Q1 2025 Kosmos Energy Ltd Earnings Call

May 6, 2025

Speaker Change: Good day, everyone. Welcome to Kosmos Energy's first quarter, 2025 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 Kosmos Energy.

Jamie Buckland: Thank you, operator, and thanks to everyone for joining us today. This morning, we issued our Q1 2025 earnings release. This release and the slide presentation to accompany today's call are available on the investors page of our website. Joining me on the call today to go through the materials are Andy Inglis, Chairman and CEO, and Neal Shah, CFO. During today's presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially due to factors we note in this presentation and in our UK and SEC filings. Please refer to our annual report, stock exchange announcement, and SEC filings for more details. These documents are available on our website. At this time, I will turn the call over to Andy.

Speaker Change: Thank you operator and thanks to everyone for joining us today. This morning we issued our first quarter 2025 earnings release. This release and the slide presentation to a company today's call are available on the Investors page of our website.

Speaker Change: Joining me on the call today to go through the materials, Randy Inglis, Chairman and CEO , and Neal Shah, CFO .

Speaker Change: During today's presentation we will make forward-looking statements that refer to our estimates, plans, and expectations.

Speaker Change: Actual results and outcomes could differ materially due to factors we note in this presentation and in our UK and SEC filings.

Speaker Change: Please refer to our annual report, Stock Exchange Announcement and FEC Filing for more details. These documents are available on our website and at this time I will turn the call over to Andy.

Andy Inglis: Thanks, Jamie, and good morning and afternoon to everyone. Thank you for joining us today for our Q1 results call. I'll start off the call by reinforcing the messages I gave in February with our full year results, which apply even more so in today's volatile market. Kosmos continues to focus on prioritizing cash generation, rigorous cost control, and enhancing the financial resilience of the company. I'll then provide an update on the operational progress we've made so far this year and the outlook for the remainder of 2025. Neil will then walk you through the quarter's results and the balance sheet before I wrap up with closing remarks. We'll then open up the call for Q&A. Starting on slide 3. While we're seeing heightened volatility in our sector and across global markets more broadly, our priorities remain unchanged.

Andy Inglis: Thanks, Jamie, and good morning and afternoon to everyone. Thank you for joining us today for our first quarter results call.

Speaker Change: I'll start off the call by reinforcing the messages I gave in February with our four-year results, which apply even more so in today's volatile market.

Speaker Change: Kosmos continues to focus on prioritising cash generation, rigorous cost control and enhancing the financial resilience of the company.

Speaker Change: I'll then provide an update on the operational progress we've made so far this year and the outlook for the remainder of 2025. Neil will then walk you through the quarter's results and the balance sheet before I wrap up with closing remarks. We'll then open up the call for Q&A.

Starting on line 3.

Andy Inglis: I talked in detail in February about prioritizing cash generation, and that continues to be our primary focus. We deliver that through a combination of increasing production and lowering costs. Starting with production. We were pleased to announce the export of the first cargo from the GTA project last month. All four trains on the FLNG vessel are now operational with daily production ramping up towards the contracted sales volume equivalent to 2.45 million tons of LNG per annum, with potential to go higher. I'll talk more about that on the following slide. In Ghana, we expect the drilling rig to arrive late this month with two Jubilee wells planned in 2025, which should help deliver production growth in the second half of the year.

Speaker Change: I talked in detail in February about prioritizing cast generation and that continues to be our primary focus.

Speaker Change: and we deliver that through a combination of increasing production and lowering costs.

Speaker Change: Starting with production, we were pleased to announce the export of the first cargo from the GTA Project last month.

Speaker Change: All four trains on the FMG vessel are now operational, with daily production rumping up towards the contracted sales volume, equivalent to 2.45 million tons of FMG Pradam.

Speaker Change: with potential to go higher. I'll talk more about that on the following slide.

Speaker Change: In garlic, we expect the drilling ready to arrive late this month with two Jubilee Wells planning in 2025, which should help deliver production growth in the seven half of the year.

Andy Inglis: The partnership also plans to drill an additional 4 Jubilee wells in 2026, which should further enhance production with low cost, high margin barrels, even in a lower oil price environment. In the Gulf of Mexico, we're currently drilling the fourth Winterfell well, which is expected online in Q3. On costs, I talked in February about a material reduction in costs across both capital expenditures and overhead, with the ability to exercise greater control over our CapEx going forward. We expect CapEx to fall by over 50% year-on-year, with evidence of this in Q1, with CapEx of $86 million, $200 million lower than the same quarter last year. We also committed to reduce our annual overhead by $25 million by year-end, and we've already made significant progress against that target through April.

Speaker Change: The partnership also plans to drill an additional four Jubilee Wells in 2026, which is further enhanced production with low cost high margin barrels, even in a lower oil price environment.

Speaker Change: In the Gulf of America, we're currently drilling the fourth Winterfell well, which is expected online in the third quarter.

Speaker Change: On cost I talked in February about a material reduction in costs across both capital expenditures and overhead with the ability to exercise creative control over our [inaudible]

Speaker Change: We expect Catholics to fall by over 50% year on year with evidence of this in one queue with the Catholics of 86 million, $200 million lower than the same quarter last year.

Speaker Change: We also committed to reduce our annual overhand by 25 million dollars by year and the already May significant progress against that target through April .

Andy Inglis: Finally, as we navigate a volatile market backdrop, the important actions taken last year to enhance the financial resilience of the company have put us in good shape for the year ahead. In 2024, we raised new capital, refinanced and upsized our reserve-based lending facility, which pushed out our average maturity lending. We continue to protect our balance sheet with a rolling hedging program and have minimal near-term maturities and ample liquidity. Our portfolio is also made up of assets, particularly on the oil side, with low operating costs and therefore low breakevens. Neil will go into more detail on the actions we're taking later in the presentation. The activities we have completed leave us the flexibility to maintain the resilience of our balance sheet through the current volatility.

Speaker Change: And finally, as we navigate a volatile market backdrop, important actions taken last year to enhance the financial resilience of the company are put as in good shape for the year ahead.

Speaker Change: In 2024, we raised new capital and refinance and other sides of our reserve-based lending facility, which pushed out our average maturity lend.

Speaker Change: We continue to protect our balance sheet with a role in hedging program and a minimal near-term maturity and out of poor quality.

Speaker Change: Our portfolio is also made of Bob Brackett's particularly on the oil side with low operating cost and therefore low break evens.

Speaker Change: Neil will go into more detail on the actions we're taking later in the presentation. For the activities we have completed leaders, the flexibility to maintain the resilience of our balance sheet through the current volatility.

Andy Inglis: In summary, we're focused on keeping the business in good shape through a period of market uncertainty with growing production, material cost reduction, and an unchanged priority on cash delivery to pay down debt. Turning to slide 4. We achieved several key milestones in Mauritania and Senegal in recent months, with first gas and LNG production in the GTA project, followed by the first LNG cargo. With the export of this first cargo, Mauritania and Senegal have become the latest LNG exporting nations, and Kosmos is proud to become an LNG producer. On the FLNG vessel, all four liquefaction trains are now operational, with production ramping up towards the contracted daily rate equivalent of 2.45 million tons per annum. The second cargo lifting is underway, and our full-year gross cargo guidance of 20 to 25 cargo remains unchanged.

Speaker Change: So in summary, we're focused on keeping the business in good shape through a period of market uncertainty, withdrawing production, material cost reduction, and a long-change priority in cash delivery to pay down that.

Speaker Change: Turning to slide four, we achieved several key milestones in Mauritania and Senegal in recent months. With first gas and LNG production of GTA Project, followed by a first LNG cargo.

Speaker Change: With the export of its first cargo, Mauritane and Stanigal have become the latest LNG exporting nations and Kosmos is proud to become an LNG producer.

Speaker Change: On the FLLG vessel, all fall into fashion trends are now operational, with production ramping up towards a contract of daily rate equivalent of 2.45 million tonnes per annum.

Speaker Change: The second car bill listening is underway and our four-year gross cargo guidance of 20 to 25 cargo remains unchanged.

Andy Inglis: We also expect the first condensate cargo to be exported in the second half of the year. On costs, we're targeting material reductions in both operating costs and our FPSO lease costs. We expect routine operating costs to reduce near-term as the commissioning work naturally comes to an end. In addition, we're working with BP on the FPSO refinancing, which should further reduce OpEx, targeting completion in the second half of the year. Over the medium- to long-term, the operator is investigating alternative operating models that could materially reduce costs and enhance the overall returns of the project. We look forward to working with them on this initiative. We see future upside potential in GTA with increased production through the existing facilities, and then a potentially material step up in production through some low-cost modifications to those facilities.

Speaker Change: We also expect the first Conor St. Cargo to be exported in the 7.5 of the year.

Speaker Change: On costs, we're targeting material reductions in both operating costs and our FPSO lease costs.

Speaker Change: We expect routine operating costs to reduce near term as a commissioning work naturally comes to an end.

Speaker Change: In addition, we're working with BP on the FPSO Refinancing, which should further reduce our plates, finally completion the same half of the year.

Speaker Change: Over the medium to longer term, the operator is investigating alternative operating models that could materially reduce costs and enhance the overall returns of the project.

We look forward to working with him on this initiative.

Speaker Change: We see picture upside potential in GTA with increased production through the existing facilities and then potentially material staff of the production through some low cost modifications to those facilities.

Andy Inglis: The FLNG vessel has a nameplate capacity of 2.7 million tons per annum, and the liquefaction trains are being tested at around 10% above this equivalent nameplate capacity. Next, we'll test the common systems at the maximum rate to get a better picture of where we can safely operate the facility above the contracted sales volume. We're also working with the operator in Golar to explore potential upgrades to the FLNG vessel, which could help increase LNG production capacity to beyond 3 million tons per annum. Initial work suggests this can be achieved with relatively modest upgrades. This would likely be done as part of Phase One Plus, where work has begun with the project partners to fully leverage the existing infrastructure.

Speaker Change: The FLJ vessel has a name plate capacity of 2.7 million tons per annum, and the liquefaction trains are being tested at around 10% of both this equivalent name plate capacity.

Speaker Change: Next, we'll catch the common systems at the maximum rate to get a better picture where we can safely operate the facility above the contracted sales volume.

Speaker Change: We're also working with the Operator and Gohlar to explore potential upgrades to the FMG vessel which could help increase LMG production capacity to be on 3 million tonnes per annum. Initial work suggests this can be achieved with relatively modest upgrades.

Speaker Change: This would likely be done as part of Fane's One Plus, where work has begun with the project partners to fully leverage the existing infrastructure.

Andy Inglis: Phase One Plus is a low-cost brownfield expansion to potentially double future gas sales with minor modifications to the FPSO, in addition to the upgrades to the FLNG vessel and the provision of additional domestic gas. The performance of the GTA reservoir based on data from the initial production has been positive, which creates the potential to reduce future well counts and CapEx. We'll continue to update the market as we make further progress. Turning to slide five, which looks at operations in Ghana. It's been a busy start to the year in Ghana, where we've completed two major pieces of work. Firstly, the partnership shot a new 4D seismic survey, the first over the field in around eight years, and that data is now being processed using state-of-the-art algorithms.

Speaker Change: Phase 1 plus did a low cost brownfield expansion to potentially double future gas sales with minor modifications to the FSO, in addition to the upgrade to the FLNG vessel and the provision of additional domestic gas.

Speaker Change: The warmance of the GTI Ranzo debates on data from the initial production has been positive which creates the potential to reduce future well-cowls and cafes.

Speaker Change: We'll continue to update the market as we make further progress.

Tony Sline, quite with website operations in Ghana.

Speaker Change: It's been a bit of a start to the year in Ghana where we've completed two major pieces of work.

Speaker Change: Firstly, the partnership shot a new 40 seismic survey, the first over the field in around eight years and that data is now being processed using state-of-the-art algorithms.

Andy Inglis: We believe the enhanced 4D image will greatly improve our reservoir models, and when combined with AI-supported production optimization, will enable the partnership to high-grade the future infill drilling campaigns and optimize reservoir management strategies to drive higher field recovery over the life of the asset. The second major piece of work was the scheduled Jubilee FPSO shutdown, which was completed safely and on budget in early April. The work scope should help to sustain high levels of reliability and higher production as we drill new wells in the future. This year, the operator has been delivering good facilities uptime and consistent water injection into the fields necessary to mitigate the natural decline rate. On drilling, the rig is expected to arrive this month with two Jubilee wells planned in 2025.

Speaker Change: We believe the enhanced 40-image will greatly improve our reservoir models.

Speaker Change: and when combined with a unsupported production optimization will enable a partnership to hire greater future infill drilling campaigns and optimize reservoir management strategies to drive higher field recovery over the life of the asset.

Speaker Change: The same major piece of work with the Schedule Jubilee FDSO shutdown which was completed safely in our budget in early April .

Speaker Change: The word scope should help to sustain high levels of reliability and higher production as we drill new wells in the future.

Speaker Change: This year the operators have been delivering good facilities uptime and consistent water injection into the fields necessary to mitigate the natural decline rate.

Speaker Change: On drilling, the rig is expected to arrive this month with two Jubilee Wells plans in 2025.

Andy Inglis: The partnership then plans to drill 4 Jubilee wells in 2026, with an option of additional wells if the external environment is supportive. Jubilee infill wells provide the highest returns across our portfolio, with full payback typically in months due to the low operating and development costs, and high cash margins of the barrels, even in a lower oil price environment. Finally, last month, I had a very productive meeting with President Mahama in Accra to discuss his vision for the future of Ghana's energy sector. We share a very aligned agenda around the importance of investment in the oil and gas sector to support the long-term economic and social development of the country. We look forward to continuing to work with the President and his government to invest in and advance Ghana's energy sector under his leadership. Turning to slide 6.

Speaker Change: The partnership then plans to drill four degree wells in 2026 with an option of additional wells if the external environment is supported.

Speaker Change: Jubilee Infill Wales provide the highest returns across our portfolio, with full payback typically months due to the low operating and development costs and high cash rises of the barrels, even at a low oil cost environment.

Speaker Change: And it's finally last month I had a very productive meeting with Krunter and Bahawain across to discuss his vision for the future of Guyana's energy sector.

Speaker Change: We share a very line agenda around the importance of investment in the oil gas sector.

Speaker Change: to support the long-term economic and social development of the country.

Speaker Change: We look forward to work continuing to work with the President and his government to invest in the drought that's gone as energy sector under his leadership.

Tony Spine Six

Andy Inglis: In the Gulf of Mexico, production for Q1 was in line with expectations and included a planned 30-day shutdown of the facility that hosts the Kodiak field, which has been completed. Our Gulf of Mexico production has ramped back up to around 20,000 barrels of oil equivalent a day net. On Winterfell, the workover of the No. 3 well was unsuccessful. We are currently working with partners to evaluate a future sidetrack to access those reserves. The rig is currently drilling the Winterfell No. 4 well, and that is expected online in Q3. On Tiberius, where Kosmos is operator, we're making good progress on an improved lower cost development plan, which will be supported by new ocean bottom node seismic, or OBN, being acquired this year.

Speaker Change: In the Gulf of America, production for the first quarter was in line with expectations and included a planned 30-day shutdown of facility that housed the Kodiak Field, which has been completed.

Speaker Change: Our Guild of America production has ramped back up to around 20,000 barrels while the equivalent today met.

Speaker Change: And we've developed the work over the number three wells and successful. We're currently working with partners to evaluate a future side track to access those reserves.

Speaker Change: The rig is currently drilling the winter foul for well and that is expected online in the third quarter.

Speaker Change: On Tamirius, where Cosmos is operated, we're making good progress on an improved, well-acousted development plan, which will be supported by you, Ocean bottom node, seismic, or OBN, been acquired this year.

Andy Inglis: We're working closely with Oxy, who are 50/50 partners on the project, and also own the nearby Lucius facility, which we expect would host production from the field. Post-acquisition of the OBN, the farm-out process will continue, with the aim of bringing a partner ahead of project sanction. In Equatorial Guinea, production for the quarter was steady at around 9,000 barrels of oil per day net. Post the recent infill drilling campaign, activity is relatively light this year as the partnership focuses on well work to support current production levels. In addition, we're working with the operator to reprocess the seismic we have with modern technology to high-grade the future infill drilling potential. There's a lot of opportunity in EG, so the key is making sure we have the best understanding of the subsurface before our next drilling program. Neil will now take you through the financials.

Speaker Change: We're working closely with Opsi, who are 1550 partners on the project, and also on the nearby Lucia facility, which we expect would host production from the field.

Speaker Change: Post Acquisition of the OBN, the Farm Not Process, will continue with the aim of bringing an apartment ahead of Project Cension.

Speaker Change: In Extraordinary, production for the quarter was donated around 9,000 barrels of oil per day net. Post-the-reasoned interval drilling campaign activity is relatively light this year, as a partnership focused on well work to support current production levels.

Speaker Change: In addition, we're waiting for the operators to re-process the size we have with modern technology to hydrate the future info-rolling potential.

Speaker Change: There's a lot of opportunities in EG, so the key is making sure we have the best understanding of the Substurface before our next drilling program.

Neil without taking through the financials.

Neal Shah: Thanks, Andy. Turning now to slide 7, which looks at the quarter in detail. Production for Q1 was impacted by a number of one-offs. We had heavy scheduled maintenance as communicated in February, primarily driven by the Jubilee and Kodiak shutdowns, which led to a large underlift in Q1. Entitlement production did come in slightly lower than guidance, primarily due to the timing of the GTA ramp up. As Andy talked about earlier, the GTA ramp up has progressed in April, and our full year GTA cargo guidance is unchanged. Q2 production guidance reflects this GTA ramp up, with production in Q2 expected to be around 15% higher than Q1 at the midpoint of our guidance.

Neal Shah: Thanks Andy, turning now to Slide 7 which looks at the quarter in detail.

Neal Shah: Production for the first quarter was impacted by a number of one-off.

Neal Shah: We had heavy scheduled maintenance as communicated in February , primarily driven by the Jubilee and Kodiak shutdowns, which led to a large underlist in one queue.

Neal Shah: Intitlement production did come in slightly lower than guidance, primarily due to the timing of the GTA ramp up.

Neal Shah: As Andy talked about earlier, the GTA ramp-up has progressed in April and our full-year GTA cargo guidance is unchanged.

Neal Shah: 2Q production guidance reflects this GTA ramp up, with production in the second quarter expected to be around 15% higher than the first quarter at the midpoint of our guidance.

Neal Shah: OpEx per barrel of oil equivalent was in line with guidance, but higher year-on-year, reflecting the lower production and higher maintenance in Q1 2025, including a construction support vessel at Jubilee prior to and during the scheduled shutdown and the Winterfell three workover. The biggest change was CapEx, which is materially lower year-on-year, in line with our commitment to deliver capital for the year of $400 million or lower. G&A, exploration, and interest expense were also all down year-on-year. Tax was lower year-on-year, primarily reflecting lower commodity prices. As you'll see in the appendix, we have put in our updated guidance. Full year guidance has not changed. However, I want to point out a couple of items related to Q2. The increase in Q2 OpEx is a function of our LNG cargo being lifted this quarter.

Neal Shah: Opex, her barrel of oil equivalent, was in line with guidance, but higher a year on year, reflecting the lower production and higher maintenance in 1 Q2 025, including a construction support vessel at Jubilee, prior to and during the schedule shutdown, and the Winterfell III workover.

Neal Shah: The biggest change was Capix, which is a materially lower year-on-year in line with our commitment to deliver capital for the year of $400 million or lower.

DNA, expiration, and interest expense were also all down year on year.

Taxes with lower year on year, primarily reflecting lower commodity prices.

Neal Shah: As you'll see in the appendix, we've put in our updated guidance.

Neal Shah: Full year guidance has not changed, however I want to point out a couple of items related to

Neal Shah: The increase in 2Q-Opex is a function of our 110 cargo being listed this quarter.

Neal Shah: Higher CapEx in Q2 is a function of some activity moving to Q2 from Q1 and commencing the drilling activity in Ghana and the Gulf of Mexico. Turning to slide 8. As Andy touched on earlier, 2024 was an important year of financing activity to position us well for the future. Last year, we refinanced and upsized the reserve-based lending facility, and we have recently concluded the spring redetermination with our banks. That process went well with the borrowing base well in excess of the current facility size, with the banks using a long-term price deck below the current strip. Importantly, this borrowing base excludes any value for our GTA and Gulf of Mexico assets, which could be used to access financing in the future.

Neal Shah: Higher CAPEX in 2Q is a function of some activity moving to 2Q from 1Q and commencing the drilling activity in Ghana and the Gulf of America.

[inaudible]

Starting the flight at 8pm

Speaker Change: As Andy touched on earlier, 2024 was an important year of financing activity to position us well for the future.

Speaker Change: Last year, we refinanced and upsized the Reserve-based lending facility, and we have recently concluded the spring redetermination with our banks.

Speaker Change: That process went well with a barring base well in excess of the current facility size, with the banks using a long-term price deck below the current strip.

Speaker Change: Importantly, this barring base excludes any value for our GTA and Gulf of America assets which could be used to access financing in the future.

Neal Shah: We continue to actively manage all the levers we have to maximize cash generation to repay debt, including our 2026 maturity. As part of that effort, post quarter end, we continued our rolling hedging program, adding a further 2 million barrels. We now have around 40% of remaining 2025 produced oil production hedged with a floor of approximately $65 per barrel and a ceiling of approximately $80 per barrel. In addition, as I mentioned on the previous slide, Q1 CapEx this year was materially lower year-over-year, as can be seen on the chart on the bottom right. We are working to reduce full-year CapEx further from the $400 million we communicated at our full-year results. Going into next year, we have minimal capital committed, which provides us a lot of flexibility to further manage our activity set.

Speaker Change: We continue to actively manage all the levers we have to maximize cash generation to repay debt including our 2026 maturity.

Speaker Change: As part of that effort, post-corder end, we continued our rolling hedging program, adding a further 2 million barrels.

Speaker Change: We now have around 40% of remaining 2025 production hedge with the floor of approximately $65 per barrel and the ceiling of approximately $80 per barrel.

Speaker Change: In addition, as I mentioned on the previous slide, first quarter of capex this year was materially lower year on year, as can be seen on the chart on the bottom right, and we are working to reduce full year capex further from the $400 million we communicated at our full year results.

Speaker Change: Going into next year, we have a minimal capital committed which provides us a lot of flexibility to further manage our activity set.

Neal Shah: While the environment is volatile, we continue to be active in managing our options to maintain our financial resilience. With that, I'll hand it back to Andy.

Speaker Change: While the environment is volatile, we continue to be active in managing our options to maintain our financial resilience.

With that, I'll hand it back to Andy.

Andy Inglis: Thanks, Neil. Turning now to slide 9 to conclude today's presentation. Our focus on cash generation and cost discipline remains unchanged. It is even more important given the current market volatility. Production is rising as we ramp up GTA and the near-term drilling in Ghana and the Gulf of Mexico expected to lead to further production gains in the second half of the year. We're prioritizing cash generation through the rigorous cost and capital discipline we've outlined in today's materials. We have assets with low breakevens that generate cash in a low commodity price environment. The long-term value proposition of the company is underpinned by a 2P reserves production life of over 20 years. Thank you. I'd now like to turn the call over to the operator to open the session for questions.

Andy Inglis: Thanks, Neil, for turning now to slide 9 to the food today's presentation.

Andy Inglis: I'll focus on cash generation and cost discipline remains unchanged. It's even more important given the current market volatility.

Andy Inglis: Production is rising as he ramped up GTA in the near-timed drilling in Ghana and the Gulf of America expected to lead to further production gains in the second half of the year.

Andy Inglis: We're prioritizing cash generation to the rigorous cost and capital discipline we've outlined in today's materials.

Andy Inglis: We have our sense of low-grade even the generate catch in a low-commodity price environment.

Andy Inglis: and the long-term value proposition of the company is underpinned by a 2P reserve's production last of over 20 years.

[inaudible]

Andy Inglis: Thank you, and now I'd like to turn the call over to the operators to open the session for questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for your questions. Our first questions come from the line of David Round with Stifel. Please proceed with your questions.

Speaker Change: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation total indicate your line is in the question queue. You may press star two to remove your question from the queue.

Andy Inglis: for participants using speaker equipment and maybe necessary to pick up your handset before pressing the star keys. One moment please while we pull for your questions.

Speaker Change: Our first questions come from the line of David Round with Steeple. Please proceed with your questions.

David Round: Great. Thanks. Thanks, guys. A couple from me, please. Firstly, just on the nameplate capacity test at GTA, can you talk about the timeframe there for actually understanding the potential rates and what do you actually need to see to have confidence that higher rates might be sustainable there? The second one, just in your presentation, you talk about breakevens a few times. Interested if you can talk about where you see your breakevens today and potentially how those might evolve in future years.

David Round: Great, thanks guys. Couple from me please firstly. Just on the name plate capacity test at GTA, can you talk about the time frame there for actually understanding the potential rates and what do you actually need to see to have confidence that higher rates might be sustainable there?

David Round: The second one, just in your presentation, you talk about break evens a few times, so interested if you can talk about where you see your break evens today and potentially how those might evolve in future years.

Andy Inglis: Yeah. Hi, David. Yeah, no, thanks for those two questions. In terms of the nameplate capacity, you know, as I said in the remarks, the nameplate capacity of the FLNG vessel is 2.7 million tons per annum. The process of getting to that level and beyond is testing each of the trains individually, and we're going through that process now. We've tested several, and they're sort of coming in at around 10% higher, which is typical. You know, work's ongoing then to test the overall system, and then that will give us the rate that we can deliver reliably, safely above that 2.7. That's the first step. I think that work's sort of gonna go on through the Q2. Yeah.

David Round: Yes, thanks David. Thanks for those two questions. In terms of the nameplate capacity, as I said in the remarks, the nameplate capacity of the FL and G versatile is 2.7.

David Round: and Millions Times Paranum. The process of getting to that level and beyond is...

David Round: testing each of the trains individually and we're going through that process now and we've tested several and they're sort of coming in at around 10% higher.

David Round: which is typical. You know, works on going then to test your system and then that will give us the rate that we can deliver reliably safely above that 2.7.

David Round: So that's the first step, and I think that works so they're going to go on through the second quarter.

Andy Inglis: Beyond that, once we know we're at that level, the objective then will be to deliver reliably at that, and therefore you have the option of additional volumes above the ACQ of 2.45. That's the process. There's sort of nothing unusual here. I think if you look at in LNG facilities around the world, they typically operate at above around 10% higher than nameplate. That's what we're seeing on the FLNG vessel at GTA. Moving to your second question on the breakevens.

David Round: And then beyond that, once we know we're at that level, the objective of them will be to deliver reliably with that and therefore you have the option of additional volumes above the ACQ of 2.45.

David Round: So that's the process and there's sort of nothing unusual here, you know, I think if you look at if Alan Geek's studies around the world, they typically operate it above, you know, around 10% high in the name plate and, you know, that's what we're seeing on the FL and G vessel at

Moving to your second question on the Brake Evans.

Andy Inglis: I think, you know, look, at oil prices around current levels, you know, for the remainder of the year as a whole, you know, we expect to be free cash flow positive, and we'd obviously use that free cash flow to pay down debt. Then as you look sort of forward beyond, you know, where we are today, you know, we've got a ramp-up in volume in the second half of the year and into 2026. As we expect, you know, production to rise, obviously, with the ramp-up of GTA that I've just talked about, and then with Jubilee drilling, which should commence shortly. Again, you know, as we've talked about today, we've been pretty clear about our focus on cost control, which is, you know, bringing down CapEx, reducing the overhead.

David Round: I think, you know, look, at all prices around current levels, you know, for the remainder of the year as a whole, you know, we expect to be free cashflow positive and we'd also use that free cashflow to pay down debt.

David Round: Then, as you look, sort of forward beyond the, you know, where we are today Hey!

David Round: We've got a ramp up in volume in the second half of the year and into 2026.

David Round: As we're expecting a production to rise obviously with the ramp of GTA that I've just talked about and then with Jubilee Drilling which should commence shortly.

David Round: And again, as we've talked about today we've been pretty clear about our focus on cost control, which is, you know, bringing down carpets, reducing the overhead and I think as we showed in the, with the first quarter-countbacks, we're making good progress on that.

Andy Inglis: I think as we showed with the first quarter CapEx, we're making good progress on that. You know, we haven't given CapEx guidance for 2026, but in a low price environment, you know, Neil talked about the minimal committed CapEx we have for 2026, which is really just the 4-well Jubilee program. If you have that plus maintenance CapEx across the rest of the portfolio, you know, we get to a target breakeven of around $50 per barrel Brent. You know, in that scenario, you still see production growth year-on-year 2025 to 2026, but we would be deferring future growth projects in that lower price environment.

David Round: So, you know, we haven't given Cabex Gardens for 26, but in a low price environment.

David Round: You know, Neil talked about the minimal committed capex we have for 26, which is really just the full well

David Round: Jubilee Program. So if you have that, as maintenance cap acts, across the rest of the portfolio, we get to a target breakeven of around $50 to barrel bread.

David Round: In that scenario, you still see production growth here on year 25 to 26, but we would be referring, you know, future growth projects in that lower price environment.

Andy Inglis: The thing I'd add is, you know, in that scenario. You know, I think probably around 85% the lion's share of capital is going into the Jubilee infill wells, which again, as we said in the remarks, are our highest return projects, and they've got a very low breakeven, probably on a project basis, around $30 a barrel. Even in a low price world, those are things that are gonna be adding value for the company. I think that just wanted to make sure I've sort of communicated two things. You have a sense of where that breakeven would be going forward. You know, where the capital would be allocated, and, you know, our ability to manage in a lower price world.

David Round: and I think probably around 85% of the lion's share of capital is going into the Jubilee Infil World, which again we said in remarks are our highest return projects and they've got a pro-loat break even probably on a project basis around $30 a barrel so even in a low price world those are things that are going to be adding value to the company. So I think that's it. You just want to make sure I've sort of communicated two things to your sense of why that break even would be going forward.

David Round: where the capital would be allocated and our ability to manage in the lower price world.

David Round: Okay. That's very clear. Thanks, Andy.

Okay, that's very clear. Thanks, Andy.

Andy Inglis: Great. Thanks, David.

Good bright thanks, David.

Operator: Thank you. Our next question has come from the line of Lydia Gould with Goldman Sachs. Please proceed with your questions.

Speaker Change: Thank you. Our next questions come from the line of Lydia Gould with Goldman Sachs. Please proceed with your questions.

Lydia Gould: Good morning. Thanks for taking my question. My question is around credit and the balance sheet. How are you thinking about financial leverage in a lower commodity price environment and liquidity in those circumstances? Would love your perspective on how you're thinking about the 1.0x leverage target as well.

Lydia Gould: Good morning, thanks for taking my question. My question is around credit and the balance sheet. How are you thinking about financial leverage in a lower commodity price environment and liquidity in those circumstances? We love your perspective on how you're thinking about the 1.5 times leverage target as well?

Andy Inglis: Yeah. Thanks, Lydia. Yeah. I'll pass the question across to Neal.

Yeah, thanks for being there. I'll pass the question across to Neil.

Neal Shah: Yeah. Hi, Lydia. I'd say, you know, again, I think our focus on sort of reducing financial leverage and maintaining sufficient liquidity for the business haven't changed. Again, the direction of travel for us is, you know, continue to generate free cash, which, you know, as Andy just commented, you know, we can generate in an oil price around this price, at the current price level and use that to pay down debt. As a result of that, leverage will come down over time. The pace, you know, really changes based on the oil price. You know, again, that's something outside of our control.

Lydia Gould: Yeah, hi, Lydia. So, I'd say, you know, again, I think our focus on sort of reducing financial leverage and maintaining sufficient liquidity for the business haven't changed. So, again, the direction of travel for us to, you know, continue.

Lydia Gould: to generate free cash which Andy just commented we can generate in an oil price around this price.

Lydia Gould: at the current price level, and use that to pay down debt. And as a result of that leverage will come down over time. And so the pace really changes based on the old price, but again, that's something.

Neal Shah: You know, we're taking the steps to both increase production, lower the capital expenses and operating expenses that are sort of conducive to that environment. I'd say in addition to that, you know, we talked a bit about hedging on the call. That's another tool that we're actively using to protect, insulate the cash flow from the business. If I hit your second part of the question around sort of liquidity, yeah, again, I'd still say we've got questions around sort of the debt maturities in 2026 and 2027. We did a lot of work last year to sort of manage those maturities down. We'd still anticipate paying the bulk of the outstanding 2026 notes with cash flow generated from the business.

Outsider Control

Lydia Gould: But we've taken the steps to both increase production, lower the capital expenses and operating expenses that allow.

Lydia Gould: that are sort of conducive to that environment. I'd say in addition to that, we talked a bit about hedging on the call. That's another tool that we're actively using to protect and light the cash flow from the business.

Um...

Lydia Gould: If I hit your second part of the question around sort of liquidity, um...

Lydia Gould: Yeah, again, I'd still say we've got questions around sort of the debt maturities in 26 and 27. We did a lot of work last year to sort of manage those maturities down. We'd still anticipate paying the bulk of the outstanding 26 notes with cash flow generated from the business.

Neal Shah: you know, if oil prices, you know, move lower or stay lower for a sort of extended period of time, you know, we have clearly other options in terms of leaning into existing liquidity, as well as, you know, accessing financing on some of our, unencumbered assets. You know, the Gulf of Mexico assets and, you know, our assets in Mauritania, Senegal, clearly don't have any debt. They provide us some flexibility if we wanna go raise, cost-effective secured financing, against those assets. We have a lot of, levers, that we can manage, if the environment gets worse.

Lydia Gould: and then if oil prices move lower or stay lower for a sort of extended period of time, we have clearly other options in terms of leaning into existing liquidity.

Lydia Gould: as well as, you know, accessing financing on some of our-

Lydia Gould: on encumbered assets. So the Gulf of America assets and there are assets in more

Lydia Gould: Clearly don't have any debt and that's a, they provide us some flexibility if we want to go raise cost effective secured financing against those assets and so we have a lot of levers that we can manage if the environment gets worse.

Lydia Gould: Thanks, team.

Thanks, team.

Andy Inglis: Great. Thanks, Lydia.

Great. Thanks, Lydia.

Operator: Thank you. Our next question has come from the line of Bob Brackett with Bernstein Research. Please proceed with your questions.

Speaker Change: Thank you. Our next question is coming from the line of Bob Brackett with Bernstein Research. Please proceed with your questions.

Bob Brackett: Yeah, good morning. This might be a stretch, but if I talk about Tiberius, and I see you're looking at a lower cost development plan with new OBN seismic data, and if I compare that to some of the Department of the Interior studies around co-mingled production or higher drawdown production, how do you think about the evolving policy in the Gulf of Mexico? Is that driving anything that you're doing there?

Bob Brackett: Good morning, this might be a stretch, but if I talk about Tiberius and I see you're looking in a lower cost development plan with new OB and seismic data, and if I compare that to some of the Department of Interior studies around co-mingled production or higher drawdown production, how do you think about the evolving policy in the Gulf of Mexico? Is that driving anything that you're doing there?

Andy Inglis: Yeah. No, interesting question, Bob. Yeah. I'd say there's nothing specific today that is changing our plans. Yeah. You know, it remains, I think, a basin where we see the ability to conduct business. It's a basin where we can leverage technology. You know, I think over half of the seismic in the Gulf of Mexico now is OBN. That provides us with, you know, we think, a much enhanced image, and therefore the ability to de-risk and optimize the development. So a piece of the optimization is the leverage of that OBN. Then a piece of it is actually, you know, work that we're doing with Oxy, who are our co-partner there, 50/50, but it's tied back to Lucius, that's our objective.

[inaudible]

Yeah, no interesting question, Bob, yeah, I'd say...

Bob Brackett: There's nothing specific today that is changing our plans, you know, it remains I think a base and where we see the ability to conduct business. It's a base and where we can leverage technology and then go over half of the seismic.

Bob Brackett: in the Gulf of Mexico now as OBN, and that provides us with, you know, we think a much enhanced image in there for the ability to de-risk.

Bob Brackett: our co-partner there at 50-50, but it's tied back. We, we, we, to, to Lucius, that's the, our objective.

Andy Inglis: the ability then to figure out how you fully optimize the existing infrastructure on Lucius. You know, I don't think for Tiberius, in particular, there's been something that the Department of the Interior has done, which is making a big change for us. This is work that we had going for some time now. You know, for me, it's more about the ability to leverage the technology, the pace at which that's evolving. Then I would say just good, honest engineering to take out cost. I think those are the things.

Bob Brackett: and the ability then to figure out how you fully optimise the existing infrastructure on

Bob Brackett: You know, I don't think for Tiberius in the Pacific there's been something that the Interim to what nature is done, which is making a big change for us. This is the work that we have going for some time now. And you know, for me it's more about

Bob Brackett: The ability to rule leverage the technology, the pace at which that's evolving and then I would say just is good honest engineering to take out costs. I think those are the things.

Bob Brackett: Very clear. Thanks.

Very close, thanks [inaudible]

Andy Inglis: Thanks, Bob.

Thanks, Bob.

Operator: Thank you. Our next question has come from the line of Matthew Smith with Bank of America. Please proceed with your questions.

Speaker Change: Thank you. Our next question comes from the line of Matt Smith with Bank of America. Please proceed with your questions.

Matthew Smith: Hi there, Andy. Hi, Neal. I guess my questions were really around in the current price environment, the current oil prices, would you be comfortable, deploying that growth CapEx on the Tortue expansions that you referenced, earlier? Specifically, I think the Phase One Plus, so would you be willing to deploy that growth CapEx at the current oil price was really the first question. The second question, you know, related was, are you considering in any greater way sort of monetizing part of your stakes in Senegal, Mauritania at the moment? Whether that be Tortue itself or the peripheral discoveries as well.

Matt Smith: and I related was are you considering in any greater way sort of monetising part of your stakes in Senegal, Mauritania at the moment? Was that be taught through itself or the peripheral discoveries as well?

Andy Inglis: Yeah. Good questions, Matt. Look, you know, it's a tough one to answer because it obviously depends what the price is, right? I think we've been very clear on the call today about our ability to manage in a lower price environment. It is about the committed CapEx, and that's the scenario I talked about when David asked the original question. I think going forward, we would say that the growth CapEx on Phase One Plus is not committed today, and therefore we have the option around the pace. I think that's the important thing around the resource there is that, you know, it's not an option we're gonna lose. It's about the pace of the development, and it's therefore about ensuring that we're doing it in a way which doesn't interfere with the overall financial resilience of the company.

Speaker Change: Yeah, good question, Mark. Look, you know, it's a tough one to answer because I'll tell you what the price is, right? I think we've been very clear on the call today about our ability to manage it, a lot of price environment. It is about the committed Catholics and that's an area I talked about when David asked the original question.

Speaker Change: I think going forward, we would say that the growth capex on phase 1 plus is not committed today, and therefore we have the option around the pace.

Speaker Change: And I think that's the important thing around the resource there is that it's not an option we're going to lose, it's about the pace of the development.

Andy Inglis: I feel good about the fact that we have greater clarity now, I think, on what that option is. I think we have greater alignment with ourselves, BP, and the national oil companies. I think really strong alignment now. The work that we're doing now is at the front end. It's very low CapEx, allowing us over the next 12 to 18 months to understand the engineering and make sure that we've got the right basis on which to proceed. It's a really low cost spend initially. Clearly, you'll monitor that progress, and therefore decide when you would move into a higher CapEx spend. You know, look, and then in terms of monetization. There's value being added to GTA as we speak.

So I feel good about the fact that we have...

Speaker Change: Greater clarity now, I think on what that option is. I think we have greater alignment with ourselves.

Speaker Change: to understand the engineering and make sure that we've got the right basis on which to proceed. So it's a really low cost spend initially and clearly you'll monitor that, that progress and therefore decide when you would move into a higher capex.

Spine

Matt Smith: You know, look, and then in terms of monetisation, you know, there's value being added to GTA as we speak, we're ramping up, we're demonstrating the field is working, we've got optionality, I think, I'm moving beyond the ACQ, I think there's work to be done to make sure that we fully describe the...

Andy Inglis: We're ramping up. We're demonstrating the field is working. We've got optionality, I think, of moving beyond the ACQ. I think there's work to be done, Matt, to make sure that we've fully described the full potential of GTA before we start to think about any dilution. Nothing's sacred. Everything ultimately in the portfolio has a value. What we need to do is make sure that we're in the point of the cycle where we've properly described the value. I feel good about the subsurface. We talked about that in the remarks. I think that the initial production data we're getting now is very positive, so that's a good sign.

Matt Smith: The full potential of GTA before we start to think about any deletion. So nothing sacred, everything ultimately in the portfolio has a value. What we need to do is make sure that we're in the point of the cycle where we properly describe the value. I feel good about the subsurface. We talked about that in the remarks. I think the initial production data we're going now is very positive. So that's a good sign. I think we need to demonstrate.

Andy Inglis: I think we need to demonstrate, you know, that the facility has greater potential than what is currently described in terms of the offtake, and therefore building that into future models. I think we're a little ways away from that, but it's something that we're, you know, working towards getting ourselves to the place where we've fully described the potential of GTA.

Matt Smith: You know, that the facility has greater potential than what is currently described in terms of the after and therefore building that into future models. So I think we're a little ways away from that but it's something that we're working towards getting ourselves to the place where we've fully described the potential of GTA.

Matthew Smith: Okay, great. Thank you, Andy. Happy to pass it on.

[inaudible]

Okay, great. Thank you, Andy. Happy to be able to start. Thank you.

Andy Inglis: Sure. Thank you.

Operator: Thank you. Our next question has come from the line of Stella Cridge with Barclays. Please proceed with your questions.

Speaker Change: Thank you. Our next questions come from the line of Stella Cridge with Barclays. Please proceed with your questions.

Stella Cridge: Hi there. Afternoon, everyone. Many thanks for all the updates. There was a couple of areas I wanted to ask on. The first you talked about, recent meeting in Ghana and engaging positively there. I noticed recently Tullow on their call talked about potential multiple future rounds of investment in Ghana. I just wondered, what was your takeaways from those, discussions? You know, are there any kind of key action points in the near term with regarding, you know, the partnership there over the longer term? That was the first one. Just the second one was that I noted that there was a cash outflow from notes receivable in Q1. I just wondered, will there be any more outflows from receivables, or could potentially there be any inflows, from Senegal, Mauritania in the future? That'd be great.

Speaker Change: Hi there, afternoon everyone, and many thanks for all the updates. There was a couple of areas I wanted to ask on. The first you talked about recent meeting in Ghana and engaging positively there. I know it's a recently tell-o on their call talks about potential multiple future rounds of investment in Ghana. I just wondered what was your take away from those discussions, are there any kind of key action points in the near term with regarding the partnership that they are over the longer term? That was the first one.

Speaker Change: and just the second one was the, I noted that there was a cash outflow from North Receivable in Q1. I just wondered, will there be any more outflows from receivables or could potentially there be any inflows from Senegal Mauritina in the future? That would be great.

Andy Inglis: Yeah. Look, I'll... Thanks, Stella. I'll ask Neil to pick up the question around the cash outflow. You know, Ghana, we've been there a long time. We've seen, obviously, multiple governments. For me, it was great to meet President Mahama again. He was clearly there in power eight years ago, and it was an opportunity to connect with him and sort of his view and vision of the industry in Ghana. My big takeaway is that he has a very clear mandate, I think to reenergize the sector.

Speaker Change: Yeah, well, thanks, I'll ask Neil to pick up the question around the catch outflow.

You know, we've been there a long time.

Speaker Change: For me it was great to meet President Mohammer again. He was clearly there in a couple of years ago.

Speaker Change: It was an opportunity to connect with him and sort of has you a vision of the industry in Ghana.

Speaker Change: Nothing take away is that he has a very clear mandate, I think, to re-energise the sector. There is, I think, a lot of potential remaining in the basin.

Andy Inglis: There is, I think, a lot of potential remaining in the basin, but it's a potential that is actually around sort of near-term activity, you know, where you're getting the most out of your existing fields that are on production. I think, you know, the big point to take away from it is that, you know, I think I've talked on previous calls about the potential that we see in Jubilee, the remaining reserves to be produced. You know, an important element of that is you have an aligned agenda with the government and obviously with the national oil company. That's what I took away from it, that we have the same aligned agenda. It's a place where Kosmos is welcome.

Speaker Change: but it's a potential that is actually around sort of near to an activity, you know, where you're getting the most out of your existing fields that are on production and I think the big point to take away.

Speaker Change: from it is. I've talked on previous calls about the potential that we see in Jubilee, the remaining reserves to be produced.

Speaker Change: and an important element that that is you have an aligned agenda with the government and obviously with the National Oil Company.

Speaker Change: And that's what I took away from it, that we have the same align agenda. It's a place where Kosmos is welcome.

Andy Inglis: You know, we're embarking on a program now with obviously two wells in 2025, but then, you know, four wells in 2026 to ramp up Jubilee production. Then the potential, you know, to work and continue to work on enhanced recovery from the field. I, you know, I think the big message is around. We're welcome. We have a long history there, and we have very much an aligned agenda as we look, you know, to get the, you know, maximize both the efficiency and the effectiveness of the recovery, which will benefit both, you know, the country and Kosmos's shareholders. You know, I think that's the big message from that.

Speaker Change: and we're embarking on a programme now with obviously two worlds in 25 but then four worlds in 26 to ramp up a Jubilee production. And then the potential to work and continue to work on enhanced recovery from the field.

Speaker Change: So I think the big, you know, big messages around the fight. We have a country where we're welcome, we have a long history there, and we have very much an aligned agenda as we look, you know, too to get.

Speaker Change: They are maximised both the efficiency and the effectiveness of the recovery, which will benefit both the country and Kosmos' shareholders.

Speaker Change: So, you know, I think that's a big message from that. And, you know, as I say, we're starting on that journey now with the, with the info program that we'll, you know, drilling rig to arrive this quarter.

Andy Inglis: You know, as I say, we're starting on that journey now with the infill program that will, you know, drilling rig to arrive this quarter. Maybe if I just pass the call across to Neil just to cover your question about the cash flow.

Neal Shah: Maybe if I just pass the call across to to Neil just to cover your question about the cash

Neal Shah: Yeah. Hi, Stella. I think the question you asked was just around the NOC financing that was in Q1. You know, that's part of the development loan that we put in place with GTA that comes to a close basically this quarter. In terms of our obligation to finance their sort of development expense, and then, you know, as you noted then, there'll be a repayment schedule in terms of then starting to get that cash flow back.

Neal Shah: Yeah, I sell it. I think the question yes is just around the NSC financing that was in one queue and so yeah that's part of the development loan that we put in place with GTA that comes to a close basically this quarter and so in terms of our obligation to finance.

Neal Shah: Their sort of development expense, and then, you know, as you noted, then there will be a repayment schedule in terms of then starting to get that cash flow back. So, you know, again, in the second half of the year, you know, it'd be stopping an outflow, and then, you know, as we deliver the increase in production and reductions in operating expenses, then there's capacity for that cash flow to start being...

Neal Shah: you know, again, in the second half of the year, you know, it'd be stopping an outflow and then, you know, as we deliver the increase in production and reductions in operating expenses, then there's capacity for that cash flow to start being repaid back to both us and BP as part of that repayment of the NOC loans. We're sort of near the peak of that in terms of capital expended.

Neal Shah: Repaid back to both us and BP as part of that repayment of the NFC loans and so we're sort of near the peak of that in terms of capital expended.

Stella Cridge: That's super. Many thanks for the answers.

That's it from me. Thanks for the answers.

Andy Inglis: Mm-hmm. Great. Thanks, Cel.

Great. Thanks, Scott.

Operator: Thank you. Our next question has come from the line of Nikhil Bhat with JPMorgan. Please proceed with your questions.

Speaker Change: Thank you. Our next question has come from the line of Nikhil Becht with JP Morgan. Please first see with your questions.

Nikhil Bhat: Morning. I just have one quick one. More of a clarification on your LNG offtake agreement with BP. Could you please remind me if there's any annual quota of volumes of cargoes that you're contracted to sell to BP? Also if there's, could you remind me what was the contracted price again, please? Thanks.

Speaker Change: Morning. I just have one quick one. The more of a clarification on your LNG off-take agreement with BP.

Speaker Change: Could you please remind me if there's any annual quota of volume the car goes that you're contracted to sell to BP and also if there's couldn't remind you of the contracted price again, please.

Andy Inglis: Yeah. The annual contract quantity is 2.45 million tons per annum, and the price is 0.95 or 9.5% slope against Brent FOB.

Speaker Change: The annual contract quantity is 2.45 million tonnes per annum, and the price is 0.95 or 9.5% slope against Brent.

Nikhil Bhat: Thank you.

Thank you.

Andy Inglis: Does that make sense, Nikhil? Yeah, I know that's sort of short machine gun stuff, but is that precisely the answer?

Speaker Change: Does that make sense in the kill? I know that's sort of short machine gun stuff, but is that precisely the answer?

Operator: Thanks.

Nikhil Bhat: Thanks.

Andy Inglis: Okay.

Operator: Our next question comes from the line of Mark Wilson with Jefferies. Please proceed with your questions.

Okay, we're next.

Operator: Our next question comes from the line of Mark Wilson with Jefferies. Please proceed with your questions.

Speaker Change: Our next question comes from the line of Mark Wilson with Jeffries. Please proceed with your questions.

Mark Wilson: Thank you. Good afternoon, gents. First off on two, if you give a bit more color on what is it you've seen with the subsurface performance that you mentioned is ahead of expectations, which sounds good. Second point, I wonder what are the steps to domestic obligation offtake, physically with regards to pipeline, and also financially, does that connect to what Neal was just talking about NOC payback? Do you need that domestic obligation in place? Thanks. Those are my two points.

Thank you and good afternoon, gents.

Mark Wilson: First off, on tour two, I'll just give you a bit more color on what is it you've seen with the subsurface performance that you mentioned is ahead of expectations, it sounds good. And then second point, I wonder what are the steps to domestic obligation offtake?

Physically with his concert prep line, and also financially does that connect to what?

Neal Shah

Speaker Change: just talking about NOC payback. Do you need that domestic obligation?

in place. Thanks, those are my two...

Andy Inglis: Yeah. Mark, yeah. Look, on the subsurface, you sort of go back in time, obviously, you know, you understand this, but, you know, seismic you then do, you know, we had 3 exploration wells, 1 appraisal well, and we've got 4 development wells. The 4 development wells we did flow back for a short period of time. It's tough on those shorter flow backs to sort of see where you are getting any connected volumes. Yeah. I think the big, you know, as it were, new piece of data we've got is from the flow back from the first two wells actually, we're seeing a greater connection in volume than we'd originally mapped.

Mark Wilson, Neil Mehta,

Speaker Change: Yeah, Mark, yeah, still, look on the subsets, you still go back in time, lots of, you know, you understand this, but you know, seismic, you then do, you know, we've had three exploration wells, one appraisal well, then we've got four development wells.

for the very moment. Well, we did fly back.

Speaker Change: You know, as we're new piece of data, we've got it from the flow back from the first two months actually. We're seeing a greater connection and volume than we'd originally met.

Andy Inglis: I think, you know, that's a very positive, obviously, because as you start to think about the future, therefore, there, you know, if you have the opportunity to reduce the number of wells you need for a given amount of recovered volume, which again, would handily enhance the returns from the project. In terms of the second question, Mark, just remind me. Domestic gas and the build-out of the infrastructure. Yeah. Okay. Yeah. In essence, yeah, the obligation, just so we're clear on the obligation. The obligation is with the offtaker, which is the national oil company, to build any infrastructure.

Speaker Change: So I think that's a great positive, obviously, because as you start thinking about the future there for there, you have the opportunity to reduce the number of wells you need for a given amount of recovered volume which again would enhance the returns from the...

from the project. [inaudible]

of the same question, Mark, just remind me.

Speaker Change: Domestic gas and the build out of the infrastructure. The obligation is with the off-take, which is the natural company to build any infrastructure. They are responsible for building the pipeline from the hub terminal to the off-take point.

Andy Inglis: They’re responsible for building the pipeline from the hub terminal, which is the offtake point, to whatever their chosen landing point is. We don't have any capital liability for that. Was that? I think that was really the essence of your question, wasn't it?

Speaker Change: to whatever that shows landing point is, so we don't have any capital liability for that.

Speaker Change: I think that was really the essence of your question, wasn't it?

Mark Wilson: Yes, it is. Obviously until they do that, you, I guess, can sell at nameplate price.

Yes, it is, and obviously until I do that, you- [inaudible]

Thank you.

and Jessica Mischel. Thank you.

Andy Inglis: You have more gas to sell. Yeah, exactly. You've got more gas to sell. Yeah. We're so, you know, and I don't think there's a limit to the system or, you know, the FPSO, all right, and then its associated infrastructure can do well more than, you know, 3 million tons per annum. Yeah. It's, in terms of delivering LNG, the constraint is the capacity of the facility itself. Then, you know, if it's at its full capacity and that number is beyond the 2.7 million tons per annum, there's still, you know, gas available for domestic. We're not, you know, it's not about sort of one big exchange for the other. There's plenty of capacity in the system.

Name.

You have more gas to sell.

Speaker Change: and that number is beyond the 2.7 million tonnes per annum, that's still gas available for domestic. So it's not about one being exchanged for the other, there's plenty of capacity in the system.

Mark Wilson: Absolutely. It makes sense. Thank you. I'll hand that over.

Absolutely.

Andy Inglis: All right. Good. Thanks, Mark.

It makes sense, thank you, I'll hand that [inaudible]

All right, good. Thanks, Mark.

Operator: Thank you. 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 now disconnect your lines, and thank you for your participation.

Speaker Change: Thank you. Since there are no further questions at this time, I would like to bring the call to a close.

Speaker Change: Thanks to everyone for joining today. You may now disconnect your lines and thank you for your participation.

Q1 2025 Kosmos Energy Ltd Earnings Call

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