 to 76000 barrels of oil per day and grows 10 production of between 15% to 16000 barrels of oil per day.
Speaker Change: The best technology to increase the recovery factor of more than 2 billion barrels of oil in place.
Speaker Change: We're looking to leverage our position in the Gulf of America accessing the latest seismic processing techniques and reservoir management tools, including AI.
Neil Shah: So expect around 6000 barrels of oil equivalent of gas net to Kosmos.
Neil Shah: Turning to slide 13.
Neil Shah: In the Gulf of America, we saw a gradual quarterly ramp up in production from two Q onwards.
Speaker Change: We're also planning two new wells in Jubilee this year with a rig that is returning to Ghana, and we'll continue with a four well program in 2026.
Neil Shah: Can be seen on the chart as we delivered the first winterfell wells and the production optimization projects on our job and Kodiak, both of which are performing ahead of expectations.
Speaker Change: In terms of guidance for the operator didn't provide specific guidance for the fields in its recent trading update but we expect gross jubilee production of between 70 to 76000 barrels of oil per day and grows 10 production of between 15 to 16000 barrels of oil per day. We also expect around 6000.
Neil Shah: The year end exit rate is indicative of the product's potential of this business unit before taking into account planned maintenance and hurricane downtime.
Neil Shah: The operator of the wins of our project is currently performing the remediation work on the Windsor fell three well before the rig moves to drill the winterfell full well, which is expected online early in the second half of the year on.
Speaker Change: Of oil equivalent of gas net to Kosmos.
Speaker Change: Turning to slide 13.
Speaker Change: In the Gulf of America, we saw a gradual quarterly ramp up in production in two Q onwards, as can be seen on the chart as we delivered the first winterfell wells and the production optimization projects on odd job and Kodiak, both of which are performing ahead of expectations.
Neil Shah: On Tiberius, we continue to progress the development with our partner Oxy, but it manage pace given our focus on 2025 cash generation.
Neil Shah: We're aiming to complete the pharma around the time of project sanction.
Neil Shah: In addition, we have an attractive portfolio of <unk> opportunities.
Speaker Change: The year end exit rate is indicative of the productive potential of this business unit before taking into account planned maintenance and hurricane downtime.
Neil Shah: The outlook for activity in the Gulf of America has improved under the new administration with the potential for more lease sales, giving us more opportunity to continuously high grade our future activity set.
Speaker Change: The operator, the wins of our project is currently performing the remediation work on the Windsor fell three well before the rig moves to drill the winterfell full well, which is expected online early in the second half of the year on.
Neil Shah: Full year guidance is 17% to 20000 barrels of oil equivalent per day, net an approximate 20% increase year over year.
Speaker Change: On Tiberius, we continue to progress the development with our partner Oxy, but it manage pace given our focus on 2025 cash generation.
Neil Shah: Turning to slide 14.
Neil Shah: In <unk>, we finished the infill drilling campaign in late 2024 with both wells now online collectively producing around 9000 barrels of oil per day gross.
Speaker Change: We're aiming to complete the farm out around the time of project sanction.
Speaker Change: In addition, we have an attractive portfolio of vial X opportunities.
Neil Shah: In the fourth quarter, we drilled the King <unk> well, we did encounter oil zones in the upper Albion section confirming elements of an active petroleum system, but were deemed sub commercial so the well was plugged and abandoned Tvs.
Speaker Change: The outlook for activity in the Gulf of America has improved under the new administration with the potential for more lease sales, giving us more opportunity to continuously high grade our future activity set.
Speaker Change: Full year guidance is 17% to 20000 barrels of oil equivalent per day net.
Neil Shah: <unk> is now working on analyzing the results to better understand the future potential of the area.
Speaker Change: So about 20% increase year over year.
Neil Shah: For 2025, we are seeing the continuing contribution of the two infill wells and we'll be reprocessing. The latest seismic we have over the fails to help plan. The next infill drilling campaign, which we expect to carry out in 2027.
Speaker Change: Turning to slide 14.
Speaker Change: Thanks, Joe again, we finished the infill drilling campaign in late 2024 with both wells now online collectively producing around 9000 barrels of oil per day gross.
Neil Shah: Full year guidance is nine to 11000 barrels of oil per day, net an approximate 15% increase year over year.
Speaker Change: In the fourth quarter, we drilled the King <unk> well, we did encounter oil zones in the upper Albion section confirming elements of an active petroleum system, but were deemed sub commercial so the well was plugged and abandoned TB is now working on analyzing the results to better understand the future potential of the area.
Neil Shah: Turning to slide 15 to conclude today's presentation.
It's not communicated in todays material, we did a lot in 2020 for to put in place the foundations to deliver value for our shareholders in 2025.
Speaker Change: Yeah.
Speaker Change: For 2025, we are seeing the continuing contribution of the two infill wells and when we reprice I've seen the latest seismic we have over the fails to help plan. The next infill drilling campaign, which we expect to carry out in 2027.
Neil Shah: Production is rising as new projects come online and ramp up as we showed in the earlier slides we have the reserve base for this production well into the future.
Neil Shah: We're rigorously managing costs to prioritize free cash flow with material reductions planned in both capex and overhead.
Speaker Change: Full year guidance is nine to 11000 barrels of oil per day, net an approximate 15% increase year over year.
Neil Shah: We plan to use cash generated to reduce our absolute debt and leverage enhancing the financial resilience of the company.
Speaker Change: Turning to slide 15 to conclude today's presentation.
Speaker Change: As I've communicated in todays material, we did a lot in 2020 for to put in place the foundations to deliver value for our shareholders in 2025.
Neil Shah: And we maintained our attractive portfolio of growth opportunities, which provides differentiated optionality for cosmos into the future.
Speaker Change: Production is rising as new projects come online and ramp up as we showed in the earlier slides we have the reserve base for this production well into the future.
Speaker Change: Thank you I'd now like to turn the call over to the operator to open the session for questions.
Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: We're rigorously managing costs to prioritize free cash flow with a material reduction as planned in both capex and overhead.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset.
Speaker Change: We plan to use cash generated to reduce our absolute debt and leverage enhancing the financial resilience of the company.
Speaker Change: Mark.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: And we maintained our attractive portfolio growth opportunities, which provides differentiate the optionality for cosmos into the future.
Speaker Change: Thank you. Our first question is from Neil Mehta with Goldman Sachs. Please proceed with your question.
Speaker Change: Thank you I'd now like to turn the call over to the operator to open the session for questions.
Speaker Change: Thank you, Ed and Danielle and team that.
Speaker Change: Thank you well now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: We've been getting a couple of questions. This morning around startup costs.
Speaker Change: That you highlighted.
Speaker Change: So maybe that's a good place to start with just.
Speaker Change: The confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing on this.
Speaker Change: Startup and commissioning costs.
Speaker Change: <unk> appear to be onetime in nature, but how do you think about it.
Speaker Change: Framing those out and working through them.
Speaker Change: One moment, please while we poll for questions.
Neil: Yeah, Hey, Thanks, Neil Yes.
Speaker Change: Good question.
Speaker Change: We've talked on prior calls about the key components of the operating costs, namely the ethane LNG.
Speaker Change: Thank you. Our first question is from Neil Mehta with Goldman Sachs. Please proceed with your question.
Speaker Change: The upstream opex.
Neil Mehta: Thank you, Ed and Danielle and team.
Speaker Change: So the financing.
Speaker Change: In today's update will give you pretty fulsome guidance for the year, which reflects our best view of the production ramp up cargo timing.
Speaker Change: We've been getting a couple of questions. This morning around startup costs and.
Speaker Change: That you highlighted in the deck and so maybe it's a good place to start with justice.
Speaker Change: Startup and commissioning costs and these appear to be onetime in nature, but how do you think about it.
Speaker Change: Of course.
As we said in our prepared remarks, this year is going to be a transition year.
Speaker Change: No.
Speaker Change: Framing those out and working through them.
Speaker Change: Because as we finish off all the commissioning work.
Speaker Change: Yeah, Hey, Thanks, Neal Yeah. Good good good question.
Speaker Change: See the volumes to ramp up and therefore, we would expect to see cost to be higher this year, and then trend lower over time, so what's going to drive that sort of no more one off commissioning cost volume ramp ups of the contracted volume which is Q.
Speaker Change: You know we've talked on prior calls about the key components of the operating costs, namely the ethane as LNG.
Speaker Change: The upstream opex in the <unk> financing.
Speaker Change: In today's update will give you a pretty fulsome guidance for the year, which reflects our best view of the production ramp up cargo timings.
Speaker Change: Q2, four 5 million tons per annum, and then as I alluded to.
Speaker Change: In the prepared remarks.
Speaker Change: Testing the facility.
Speaker Change: And costs.
Speaker Change: As we said in our prepared remarks, this year is going to be a transition year.
Speaker Change: Plate capacity at $2 7 million and potentially higher and then some refinancing of the Fps So leased to do so.
Speaker Change: And.
Speaker Change: The cost as we finish off all of the commissioning work and see the volumes to ramp up therefore, we would expect to see cost to be higher this year, and then a trend lower overtime. So what's going to drive that sort of no more one off commissioning cost volume ramp ups of the contracted volume which is.
Speaker Change: Yes, probably good then as Nielsen kind of give you a breakdown of those three areas and that should give you a little bit more color around what we're targeting going forward.
Speaker Change: As we remove some of those one off costs and get to a steady state.
Speaker Change: Yes.
Speaker Change: Now you see Q2, four 5 million tons per annum, and then you know as I alluded to.
Speaker Change: So yes, when you look at it sort of going forward in terms of a normalized state was asked about the two components, which are normal opex, which is the LNG vessel and the operating expense and we'd expect that to normalize in the four to $5 per end type range and then his question yes.
Speaker Change: In the prepared remarks, you know sensing the facility and its name plate capacity at $2 7 million and potentially higher and then there's some refinancing of the Fps so leased to do so.
Speaker Change: DSO financing and how much we can bring that to you, but I think sort of Notionally. If you think about that it is a little more than another dollar per mcf in terms of that long term DSO cost.
Speaker Change: Yeah, probably good then as Nielsen kind of give you a breakdown of those three areas and actually give you a little bit more color around what we're targeting going forward.
Speaker Change: But again to get significant reduction on the basis of decreasing the cost and actually increase in the volume.
Speaker Change: As we remove some of those one off costs and get to a steady state.
Speaker Change: As Andy pointed out and then and then like I said Europe prepare.
Neal: Hey, Neal.
Speaker Change: Producing very cost competitive LNG at that point.
Neal: Yeah. When you look at it sort of going forward in terms of a normalized state was asked about the two components, which are normal opex, which is the LNG vessel and the operating expense and we'd expect that to normalize in the four to $5 per end type range and then his question yeah.
Speaker Change: Okay. Thanks, Andy Thanks, Neil on the follow up is just around Capex.
Companies guide to a ceiling of $400 million is there a scenario where it could come in lower than that what are some levers you can pull on to okay.
Neal: Psf financing and how much we can bring that to you, but yes, I think sort of Notionally. If you think about that as a little more than another dollar per mcf in terms of that long term DSO cost.
Speaker Change: Maximize capital efficiency and Thats, a 25 look I know, it's early to talk about 'twenty six but.
Speaker Change: For investors, who were worried about the sustainability of that capital efficiency.
But again to get significant reduction on the basis of decreasing the cost and actually increase in the volume.
Speaker Change: Entering into a harvest mode that could be multiyear in nature.
Neal: As Andy pointed out and then yeah and then like you said that you are preparing.
Speaker Change: Good question.
Speaker Change: I think as I sort of appropriate emphasized in the prepared remarks, we are prioritizing free cash flow I think that's what I've been looking for and we're clear about.
Neal: Producing very cost competitive LNG at that point.
unknown: Okay. Thanks, Thanks, Andy Thanks, Neil and the follow up is just around Capex.
Speaker Change: Delivering a.
unknown: Companies guide to a ceiling of $400 million is there a scenario where it could come in lower than that what are some levers you can pull on to it.
Speaker Change: Sustainable free cash flow yield at today's equity Brian of around 25%. That's what we showed on the opening slide.
unknown: Maximize capital efficiency and that's a 25 look I know, it's early to talk about 'twenty six but for investors who were worried about the sustainability of that capital efficiency are we entering into a harvest mode that could be multiyear in nature.
Speaker Change: Whats not about we've been through a growth phase now.
Speaker Change: Rigorous cost management and rigorous capital allocation.
Speaker Change: Tackling the overhead with a significant reduction delivered by year end, which obviously is sustainable going forward and then on the.
unknown: Good question.
unknown: I think as I sort of appropriate emphasized in the prepared remarks, we are prioritizing free cash flow I think thats, what I was saying holds it would be looking for and we're clear about.
Speaker Change: The capital side as you said, we are targeting $400 million of Aloha and primarily in 'twenty five capital going into sustaining the base.
Speaker Change: Julie.
unknown: Delivering a sustainable free cash flow yield at today's equity price of around 25%. That's what we showed on the opening slide.
Speaker Change: The wells in and wins.
Speaker Change: And then.
Speaker Change: Going forward, it's about getting that right balance between between growth and cash flow.
unknown: What's not about we've been through a growth phase now it's rigorous cost management.
Speaker Change: And we believe we've got a portfolio, we can do do that and create the right balance.
unknown: And in a rigorous capital allocation.
unknown: We're tackling the overhead with a significant reduction.
Speaker Change: Operated projects going forward. Some of those are our operated those growth projects are operated so we have a greater degree.
unknown: By year end, which obviously sustainable going forward and then on the capital side. As you said, we are targeting 400 million.
Speaker Change: Control.
unknown: Lola and primarily in 'twenty five ounce count that we're going into sustaining the base.
Speaker Change: No.
Speaker Change: In prior calls we've talked about.
Speaker Change: Our capital profile of.
unknown: Julie.
Speaker Change: Around 500.
unknown: The wells and and wins.
Speaker Change: We said 300 to 360 and the base of 150 to 200 growth and 25 were at the low end of that guidance because we've got limited spend on growth and we aren't going to be disciplined around the allocation of growth. So it's not about decline is not about harvesting we can absolutely sustain.
unknown: And then you know.
unknown: Going forward, it's about getting that right balance between between growth and cash flow returns and we believe we've got a portfolio, where we can do do that and create the right balance.
unknown: Operated projects going forward you know some of those are our operated those growth projects are operated so we have a greater degree.
Speaker Change: The business of 300 to 350, and then it's about bringing in those quality growth options at the right pace.
unknown: Control.
Speaker Change: Staying in the company and.
unknown: In prior calls we've talked about.
Speaker Change: One of the things that does differentiate kosmos is the quality.
unknown: You know our capital profile of.
Speaker Change: Of its portfolio, we've got an RFP on a CPE basis of over 20 years. So we've got plenty of organic material to do work.
unknown: Of around 500.
unknown: So we said 300 to $3 50 in the base.
unknown: <unk> hundred 50 to 200 growth and 25 were at the low end of that guidance because we've got limited spend on growth and we are going to be disciplined around the allocation of our growth. So it's not about decline it's not about let's say, we can absolutely sustain the business of 300 to 350.
Speaker Change: Our work on and now it's about the discipline of getting the free cash flow yield into the right clients through delivering the cash and managing that growth portfolio.
Speaker Change: We can sustain that free cash flow yield.
Speaker Change: Absolutely.
Speaker Change: <unk> engaged in now hopefully by.
unknown: And then it's about bringing in those quality growth options atherine pace to sustain the company and one of the things that does differentiate kosmos is the quality of it.
Speaker Change: Some of the.
Speaker Change: The point that we have illustrated in the prepared remarks around the discipline around cost therefore.
Confidence that we can deliver that forward together with the right pacing of the.
unknown: Oh, Yeah, no we've got to pay on a CPE basis of over 20 years. So we've got plenty of organic material to do work on and now it's about the discipline of getting the free cash flow yield into the right place through delivering the cash and managing that growth portfolio. So that.
Speaker Change: We go out and talk to absolutely is not about how this is not about the decline it's about a sustainable free cash flow yield going forward.
Speaker Change: Thank you Andy.
Speaker Change: Great. Thanks, Neil.
Speaker Change: Our next question is from Charles Meade with Johnson Rice. Please proceed with your question.
We can sustain that free cash flow yield.
unknown: Absolutely.
Charles Meade: Good morning, Andy at new onto the rest of the Cosmos team there Andy I want to go back to your prepared comments about.
unknown: Engaged and now hopefully by.
unknown: Some of the.
unknown: The points that we have illustrated in the prepared remarks around the discipline around cost therefore.
Speaker Change: About GTA not the immediate but but.
Your discussions about phase, one plus I guess youre, calling it is that I want to understand what that is and the timing is that is one plus the.
unknown: <unk> that we can and deliver that forward together with the right pacing of the.
unknown: We go out and target the absolutely its not about how this is not about the decline it's about a sustainable free cash flow yield going forward.
Speaker Change: The increment from the from the contract of $2 45 to the knee played a two seven or does that also include <unk>.
Eddie: Thank you Eddie.
Neil Mehta: Great. Thanks, Neil.
Speaker Change: Some gas into local markets.
Speaker Change: What is it composed of and what's the timeframe for that.
Speaker Change: Our next question is from Charles Meade with Johnson Rice. Please proceed with your question.
Speaker Change: Yes.
Speaker Change: Charles I think that the way to think about wound pluses fully used.
Charles Meade: Yes, good morning, Andy and Neil and the rest of the Cosmos team there Andy I want to go back to your prepared comments about.
Speaker Change: Fully utilizing all of the infrastructure that we've got in place in terms of phase one yeah. So the Sps so actually has.
Speaker Change: About GTA not not the immediate but but.
Speaker Change: Discussions about phase one plus I guess youre, calling it is is that I want to understand what that is and the time. You mean is that a is one plus the the increment from the from the contract of $2 45 to the knee played a two seven or does that also include <unk>.
Speaker Change: A debottleneck capacity of close to 800 million standard cubic feet sort of double what it reduces to today and that is a relatively low cost relatively really low cost.
Speaker Change: Debottlenecking.
Speaker Change: Some gas into local markets.
Speaker Change: And then it's about utilizing the rest of the infrastructure we have in place too.
Speaker Change: What is it composed of and what's the timeframe for that.
Speaker Change: Good question, Charles I think that the way to think about one plus is fully utilized.
Speaker Change: Move that gas through the existing plan.
Speaker Change: So I think youre going to see a component which is increasing.
Speaker Change: Fully utilizing all of the infrastructure that we've got in place in terms of size well yeah. So the the Sps So actually has.
Speaker Change: The capacity of the Caribbean.
Speaker Change: Awesome.
Speaker Change: They gave me this that and Youre going to probably see an increase in the.
Speaker Change: A debottleneck capacity of close to 800 million standard cubic feet, he sort of double what it reduces to.
Speaker Change: And the domestic assay, but equally those projects with nominal economic because it literally at very low capital cost and you have the potential to.
Speaker Change: Good day.
Speaker Change: That is a relatively low cost relatively really low cost.
Speaker Change: Debottlenecking.
Speaker Change: To double the throughput so that's the journey we're on.
Speaker Change: Then it's about utilizing the rest of the infrastructure we have in place.
Speaker Change: And I think in terms of timing, we have great alignment now between the NSE.
Speaker Change: You bet.
Speaker Change: Move that gas through the existing plan.
Speaker Change: And BP.
Speaker Change: And beyond so I think youre going to see a component which is increasing the.
Speaker Change: Getting on with the technical studies to deliver that and I think as minister <unk> from Mauritania said, our goal is to accelerate production.
Speaker Change: The capacity of the current vessel.
Speaker Change: Sure.
Speaker Change: They gave me that's there and you're going to probably see a an increase in the AR and the.
Speaker Change: The upcoming phase with the target for 2030, while ensuring the local gas market needs and that so that's the objective Charles yeah.
Speaker Change: Domestic assay, but equally those projects are phenomenal economic.
Speaker Change: Because it literally at very low capital cost and you have the potential to.
Speaker Change: It's about a brownfield expansion is getting the most out of what we have today and doing that in a really capital efficient way.
Speaker Change: To double the throughput so that's the journey we're on and.
Speaker Change: That makes sense, maybe thank you for that and then if I could go back to.
Speaker Change: And I think in terms of timing, we have great alignment now between you know the NSE is ourselves and BP on getting on with it technical studies to deliver that.
Speaker Change: I think it's slide.
Speaker Change: You talked about Jubilee and I believe it's slide 12.
Speaker Change: Can you talk about.
Charles Meade: You know I think as minister kind of lead from Mauritania said, our goal is to accelerate production in the upcoming phase with the target for 2030, while ensuring the local gas market needs and that so that's the objective Charles Yeah. It's about a brownfield expansion is getting the most out of what we have today and doing that in there.
Speaker Change: The question is about you guided to 70 to 76.
Speaker Change: <unk> thousand barrels of oil a day gross.
Speaker Change: Can you talk about what the assumptions are you have perhaps specific to the Fps. So.
Speaker Change: You know.
Speaker Change: Generation and.
Speaker Change: And water injection.
Speaker Change: Assumptions do you have.
Speaker Change: It really capital efficient way.
Speaker Change: Our our implicit in that 70 76 for the performance of the peso.
Charles Meade: No that makes sense anyway. Thank you for that and then if I could go back to.
Charles Meade: Yes Charles.
Charles Meade: I think it's slide where you talked about Jubilee and I believe it's slide 12.
Charles Meade: It's sort of coming back to what are the fundamentals.
Charles Meade: <unk> yeah.
Charles Meade: Can you talk about.
Charles Meade: <unk>.
Speaker Change: What I do want to reemphasize I think is that do you believe the world class oilfield it's gone.
Speaker Change: The question is about you you you got it to 70 to 76000 barrels of oil a day gross.
Speaker Change: Can you talk about what the assumptions are you have you know perhaps specific to the F. P. S O.
Speaker Change: $2 4 billion barrels of oil in place.
Speaker Change: We're currently carrying recovery factor in our reserves are probably around 33%.
Speaker Change: You know generation and and a water injection well, what what assumptions do you have.
Speaker Change: Run the math on that we've just produced maybe 55 reserve base.
Speaker Change: Our our implicit in that 70 76 for the performance of the F. P. S O.
Speaker Change: I think the recovery factor will be in the high thirties.
Charles Meade: Yeah, So look Charles.
Speaker Change: At the end of the days that were probably half way that yeah.
Charles Meade: Again, it's sort of coming back to what are the fundamentals.
Speaker Change: Less than half weigh that against the remaining reserves once you have to do.
Charles Meade: <unk> yeah.
Charles Meade: <unk>.
Charles Meade: You know what I do want to reemphasize I think he is.
Speaker Change: It is fundamentally about good reservoir management.
Charles Meade: Do you believe the world class oil field.
Charles Meade: Yeah.
Speaker Change: It's fundamentally about getting water in the ground in the right places we struggle.
Charles Meade: Two 4 billion barrels of oil in place.
Charles Meade: We're currently carrying in a recovery factor in our reserves would probably be around 33%.
Speaker Change: The operators struggled in 2004 as we show on slide 12, with less than 100% voltage replacement and that has impacted the entry rate into 25 and that sort of that's why the guidance is sort of where it is.
Charles Meade: Run the math on that we've just produced maybe 55% resistance.
Charles Meade: I think the recovery factor will be in the high <unk>.
Charles Meade: At the end of the days that we're probably sort of halfway that yeah.
Speaker Change: Our objective is to get to 100% bodies replacements through the year. So that's one of the key assumptions and we've started the year strongly on that and it's really about power generation reliability.
Charles Meade: Less than half way that said against the remaining reserves once you have to do.
Charles Meade: It's fundamentally about good reservoir management.
Speaker Change: The offer to address that clearly there's a piece.
Charles Meade: It's fundamentally about getting water in the ground in the right places we struggle.
Speaker Change: Please around facilities.
Speaker Change: It's uptime has been strong.
Charles Meade: The operator has struggled in 2004 as we show on slide 12, with less than 100% voltage replacement and that has impacted the entry rate into 25 and that sort of you know that's why the guidance is sort of where it is.
Speaker Change: 90, 899%.
Speaker Change: Not worried about that we do have a planned shutdown built in.
Speaker Change: He is taking place at the end.
Speaker Change: First quarter, which is sort of impacting <unk> volumes.
Speaker Change: Those are key assumptions and then the final assumption is the delivery of two additional wells won't produce.
Charles Meade: You know our objective is to get to 100% bodies replacements through the year. So that's one of the key assumptions and we've started the year strongly on that and it's really about power generation reliability and we will.
Speaker Change: And one injector the objectives <unk> with wells delivering the back end of <unk>.
Charles Meade: The offer to address that clearly.
Speaker Change: <unk> I think we've got a good set of credible assumptions.
Charles Meade: At pizza around facilities <unk> facilities uptime has been strong.
Speaker Change: And.
Speaker Change: <unk>.
Charles Meade: 90, 899% so not worried about that we do have a planned shutdown built in which is taking place at the end of the first quarter, which is sort of impacting <unk> volumes. So you know.
Speaker Change: The objective clearly is then to utilize the <unk> that we're shooting this year.
Speaker Change: We started already.
Speaker Change: <unk>.
Speaker Change: Then there is the objective to use the information from.
Speaker Change: <unk> 42 impact the wells.
Speaker Change: 96, when we have a four well program so the combination event.
Charles Meade: Those are key assumptions and then the final assumption is the delivery of two additional wells one could use and one injector the objectives <unk> with wells delivering you know the backend.
Speaker Change: Moving forward with a higher exit rate of 25, the additional drilling in 2006.
Higher quality data from from the <unk>.
Charles Meade: <unk> I think.
Speaker Change: That enables events is sustaining the profile going forward. So we're not short of reserves. This issue is making sure we get the proper field management, which is fundamentally about about mortgage replacement warning going in the right place and then Lachlan and high quality infill wells and the delivery of them.
Charles Meade: Good.
Charles Meade: Credible assumptions there.
Charles Meade: You know the objective clearly is then to utilize the 40 that were shooting this yeah.
Charles Meade: Started already.
Charles Meade: And.
Charles Meade: Then there is the objective to use the information from that 42 impact the wells like the <unk>.
Speaker Change: That's great great detail I'll hop back in the queue.
Speaker Change: Right. Thank you.
Charles Meade: Six when we have a four well program so the combination event.
Speaker Change: Our next question is from Matthew Smith with Bank of America. Please proceed with your question.
Charles Meade: Moving forward with a higher exit rate of 25, the additional drilling in 2006.
Matthew Smith: Hi, good morning.
Speaker Change: And now.
Matthew Smith: Just a couple of questions from me if I start with.
Charles Meade: Higher quality data from from the for the not enables events is sustaining the profile going forward. So we're not short of reserves.
Matthew Smith: One on torture again, if I could I guess, firstly it would be interesting to see you're talking about three phases.
Charles Meade: Issue is making sure we got the proper field management, which is fundamentally about about commodities replacement water going in the right place and then you know selection of high quality infill wells and the delivery of them.
Matthew Smith: The phases on torture you again.
Matthew Smith: Included in the Phase one plus I guess the first question was really weather.
Matthew Smith: Detected a clear Tianjin emphasis from the operator or at least more impetus, perhaps I should say.
Charles Meade: That's great team great detail I'll hop back in the queue.
Matthew Smith: With those potential development schemes and then equally just link it back to.
Charles Meade: Right. Thank you.
Speaker Change: Our next question is from Matthew Smith with Bank of America. Please proceed with your question.
Matthew Smith: Phase one it looks as though.
Matthew Smith: Is potentially progressing.
Matthew Smith: Hi, there good morning, Andy came on it now.
Matthew Smith: Should we still think about your.
Matthew Smith: Just a couple of questions from since they first start with one on torture again, if I could I guess, firstly it would be interesting to see you're talking about three phases.
Matthew Smith: Capex go forward run rate should.
Matthew Smith: Should we keep that $400 million mined.
Matthew Smith: And in terms of the ceiling for future years beyond 2025.
Matthew Smith: The phases on torture you again.
Matthew Smith: Torchy capex be incremental to that.
Matthew Smith: Inclusion in the phase one plus I guess the first question was really weather use.
Matthew Smith: Okay.
Matthew Smith: Detected a clear change in emphasis from the operator or at least more impetus, perhaps I should say with those potential.
Matthew Smith: So it's an important question sort of.
Matthew Smith: The first question is sort of.
Matthew Smith: Is there a alignment between the operator ourselves.
Matthew Smith: <unk> development schemes, and then equally could I just link it back to.
Matthew Smith: On the way forward and I think yes, there is.
Matthew Smith: Phase, one and it looks as though.
Matthew Smith: <unk> always talked about getting the first phase on and getting the results from the wells.
Matthew Smith: Is potentially progressing.
Matthew Smith: Should we still think about your <unk>.
Matthew Smith: Enabling them then systems now to think about the next phases with new data what I would add.
Matthew Smith: Capex go forward run rate should we keep that $400 million mind and in terms of the ceiling for future years beyond 2025, well cuts the torchy capex be incremental to that.
Matthew Smith: Is that.
Matthew Smith: The initial data from actually flowing the wells from the beginning of the year is actually.
Matthew Smith: Okay Yeah.
Matthew Smith: The positive so that sort of underpins the resource base enables you therefore.
Matthew Smith: So it's an important question is sort of.
Matthew Smith: The first question is sort of you know is.
Matthew Smith: Is there a alignment as it were between the operator ourselves.
Matthew Smith: Confidence in the future phases.
Matthew Smith: That is an important piece of data as it was six weeks into this.
Matthew Smith: He's on the way forward and I think yes. There is I think you know.
Michael: Hello, Michael seven weeks into the into the program.
Matthew Smith: As always we always talked about getting you know the first phase on and getting the results from the wells.
Matthew Smith: I think we're also clear about.
Michael: Being really careful efficient about the next phases.
Matthew Smith: <unk> and then to sort of start to think.
Matthew Smith: As I said two.
Matthew Smith: Think about the next phases with new data.
Matthew Smith: To nail and Charles.
Matthew Smith: Good add.
Matthew Smith: Is that the.
Matthew Smith: What we're aiming to do is.
Matthew Smith: The initial data from actually flowing the wells you know from the beginning of the year is actually.
Matthew Smith: Phase one plus in a really capital efficient way, it's got very little additional capex associated with it and therefore, we're getting an incremental sort of value add from brownfield development.
Matthew Smith: Actually positive so that sort of underpins the resource base. The enables you therefore have confidence in the future phases. So I think you know.
Matthew Smith: That is an important piece of data as it was six weeks into this.
Matthew Smith: So if you then go to that you will sort of follow on question, which is okay, where clients how does that work within the capital allocation.
Matthew Smith: The flowback of seven weeks into the into the flowback.
Matthew Smith: I think we're also clear about being really carefully efficient about the next phases.
Matthew Smith: Is there a rinse repeat of the prior answer which is that.
Matthew Smith: <unk>.
Matthew Smith: We've always talked about 300 to 350 in the base.
Matthew Smith: You know as I said two.
Matthew Smith: Sure.
Matthew Smith: 150 to 200 and grow.
Matthew Smith: Two to nail and Charles you know what.
Matthew Smith: 300, <unk> in the base sustaining the base that's the focus of the capital spend today. So we are not in harvest mode is now declining and then it's about phasing those growth projects.
Speaker Change: What we're aiming to do is expand you know phase one plus in a really capital efficient way, it's got very little additional capex associated with it and therefore, we're getting.
Speaker Change: And incrementals that are value add from a brownfield development.
Matthew Smith: And the free cash flow yield.
Matthew Smith: We forecast.
Speaker Change: You can go to that you've set a follow on question, which is okay. Well find you know how does that work within the capital allocation.
Matthew Smith: Uh huh.
Matthew Smith: The current equity price that takes account of.
Matthew Smith: Probably a little more growth capex, but certainly within that frame.
Speaker Change: Do a rinse repeat of the prior answer which is to say that you know we've always talked about 300 to 350 in the base of 150 to 200 and grow that's really $103 50 in the base sustaining the base. That's the focus of the capital spend today. So we're not at all.
Matthew Smith: That we've talked about in the past so.
Matthew Smith: The underlying question is sort of argue off to the races again with a massive capital spend the answer is absolutely no. Yeah, we're going to prioritize the free cash flow and the capital spend.
Matthew Smith: So what you really through the end of this decade is going to be minor, it's going to be about sustaining the current well count and doing a little better brownfield months, which allows us to get more volume and maximize revenue.
Speaker Change: <unk> is now declining and then it's about phasing those growth projects.
Speaker Change: And the free cash flow yield.
Speaker Change: We forecast.
Speaker Change: Uh huh.
Speaker Change: The current equity price that takes account of.
Matthew Smith: Thank you very much Andy.
Matthew Smith: Oscar.
Speaker Change: Probably a little more growth capex, but certainly within that frame.
Speaker Change: Just a quick one I apologize if I missed this earlier, but just around <unk>.
Speaker Change: That we've talked about in the past. So you know if your underlying question is sort of all you off to the races again with a massive capital spend the answer is absolutely no. Yeah, we're going to prioritize the free cash flow and the capital spend.
Matthew Smith: And do you believe specific to me if I could so it seems like.
Speaker Change: Pleasing performance.
Speaker Change: In terms of avoided replacement on the water side of things.
Speaker Change: Early 2025, I just wondered if you could clarify Alex I apologize if I missed it.
Speaker Change: So what you really through the end of this decade is going to be mine area is going to be about sustaining the current well count and doing a little better brownfield months, which allows us to get more volume and maximizing revenue.
Speaker Change: The production.
Speaker Change: As Ron So far in January February as it has.
Speaker Change: Yes.
Speaker Change: My right being similar.
Speaker Change: So the voyage replacement yes.
Speaker Change: Yes. So we are absolutely in the range that we forecasted in the course.
Speaker Change: Well, thank you very much Andy.
Speaker Change: The only thing that if you look at the quarter you need to remember.
Speaker Change: Oscar.
Speaker Change: We have the downtime in the from the maintenance.
Speaker Change: Question, just a quick one and I apologize if I missed this earlier, but just around Ghana Jubilee specific me if I could so it seems like.
Speaker Change: We were actually producing within the range that we're forecasting.
Speaker Change: Currently, but we'll have a little impact in <unk> because of the unplanned maintenance and then we get the benefit of the additional wells starting up.
Speaker Change: Pleasing performance in terms of avoided replacement on the water side of things.
Early 2025, but just wondered if you could clarify sorry, apologies if I missed it but the <unk>.
Speaker Change: In Q, so everything going to plan in terms of the forecast range.
Speaker Change: Production.
Speaker Change: So far in January February as it has been yes.
Speaker Change: Got it.
Speaker Change: Production run rate being similar.
Speaker Change: Alright, well, thank you very much.
Speaker Change: The voyage replacement.
Speaker Change: Alright, Thanks, Matt.
Speaker Change: So we are absolutely in the range that we forecast and of course.
Speaker Change: Our next question is from David Ross with Stifel. Please proceed with your question.
Speaker Change: The only things that you look at the quarter you need to remember that we have the downtime in the from the maintenance side.
Speaker Change: Alright, great. Thanks, guys just a follow up please on <unk> actually I thought guidance was pretty upbeat given some of the other comments out there how much of that guidance in let's say Europe feels like a more optimistic view on Jubilee is down to the results you've seen from board his replacement.
Speaker Change: We're actually producing within the range that were forecasting currently but we'll have a little impact in <unk> because of the unplanned maintenance and then we get the benefit of the of the additional wells starting up.
Speaker Change: In the <unk>.
At what point can we be confident that those issues are in the past or is it too early to get carried away there.
Speaker Change: Everything going to plan in terms of the forecast.
Speaker Change: Arrange that.
Speaker Change: Got it.
Speaker Change: Yes.
Speaker Change: Well, thank you very much.
Speaker Change: Good question David.
Speaker Change: All right. Thanks, Matt.
Speaker Change: I don't want to be over simplistic about it but if you do the right things in the right way you deliver the right results. So we know what it is we need to focus on.
Speaker Change: Our next question is from David round with Stifel. Please proceed with your question.
David: Great. Thanks, guys just a follow up please on <unk> actually I thought guidance was pretty upbeat given some of the other comments out there.
Speaker Change: I would say that the.
Speaker Change: The focus for the operator and as it was so far we've started.
Speaker Change: Positively I think.
David: How much of that guidance and let's say youll feels like a more optimistic view on Jubilee is down to the results you've seen from voltage replacement.
Speaker Change: The fundamental issue is just about power generation reliability, and we've done a lot of work to identify the vulnerabilities and address those we actually did a shutdown of one of the.
David: At what point can we be confident that those issues are in the past or is it too early to get carried away that.
Speaker Change: The generators earlier this year and that's actually going to be beneficial going forward. So I think.
David: Yes.
David: It's a good question David.
Speaker Change: Are you comfortable that we know what needs to be done how it needs to be be delivered.
David: You know I don't want to be over simplistic about it but if you do the right things in the right way. You'll go then to the right result, so we know what it is we need to focus on I would say that the the focus for the operator and as it was so far we started positively I think.
Speaker Change: Therefore focused on delivering the forecast that we've put in place.
Speaker Change: What are the variables.
Speaker Change:
Speaker Change: The additional variable will be the addition of the two wells, but I think we demonstrated in the past a good track record of delivery of those wells.
David: The fundamental issue is just about power generation reliability, and we've done a lot of work to identify the vulnerabilities and address those we actually did a shutdown of one of the.
The rig that's coming back to drill is the same rig that we used in prior campaign, so that sort of derisked that too.
David: The generators earlier this year and that science, you're going to be beneficial going forward. So I think you know I feel comfortable that we know what needs to be done how it needs to be be delivered.
Speaker Change: Some degree I think we've got a very clear set of objectives for the field. We know what it is we're managing and therefore.
Speaker Change: What you should do is hold us to account for delivering the things that we said, we'd do in terms of water displacement and timing of the wells timing of the shutdown etcetera.
David: And therefore.
David: Therefore focused on delivering the forecast that we've put in place.
David: What are the variables you know.
Andy: Okay. Thanks, Andy.
David: Yeah.
David: The additional variable will be the addition of the two wells, but I think we demonstrated in the past a good track record of delivery of those wells.
Speaker Change: Second one then just I think this is the first time, we've heard from you since the terminated discussions with Tullow.
Speaker Change: Can I just get your thoughts there, please and whether that's off the table for now.
David: The rig that's coming back to drill is the same rate that we use inspire campaign, so that sort of derisked that too.
Speaker Change: Sorted by sort of stepped back a little from the question and sort of maybe.
David: Some degree I think.
David: Very clear set of objectives for the field, we know what it is we're managing and therefore, what you should do is hold us to account for delivering the things that we said we would do in terms of avoiding these placement and timing of the wells timing of the shutdown etcetera.
Speaker Change: Sort of talk about M&A in general one thing.
Speaker Change: We've been through.
Speaker Change: A period of growth for the company in a period of investment.
Speaker Change: Yeah.
Speaker Change: Coming to an end.
Speaker Change: Built a very strong portfolio I believe.
David: Okay. Thanks, Andy.
Speaker Change: With.
David: Second one then just I think this is the first time, we've heard from you since the terminated discussions with Tullow.
Speaker Change: Our strong and long RFP.
Speaker Change: With.
Speaker Change: Yeah.
Speaker Change: A deep hopper of growth projects and actually as we've discussed on the call.
David: Can I just get your thoughts there, please and whether that's off the table from now on.
Speaker Change: Your line is actually making sure that we have the right balance between the free cash flow delivery in the growth and as you can see in 2005 with focused absolutely on free.
David: You know I started by sort of step back a little from the question and sort of maybe.
David: Sort of talk about M&A in general I think the.
Free cash flow.
Speaker Change: Generation.
David: You know we've been through.
Speaker Change: I think as you then sort of turn to.
David: A period of growth for the company in a period of investment you know it's now.
Speaker Change: Through M&A I think.
Speaker Change: We are constantly always looked at opportunities through two lenses and needs to be play a value accretion process holders.
David: Coming to and we've built a very strong portfolio I believe.
David: With a strong and long RFP and there with it.
Speaker Change: Importantly, free cash flow.
<unk>.
David: A deep hopper of growth projects and actually as we've discussed on the call. Yeah. The challenge is actually making sure that we've got the right balance between the free cash flow delivery in the growth and as you can see 25 with focused absolutely on that free cash flow.
Speaker Change: Given our focus on leverage reduction is absolutely has to be positive.
Speaker Change: Of any transaction.
That's what we did on the Oxy deal for instance, so as you sort of come back to Taylor I think the short answer to use only.
Speaker Change: Plenty to look at it again in the hands.
David: Generation.
David: I think you then sort of tend to.
Speaker Change: No.
You sort of know the background, David we were at a very very preliminary stage.
David: Through M&A I think.
David: No.
David: We are constantly always looked at opportunities III. So that's two lenses and needs to be play a value accretion for our shareholders and most importantly free cash flow.
Speaker Change: Before we were forced to put out a press release and the tools.
Speaker Change: We obviously have no intention of using cosmos is occupancy.
David: <unk>, which you know Gabe.
Speaker Change: The current depressed levels, which was a.
David: Given our focus on leverage reduction is absolutely has to be positive.
Speaker Change: Have you shared by our shareholders.
David: Of any transactions.
Speaker Change: Okay Alright.
Speaker Change: Alright, Thanks, Andy that's alright.
David: That's what we did on the Oxy deal for instance, so as you sort of come banks, It's Hello, I think the short answer to use.
Speaker Change: Thanks, David.
Speaker Change: Our next question is from Mark Wilson with Jefferies. Please proceed with your question.
David: And we have plenty to look at it again in the end.
Mark Wilson: Thank you good morning gents.
David: No.
David: You sort of know the background David.
Speaker Change: I wanted to ask on the.
Speaker Change: The timeline you expect to that one five times leverage level and then just remind us of your priorities once you get beyond that point.
David: We were at a very very preliminary stage.
David: Before we were forced to put out a press release and the talks.
David: We obviously have no intention of using cosmos is accuracy.
Speaker Change: Possibly for shareholder returns versus further debt.
David: At the current depressed levels, which was a view shared by our shareholders.
Speaker Change: Leverage pay down.
Speaker Change: Yes. Thanks.
Neil Shah: I'll, let Neil take that Yeah, Hey, Mark, Yes, again, we've been clear sort of the priorities generation of free cash flow that generate that free cash flow, we used to pay down debt.
David: Okay, great. Thanks Sandy.
David: Thanks, David.
David: Yeah.
Neil Shah: And a sort of a regular cadence to queue forward in terms of getting to around one five times you can see that that's probably towards the back half of 'twenty six.
Speaker Change: Our next question is from Mark Wilson with Jefferies. Please proceed with your question.
Mark Wilson: Thank you good morning, Gents I just wanted to ask on the.
Neil Shah: In terms of where we are.
Speaker Change: The timeline, you expect to that one and a half times leverage level and then just remind us of your priorities once you get beyond that point.
Neil Shah: And.
Neil Shah: That do.
Neil Shah: Through a combination of debt pay down.
Neil Shah: And growth in the EBITDAX as production continues to increase.
Speaker Change: Possibly for shareholder returns versus further debt and leverage pay down.
Yes, and Thats, all assuming sort of a normalized oil price.
Speaker Change: Yeah. Thanks.
Neil Shah: So as we get to that point.
Speaker Change: Let me I'll take that yeah, Hey, Mark Yes. So you know again, we've been clear sort of the priorities generation of free cash flow that generate that free cash flow, we used to pay down debt.
Neil Shah: And then again I think then the conversation reopens around.
Neil Shah: The the right priority in terms of.
Neil Shah: Further debt Paydown and shareholder returns that's in my mind.
Speaker Change: And a sort of a regular cadence to queue forward in terms of getting to around one five times and see that that's probably towards the back half of 'twenty six.
Neil Shah: We will revisit that conversation continue to happen with our shareholders as we approach that in the back half of 'twenty six.
Neil Shah: Got it okay. That's great. Thank you and then another one moving over to talk to and and.
Speaker Change: In terms of where we are and yes that do.
Neil Shah: This speaks to your overall 22 year.
Speaker Change: Through a combination of debt pay down and.
Speaker Change: And growth in the EBITDAX as production continues to increase.
Neil Shah: Two P Reserve life, you spoke clearly two very little additional capex required to.
Speaker Change: Yeah, and Thats, all assuming sort of a normalized oil price.
Neil Shah: Debottleneck and otherwise the capacity in the vessel could you also speak to the if we assumed.
Speaker Change: So as we get to that point.
Speaker Change: And then again I think then the conversation reopens around Where's the right priority in terms of.
Neil Shah: Running this facility to four five or even the $2 7 million tonnes per annum.
Speaker Change: Further debt pay down and shareholder returns that's in my mind.
Neil Shah:
Speaker Change: We'll revisit that conversation continue to happen with our shareholders as we approach that in the back half of 'twenty six.
How long would it be before you would have to drill any wells at all into the tool to reservoir.
Speaker Change: Got it okay. That's great. Thank you and then another one moving over to <unk> and <unk>.
Neil Shah: Extend that.
Speaker Change: That level. Thank you.
Neil Shah: Yeah. Thanks, Thanks, Mark Yeah.
Speaker Change: This speaks to your overall 22 year.
Neil Shah: As always good questions.
Speaker Change: Two P Reserve life, you spoke clearly two very little additional capex required to debottleneck and otherwise the capacity in the vessel could you also speak to the two if we assumed.
Neil Shah: I'd go back to what I said earlier, which is the initial sort of whatever it is.
Neil Shah: Seven or eight weeks into the.
Neil Shah: The production data, we are getting back to the reservoir is sort of a positive.
Neil Shah: Obviously, we need to assimilate all of that and build it into therefore, the timing of the.
Speaker Change: Running this facility to four five or even the $2 7 million tonnes per annum.
Neil Shah: The next well currently well capacity.
Speaker Change: How long would it be before you would have to drill any wells at all into the tool to reservoir.
Neil Shah: Well exceeds the 400 million standard cubic feet.
Neil Shah: We would need to deliver the current icq of around.
Speaker Change: Extend.
Speaker Change: That level. Thank you.
Speaker Change: Yeah. Thanks, Thanks, Mark Yeah.
Neil Shah: Two four and therefore, the timing of the current of the next set of wells is dependent on.
Speaker Change: As always good questions.
Speaker Change: I go back to what I said earlier, which is the initial sort of whatever it is that sort of seven or eight weeks into the.
Neil Shah: Obviously the.
Neil Shah: Connected volume too.
Neil Shah: Each well.
Therefore, the decline rate that we would see but we are.
Production.
Speaker Change: Data, we're getting back to the reservoir is sort of positive.
Obviously, we need to assimilate all of that and build it into therefore, the timing of the AR.
Neil Shah: Several years away from from needing that well capacity.
Neil Shah: Then if you were to drill you would probably add sufficient well then to increase the capacity overall above the 800 million standard cubic feet will be driving.
Speaker Change: The next well so currently well capacity.
Speaker Change: Well exceeds the 400 million standard cubic feet.
Speaker Change: We would need to deliver the current icq of around.
Neil Shah: The profile sort of in that sort of <unk>.
Neil Shah: <unk> <unk> timeframe.
Speaker Change: 245, yeah, therefore, the timing of the current and the next set of wells is dependent on.
Neil Shah: So.
Speaker Change: Im not going to give you exact guidance of how many wells and in Asia, because I think it's slightly early on that but I think where you can take from that is it's not a significant draw on capital.
Speaker Change: Nope.
Speaker Change: Obviously, the connected volume too.
Speaker Change: Each well and therefore, the decline rate that we see but we are.
Speaker Change: The infrastructure is in terms of tie backs to the existing manifolds release really it is it is the cost of those individual wells.
Speaker Change: Yeah.
Speaker Change: Several years away from from needing that well capacity.
Speaker Change: If you were to drill you would probably add sufficient well then to increase the capacity overall above the 800 million standard cubic feet will be driving.
Speaker Change: Okay. Thank you I'll I'll hand, it over and good luck with that ramp up thank you.
Speaker Change: Thanks Mark.
Speaker Change: Our next question is from Charles Meade with Johnson Rice. Please proceed with your question.
Speaker Change: The profile sort of in that sort of 2030 timeframe yeah. So.
Charles Meade: Andy Thanks for letting me back in the queue here you've touched on this.
Speaker Change: No I'm not going to give you exact guidance of how many wells each year, because I think it's slightly early on that but I think where you can take from that is it's not a significant draw on capital.
Charles Meade: Twice, maybe three times the performance of the of the wells, which you've seen in the first seven weeks can you can you talk about that is that just.
Charles Meade: Is that just youre seeing less drawdown and better flowing pressures or is there something more.
Speaker Change: The infrastructure is in home ice in terms of tie backs to the existing manifolds that release really it is it is the cost of those individual wells.
Charles Meade: Did you guys have seen in these early days.
Charles Meade: Now what Youre doing in the early days Charles is basically to understand what you think the size of the tank is associated with each of the wells.
Okay. Thank you I'll I'll hand, it over and good luck with that ramp up.
Speaker Change: Right. Thanks Mark.
Speaker Change: Yeah.
Charles Meade: So in terms of annual productivity, we did pretty good.
Speaker Change: Our next question is from Charles Meade with Johnson Rice. Please proceed with your question.
Ts.
Charles Meade: The initial DST and then we did pretty good flow box extended flowback of the wells when we when we commissioned each of the wells. So we had a pretty good idea.
Speaker Change: Andy Thanks for letting me back in the queue here you've touched on this.
Charles Meade: Twice, maybe three times the performance of the of the wells, which you've seen in the first seven weeks can you can you talk about that is that just.
Charles Meade: The rate of each of the wells.
Charles Meade: The next piece of data that we needed was just actually what do we think the size of the Tam case yeah.
Charles Meade: Is that just you're you're seeing less drawdown and better flowing pressures or is there something.
Charles Meade: And I would say, we see more positive indications of the size and timing.
Charles Meade: More did you guys have seen in these early days.
Charles Meade: Now what you're doing in the early days Charles is basically to understand what you think the size of the tank is associated with each of the wells yeah. So in terms of actual productivity, we did pretty good.
Charles Meade: Clearly, we've got two weeks of production.
Charles Meade: From one of the wells as opposed to just a few days.
Charles Meade: Got it.
Charles Meade: Great details thanks, Amy.
Charles Meade: Thanks.
Charles Meade: <unk>.
We the initial DST and then we did pretty good flow box extended flowback of the wells when we when we commissioned each of the wells. So we had a pretty good idea of the of the rate of each of the wells that July is the next piece of Dallas that we needed was just actually what do we think the size of the Tam case yeah.
Speaker Change: Since there are no further questions at this time I would like to bring the call to a close thanks to everyone for joining today you may disconnect. Your lines at this time and thank you for your participation.
Charles Meade: I would say, we see more positive indications of the size of the tank cars.
Charles Meade: We've got so the weeks of production.
Charles Meade: From one of the wells as opposed to just a few days.
Speaker Change: Got it that's great detail thanks, Andy.
Charles Meade: Great. Thanks.
Speaker Change: Since there are no further questions at this time I would like to bring the call to a close and thanks to everyone for joining today you may disconnect. Your lines at this time and thank you for your participation.