Q2 2026 Kosmos Energy Ltd Earnings Call

August 3, 2026

Speaker #1: Good day, everyone. Welcome to Kosmos Energy's second quarter 2026 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.

Operator 3: Good day, everyone. Welcome to Kosmos Energy's Q2 2026 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.

Operator: Good day, everyone. Welcome to Kosmos Energy's Q2 2026 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.

Speaker #2: Thank you, operator, and thanks to everyone for joining us today. This morning, we issued our second quarter 2026 earnings release. This release and the slide presentation to accompany today's call are available on the Investors page of our website.

Jamie Buckland: Thank you, operator, and thanks to everyone for joining us today. This morning, we issued our Q2 2026 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 that 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'll turn the call over to Andy.

Jamie Buckland: Thank you, Operator, and thanks to everyone for joining us today. This morning, we issued our Q2 2026 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 that 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'll turn the call over to Andy.

Speaker #2: 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.

Speaker #2: Actual results and outcomes could differ materially due to factors that 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.

Speaker #2: These documents are available on our website. At this time, I'll turn the call over to Andy.

Speaker #3: Thanks, Jamie, and good morning and afternoon to everyone. Thank you for joining us today for our second quarter 2026 results call. I'll begin today's call by reviewing the progress we've made against the four 2026 goals that we laid out at the start of the year, before giving an update on each of our business units.

Andy Inglis: Thanks, Jamie, and good morning and afternoon to everyone. Thank you for joining us today for our Q2 2026 results call. I'll begin today's call by reviewing the progress we've made against the four 2026 goals that we laid out at the start of the year before giving an update on each of our business units. I'll hand it to Neal to talk about the financials before I wrap up with closing remarks. We'll open up the call for Q&A. Starting on slide three. When we released our full year 2025 results in March, we laid out four key objectives for Kosmos in 2026, which is shown on the slide. I'm pleased to say, in the H1 of the year, we've made excellent progress across all four. We've grown production from our core assets, namely Jubilee and GTA.

Speaker #3: I'll then hand over to Neal to talk about the financials before I wrap up with the closing remarks. We'll then open up the call for Q&A.

Speaker #3: Starting on slide 3: When we released our full-year 2025 results in March, we laid out four key objectives for Kosmos in 2026, which are shown on the slide.

Speaker #3: I'm pleased to say that, in the first half of the year, we made excellent progress across all four. We've grown production from our core assets, namely Jubilee and GTA. We've delivered significant absolute and per-BOE cost reductions year-on-year, with a particular focus on operating costs. We've delivered a meaningful reduction in net debt already this year and are making good progress toward hitting a 20% reduction in net debt—a target we increased with our first quarter results in May.

Andy Inglis: We've delivered significant absolute and per BOE cost reductions year on year with a specific focus on operating costs. We've delivered a meaningful reduction in net debt already this year and are making good progress towards hitting a 20% reduction in net debt, a target we increased with our Q1 results in May. We've continued to advance our high-quality growth portfolio, particularly in the Gulf of America, with minimal capital input. Through these actions, we're delivering a stronger and more valuable Kosmos, a company with high production, lower costs, and lower debt that is more resilient to future price volatility, with significant upside from our deep hopper of future growth opportunities. I'll now go into more detail as we move through the slides. Starting with Ghana on slide four.

Speaker #3: And we've continued to advance our high-quality growth portfolio, particularly in the Gulf of Mexico, with minimal capital input. Through these actions, we're delivering a stronger and more valuable Kosmos.

Speaker #3: A company with high production, lower costs, and lower debt is more resilient to future price volatility, with significant upside from our deep hopper of future growth opportunities.

Speaker #3: I'll now go into more detail as we move through the slides, starting with Ghana on slide 4. We've seen a lot of positive progress in Ghana this year, with an active drilling campaign that is delivering towards the upper end of our expectations, demonstrating Jubilee's potential.

Andy Inglis: We've seen a lot of positive progress in Ghana this year with an active drilling campaign that is delivering towards the upper end of our expectations, demonstrating Jubilee's potential. We've used a chart on this slide for the last few quarters to highlight the ramp-up in Jubilee production since the start of the current drilling campaign in the H2 of 2025. Since we reported Q1 results in May, two new producers have come online, J76 and J77. The final producer well of the campaign, J50, is the completion of a previously drilled well, is expected to start up in the coming days. With J50 online, we expect Jubilee gross production above 90,000 barrels of oil per day. J76, in particular, came in at the top end of our expectations, and based on performance so far, is the best well we've seen at Jubilee in over a decade.

Speaker #3: We've used the chart on this slide for the last few quarters to highlight the ramp-up in Jubilee production since the start of the current drilling campaign in the second half of 2025.

Speaker #3: Since we reported first quarter results in May, two new producers have come online—J76 and J77. The final producer from the campaign, J50, which is the completion of a previously drilled well, is expected to start up in the coming days.

Speaker #3: With the J50 online, we expect Jubilee gross production to be above 90,000 barrels of oil per day. J76, in particular, came in at the top end of our expectations, and based on performance so far, is the best well we've seen at Jubilee in over a decade.

Speaker #3: The well is an example of the upside potential of the asset and shows there is a lot of future value left to play for, particularly as we start to integrate the results of the 2025 OBN seismic into our future well planning.

Andy Inglis: The well is an example of the upside potential of the asset and shows there is a lot of future value left to play for, particularly as we start to integrate the results of the 2025 OBN seismic into our future well planning. With seven months of production, we have a robust track record that underpins our full year guidance for Jubilee, which remains unchanged at 70,000 to 80,000 barrels of oil per day. The performance of the latest wells continues to support the upper end of this range. An important takeaway from the chart at the top of the slide is the correlation between activity and performance. During periods of drilling, high FPSO uptime, and sustained water injection, the field has performed well.

Speaker #3: With seven months of production, we have a robust track record that underpins our full-year guidance for Jubilee, which remains unchanged at 70,000 to 80,000 barrels of oil per day.

Speaker #3: The performance of the latest wells continues to support the upper end of this range. An important takeaway from the chart at the top of the slide is the correlation between activity and performance.

Speaker #3: During periods of drilling, high FPSO uptime, and sustained water injection, the field has performed well. We are therefore working closely with the operators to secure a rig for the 2027-2028 drilling campaign for up to 10 wells, with the objective of starting in mid-2027.

Andy Inglis: We're therefore working closely with the operators to secure a rig for the 2027, 2028 drilling campaign for up to 10 wells, with the objective of starting in mid-2027. This campaign will benefit from both the fully processed 4D and fast-track OBN seismic, which will help refine and high-grade future well locations and give the partnership the best opportunity to maximize future reserve recovery. In summary, it's an exciting time in Ghana. Jubilee, our highest margin production, is performing strongly at a time of higher oil prices, helping us to deliver our debt reduction targets for the year. Looking forward, with the benefit of new technologies, we're working closely with the operators to plan and progress next year's drilling campaign. Turning to slide five. GTA has continued to perform well this year.

Speaker #3: This campaign will benefit from both a fully processed 4D and fast-track OBN seismic, which will help refine and high-grade future well locations and give the partnership the best opportunities to maximize future reserve recovery.

Speaker #3: So, in summary, it's an exciting time in Ghana. Jubilee, our highest margin production, is performing strongly at a time of higher oil prices, helping us to deliver our debt reduction targets for the year.

Speaker #3: And looking forward, with the benefit of new technologies, we're working closely with the operators to plan and progress next year's drilling campaign. Turning to slide 5.

Speaker #3: GTA has continued to perform well this year. In the second quarter, gross LNG production was around 2.65 million tons per annum equivalent, in line with our expectations.

Andy Inglis: In Q2, gross LNG production was around 2.65 million tons per annum equivalent, in line with our expectations. Nine gross LNG cargoes were lifted during the quarter at the upper end of guidance. For the full year, our guidance of 32 to 36 gross LNG cargoes remains unchanged, with 18.5 lifted in H1. During Q2, one condensate cargo was jointly lifted by Kosmos and the NSC, with around 300,000 barrels net to Kosmos. An additional condensate cargo is expected late in Q3, which is also expected to be assigned to Kosmos and the NSC, with around 400,000 barrels net to Kosmos. Due to the seasonality that we've flagged in the past, daily LNG production expected to remain slightly lower during the summer months because of the warmer sea and air temperatures.

Speaker #3: Nine gross LNG cargoes were lifted during the quarter, at the upper end of guidance. For the full year, our guidance of 32 to 36 gross LNG cargoes remains unchanged, with 18.5 lifted in the first half of the year.

Speaker #3: During the second quarter, one condensate cargo was jointly lifted by Kosmos and the NSCs, with around 300,000 barrels net to Kosmos. An additional condensate cargo is expected late in the third quarter, which is also expected to be assigned to Kosmos and the NSCs, with around 400,000 barrels net to Kosmos.

Speaker #3: Due to the seasonality that we've flagged in the past, daily LNG production is expected to remain slightly lower during the summer months because of the warmer sea and air temperatures.

Speaker #3: Volume should then pick up again late in the year as cooler temperatures return. On costs, we remain on track to hit our 50% reduction target for opex per MMBTU this year, and see scope for further reduction in 2027.

Andy Inglis: Volumes should pick up again later in the year as cooler temperatures return. On costs, we remain on track to hit our 50% reduction target for OpEx for MMBtu this year and see scope for further reduction in 2027. On the phase I expansion with domestic gas to power, which should materially enhance project returns, there's been good progress on the ground in both Senegal and Mauritania so far this year. In Senegal, the land has now been cleared to the onshore section of the northern segment of the gas pipeline, which will connect GTA to the 250-megawatt Gandon power station being built near Saint Louis. The photographs on the top of the slide show the gathering in China in May to celebrate the completion of the fabrication of the onshore pipeline before it was shipped to Senegal.

Speaker #3: On the phase one expansion for domestic gas to power, we should materially enhance project returns. There's been good progress on the ground in both Senegal and Mauritania so far this year.

Speaker #3: In Senegal, the land has now been cleared for the Ensore section of the northern segment of the gas pipeline, which will connect GTA to the 250-megawatt Gandong power station, being built near Saint Louis.

Speaker #3: The photographs on the top of the slide show the gathering in China in May to celebrate the completion of the fabrication of the onshore pipeline before it was shipped to Senegal.

Speaker #3: The pipeline is due to arrive in-country in the coming days, after taking a longer route than initially planned to avoid the Middle East.

Andy Inglis: The pipeline is due to arrive in country in the coming days after taking a longer route than initially planned to avoid the Middle East. In Mauritania, the country just signed a 25-year agreement with the Saudi Power Company for the development, finance, construction, and operation of a new 230-megawatt gas-fired power plant in N'diago, which is expected to use gas from the GTA field. These developments in Senegal and Mauritania are important steps for both countries to enhance domestic electricity generation, reduce reliance on imported fuels, and support the country's long-term energy security and industrial development. Turning to slide six. Production in the Gulf of Mexico for Q2 was in line with expectations, with continued solid performance for our operated Odd Job and Kodiak fields.

Speaker #3: In Mauritania, the country just signed a 25-year agreement with the Saudi Power Company for the development, finance, construction, and operation of a new 230-megawatt gas-fired power plant in Ndiago, which is expected to use gas from the GTA field.

Speaker #3: These developments in Senegal and Mauritania are important steps for both countries to enhance domestic electricity generation, reduce reliance on imported fuels, and support the countries' long-term energy security and industrial development.

Speaker #3: Turning to slide 6. Production in the Gulf of Mexico for the second quarter was in line with expectations, with continued solid performance from our operated Odd Job and Kodiak fields.

Speaker #3: On Winterfell, the Number Five well was temporarily abandoned by the operator due to casing issues encountered during drilling. Turning to the gross side of the business, following Final Investment Decision in March, the Tiberius project is making good progress.

Andy Inglis: On Winterfell, the number five well was temporarily abandoned by the operator due to casing issues encountered during drilling. Turning to the growth side of the business. Following final investment decision in March, the Tiberius project is making good progress. Last week, we successfully completed a highly competitive farm down on Tiberius, bringing Navitas into the project as a 33.33% partner. Following the farm in, Kosmos will remain as operator with a 33.34% interest. Oxy, the owner and operator of the nearby Lucius facility, will have a 33.33% interest. The farm-in proceeds are a mix of upfront cash, carry for future development CapEx, and future milestone payments. We expect the carry element to cover all of our Tiberius CapEx in 2026 and fund our share of the development through H1 2027. Tiberius is a low-cost, high-margin development.

Speaker #3: Last week, we successfully completed a highly competitive farm-down on Tiberius, bringing Navitas into the project as a 33.33% partner. Following the farm-down, Kosmos will remain as operator, with a 33.34% interest.

Speaker #3: Off to the owner and operator of the nearby Lucius facility, we'll have a 33.33% interest. The farm-in proceeds are a mix of upfront cash, carry for future development capex, and future milestone payments.

Speaker #3: We expect the carry element to cover all of our Tiberius capex in 2026 and fund our share of the developments through the first half of 2027.

Speaker #3: Tiberius is a low-cost, high-margin development. We now have an aligned partnership to move it forward, with the first order expected in the second half of 2028.

Andy Inglis: We now have an aligned partnership to move it forward, with first oil expected in H2 2028. Elsewhere in the Gulf, as previously discussed, we entered into a strategic exploration alliance with Shell earlier in the year. As part of the alliance, we exchanged interests across multiple blocks across the Norphlet Play, which houses several material exploration prospects. Shell plans to start drilling the first of these, Trailblazer, in Q1 2027. Trailblazer is targeting around 200 million barrels oil gross equivalent resource, and Kosmos is designated as the development operator in the event of success. I'll now turn it over to Neal to take you through the financials.

Speaker #3: Our swell in the Gulf has previously been discussed. We entered into a strategic exploration alliance with Shell earlier in the year. As part of the alliance, we exchanged interests across multiple blocks across the Norfolk Plain, which houses several material exploration prospects.

Speaker #3: Shell plans to start drilling the first of these Trailblazer wells in the first quarter of 2027. Trailblazer is targeting around 200 million barrels of oil gross equivalent resource, and Kosmos is designated as the development operator in the event of success.

Speaker #3: I'll now turn it over to Neal to take you through the financials.

Speaker #2: Thanks, Andy. Turning now to slide 7, which looks at the financials for the second quarter in detail. As Andy mentioned, it's been a strong quarter for the company, with production around 12% higher year on year.

Neal Shah: Thanks, Andy. Turning now to slide seven, which looks at the financials for Q2 in detail. As Andy mentioned, it's been a strong quarter for the company, with production around 12% higher year-on-year, driven by the new wells coming online at Jubilee and the ramp up at GTA. Realized price was higher year-on-year, reflecting the elevated pricing seen in Q2 following the war in the Middle East. As flagged last quarter, some of the pricing of our production has a lag impact, so we should also see some benefit of the higher Q2 pricing in Q3. On operating costs, we've seen a material reduction in both absolute and unit costs year-on-year. Absolute operating costs in Q2 are around 25% lower year-on-year, consistent with our ongoing efforts to drive down costs across the business.

Speaker #2: Driven by the new wells coming online at Jubilee and the ramp-up at GTA. Realized price was higher year-on-year, reflecting the elevated pricing seen in the second quarter, following the war in the Middle East.

Speaker #2: As flagged last quarter, some of the pricing of our production has a lag impact, so we should also see some benefit from the higher Q2 pricing in the third quarter.

Speaker #2: On operating costs, we've seen a material reduction in both absolute and unit cost year-on-year. Absolute operating costs in the second quarter are around 25% lower year-on-year, consistent with our ongoing efforts to drive down costs across the business.

Speaker #2: With the EG disposal, we've now sold our highest-cost barrels, so we'd expect absolute operating costs per unit to continue to fall through the second half of the year.

Neal Shah: With the EG disposal, we've now sold our highest cost barrels, we'd expect absolute operating costs and cost per unit to continue to fall through the H2 of the year. The rest of the cost lines for the quarter were in line with guidance, it's worth highlighting the interest expense reduction, which we expect to continue as we deliver on our debt reduction targets for the year. In terms of guidance for the Q3 and the full year 2026, we have updated the table in the appendix to reflect the Equatorial Guinea sale, which was completed in June. The two main line items that have been updated are production and operating costs.

Speaker #2: The rest of the cost lines for the quarter were in line with guidance, but it's worth highlighting the reduction in interest expense, which we expect to continue as we deliver on our debt reduction targets for the year.

Speaker #2: In terms of guidance for the third quarter and the full year 2026, we have updated the table in the appendix to reflect the Equatorial Guinea sale, which was completed in June.

Speaker #2: The two main line items that have been updated are production and operating costs. On production, the midpoint of the range has been moved down around 2,500 barrels of oil equivalent per day net, taking out the EG barrels for the second half of the year.

Neal Shah: On production, the midpoint of the range has been moved down around 2,500 barrels of oil equivalent per day net, taking out the EG barrels for the H2 of the year, with the remaining portfolio on track following the strong performance year to date. With slightly lower production post the EG sale and significantly lower costs, we remain on track to reduce OpEx per barrel by around 35% in 2026. Turning to slide eight. We have had an active H1 of the year, carrying out several important initiatives to drive a meaningful reduction in both debt and leverage, clear near-term maturities and increase liquidity. The successful GTA bond largely addressed the 2027 bond maturity, we intend to pay the remaining stub with free cash flow. We paid down approximately $420 million of debt through free cash flow, the equity raise, and proceeds from the EG sale.

Speaker #2: With the remaining portfolio on track, following the strong performance year to date, and with slightly lower production post the EG sale and significantly lower costs, we remain on track to reduce opex per barrel by around 35% in 2026.

Speaker #2: Turning to slide 8. We have had an active first half of the year, carrying out several important initiatives to drive a meaningful reduction in both debt and leverage, clear near-term maturities, and increase liquidity.

Speaker #2: The successful GTA bond largely addressed the 2027 bond maturity, and we intend to pay the remaining stub with free cash flow. We paid down approximately $420 million of debt through free cash flow, the equity raise, and proceeds from the EG sale.

Speaker #2: And we ended the quarter with over $500 million of available liquidity. This progress was recognized by the rating agencies, with both S&P and Fitch upgrading the company to B-.

Neal Shah: We ended the quarter with over $500 million of available liquidity. This progress is recognized by the rating agencies with both S&P and Fitch upgrading the company to B-, reflecting the work we've done to enhance the balance sheet in the H1 of the year. Looking at the H2 of the year and the things that remain on our to-do list. We've commenced discussions with the lending banks around amending and extending the RBL, we expect that process to close during the Q4, targeting a facility size of around $1.2 billion. As we make further progress on the capital structure, we will also look potentially to repay the 2028 notes later in the year. Lastly, we'll continue to take advantage of higher prices to layer in more hedges for 2027.

Speaker #2: Reflecting on the work we've done to enhance the balance sheet in the first half of the year, let's look at the second half and the items that remain on our to-do list.

Speaker #2: We've commenced discussions with the lending banks around amending and extending the RBL, and we expect that process to close during the fourth quarter, targeting a facility size of around $1.2 billion.

Speaker #2: As we make further progress on the capital structure, we will also look, potentially, to repay the 2028 notes later in the year. And lastly, we'll continue to take advantage of higher prices to layer in more hedges for 2027.

Speaker #2: With continued execution, we'd expect leverage to fall further towards 2x by year-end, a pretty significant turnaround in only 12 months. So, in summary, we've worked hard in the first half of the year to reduce absolute debt and leverage while improving liquidity.

Neal Shah: With continued execution, we'd expect leverage to fall further towards two times by year end, a pretty significant turnaround in only 12 months. In summary, we've worked hard in the H1 of the year to reduce absolute debt and leverage while improving liquidity. There's more to do in the H2, we are being proactive and methodical to get it all done. With that, I'll hand it back to Andy.

Speaker #2: There's more to do in the second half, and we are being proactive and methodical to get it all done. With that, I'll hand it back to Andy.

Speaker #3: Thanks, Neal. Turning now to slide 9 to conclude today's presentation. As stated in my opening remarks, we have four key objectives for 2026: grow production, lower costs, reduce debt, and advance our quality growth portfolio with minimal capex in 2026.

Andy Inglis: Thanks, Neal. Turning now to slide nine to conclude today's presentation. As stated in my opening remarks, we have four key objectives for 2026: grow production, lower costs, reduce debt, and advance our quality growth portfolio with minimal CapEx in 2026. This slide shows the progress we've achieved year to date against those goals. Production for H1 2026 is up 18% versus the same period last year. Absolute operating costs are down 24% in H1 2026 versus 2025. We've delivered a reduction in net debt around 50% versus year-end 2025. We are advancing our growth portfolio with the Tiberius FID and farm down, continuing progress on GTA expansion and the exploration alliance with Shell in the Gulf of Mexico.

Speaker #3: This slide shows the progress we've achieved year to date against those goals. Production for the first half of 2026 is up 18% versus the same period last year.

Speaker #3: Absolute operating costs are down 24% in the first half of 2026 versus 2025. We’ve delivered a reduction in net debt of around 50% versus year-end 2025.

Speaker #3: And we are advancing our growth portfolio with the Tiberius FID and Farmdown, continuing progress on GTA expansion, and the exploration alliance with Shell in the Gulf of Mexico.

Speaker #3: We're working hard to deliver a stronger, more valuable Kosmos, and we look forward to delivering on our full-year targets to support long-term value creation for our investors.

Andy Inglis: We're working hard to deliver a stronger, more valuable Kosmos and look forward to delivering on our full-year targets to support long-term value creation for our investors. Thank you. I'd now like to turn the call over to the operator to open the session for questions.

Speaker #3: Thank you. I'd now like to turn the call over to the operator to open the session for questions.

Speaker #4: Thank you. We will now begin the question-and-answer session. If you'd like to ask a question at this time, please press star then the number 1 on your telephone keypad to raise your hand and enter the queue.

Operator 3: Thank you. We will now begin the question and answer session. If you'd like to ask a question at this time, please press star then the number one on your telephone keypad to raise your hand and enter queue. If you'd like to withdraw your question at any time, you can press star one again. Pause just for a second to compile your roster. Our first question comes from Charles Meade with Johnson Rice. Your line is open.

Operator: Thank you. We will now begin the question and answer session. If you'd like to ask a question at this time, please press star then the number one on your telephone keypad to raise your hand and enter queue. If you'd like to withdraw your question at any time, you can press star one again. Pause just for a second to compile your roster. Our first question comes from Charles Meade with Johnson Rice. Your line is open.

Speaker #4: If you'd like to withdraw your question at any time, you can press *1 again. We'll pause for just four seconds to compile your options.

Speaker #4: And our first question comes from Charles Mead with Johnson Rice. Your line is open.

Speaker #5: Yes. Good day to you, Andy, and to the rest of your team there.

David Round: Yes. Good day to you, Andy, and to the rest of your team there.

Charles Meade: Yes. Good day to you, Andy, and to the rest of your team there. I'd like to ask about the J76 well, if you could characterize for us the setting of that well. I'm thinking along the lines of, is it an updip of one of your previous strong producers in a known fault block, or is it maybe on the other end of the spectrum, maybe it's in some fault block that you hadn't been connected to. I'm really trying to understand what the nature of the remaining opportunity for you is. Maybe just the nature of the opportunity in the next couple of years in Jubilee for you guys.

Andy Inglis: Charles.

Speaker #3: Yes.

David Round: I'd like to ask about the J76 well, if you could characterize for us the setting of that well. I'm thinking along the lines of, is it an updip of one of your previous strong producers in a known fault block, or is it maybe on the other end of the spectrum, maybe it's in some fault block that you hadn't been connected to. I'm really trying to understand what the nature of the remaining opportunity for you is. Maybe just the nature of the opportunity in the next couple of years in Jubilee for you guys.

Speaker #5: I'd like to ask about the J76 well and if you could characterize for us the setting of that well. I'm thinking along the lines of, is it kind of updip of one of your previous strong producers in a known fault block, or is it maybe on the other end of the spectrum?

Speaker #5: Maybe it's in some fallback that you hadn't been connected to. And I'm really trying to understand what the nature of the remaining opportunity for you is, or maybe not—just the nature of the opportunity in the next couple of years in Jubilee for you guys.

Speaker #3: Yeah, yeah. Thanks, Charles. Look, clearly, J76 has been a very strong well. I think actually one of the best wells we've drilled in over a decade.

Andy Inglis: Yeah. Thanks, Charles. Look, clearly J76 has been a very strong well. I think actually one of the best wells we've drilled in over a decade. I think ultimately we're in the core part of the field, we've used the latest 4D to be able to identify some opportunities that are in that core part of the field, that are updip and been unswept. The other interesting thing about 76 is we have actually picked up some deeper horizons as well. There's a combination of sort of what I would say the core areas of the field we've looked at in the past, plus some deeper opportunity. I think in total, it sort of demonstrates two things.

Speaker #3: I think, ultimately, we're in the core part of the field. So we've used the latest 4D to be able to identify some opportunities that are in that core part of the field that are updip and have been unswept.

Speaker #3: So, the other interesting thing about 76 is we have actually picked up some deeper horizons as well. So there's a combination of, sort of, what I would say are the core areas of the field we've looked at in the past, plus some deeper opportunity.

Speaker #3: So I think, in total, it sort of demonstrates two things. There are significant opportunities in the field where we have oil that has been bypassed by the current drilling program and injection patterns.

Andy Inglis: There are significant opportunities in the field where we have oil that is being bypassed by the current drilling program and injection patterns, therefore can provide wells that have both significant resource and the ability to drill a well where you can have a secondary target deeper that introduces additional resource. I think it's those two elements that are important as we go forward. I think there's significant bypassed oil opportunities, I think there'll be continuing opportunities to find potentially deeper horizons that we haven't accessed in the past.

Speaker #3: And therefore, can provide wells that have both significant resource and the ability to drill a well where you can have a secondary target deeper that introduces additional resource.

Speaker #3: And I think it's those two elements that are important as we go forward. I think there's significant bypassed oil opportunities, and I think there will be continuing opportunities to find potentially deeper horizons that we haven't accessed in the past.

Speaker #5: Got it. And that's exactly the kind of detail we're looking for. And then, a follow-up question on Tiberius: I read, or I went through, the Navitas press release, and I had a hard time following it, even though it was in the Hebrew version.

David Round: Got it. Andy, that's exactly the kind of detail I was looking for. Then a follow-up question on Tiberius. I read or I went through the Navitas press release-

Charles Meade: Got it. Andy, that's exactly the kind of detail I was looking for. Then a follow-up question on Tiberius. I read or I went through the Navitas press release-

Andy Inglis: Right

David Round: I had a hard time following it, even though it was in the Hebrew version. I am wondering if you could, and I recognize some of this may be sensitive, I wonder if you could frame up for us how we should think about the value that you achieved for your sell down of 70% there.

Charles Meade: I had a hard time following it, even though it was in the Hebrew version. I am wondering if you could, and I recognize some of this may be sensitive, I wonder if you could frame up for us how we should think about the value that you achieved for your sell down of 70% there.

Speaker #5: And so I'm wondering if you could—and I recognize some of this may be sensitive—but I wonder if you could frame up for us how we should think about the value that you achieved for your sell-down of 17% there.

Speaker #3: Yeah, thanks. They're looking at this this morning. I'll pass it over to Neal, who can give you the full translation.

Andy Inglis: Charles, thanks for looking at this morning. I will pass it over to Neal, who can give you the full translation.

Speaker #2: Yeah, Charles. Hi. Yeah, so if you just take the math simply, in terms of what we got for what we've sold, it implies a gross valuation for Tiberius of around $250 million as of January 1st.

Neal Shah: Charles. Hi. So if you just take the math simply in terms of what we got for what we have sold, it implies a gross valuation for Tiberius of around $250 million as of 1 January 2026. Again, we have got sort of a total of a bit under $45 million of consideration in between sort of upfront cash carry and milestone payments. Again, I think a very good result from the team in executing a really good competitive farm-down process. We are excited that we have the right partnership for the future.

Speaker #2: 2026. And again, we've got sort of a total of a bit under $45 million at consideration in between sort of upfront cash, carry, and milestone payments.

Speaker #2: And so again, I think a very good result from the team in executing a really good, competitive farm-down process. And we're excited that we have the right partnership for the future.

Speaker #5: Yeah, that's exactly the kind of detail I was looking for, Neal. And to be clear, that $250 million gross valuation—does that include the future continued payments?

David Round: That is exactly the kind of detail I was looking for, Neal. To be clear, that $250 million gross valuation, does that include the future contingent payments?

Charles Meade: That is exactly the kind of detail I was looking for, Neal. To be clear, that $250 million gross valuation, does that include the future contingent payments?

Speaker #2: No, there's a gross value of the asset. So, our net, you'd add our net plus the value of the carry.

Neal Shah: No, there's a gross value of the asset. You'd add our net plus the value of the carries.

Speaker #5: Okay. Thanks.

David Round: Okay, thanks.

Charles Meade: Okay, thanks.

Speaker #2: Yeah.

Neal Shah: Yeah.

Speaker #3: Great. Thanks, Charles.

Andy Inglis: Great. Thanks, Charles.

Speaker #4: Your next question comes from Bob Brackett with Bernstein Research. Your line is open.

Operator 3: Your next question comes from Bob Brackett with Bernstein Research. Your line is open.

Speaker #6: Good morning. I have a bit of a follow-up question. Can you talk about the Logan discovery that you all picked up and is now part of this Veritas JV?

Bob Brackett: Good morning. A question, a bit of a follow-up, I suppose. Can you talk about the Logan discovery that you all picked up and is now part of this Tiberius JV? Maybe what are the volumes in place, and what is the future plan to sort of bring that part of Tiberius into production?

Speaker #6: Maybe, what are the volumes in place, and what is the future plan to sort of bring that part of Tiberius into production?

Speaker #3: Yeah, thanks, Bob. I'll pass it over to Neal. He's been handling that.

Andy Inglis: Yeah. Thanks, Bob. I'll pass it over to Neal, who's been handling that.

Speaker #2: Yeah, good morning, Bob. Yeah, so, we're still sort of up. We've just got updated seismic over Tiberius. There's a good discovery well that's already on Tiberius that was drilled, I think.

Neal Shah: Yeah. Hey, good morning, Bob. Yeah, we've just got updated seismic over Tiberius. There's a good discovery well that's already on Tiberius that was drilled, I think, 10-plus years ago. It's in the tens of millions of barrels of resource, but we do look at it as a potential add-on into the sort of greater Tiberius area. We're looking at a handful of wells in Tiberius in terms of different fault blocks and ultimately connecting Logan into the system. Yeah, it's a potential well or two into that area to add some additional recovery.

Speaker #2: Ten-plus years ago. And so, yeah, whether it's in the tens of millions of barrels of resource. But we do look at it as a potential add-on into the greater Tiberius area.

Speaker #2: So we're looking at a handful of wells in Tiberius in terms of different fault blocks, and ultimately connecting Logan into the system. But yeah, so it's a potential well or two.

Speaker #2: ...into that area to add some additional recovery.

Speaker #6: Very clear. And a follow-up: I imagine you're frustrated with Winterfell—either by the operator, by the reservoir, or by something else. Is there recourse there, or do you think you've finally tackled some of the challenges there?

Bob Brackett: Very clear. A follow-up. I imagine you're frustrated with Winterfell, either by the operator, by the reservoir, by something. Is there recourse there, or do you think you've finally tackled some of the challenges there?

Speaker #2: Yeah, and so just on again, I think just from a Winterfell basis—yeah, I mean, I do think ultimately there is a big prize in terms of reserves there.

Neal Shah: I think just from a Winterfell basis, yeah, I do think ultimately there is a big prize in terms of reserves there. We've drilled a number of wells. There's good pay. We have been disappointed by the drilling performance on, again, what are relatively routine operations and the additional cost that have been incurred as a result. Hence the pause on activity to fully understand sort of what's causing the issues. There hasn't been a material daily impact to production, but we do want to make sure those drilling issues are resolved before any more capital gets spent on the project. It has been frustrating, but it's something the team's working hard on with the operator to make sure gets comprehensively resolved.

Speaker #2: We've drilled a number of wells. There's good pay, but we have been disappointed by the drilling performance on, again, what are relatively routine operations and the additional costs that have been incurred as a result.

Speaker #2: And so hence the pause on activity to fully understand sort of what's causing the issues. And yeah, again, there hasn't been a material daily impact to sort of production.

Speaker #2: But we do want to make sure those drilling issues are resolved before any more capital gets spent on the project. So, yeah, it has been frustrating, but it's something the team's working hard on with the operator to make sure it gets comprehensively resolved.

Speaker #6: Very clear. Thank you.

Bob Brackett: Very clear. Thank you.

Speaker #5: Thanks, Bob.

Neal Shah: Thanks, Bob.

Speaker #4: Your next question comes from the line of Neal Mehta with Goldman Sachs. Your line is open.

Operator 3: Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

Speaker #7: Yeah, good morning, team—Andy, Neal. I just wanted to first congratulate you guys on the progress with your net debt reduction—15% since year-end 2025.

Neil Mehta: Yeah. Good morning, team. Andy, Neal. I just wanted to first congratulate you guys on the progress on your net debt reduction, 15% since year-end 2025. Neal, maybe the first question's for you. On slide eight, you want to walk us through the progress that you guys have made and what your plan is through the balance of the year to hit 20% or above?

Speaker #7: And so, Neal, maybe the first question is for you. On slide 8, do you want to walk us through the progress that you guys have made and what your plan is through the balance of the year to hit 20% or above?

Speaker #2: Yeah, Neal. Hey, good morning, and thank you. So, it has been a lot of good work by the entire team to deliver a good first half in terms of almost $500 million of debt reduction in the first half of the year.

Neal Shah: Yeah, Neal. Hey, good morning, and thank you. Yeah. It has been a lot of good work by the entire team to deliver a good H1 in terms of almost $500 million of debt reduction in the H1 of the year. A bit under, we're at $2.5 and change. The goal would be to get closer to $2.4 by the end of the year. Again, I think from where we are from a production and cost perspective, we feel pretty good about the ability to get there even in a sort of lower commodity price environment. That'll be the big variable that sort of exists between now and the end of the year. Yeah, the balance of that difference, which is about, call it $150 million, is expected to be generated from free cash flow. Right?

Speaker #2: So, we're a bit under—sort of, we're at 2.5 and change. And then the goal would be to get closer to 2.4 by the end of the year.

Speaker #2: And again, I think from where we are, from a production and cost perspective, we feel pretty good about the ability to get there, even in a sort of lower commodity price environment.

Speaker #2: And that'll be the big variable that sort of exists between now and the end of the year. But yeah, so the balance of that difference, which is about—yeah, call it $150 million—is expected to be generated from free cash flow, right?

Speaker #2: And so, again, I think we've delivered free cash for the last two quarters. The expectation is to do that as well, and that'll get us to sort of that net debt number of around a 20% reduction year on year.

Neal Shah: Again, I think we've delivered free cash for the last two quarters. The expectation is to do that as well, and that'll get us to that net debt number of around 20% reduction year-on-year. In addition to that, again, I think we remain proactive in terms of just managing the maturity schedule. We've tackled the 2026s first earlier this year. We tackled the 2027s thereafter. We're working on the RBL at the moment, and then we'll tackle the 2028s. Once we're sort of done with that, we have call it three years plus of runway, without worrying about the debt in front of us. We'll continue to focus on free cash flow and managing that debt level down beyond the 20% reduction in 2026.

Speaker #2: And then, in addition to that, again, I think we just remain proactive in terms of managing the maturity schedule. So we've tackled the '26s first earlier this year.

Speaker #2: We tackled the 27's thereafter. We're working on the RBL at the moment. And then we'll tackle the 28's. And once we're sort of done with that, we have plus call it three years plus of runway to without sort of worrying about sort of the debt in front of us.

Speaker #2: And we'll continue to focus on free cash flow and managing that level down beyond the 20% reduction in '26. And so again, I think the strong financial performance is driven by a sort of good operational backbone at the beginning.

Neal Shah: Again, I think the strong financial performance is driven by good operational backbone at the beginning. Again, the focus on doing both things simultaneously to get to the right result.

Speaker #2: And so again, the focus is on doing both things simultaneously to get to the right result.

Speaker #7: Yeah, thanks, Neal. And then just a follow-up on the unit cost at Phase One again. Year over year, there should be significant reductions in opex as we work through startup costs.

Neil Mehta: Thanks, Neal. Just the follow-up is on the unit cost at phase 1. Again, year-over-year, there should be significant reductions in OpEx as we work through start-up costs and you get toward Mauritania, get Senegal to scale. Just talk about where you stand in terms of the reduction in cost, how does phase 1 plus fit into the equation? What could the cost trend down to on a multi-year basis, as we try to dial in that number?

Speaker #7: And you get towards more tenuous technical scale. But just talk about where you stand in terms of the reduction in cost, and then how does Phase One Plus fit into the equation?

Speaker #7: What could the cost trend down to on a multi-year basis as we try to dial in that number?

Speaker #5: Yeah, around the opex, I don't know. Yeah, you're correct. Clearly, we're getting the effect of two dynamics this year. We've clearly pushed volume up on GTA.

Andy Inglis: I'll pick that up, Neal. You're correct. Clearly, we're getting the effect of two dynamics this year. We're clearly pushed volume up on GTA, and the performance through H1 of the year has been very strong. We were targeting 32 to 36 cargoes. We did 18 and a half in the front end of the year. The overall production level, clearly strong. That's obviously helped in terms of managing the unit cost. We've also had the benefit of some of the final commissioning costs coming out. I think there's still improvement to make in the cost base in 2027 with different operating models that we're discussing with BP. You have the additional impact of increasing production.

Speaker #5: And the performance through the first half of the year has been very strong. We were targeting 32 to 36 cargoes. We did 18 and a half in the front end of the year.

Speaker #5: So the overall production level is clearly strong. That's obviously helped in terms of managing the unit costs. And we've also had the benefit of some of the final commissioning costs coming out.

Speaker #5: And then I think there's still improvement to make in the cost base in '27 with different operating models. We're discussing with BEP.

Speaker #5: And then you have the additional impact of increasing production. And as we said in the past, you can sort of add at least another 50% to the FPSO—the current throughput that's been supplied to the FLNG vessel for domestic gas.

Andy Inglis: As we've said in the past, you can add at least another 50% to the FPSO, the current throughput that's being supplied to the FLNG vessel for domestic gas. That additional volume is going to have a significant impact on the unit cost because it comes as cost. I think, as we said in the remarks, the big agenda now, and it's an agenda that's in Mauritania and Senegal, is to push on with the supply of the domestic gas. We saw the progress. I think some pictures in the progress in Senegal in terms of getting pipe in the ground. That they've done with a Saudi developer for their power station. That volumetric effect just simply impacts the per unit cost. I think we've got continuing growth in margin in GTA through that phase 1 expansion.

Speaker #5: So that additional volume is going to have a significant impact on the unit cost because it comes—cost. So, I think as we said in the remarks, the big agenda now...

Speaker #5: And it's an agenda that's. Countries in Mauritania and Senegal is to push on with the supply of the domestic. We saw the progress. I think some pictures in the the progress in Senegal in terms of getting the getting pipe in the ground.

Speaker #5: That they've done with a Saudi developer for their power station. So that volumetric effect just simply then impacts the per-unit cost. So I think we've got continuing growth in margin in GTA.

Speaker #5: Through that Phase One expansion, and I think we're aligned with the governments in both countries in terms of how we deliver that.

Andy Inglis: I think we're aligned with the governments in both countries in terms of how we deliver that.

Speaker #7: Okay, Eddie.

Operator 3: Andy?

Neil Mehta: Andy?

Speaker #5: Great. Thanks, Neal.

Andy Inglis: Great. Thanks, Neal.

Speaker #1: Side and the voyage replacement – and what that could mean for this period, this upcoming period where you aren't drilling – and whether sort of previous decline assumptions may change if that's been going well.

David Round: side and the voidage replacement and what that could mean for this upcoming period where you aren't drilling and whether sort of previous decline assumptions may change if that's been going well.

[Analyst]: side and the voidage replacement and what that could mean for this upcoming period where you aren't drilling and whether sort of previous decline assumptions may change if that's been going well.

Speaker #5: Yeah, no, thanks, David. I think it's a really good question. Clearly, our focus through the first half of the year has been on the drilling program.

Andy Inglis: Yeah. No, look. Thanks, David. I think it's a really good question. Clearly, our focus through the H1 of the year has been on the drilling program. I think we've seen the impact of the new data, the ability to influence then the selection of good wells. I think that selection then with good operator drilling performance has led to the current levels that we're experiencing. I think, big check in the box there. I think when it comes to water injection, I'd say this is an area where there is an opportunity to do better. We did well in the Q1. Voidage replacement around 130%, which is sort of what you need. That's what sort of world-class performance looks like. It hasn't been as strong in 2Q. It's been around about half that level. I'd say around 65%. Some of it was scheduled maintenance.

Speaker #5: And I think we've seen the impact of the new data, the ability to influence then the selection of good wells, and I think that selection, then, with good operator drilling performance, has led to the current levels that we're experiencing.

Speaker #5: So, I think big check in the box there. I think when it comes to water injection, I'd say this is an area where there is an opportunity to do better.

Speaker #5: We did well in the first quarter. Voyage replacement was around 130%, which is sort of what you need—that’s what world-class performance looks like.

Speaker #5: It hasn't been as strong in Q2. It's been around half that level—actually, around 65%. Some of it was scheduled maintenance; some of it was availability.

Andy Inglis: Some of it was availability of the water injection pumps. We're working really hard with the operator now to focus on that issue, and it's just an operational issue. It's not a reservoir issue. It's just simply about keeping the water injection pumps up and with high availability. We've had high availability on the oil side. We need to sort of match that on the water side. That's the focus in 3Q and 4Q, and then into the beginning of next year as we take a time out on the drilling program and then restart. Planned restart is around the middle of the year. We're making good progress on the rig contract. I think we're clear about what we need to do, and the back end of the year will be a strong focus on the water injection.

Speaker #5: ...of the water injection pumps. So we're working really hard with the operator now to focus on that issue, and it's just an operational issue.

Speaker #5: It's not a reservoir issue. It's simply about keeping the water injection pumps operating with high availability. We've had high availability on the oil side.

Speaker #5: We need to sort of match that on the water side. So that's the focus in Q3 and Q4, and then into the beginning of next year, as we take a time out on the drilling program and then restart. Planned restart is around the middle of the year.

Speaker #5: We're making good progress on the rig contract, so I think we're clear about what we need to do. The back end of the year will have a strong focus on the water injection.

Speaker #1: Okay, thanks, Andy. In terms of the forward program and the program you're looking at next year, is it too early to think about how many of those might be injectors versus producers?

David Round: Okay. Thanks, Andy. In terms of the forward program and the program you're looking at next year, is it too early to think about how many of those might be injectors versus producers?

[Analyst]: Okay. Thanks, Andy. In terms of the forward program and the program you're looking at next year, is it too early to think about how many of those might be injectors versus producers?

Speaker #5: Yeah, yeah. It's a little early, David. Without being overly simplistic, I think we're saying at the core of the field we've got pretty good injection support.

Andy Inglis: Yeah. It is a little early, David. Without being overly simplistic, I think Let's say in the core of the field, we've got pretty good injection support. I'm talking more broadly now, the issue is not so much about needing new injection, probably more around getting the water in the ground, actually. As we move out of some of the areas where the well density isn't as high, let's say, as you move back into the eastern side of the field, JSC, for instance, it will be more about pairing injectors and producers. If you sort of haze through, sort of, you look through all of that, there'll be a bias. I think the bias is still going to be more towards in injection. More towards producers over injectors.

Speaker #5: I'm talking more broadly now, and the issue is not so much about needing new injection—it's probably more around getting the water in the ground, actually.

Speaker #5: As we move out of some of the areas where the well density isn't as high—let's say, as you move back into the eastern side of the field, JSE for instance—it will be more about pairing injectors and producers.

Speaker #5: So if you sort of haze through—sort of, you can look through all of that—there'll be a bias. I think the bias is still going to be more towards injection.

Speaker #5: Sorry, more towards producers over injectors. But actually, the injection well we're drilling at the tail end of this program—that's actually an injector. It'll provide some support for this year.

Andy Inglis: Actually, the injection well that we're drilling at the tail end of this program, that's actually an injector. It will provide some support for this year, but actually, it's just to support a future producer. Okay? You're sort of getting the right balance there between injection and production. I think, the bias will still be that it'll be more heavily weighted to producers.

Speaker #5: But actually, it's to support a future producer. Okay, so you're sort of getting the right balance there between injection and production, but I think the bias will still be that it'll be more heavily weighted to producers.

Speaker #1: Okay, that's really helpful. Thanks, Andy.

David Round: Okay. That's really helpful. Thanks, Andy.

[Analyst]: Okay. That's really helpful. Thanks, Andy.

Speaker #5: Great, thanks, David.

Andy Inglis: Great. Thanks, David.

Speaker #3: Your next question comes from the line of Mark Wilson with Jefferies. Your line is open.

Operator 3: Your next question comes from the line of Mark Wilson with Jefferies. The line is open.

Speaker #4: All right, thank you. Let me ask a question about the U.S. Gulf, if I may start there. Grade C Tiberius farming completed. One well tied back initially, speaking to 100 million barrels there.

Mark Wilson: All right. Thank you. I'd like to ask questions about the US Gulf, if I may start there. Great to see Tiberius farming completed. One well tieback initially, you speak to 100 million barrels there. Reminds me of Winterfell. I imagine that 100 million is a kind of an area, region. I'm just wondering what you're targeting with that one well tieback in terms of recoverable reserves at Tiberius. Same sort of question for Trailblazer. Great exploration opportunity. Just wondering what Kosmos' net share would be of that 200 million target. That's my first question.

Speaker #4: It reminds me of Winterfell. I imagine that 100 million is a kind of an area region. So, I'm just wondering what you're targeting with that one well tie-back, in terms of recoverable reserves at Tiberius.

Speaker #4: And then, same sort of question for Trailblazer—great exploration opportunity. Just wondering what Kosmos's net share would be of that $200 million target. That's my first question.

Speaker #4: Thank you.

Andy Inglis: Yeah.

Neal Shah: Yeah.

Mark Wilson: Thank you.

Speaker #2: Yeah, hey Mark, good morning. Yeah, so with Tiberius, the 100 million barrels is sort of within Tiberius. And then Logan would be sort of additional beyond that.

Andy Inglis: Hey, Mark. Good morning. With Tiberius, the 100 million barrels is sort of within Tiberius. Logan would be sort of additional beyond that. There are, call it, three fault blocks in Tiberius, which we've penetrated one. The first well is targeting around, call it, 40 million barrels recovery. Again, we've talked about sort of $10 F&D, which is sort of a $400-ish million slightly gross development cost all in. That sort of squares. Once the infrastructure's in place, that includes-

Neal Shah: Hey, Mark. Good morning. With Tiberius, the 100 million barrels is sort of within Tiberius. Logan would be sort of additional beyond that. There are, call it, three fault blocks in Tiberius, which we've penetrated one. The first well is targeting around, call it, 40 million barrels recovery. Again, we've talked about sort of $10 F&D, which is sort of a $400-ish million slightly gross development cost all in. That sort of squares. Once the infrastructure's in place, that includes-

Speaker #2: But there are, sort of, call it, three fault blocks in Tiberius, which we've penetrated one, but the first well is targeting around, call it, 40 million barrels recovery.

Speaker #2: And again, we've talked about sort of $10 FND, which is sort of a $400-ish million slightly gross development cost all in. So that sort of squares.

Speaker #2: But once the infrastructure is in place, that includes sort of the tie-in infrastructure. So once that's in place, then we can add the additional wells and get much production impact much sooner.

Neal Shah: Sort of the tie-in infrastructure. Once that's in place, we can add the additional wells and get production impact much sooner. We'll phase that on post first oil. If I take that to Trailblazer, similar, that's a larger prospect. It's about 200 million barrels gross in terms of prospectivity. We own about a third, a little under a third, 30% of the projects in next to us, a little under, around 60 million barrels. Again, pretty material prospect for us. Again, I think you'd expect it to be a multi-well development all in, if successful. In the similar sort of Kosmos fashion, the idea would be keep the first well on as a development well. Bring that online to put in the infrastructure, then bring in additional producers once it's tied back.

Speaker #2: And so we'll sort of phase that on, post first oil. If I sort of take that to Trailblazer, similar sort of—that's a larger prospect.

Speaker #2: It's about 200 million barrels gross in terms of prospectivity, and we own about a third—a little under a third, 30%—of the project. Next to us, it's a little under, around 60 million barrels.

Speaker #2: And so again, pretty material prospect for us. And again, I think you’d expect it to be a multi-well development all in, if successful.

Speaker #2: But in a similar sort of Kosmos fashion, the idea would be to keep the first well on as a development well. Bring that online to put in the infrastructure, and then bring in additional producers once it's tied back.

Speaker #4: That's really appreciated, Neal. Thank you for that. If I could move on to GTA—because it's excellent to see the pipe on its way, goodness me, for the domestic power.

Mark Wilson: That's really appreciated, Neal. Thank you for that. If I could move on to GTA, because excellent to see the pipe on its way, goodness me, for the domestic power. I'm just wondering what flexibility you have on the pricing for that or if that's part of the actual license agreements. That'd be the first point. Secondly, a lot going on at BP, just wondering if there's any discussions over further phases at GTA. Thank you.

Speaker #4: I'm just wondering what flexibility you have on the pricing for that, or if that's part of the actual license agreements. That would be the first point.

Speaker #4: And then, secondly, a lot going on at BP. So just wondering if there's any discussions over further phases at GTA. Thank you.

Speaker #5: Yeah, so the agreements we have in place—we get the equivalent netback of the FOB, less the LNG processing fee, because clearly you're not converting it into LNG.

Andy Inglis: The agreements we have in place, we get the equivalent net back of the FOB, less the LNG processing fee. Because, well, you're not converting it into LNG, you're just delivering it as domestic gas. It's the FOB equivalent for domestic supply.

Speaker #5: You're just delivering it as domestic gas, so it's the FOB equivalent for domestic supply.

Speaker #2: And that's been agreed through further Phase One, in terms of the gas price. Mark.

Neal Shah: That's been agreed through for phase one, in terms of the gas price, Mark.

Speaker #5: So, the point about that is the additional volume comes with the same economics as the LNG export. And then, yeah, look, there’s a lot going on in BP, as you say.

Andy Inglis: The point about that is the additional volume comes with the same economics as the LNG export. Yeah, look, there's a lot going on in BP as you say. Obviously I don't have any insight into that or can't comment on what their corporate objectives are, whether GTA is core or non-core. I think for us, the most important thing at the moment is to sort of focus on the development of the asset, and we continue to work hard with BP on that, and aligned with states around the delivery of the domestic gas, where as you say, there's real progress being made.

Speaker #5: So obviously, I don't have any insight into that or can't comment on what their sort of corporate objectives are, whether GTA is core or non-core.

Speaker #5: I think for us, the most important thing at the moment is to sort of focus on the development of the asset, and we continue to work hard with BP on that.

Speaker #5: And aligned with states around the delivery of the domestic gas, whereas you say there's real progress being made.

Speaker #4: Okay, and obviously the main one is the debt coming down, which is, yes, a great see—as it's been commented by others. And RBL refinance in the second quarter, and Neal, you also mentioned looking to—I think you said—repay the 2028 bonds.

Mark Wilson: Okay. Obviously the main one is the net debt coming down, which is, yes, great to see, as has been commented by others. RBL refinance in Q2. Neal, you also mentioned looking to, I think you said repay the 2028 bonds, that's the $400 million. Is that what I understood correct, or is that a refinance of those targeted this year?

Speaker #4: That's the $400 million. That's what I understood, correct? Or is that a refinance of those targeted this year?

Speaker #6: Yeah, no, good question,

Neal Shah: Yeah. No, good question, Mark. Yeah. Again, I think, like I was trying to say earlier, but this year we've tried to be really methodical around how we address the financing issues and the maturity schedule. Like I said, we've gone through the 2026s earlier this year. We paid the 2027s with the Nordic bond. Are working on the RBL at the moment, which matures in 2029 but starts amortizing in 2027. Once that's out of the way, the next maturity for us to address is the 2028s. Again, I think it's been good to see the yields on the bonds return closer to normal. We'd expect as we continue to address the financial risk, get the debt down, we'll see a continued improvement in yields.

Speaker #2: Mark: Yeah, so again, I think, like I was trying to refer to earlier, this year we've tried to be really sort of methodical around how we address the financing issues and the maturity schedule.

Speaker #2: And like I said, we've gone through the '26, and earlier this year, we paid the '27s with the Nordic bond. We're working on the RBL at the moment, which matures in '29, but starts amortizing in '27.

Speaker #2: And then, once that's out of the way, the next maturity for us to address is the '28s. And again, I think it's been good to see sort of the yields on the bond sort of return closer to normal.

Speaker #2: We'd expect, as we continue to address the financial risk and get the debt down, we'll see continued improvement in yields. And so it's something we're continuing to evaluate, in terms of whether it's a repayment, some sort of opportunistic repurchase, or just potentially refinancing those later in the year.

Neal Shah: It's something we're continuing to evaluate in terms of whether it's a repayment or from an opportunistic repurchase or just potentially refinancing those later in the year. Again, it's something on the agenda. As the market and the yields evolve, we'll continue to keep an eye on that.

Speaker #2: So again, it's something on the agenda. And, yeah, as the market and the yields evolve, we'll continue to keep an eye on that.

Speaker #4: Okay, understood. I'll hand it over. Thanks for those questions.

Mark Wilson: Okay. Understood. I'll hand it over. Thanks for this question.

Speaker #5: Great. Thanks, Mark. Appreciate it.

Andy Inglis: Great. Thanks, Mark. Appreciate it.

Speaker #1: Your next question comes from the line of Christopher Buckey with Clarkson Securities. Your line is open.

Operator 3: Your next question comes from the line of Christoffer Bachke with Clarksons Securities. Your line is open.

Speaker #3: Christopher from Clarkson's here. So firstly, congratulations on another very strong quarter. I mean, operational executions continue to impress. So that's great to see. My first question is related to Jubilee and especially with the Jubilee production now tracking outdoor above the 90,000 barrels per day.

Christoffer Bachke: Kristoffer from Clarksons here. Firstly, congratulations on another very strong quarter. Operational executions continue to impress, that's great to see. My first question is related to Jubilee, especially with the Jubilee production now tracking at or above the 90,000 barrels per day. How should we think about the sustainable production potential of Jubilee over the next quarters? Could this potentially influence the scope or pace of the 2027/28 drilling campaign? That's my first.

Speaker #3: How should we think about the sustainable production potential of Jubilee over the next quarters? And could this potentially influence the scope or pace of the 2027–28 growing campaign?

Speaker #3: So that's my first.

Speaker #5: Yeah, no, Christopher, that's a good question. Look, when you look at Jubilee, I think we know if you look at the '25, '26 program, it's been a very successful program.

Andy Inglis: No, Kristoffer, that's a good question. When you look at Jubilee, I think we know, if you look at the 2025, 2026 program, it's been a very successful program. It's certainly been supported by the new 4D, I think that's enabled us to see a lot more opportunity in the field. I think it is actually worth commenting on, if you look at that overall program, with a payback of less than six months, you want to get back to drilling as soon as possible. There are some logistical issues on that in terms of ordering long lead equipment, wellheads, et cetera. We're working with the operator to make sure we get back to drilling as soon as practicable. That date is around the middle of next year.

Speaker #5: Yeah, it's certainly been supported by the new 4D, and I think that's enabled us to see a lot more opportunity in the field. I think it is actually worth commenting on, if you look at that overall program, where the payback is less than six months.

Speaker #5: So you want to get back to drilling as soon as possible. There are some logistical issues with that in terms of ordering long-lead equipment, wellheads, etc.

Speaker #5: But we're working with the operator to make sure we get back to drilling as soon as practicable, and that date is around the middle of the year, middle of next year.

Speaker #5: And we're pushing, maybe, to get there a little earlier, but I think that's sort of the current target. And then it's a fulsome program.

Andy Inglis: We're pushing maybe to get there a little earlier, I think that's sort of the current target. It's a fulsome program. Our objective is to drill up to 10 wells. Not only will we have the fully processed 4D at that point, we'll also have early product from the OBN, which I think is going to be another step change in our ability to properly describe the opportunity set. Potentially some of the things that have been harder to image that are deeper. I think for us, we see ongoing opportunity, as we've said, I think, consistently over probably the last 10 quarters, you need to do sort of three things to deliver that potential. You've got to get back to regular drilling, which I've talked about.

Speaker #5: Our objective is to drill up to 10 wells. Not only will we have the fully processed 4D at that point, but we'll also have early product from the OBN, which I think is going to be another step change in our ability to properly describe the opportunity set, and potentially some of the things that have been harder to image that are deeper.

Speaker #5: So, I think for us, we see ongoing opportunity. And as we've said, I think consistently over probably the last 10 quarters, you need to do sort of three things to deliver that potential.

Speaker #5: You've got to get back to regular drilling, which I've talked about. You have to deliver high FPSO uptime, which the operator has done so far this year.

Andy Inglis: You have to deliver high FPSO uptime, which the operator has done so far this year, you have to get the water injection operating, you get water in the ground. As we look forward, we will see some decline, clearly. There'll be a little bit of mitigation from the last water injection well. That's primarily to support a future well in 2027. We will see natural decline from the end of the program, which finishes at the end of this quarter through the Q4, Q1, Q2, and then back to drilling.

Speaker #5: And you have to get the water injection operating so you get water into the ground. So, as we look forward, we will see some decline, clearly.

Speaker #5: There'll be a little bit of mitigation from the last water injection well. That's primarily the support of future well in 27. So, we will see natural decline from the end of the program, which finishes at the end of this quarter, through the fourth quarter, first quarter, second quarter, and then back to drilling.

Speaker #3: Thank you very much. Also, staying on Jubilee and the full-year guidance, you have highlighted that production is trending toward the upper end of guidance.

Christoffer Bachke: Thank you very much. Also staying on Jubilee and the full-year guidance, you have highlighted that production is trending toward the upper end of guidance, and you also had another well coming online. Assuming current operational performance continues, should we think about ending the year toward the upper end of the production range, and would that potentially allow you to exceed your targeted 20% net debt reduction for 2026?

Speaker #3: And you also had another well coming online. So, assuming current operational performance continues, should we think about ending the year toward the upper end of the production range?

Speaker #3: And would that potentially allow you to exceed your targeted 20% net debt reduction for 2026?

Speaker #5: Again, really good question, and that’s obviously our objective. Yeah, we're working—again, it's about eyes down, focus on the operational delivery. Again, as I’ve said, it’s about picking the right wells; it’s about then drilling them; it’s about the delivery, then, of the uptime.

Andy Inglis: Again, a really good question. That's obviously our objective. We're working it again. It's about eyes down, focus on the operational delivery. Again, as I've said, it's about picking the right wells. It's about drilling them. It's about the delivery of the uptime. I think the area that's really important now is that water injection availability. I think when you look at the overall suite of options within Kosmos, it's obviously GTA has been trending to the upper end of its guidance in terms of the number of cargoes. Despite Winterfell five, we've had strong performance in the Gulf of Mexico, particularly from Kodiak and Odd Job. You put all that together, Christoffer, yes, are we confident we're going to hit our numbers? It's about a managed outlook across all of those production opportunities. Finally, it's about managing the cost base.

Speaker #5: And I think the area that's really important now is water injection availability. But I think when you look at the overall suite of options within Kosmos, it's obviously GTA has been trending to the upper end of its guidance in terms of the number of cargoes.

Speaker #5: Despite Winterfell 5, we've had strong performance in the Gulf of Mexico, particularly from Kodiak and Odd Job. So, you put all that together, Christopher, and yes, are we confident we're going to hit our numbers?

Speaker #5: It's about a managed outlook across all of those production opportunities. And then, finally, it's about managing the cost base. We haven't talked about that much on the call.

Andy Inglis: We haven't talked about that much on the call. This is a significant reduction in costs we've achieved in the H1 of the year. Delivering the portfolio optimizations with the EG sale, the TEN FPSO repurchase, those are structural changes that are enduring. That together with rigorous capital management, again, I think we've talked about the Tiberius farm down, that again allows us to manage the CapEx through the back end of 2026 and into 2027. In combination, the three things, production performance, cost reduction, and capital management underpin that debt reduction target.

Speaker #5: But this is a significant reduction in cost we’ve achieved in the first half of the year. Delivering the portfolio optimizations with the EG sale, the 10 FPSO repurchase, those are structural changes that are enduring.

Speaker #5: So that, together with rigorous capital management—and again, I think we've talked about the Tiberius farm-down—but then that, again, allows us to manage the capex through the back end of '26 and into '27.

Speaker #5: So, in combination, the three things—production performance, cost reduction, and capital management—then underpin that debt reduction target.

Speaker #3: Thank you very much. Just the last one, if I may.

Christoffer Bachke: Thank you very much. Just the last one, if I may.

Andy Inglis: Great. Thanks, Christoffer.

Speaker #5: Great. Thanks, Christopher.

Christoffer Bachke: You have.

Speaker #3: Yes, you have briefly mentioned it already, but you are in ongoing discussions with the lending banks and have now also commenced that process. You expect the amended RBL to be completed during the fourth quarter.

Andy Inglis: Yeah, go on.

Christoffer Bachke: You have briefly mentioned it already, but you are in ongoing discussions with the lending banks and have now also commenced that, and you expect the amended RBL to be completed during Q4. Could you elaborate a bit on how those discussions are progressing, and once the RBL is completed, should investors expect you to kind of turn your attention towards addressing the 2028s, or are those kind of two processes going in parallel?

Speaker #3: Could you elaborate a bit on how those discussions are progressing? And once the RBL is completed, should investors expect you to turn your attention toward addressing the 2028s?

Speaker #3: Or are those kind of two processes going in parallel?

Speaker #2: Yeah, I think that's the right way to think about it, Christopher, in terms of just the series of events. Yeah, so we've kicked off the RBL process.

Neal Shah: I think that's the right way to think about it, Christoffer, in terms of just the series of events. We've kicked off the RBL process. Again, just for those of you who haven't been, this will be the fifth time we get through an extension process on the RBL with a lot of the same banks who've been in there since I joined the company in 2011. It's a well sort of established program or process. We've started exchanging term sheets in terms of what that looks like, so we need to sort of finalize that. Clearly on the back of improved Jubilee performance, in a constructive commodity price environment, we're well-placed to sort of execute that here relatively quickly.

Speaker #2: Again, just for those of you who haven't been, this is the fifth time we are going through an extension process on the RBL with a lot of the same banks who have been in there.

Speaker #2: Since I joined the company in 2011, so yeah, it's a well-established program or process. We've started exchanging term sheets in terms of what that looks like.

Speaker #2: So we need to sort of finalize that, and clearly, on the back of improved Jubilee performance and a constructive commodity price environment, we're well placed to sort of execute that here.

Speaker #2: Relatively quickly. But yeah, I mean, I think as we get that complete, then, like I said, the next maturity on the list is the 28th.

Neal Shah: I think as we get that complete, then like I said, the next maturity on the list is the 2028, so that gives us a bit over three years of runway without any maturities to manage.

Speaker #2: And that gives us a bit over three years of runway without any maturities to manage.

Speaker #3: Thanks for taking my questions.

Christoffer Bachke: Thanks for taking my questions.

Speaker #5: Great. Thanks, Christopher.

Andy Inglis: Great. Thanks, Christoffer.

Speaker #4: Again, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and enter the queue.

Operator 3: Again, if you would like to ask a question, please press star, then the number one on your telephone keypad to raise your hand and enter the queue. Your next question comes from

Speaker #4: Your next question comes from Stella Cridge with Barclays. Your line is open.

Speaker #6: Hi there, everyone, and many thanks for all the updates. Sorry to add a couple more questions on the refinancing side. I just wondered if you're still targeting 2032 and 2033.

[Analyst] (Barclays): Hi there everyone, many thanks for all the updates. Sorry to add a couple more questions on the refinancing side. Just wondered if you're still targeting 2032 and 2033 as potential maturity dates of the new RBL. I was just wondering, regarding the liquidity test that you would usually be tested on the 2028 bonds, how does that fit into the next few months in the RBL negotiation? Do you get a waiver or is that just kind of rolled into the whole process? That would be great. Thanks.

Stella Cridge: Hi there everyone, many thanks for all the updates. Sorry to add a couple more questions on the refinancing side. Just wondered if you're still targeting 2032 and 2033 as potential maturity dates of the new RBL. I was just wondering, regarding the liquidity test that you would usually be tested on the 2028 bonds, how does that fit into the next few months in the RBL negotiation? Do you get a waiver or is that just kind of rolled into the whole process? That would be great. Thanks.

Speaker #6: Oh, as a potential maturity dates of the new RBL. And I was just wondering, regarding the liquidity test that you would usually be tested on the '28 bonds, how does that fit into the next few months in the RBL negotiation?

Speaker #6: Do you get a waiver, or is that just kind of rolled into the whole process? That would be great. Thanks.

Speaker #2: Yeah, so, yeah, I mean, the chart on—I forgot what slide it is.

Neal Shah: Yeah. The chart on, I forgot what slide it is.

Speaker #5: Slide 8.

Andy Inglis: Slide eight.

Speaker #2: Slide 8 is clearly illustrative, but in line with where we are, what we're working live. And so, the idea is to get sort of the final maturity beyond the existing bonds.

Neal Shah: Slide eight is clearly illustrative, but in line with what we're working live. The idea is to get sort of the final maturity beyond the existing bonds. Again, we'd normally do it in a sort of six, seven-year timeframe. That's kind of when the final maturity base would be, but it generally starts amortizing after three years. The shape of the RBL won't be dissimilar to the shape that it's always in. That essentially puts a sort of refinancing plan in sort of three years down the line to force another extension. That's sort of again, business as usual from that perspective. Same thing with your question around the liquidity test along with sort of redetermination. Essentially we'll sort of all boil that up into the refinancing.

Speaker #2: And again, we’d normally do it in a sort of six- to seven-year timeframe. So, that’s kind of when the final maturity base would be, but it generally starts amortizing after three years.

Speaker #2: So the shape of the RBL won't be dissimilar to the shape that it's always in. And that essentially puts a sort of refinancing plan in, sort of, three years down the line to force another extension.

Speaker #2: So that's, sort of again, business as usual from that perspective. And then, yeah, same thing with your question around the liquidity test, along with sort of redetermination.

Speaker #2: And so essentially, we'll sort of all boil that up into the refinancing. And so, yeah, we probably won't have a, yeah, a sort of formal full redetermination because generally—again, I'm going into a little detail—but the RBL is always limited by the loan life.

Neal Shah: We probably won't have a sort of formal full redetermination because generally, again, I'm going in a little detail, but the RBL is always limited by the loan life. As you kick the loan life, you have full access to the facility, which keeps all the liquidity available to the company. We'll do those sort of contemporaneously with the refi.

Speaker #2: And so, as you kick the loan live, you have full access to the facility, which keeps liquidity and keeps all the liquidity available to the company.

Speaker #2: So, we'll do those sort of contemporaneously with the refi.

Speaker #6: That's great. Many thanks for that. And if you don't mind me asking, on Tiberius, could you just remind us how much gross production would come from that first well?

Operator 2: That's great. Many thanks for that. If you don't mind me asking on Tiberius, could you just remind us, like how much gross production would come from that first well, and I noticed you also mentioned a potential second well, great to hear about that as well.

Stella Cridge: That's great. Many thanks for that. If you don't mind me asking on Tiberius, could you just remind us, like how much gross production would come from that first well, and I noticed you also mentioned a potential second well, great to hear about that as well.

Speaker #6: And I noticed you also mentioned a potential second well. It would be great to hear about that as well.

Speaker #2: Yeah, and again, every well would be different. But the expectation is, yeah, again, I think a good modeling assumption is around 10,000 barrels a day gross per well.

Neal Shah: Yeah. Again, every well will be different, but the expectation is, I think a good modeling assumption there is around 10,000 barrels a day gross per well. Again, we have up to 30,000 barrels a day of capacity at Lucius, the facility. Again, the ability to accommodate multiple wells over time.

Speaker #2: And again, we have up to 30,000 barrels a day of capacity at Lucius, the facility. So again, the ability to accommodate multiple wells over time.

Speaker #6: So, for many, thanks for that.

Operator 2: Super. Many thanks for that.

Stella Cridge: Super. Many thanks for that.

Speaker #5: Great. Thanks, Stella.

Andy Inglis: Great. Thanks, Stella.

Operator 1: Thank you for your participation.

Operator: Thank you for your participation.

Q2 2026 Kosmos Energy Ltd Earnings Call

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