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(Mark One)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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98-0686001
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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8176 Park Lane
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Dallas, Texas
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75231
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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(Do not check if a smaller reporting company)
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Emerging growth company ☐
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Class
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Outstanding at May 1, 2019
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Common Shares, $0.01 par value
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|
401,303,816
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Page
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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“2D seismic data”
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Two-dimensional seismic data, serving as interpretive data that allows a view of a vertical cross-section beneath a prospective area.
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“3D seismic data”
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Three-dimensional seismic data, serving as geophysical data that depicts the subsurface strata in three dimensions. 3D seismic data typically provides a more detailed and accurate interpretation of the subsurface strata than 2D seismic data.
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"ANP-STP
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Agencia Nacional Do Petroleo De Sao Tome E Principe.
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“API”
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A specific gravity scale, expressed in degrees, that denotes the relative density of various petroleum liquids. The scale increases inversely with density. Thus lighter petroleum liquids will have a higher API than heavier ones.
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“ASC”
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Financial Accounting Standards Board Accounting Standards Codification.
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“ASU”
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Financial Accounting Standards Board Accounting Standards Update.
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“Barrel” or “Bbl”
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A standard measure of volume for petroleum corresponding to approximately 42 gallons at 60 degrees Fahrenheit.
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“BBbl”
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Billion barrels of oil.
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“BBoe”
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Billion barrels of oil equivalent.
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“Bcf”
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Billion cubic feet.
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“Boe”
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Barrels of oil equivalent. Volumes of natural gas converted to barrels of oil using a conversion factor of 6,000 cubic feet of natural gas to one barrel of oil.
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"BOEM"
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Bureau of Ocean Energy Management.
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“Boepd”
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Barrels of oil equivalent per day.
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“Bopd”
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Barrels of oil per day.
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"BP"
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BP p.l.c.
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“Bwpd”
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Barrels of water per day.
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“Debt cover ratio”
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The “debt cover ratio” is broadly defined, for each applicable calculation date, as the ratio of (x) total long-term debt less cash and cash equivalents and restricted cash, to (y) the aggregate EBITDAX (see below) of the Company for the previous twelve months.
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“Developed acreage”
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The number of acres that are allocated or assignable to productive wells or wells capable of production.
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“Development”
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The phase in which an oil or natural gas field is brought into production by drilling development wells and installing appropriate production systems.
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"DGE"
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Deep Gulf Energy (together with its subsidiaries).
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“Dry hole" or "Unsuccessful well”
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A well that has not encountered a hydrocarbon bearing reservoir expected to produce in commercial quantities.
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“EBITDAX”
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Net income (loss) plus (i) exploration expense, (ii) depletion, depreciation and amortization expense, (iii) equity‑based compensation expense, (iv) unrealized (gain) loss on commodity derivatives (realized losses are deducted and realized gains are added back), (v) (gain) loss on sale of oil and gas properties, (vi) interest (income) expense, (vii) income taxes, (viii) loss on extinguishment of debt, (ix) doubtful accounts expense and (x) similar other material items which management believes affect the comparability of operating results. The Facility EBITDAX definition includes 50% of the EBITDAX adjustments of Kosmos-Trident International Petroleum Inc for the period it was an equity method investment and includes Last Twelve Months ("LTM") EBITDAX for any acquisitions and excludes LTM EBITDAX for any divestitures.
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"ESP"
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Electric submersible pump.
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“E&P”
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Exploration and production.
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“FASB”
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Financial Accounting Standards Board.
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“Farm-in”
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An agreement whereby a party acquires a portion of the participating interest in a block from the owner of such interest, usually in return for cash and/or for taking on a portion of future costs or other performance by the assignee as a condition of the assignment.
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“Farm-out”
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An agreement whereby the owner of the participating interest agrees to assign a portion of its participating interest in a block to another party for cash and/or for the assignee taking on a portion of future costs and/or other work as a condition of the assignment.
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"FEED"
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Front End Engineering Design.
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“Field life cover ratio”
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The “field life cover ratio” is broadly defined, for each applicable forecast period, as the ratio of (x) the forecasted net present value of net cash flow through depletion plus the net present value of the forecast of certain capital expenditures incurred in relation to the Ghana and Equatorial Guinea assets, to (y) the aggregate loan amounts outstanding under the Facility.
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"FLNG"
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Floating liquefied natural gas.
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"FPS"
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Floating production system.
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“FPSO”
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Floating production, storage and offloading vessel.
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"GEPetrol"
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Guinea Equatorial De Petroleos.
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"GNPC"
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Ghana National Petroleum Corporation.
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"KBSL"
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Kosmos BP Senegal Limited.
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"KTIPI"
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Kosmos-Trident International Petroleum Inc.
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“Interest cover ratio”
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The “interest cover ratio” is broadly defined, for each applicable calculation date, as the ratio of (x) the aggregate EBITDAX (see above) of the Company for the previous twelve months, to (y) interest expense less interest income for the Company for the previous twelve months.
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“Loan life cover ratio”
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The “loan life cover ratio” is broadly defined, for each applicable forecast period, as the ratio of (x) net present value of forecasted net cash flow through the final maturity date of the Facility plus the net present value of forecasted capital expenditures incurred in relation to the Ghana and Equatorial Guinea assets, to (y) the aggregate loan amounts outstanding under the Facility.
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"LNG"
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Liquefied natural gas.
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“MBbl”
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Thousand barrels of oil.
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"MBoe"
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Thousand barrels of oil equivalent.
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“Mcf”
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Thousand cubic feet of natural gas.
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“Mcfpd”
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Thousand cubic feet per day of natural gas.
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“MMBbl”
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Million barrels of oil.
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“MMBoe”
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Million barrels of oil equivalent.
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"MMBtu"
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Million British thermal units.
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“MMcf”
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Million cubic feet of natural gas.
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“MMcfd”
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Million cubic feet per day of natural gas.
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"MMTPA"
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Million metric tonnes per annum.
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“Natural gas liquid” or “NGL”
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Components of natural gas that are separated from the gas state in the form of liquids. These include propane, butane, and ethane, among others.
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"Ophir"
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Ophir Energy plc.
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“Petroleum contract”
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A contract in which the owner of hydrocarbons gives an E&P company temporary and limited rights, including an exclusive option to explore for, develop, and produce hydrocarbons from the lease area.
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“Submarine fan”
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A fan-shaped deposit of sediments occurring in a deep water setting where sediments have been transported via mass flow, gravity induced, processes from the shallow to deep water. These systems commonly develop at the bottom of sedimentary basins or at the end of large rivers.
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“Three-way fault trap”
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A structural trap where at least one of the components of closure is formed by offset of rock layers across a fault.
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“Trap”
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A configuration of rocks suitable for containing hydrocarbons and sealed by a relatively impermeable formation through which hydrocarbons will not migrate.
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"Trident"
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Trident Energy.
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“Undeveloped acreage”
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Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of natural gas and oil regardless of whether such acreage contains discovered resources.
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March 31,
2019 |
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December 31,
2018 |
||||
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(Unaudited)
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|
||||
Assets
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Current assets:
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Cash and cash equivalents
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$
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134,423
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$
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173,515
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Restricted cash
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537
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4,527
|
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Receivables:
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||||
Joint interest billings, net
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54,580
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64,572
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Oil sales
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103,597
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48,164
|
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Related party
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11
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|
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5,580
|
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Other
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27,991
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21,690
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Inventories
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87,295
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|
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84,827
|
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||
Prepaid expenses and other
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58,404
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68,040
|
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||
Derivatives
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17,289
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|
|
38,785
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||
Total current assets
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484,127
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|
509,700
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Property and equipment:
|
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Oil and gas properties, net
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3,900,584
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3,444,864
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Other property, net
|
14,219
|
|
|
14,837
|
|
||
Property and equipment, net
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3,914,803
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|
|
3,459,701
|
|
||
Other assets:
|
|
|
|
|
|
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Equity method investment
|
—
|
|
|
51,896
|
|
||
Restricted cash
|
7,574
|
|
|
7,574
|
|
||
Long-term receivables - joint interest billings
|
20,670
|
|
|
19,002
|
|
||
Deferred financing costs, net of accumulated amortization of $12,719 and $12,065 at March 31, 2019 and December 31, 2018, respectively
|
8,283
|
|
|
8,937
|
|
||
Deferred tax assets
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33,144
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|
|
14,004
|
|
||
Derivatives
|
8,243
|
|
|
14,312
|
|
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Other
|
25,012
|
|
|
3,063
|
|
||
Total assets
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$
|
4,501,856
|
|
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$
|
4,088,189
|
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Liabilities and stockholders’ equity
|
|
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Current liabilities:
|
|
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|
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|
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Accounts payable
|
$
|
174,073
|
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$
|
176,540
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Accrued liabilities
|
187,941
|
|
|
195,596
|
|
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Derivatives
|
51,713
|
|
|
12,172
|
|
||
Total current liabilities
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413,727
|
|
|
384,308
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Long-term liabilities:
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|
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Long-term debt, net
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2,195,826
|
|
|
2,120,547
|
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||
Derivatives
|
13,306
|
|
|
10,181
|
|
||
Asset retirement obligations
|
268,535
|
|
|
145,336
|
|
||
Deferred tax liabilities
|
704,122
|
|
|
477,179
|
|
||
Other long-term liabilities
|
29,747
|
|
|
9,160
|
|
||
Total long-term liabilities
|
3,211,536
|
|
|
2,762,403
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at March 31, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 2,000,000,000 authorized shares; 445,525,116 and 442,914,675 issued at March 31, 2019 and December 31, 2018, respectively
|
4,455
|
|
|
4,429
|
|
||
Additional paid-in capital
|
2,329,244
|
|
|
2,341,249
|
|
||
Accumulated deficit
|
(1,220,099
|
)
|
|
(1,167,193
|
)
|
||
Treasury stock, at cost, 44,263,269 and 44,263,269 shares at March 31, 2019 and December 31, 2018, respectively
|
(237,007
|
)
|
|
(237,007
|
)
|
||
Total stockholders’ equity
|
876,593
|
|
|
941,478
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,501,856
|
|
|
$
|
4,088,189
|
|
|
Three Months Ended
|
|
||||||
|
March 31,
|
|
||||||
|
2019
|
|
2018
|
|
||||
Revenues and other income:
|
|
|
|
|
|
|
||
Oil and gas revenue
|
$
|
296,790
|
|
|
$
|
127,196
|
|
|
Other income, net
|
—
|
|
|
(19
|
)
|
|
||
Total revenues and other income
|
296,790
|
|
|
127,177
|
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
||
Oil and gas production
|
79,799
|
|
|
46,768
|
|
|
||
Facilities insurance modifications, net
|
(20,021
|
)
|
|
8,449
|
|
|
||
Exploration expenses
|
30,344
|
|
|
21,193
|
|
|
||
General and administrative
|
35,908
|
|
|
21,883
|
|
|
||
Depletion, depreciation and amortization
|
118,095
|
|
|
54,277
|
|
|
||
Interest and other financing costs, net
|
35,041
|
|
|
25,694
|
|
|
||
Derivatives, net
|
77,085
|
|
|
38,478
|
|
|
||
(Gain) loss on equity method investments, net
|
—
|
|
|
(18,696
|
)
|
|
||
Other expenses, net
|
2,119
|
|
|
3,705
|
|
|
||
Total costs and expenses
|
358,370
|
|
|
201,751
|
|
|
||
Loss before income taxes
|
(61,580
|
)
|
|
(74,574
|
)
|
|
||
Income tax benefit
|
(8,674
|
)
|
|
(24,348
|
)
|
|
||
Net loss
|
$
|
(52,906
|
)
|
|
$
|
(50,226
|
)
|
|
|
|
|
|
|
||||
Net loss per share:
|
|
|
|
|
|
|
||
Basic
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
|
Diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
||||
Weighted average number of shares used to compute net loss per share:
|
|
|
|
|
|
|
||
Basic
|
401,164
|
|
|
395,600
|
|
|
||
Diluted
|
401,164
|
|
|
395,600
|
|
|
||
|
|
|
|
|
||||
Dividends declared per common share
|
$
|
0.0452
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|||||||||||
|
Common Shares
|
|
Paid-in
|
|
Accumulated
|
|
Treasury
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Stock
|
|
Total
|
|||||||||||
Balance as of December 31, 2017
|
398,599
|
|
|
$
|
3,986
|
|
|
$
|
2,014,525
|
|
|
$
|
(1,073,202
|
)
|
|
$
|
(48,197
|
)
|
|
$
|
897,112
|
|
Equity-based compensation
|
—
|
|
|
—
|
|
|
8,392
|
|
|
—
|
|
|
—
|
|
|
8,392
|
|
|||||
Restricted stock awards and units
|
6,380
|
|
|
64
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock / tax withholdings
|
—
|
|
|
—
|
|
|
(11,364
|
)
|
|
—
|
|
|
(510
|
)
|
|
(11,874
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,226
|
)
|
|
—
|
|
|
(50,226
|
)
|
|||||
Balance as of March 31, 2018
|
404,979
|
|
|
$
|
4,050
|
|
|
$
|
2,011,489
|
|
|
$
|
(1,123,428
|
)
|
|
$
|
(48,707
|
)
|
|
$
|
843,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2018
|
442,915
|
|
|
$
|
4,429
|
|
|
$
|
2,341,249
|
|
|
$
|
(1,167,193
|
)
|
|
$
|
(237,007
|
)
|
|
$
|
941,478
|
|
Dividends ($0.0452 per share)
|
—
|
|
|
—
|
|
|
(18,744
|
)
|
|
—
|
|
|
—
|
|
|
(18,744
|
)
|
|||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
8,744
|
|
|
—
|
|
|
—
|
|
|
8,744
|
|
|||||
Restricted stock awards and units
|
2,610
|
|
|
26
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock / tax withholdings
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,906
|
)
|
|
—
|
|
|
(52,906
|
)
|
|||||
Balance as of March 31, 2019
|
445,525
|
|
|
$
|
4,455
|
|
|
$
|
2,329,244
|
|
|
$
|
(1,220,099
|
)
|
|
$
|
(237,007
|
)
|
|
$
|
876,593
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
|
|
||
Net loss
|
$
|
(52,906
|
)
|
|
$
|
(50,226
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depletion, depreciation and amortization
|
120,482
|
|
|
56,717
|
|
||
Deferred income taxes
|
(39,833
|
)
|
|
(24,697
|
)
|
||
Unsuccessful well costs
|
(160
|
)
|
|
43
|
|
||
Change in fair value of derivatives
|
73,807
|
|
|
38,966
|
|
||
Cash settlements on derivatives, net (including $(7.3) million and $(19.7) million on commodity hedges during 2019 and 2018)
|
(3,576
|
)
|
|
(20,397
|
)
|
||
Equity-based compensation
|
8,441
|
|
|
8,017
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
4,056
|
|
||
Distributions in excess of equity in earnings
|
—
|
|
|
5,234
|
|
||
Other
|
10,647
|
|
|
(478
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
(Increase) decrease in receivables
|
(47,219
|
)
|
|
67,937
|
|
||
(Increase) decrease in inventories
|
2,212
|
|
|
(7,849
|
)
|
||
(Increase) decrease in prepaid expenses and other
|
12,597
|
|
|
(2,439
|
)
|
||
Decrease in accounts payable
|
(59,331
|
)
|
|
(3,554
|
)
|
||
Decrease in accrued liabilities
|
(42,508
|
)
|
|
(88,346
|
)
|
||
Net cash used in operating activities
|
(17,347
|
)
|
|
(17,016
|
)
|
||
Investing activities
|
|
|
|
|
|
||
Oil and gas assets
|
(78,377
|
)
|
|
(34,712
|
)
|
||
Other property
|
(1,071
|
)
|
|
(1,757
|
)
|
||
Return of investment from KTIPI
|
—
|
|
|
41,070
|
|
||
Net cash provided by (used in) investing activities
|
(79,448
|
)
|
|
4,601
|
|
||
Financing activities
|
|
|
|
|
|
||
Borrowings under long-term debt
|
175,000
|
|
|
—
|
|
||
Payments on long-term debt
|
(100,000
|
)
|
|
—
|
|
||
Purchase of treasury stock / tax withholdings
|
(1,980
|
)
|
|
(11,874
|
)
|
||
Dividends
|
(18,147
|
)
|
|
—
|
|
||
Deferred financing costs
|
(1,160
|
)
|
|
(24,969
|
)
|
||
Net cash provided by (used in) financing activities
|
53,713
|
|
|
(36,843
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(43,082
|
)
|
|
(49,258
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
185,616
|
|
|
304,986
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
142,534
|
|
|
$
|
255,728
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
|
|
||
Cash paid for:
|
|
|
|
|
|
||
Interest, net of capitalized interest
|
$
|
40,536
|
|
|
$
|
33,280
|
|
Income taxes
|
$
|
10,438
|
|
|
$
|
21,243
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
134,423
|
|
|
$
|
173,515
|
|
Restricted cash - current
|
537
|
|
|
4,527
|
|
||
Restricted cash - long-term
|
7,574
|
|
|
7,574
|
|
||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows
|
$
|
142,534
|
|
|
$
|
185,616
|
|
1.
|
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of our leases where we are the lessee do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.
|
2.
|
The lease term for all of our leases includes the noncancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that we are reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
|
3.
|
Lease payments included in the measurement of the lease asset or liability comprise the following: fixed payments (including in-substance fixed payments), variable payments that depend on index or rate, and the exercise price of a lessee option to purchase the underlying asset if we are reasonably certain to exercise. Amounts expected to be payable under residual value guarantee are also lease payments included in the measurement of the lease liability.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Revenues from contract with customers - Equatorial Guinea
|
$
|
89,115
|
|
|
$
|
—
|
|
Revenues from contracts with customers - Ghana
|
119,330
|
|
|
128,037
|
|
||
Revenues from contracts with customers - U.S. Gulf of Mexico
|
85,067
|
|
|
—
|
|
||
Provisional oil sales contracts
|
3,278
|
|
|
(841
|
)
|
||
Oil and gas revenue
|
$
|
296,790
|
|
|
$
|
127,196
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(In thousands)
|
||||||
Oil and gas properties:
|
|
|
|
|
|
||
Proved properties
|
$
|
3,177,330
|
|
|
$
|
2,773,276
|
|
Unproved properties
|
857,009
|
|
|
759,472
|
|
||
Support equipment and facilities
|
1,528,308
|
|
|
1,463,213
|
|
||
Total oil and gas properties
|
5,562,647
|
|
|
4,995,961
|
|
||
Accumulated depletion
|
(1,662,063
|
)
|
|
(1,551,097
|
)
|
||
Oil and gas properties, net
|
3,900,584
|
|
|
3,444,864
|
|
||
|
|
|
|
||||
Other property
|
52,815
|
|
|
51,987
|
|
||
Accumulated depreciation
|
(38,596
|
)
|
|
(37,150
|
)
|
||
Other property, net
|
14,219
|
|
|
14,837
|
|
||
|
|
|
|
||||
Property and equipment, net
|
$
|
3,914,803
|
|
|
$
|
3,459,701
|
|
|
March 31,
2019 |
||
|
(In thousands)
|
||
Beginning balance
|
$
|
367,665
|
|
Additions to capitalized exploratory well costs pending the determination of proved reserves
|
2,410
|
|
|
Reclassification due to determination of proved reserves
|
—
|
|
|
Capitalized exploratory well costs charged to expense
|
—
|
|
|
Ending balance
|
$
|
370,075
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In thousands, except well counts)
|
||||||
Exploratory well costs capitalized for a period of one year or less
|
$
|
—
|
|
|
$
|
—
|
|
Exploratory well costs capitalized for a period of one to two years
|
127,532
|
|
|
299,253
|
|
||
Exploratory well costs capitalized for a period of three years
|
242,543
|
|
|
68,412
|
|
||
Ending balance
|
$
|
370,075
|
|
|
$
|
367,665
|
|
Number of projects that have exploratory well costs that have been capitalized for a period greater than one year
|
3
|
|
|
3
|
|
|
December 31,
|
||
|
2018
|
||
|
(In thousands)
|
||
Assets
|
|
|
|
Total current assets
|
$
|
149,950
|
|
Property and equipment, net
|
271,627
|
|
|
Other assets
|
21
|
|
|
Total assets
|
$
|
421,598
|
|
|
|
||
Liabilities and stockholders' equity
|
|
||
Total current liabilities
|
$
|
226,311
|
|
Total long-term liabilities
|
536,178
|
|
|
Shareholders' equity:
|
|
||
Total shareholders' equity
|
(340,891
|
)
|
|
Total liabilities and shareholders' equity
|
$
|
421,598
|
|
|
Three Months Ended
March 31, 2018 |
||
|
(In thousands)
|
||
Revenues and other income:
|
|
||
Oil and gas revenue
|
$
|
246,354
|
|
Other income
|
287
|
|
|
Total revenues and other income
|
246,641
|
|
|
|
|
||
Costs and expenses:
|
|
||
Oil and gas production
|
51,700
|
|
|
Depletion, depreciation and amortization
|
54,070
|
|
|
Other expenses, net
|
(79
|
)
|
|
Total costs and expenses
|
105,691
|
|
|
|
|
||
Income before income taxes
|
140,950
|
|
|
Income tax expense
|
49,632
|
|
|
Net income
|
$
|
91,318
|
|
|
|
||
Kosmos' share of net income
|
$
|
45,659
|
|
Basis difference amortization(1)
|
26,963
|
|
|
Equity in earnings - KTIPI
|
$
|
18,696
|
|
(1)
|
The basis difference, which is associated with oil and gas properties and subject to amortization, has been allocated to the Ceiba Field and Okume Complex. We amortize the basis difference using the unit-of-production method.
|
|
|
Carrying Value Allocation
(in thousands)
|
||
Assets acquired:
|
|
|
||
Proved oil and gas properties
|
|
$
|
372,144
|
|
Unproved oil and gas properties
|
|
103,909
|
|
|
Prepaids and other
|
|
7,273
|
|
|
Total assets acquired
|
|
$
|
483,326
|
|
|
|
|
||
Liabilities assumed:
|
|
|
||
Asset retirement obligations
|
|
$
|
114,395
|
|
Deferred tax liabilities
|
|
247,636
|
|
|
Accrued liabilities and other
|
|
69,399
|
|
|
Total liabilities assumed
|
|
$
|
431,430
|
|
|
|
|
||
Carrying value:
|
|
|
||
Equity method investment carrying value at December 31, 2018
|
|
$
|
51,896
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(In thousands)
|
||||||
Outstanding debt principal balances:
|
|
|
|
|
|
||
Facility
|
$
|
1,500,000
|
|
|
$
|
1,325,000
|
|
Corporate Revolver
|
225,000
|
|
|
325,000
|
|
||
Senior Secured Notes
|
525,000
|
|
|
525,000
|
|
||
Total
|
2,250,000
|
|
|
2,175,000
|
|
||
Unamortized deferred financing costs and discounts(1)
|
(54,174
|
)
|
|
(54,453
|
)
|
||
Long-term debt, net
|
$
|
2,195,826
|
|
|
$
|
2,120,547
|
|
(1)
|
Includes
$42.2 million
and
$40.5 million
of unamortized deferred financing costs related to the Facility and
$12.0 million
and
$14.0 million
of unamortized deferred financing costs and discounts related to the Senior Secured Notes as of
March 31, 2019
and
December 31, 2018
, respectively.
|
Year
|
|
Percentage
|
|
On or after April 4, 2022, but before April 4, 2023
|
|
103.6
|
%
|
On or after April 4, 2023, but before April 4, 2024
|
|
101.8
|
%
|
On or after April 4, 2024 and thereafter
|
|
100.0
|
%
|
|
Payments Due by Year
|
||||||||||||||||||||||||||
|
Total
|
|
2019(2)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Principal debt repayments(1)
|
$
|
2,250,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
799,800
|
|
|
$
|
509,200
|
|
|
$
|
271,600
|
|
|
$
|
669,400
|
|
(1)
|
Includes the scheduled principal maturities for the
$525.0 million
aggregate principal amount of Senior Secured Notes issued in August 2014 and April 2015, borrowings under the Facility and the Corporate Revolver. The scheduled maturities of debt related to the Facility are based on, as of
March 31, 2019
, our level of borrowings and our estimated future available borrowing base commitment levels in future periods. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. In April 2019, the Senior Secured Notes were redeemed with the proceeds from the issuance of the Senior Notes which increased the borrowings to
$650 million
and extended the maturity date to 2026.
|
(2)
|
Represents payments for the period
April 1, 2019
through
December 31, 2019
.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Interest expense
|
$
|
38,172
|
|
|
$
|
24,893
|
|
Amortization—deferred financing costs
|
2,387
|
|
|
2,440
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
4,056
|
|
||
Capitalized interest
|
(7,251
|
)
|
|
(4,820
|
)
|
||
Deferred interest
|
836
|
|
|
(1,256
|
)
|
||
Interest income
|
(652
|
)
|
|
(948
|
)
|
||
Other, net
|
1,549
|
|
|
1,329
|
|
||
Interest and other financing costs, net
|
$
|
35,041
|
|
|
$
|
25,694
|
|
|
|
|
|
|
|
|
|
Weighted Average Price per Bbl
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
Net Deferred
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
Premium
|
|
|
|
|
|
|
|
|
|
|||||||||||
Term
|
|
Type of Contract
|
|
Index
|
|
MBbl
|
|
Payable/(Receivable)
|
|
Swap
|
|
Sold Put
|
|
Floor
|
|
Ceiling
|
|
|||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Apr — Dec
|
|
Three-way collars
|
|
Dated Brent
|
|
7,880
|
|
|
$
|
1.17
|
|
|
$
|
—
|
|
|
$
|
43.81
|
|
|
$
|
53.33
|
|
|
$
|
73.57
|
|
|
Apr — Dec
|
|
Sold calls(1)
|
|
Dated Brent
|
|
688
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80.00
|
|
|
|||||
Apr — Dec
|
|
Swaps
|
|
NYMEX WTI
|
|
1,224
|
|
|
—
|
|
|
52.22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Apr — Jun
|
|
Collars
|
|
NYMEX WTI
|
|
169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.77
|
|
|
63.70
|
|
|
|||||
Apr — Dec
|
|
Collars
|
|
Argus LLS
|
|
750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60.00
|
|
|
88.75
|
|
|
|||||
2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Jan — Dec
|
|
Three-way collars
|
|
Dated Brent
|
|
4,500
|
|
|
$
|
0.58
|
|
|
$
|
—
|
|
|
$
|
45.00
|
|
|
$
|
57.50
|
|
|
$
|
81.91
|
|
|
Jan — Dec
|
|
Sold calls(1)(2)
|
|
Dated Brent
|
|
8,000
|
|
|
$
|
1.17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85.00
|
|
|
(1)
|
Represents call option contracts sold to counterparties to enhance other derivative positions.
|
(2)
|
Deferred premium payable to be paid April 1, 2019 — December 31, 2019.
|
|
|
|
|
Estimated Fair Value
|
||||||
|
|
|
|
Asset (Liability)
|
||||||
Type of Contract
|
|
Balance Sheet Location
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
(In thousands)
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
||||
Commodity(1)
|
|
Derivatives assets—current
|
|
$
|
17,289
|
|
|
$
|
38,785
|
|
Commodity(2)
|
|
Derivatives assets—long-term
|
|
8,243
|
|
|
14,312
|
|
||
Derivative liabilities:
|
|
|
|
|
|
|
||||
Commodity(3)
|
|
Derivatives liabilities—current
|
|
(51,713
|
)
|
|
(12,172
|
)
|
||
Commodity(4)
|
|
Derivatives liabilities—long-term
|
|
(13,306
|
)
|
|
(10,181
|
)
|
||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
(39,487
|
)
|
|
$
|
30,744
|
|
(1)
|
Includes
zero
and
$0.4 million
as of
March 31, 2019
and
December 31, 2018
, respectively which represents our provisional oil sales contract. Also, includes net deferred premiums payable of
$5.5 million
and
$1.6 million
related to commodity derivative contracts as of
March 31, 2019
and
December 31, 2018
, respectively.
|
(2)
|
Includes net deferred premiums payable of
$0.1 million
and
$1.3 million
related to commodity derivative contracts as of
March 31, 2019
and
December 31, 2018
, respectively.
|
(3)
|
Includes net deferred premiums payable of
$11.0 million
and
$18.0 million
related to commodity derivative contracts as of
March 31, 2019
and
December 31, 2018
, respectively.
|
(4)
|
Includes net deferred premiums payable of
$2.0 million
and
$0.5 million
related to commodity derivative contracts as of
March 31, 2019
and
December 31, 2018
, respectively.
|
|
|
|
|
Amount of Gain/(Loss)
|
||||||
|
|
|
|
Three Months Ended
|
||||||
|
|
|
|
March 31,
|
||||||
Type of Contract
|
|
Location of Gain/(Loss)
|
|
2019
|
|
2018
|
||||
|
|
|
|
(In thousands)
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||
Commodity(1)
|
|
Oil and gas revenue
|
|
$
|
3,278
|
|
|
$
|
(841
|
)
|
Commodity
|
|
Derivatives, net
|
|
(77,085
|
)
|
|
(38,478
|
)
|
||
Interest rate
|
|
Interest expense
|
|
—
|
|
|
353
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
(73,807
|
)
|
|
$
|
(38,966
|
)
|
(1)
|
Amounts represent the change in fair value of our provisional oil sales contracts.
|
•
|
Level 1 — quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 — quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3 — unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Senior Notes
|
$
|
513,006
|
|
|
$
|
535,337
|
|
|
$
|
511,873
|
|
|
$
|
525,026
|
|
Corporate Revolver
|
225,000
|
|
|
225,000
|
|
|
325,000
|
|
|
325,000
|
|
||||
Facility
|
1,500,000
|
|
|
1,500,000
|
|
|
1,325,000
|
|
|
1,325,000
|
|
||||
Total
|
$
|
2,238,006
|
|
|
$
|
2,260,337
|
|
|
$
|
2,161,873
|
|
|
$
|
2,175,026
|
|
|
|
|
Weighted-
|
|
Market / Service
|
|
Weighted-
|
||||||
|
Service Vesting
|
|
Average
|
|
Vesting
|
|
Average
|
||||||
|
Restricted Stock
|
|
Grant-Date
|
|
Restricted Stock
|
|
Grant-Date
|
||||||
|
Units
|
|
Fair Value
|
|
Units
|
|
Fair Value
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Outstanding at December 31, 2018
|
4,115
|
|
|
$
|
6.42
|
|
|
6,716
|
|
|
$
|
9.02
|
|
Granted(1)
|
2,726
|
|
|
4.81
|
|
|
3,041
|
|
|
6.02
|
|
||
Forfeited(1)
|
(53
|
)
|
|
6.46
|
|
|
(275
|
)
|
|
10.64
|
|
||
Vested
|
(1,797
|
)
|
|
5.78
|
|
|
(1,269
|
)
|
|
6.36
|
|
||
Outstanding at March 31, 2019
|
4,991
|
|
|
5.76
|
|
|
8,213
|
|
|
8.41
|
|
(1)
|
The restricted stock units with a combination of market and service vesting criteria may vest between
0%
and
200%
of the originally granted units depending upon market performance conditions. Awards vesting over or under target shares of 100% results in additional shares granted or forfeited, respectively, in the period the market vesting criteria is determined.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
United States
|
$
|
(55,741
|
)
|
|
$
|
1,633
|
|
Bermuda
|
—
|
|
|
(16,071
|
)
|
||
Foreign—other
|
(5,839
|
)
|
|
(60,136
|
)
|
||
Income (loss) before income taxes
|
$
|
(61,580
|
)
|
|
$
|
(74,574
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
|
||
Net loss allocable to common stockholders
|
$
|
(52,906
|
)
|
|
$
|
(50,226
|
)
|
Denominator:
|
|
|
|
||||
Weighted average number of shares outstanding:
|
|
|
|
||||
Basic
|
401,164
|
|
|
395,600
|
|
||
Restricted stock units(1)
|
—
|
|
|
—
|
|
||
Diluted
|
401,164
|
|
|
395,600
|
|
||
Net loss per share:
|
|
|
|
||||
Basic
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
Diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
(1)
|
We excluded outstanding restricted stock awards and units of
8.9 million
and
11.3 million
for the
three
months ended
March 31, 2019
and
2018
, respectively, from the computations of diluted net
loss
per share because the effect would have been anti-dilutive
.
|
|
Three months ended March 31, 2019
|
||
|
(In thousands)
|
||
Operating lease cost
|
$
|
1,407
|
|
Short-term lease cost
|
5
|
|
|
Total lease cost
|
$
|
1,412
|
|
|
March 31, 2019
|
|
|
(In thousands, except lease term and discount rate)
|
|
||
Balance sheet classifications
|
|
||
Other assets (right-of-use assets)
|
$
|
22,410
|
|
Accrued liabilities (current maturities of leases)
|
2,842
|
|
|
Other long-term liabilities (non-current maturities of leases)
|
20,884
|
|
|
|
|
||
Weighted average remaining lease term
|
9.1 years
|
|
|
|
|
||
Weighted average discount rate
|
9.9
|
%
|
|
Three months ended March 31, 2019
|
||
|
(In thousands)
|
||
Operating cash flows for operating leases
|
$
|
1,223
|
|
|
Operating Leases(1)
|
||
|
(In thousands)
|
||
2019(2)
|
$
|
2,078
|
|
2020
|
4,522
|
|
|
2021
|
3,852
|
|
|
2022
|
3,903
|
|
|
2023
|
3,916
|
|
|
Thereafter
|
19,549
|
|
|
Total undiscounted lease payments
|
$
|
37,820
|
|
Less: Imputed interest
|
(14,094
|
)
|
|
Total lease liabilities
|
$
|
23,726
|
|
(1)
|
Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments, in our petroleum contracts.
|
(2)
|
Represents payments for the period from
April 1, 2019
through
December 31, 2019
.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(In thousands)
|
||||||
Accrued liabilities:
|
|
|
|
|
|
||
Exploration, development and production
|
$
|
102,538
|
|
|
$
|
92,613
|
|
Revenue payable
|
21,288
|
|
|
24,379
|
|
||
Current asset retirement obligations
|
5,776
|
|
|
6,617
|
|
||
Operating lease liabilities
|
2,842
|
|
|
—
|
|
||
General and administrative expenses
|
14,742
|
|
|
39,373
|
|
||
Interest
|
7,445
|
|
|
18,152
|
|
||
Income taxes
|
24,665
|
|
|
8,958
|
|
||
Taxes other than income
|
2,669
|
|
|
4,613
|
|
||
Derivatives
|
3,504
|
|
|
441
|
|
||
Other
|
2,472
|
|
|
450
|
|
||
|
$
|
187,941
|
|
|
$
|
195,596
|
|
|
March 31,
2019 |
||
|
(In thousands)
|
||
Asset retirement obligations:
|
|
|
|
Beginning asset retirement obligations
|
$
|
151,953
|
|
Additions associated with Equatorial Guinea - Ceiba Field and Okume Complex
|
114,395
|
|
|
Liabilities incurred during period
|
3,348
|
|
|
Liabilities settled during period
|
(2,232
|
)
|
|
Revisions in estimated retirement obligations
|
1,164
|
|
|
Accretion expense
|
5,683
|
|
|
Ending asset retirement obligations
|
$
|
274,311
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Loss on disposal of inventory
|
$
|
187
|
|
|
$
|
—
|
|
Loss on ARO liability settlements
|
1,918
|
|
|
—
|
|
||
Disputed charges and related costs, net of recoveries
|
(14
|
)
|
|
2,335
|
|
||
Other, net
|
28
|
|
|
1,370
|
|
||
Other expenses, net
|
$
|
2,119
|
|
|
$
|
3,705
|
|
|
Ghana
|
|
Equatorial Guinea
|
|
Mauritania/Senegal
|
|
U.S. Gulf of Mexico
|
|
Corporate & Other
|
|
Eliminations
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues and other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil and gas revenue
|
$
|
122,919
|
|
|
$
|
88,805
|
|
|
$
|
—
|
|
|
$
|
85,066
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
296,790
|
|
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
72,809
|
|
|
(72,944
|
)
|
|
—
|
|
|||||||
Total revenues and other income
|
122,919
|
|
|
88,805
|
|
|
—
|
|
|
85,201
|
|
|
72,809
|
|
|
(72,944
|
)
|
|
296,790
|
|
|||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil and gas production
|
30,057
|
|
|
22,605
|
|
|
—
|
|
|
27,137
|
|
|
—
|
|
|
—
|
|
|
79,799
|
|
|||||||
Facilities insurance modifications, net
|
(20,021
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,021
|
)
|
|||||||
Exploration expenses
|
52
|
|
|
3,171
|
|
|
6,442
|
|
|
11,194
|
|
|
9,485
|
|
|
—
|
|
|
30,344
|
|
|||||||
General and administrative
|
5,956
|
|
|
2,045
|
|
|
2,287
|
|
|
7,393
|
|
|
44,205
|
|
|
(25,978
|
)
|
|
35,908
|
|
|||||||
Depletion, depreciation and amortization
|
54,863
|
|
|
23,017
|
|
|
15
|
|
|
39,090
|
|
|
1,110
|
|
|
—
|
|
|
118,095
|
|
|||||||
Interest and other financing costs, net(1)
|
20,653
|
|
|
—
|
|
|
(6,793
|
)
|
|
5,929
|
|
|
17,036
|
|
|
(1,784
|
)
|
|
35,041
|
|
|||||||
Derivatives, net
|
—
|
|
|
—
|
|
|
—
|
|
|
31,903
|
|
|
45,182
|
|
|
—
|
|
|
77,085
|
|
|||||||
Other expenses, net
|
45,100
|
|
|
340
|
|
|
229
|
|
|
1,592
|
|
|
40
|
|
|
(45,182
|
)
|
|
2,119
|
|
|||||||
Total costs and expenses
|
136,660
|
|
|
51,178
|
|
|
2,180
|
|
|
124,238
|
|
|
117,058
|
|
|
(72,944
|
)
|
|
358,370
|
|
|||||||
Income (loss) before income taxes
|
(13,741
|
)
|
|
37,627
|
|
|
(2,180
|
)
|
|
(39,037
|
)
|
|
(44,249
|
)
|
|
—
|
|
|
(61,580
|
)
|
|||||||
Income tax expense (benefit)
|
(4,983
|
)
|
|
15,531
|
|
|
—
|
|
|
(8,206
|
)
|
|
(11,016
|
)
|
|
—
|
|
|
(8,674
|
)
|
|||||||
Net income (loss)
|
$
|
(8,758
|
)
|
|
$
|
22,096
|
|
|
$
|
(2,180
|
)
|
|
$
|
(30,831
|
)
|
|
$
|
(33,233
|
)
|
|
$
|
—
|
|
|
$
|
(52,906
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated capital expenditures
|
$
|
34,967
|
|
|
$
|
14,936
|
|
|
$
|
2,252
|
|
|
$
|
45,882
|
|
|
$
|
12,191
|
|
|
$
|
—
|
|
|
$
|
110,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property and equipment, net
|
$
|
1,681,317
|
|
|
$
|
470,974
|
|
|
$
|
414,035
|
|
|
$
|
1,309,412
|
|
|
$
|
39,065
|
|
|
$
|
—
|
|
|
$
|
3,914,803
|
|
Total assets
|
$
|
1,938,645
|
|
|
$
|
533,244
|
|
|
$
|
528,068
|
|
|
$
|
3,369,271
|
|
|
$
|
10,092,342
|
|
|
$
|
(11,959,714
|
)
|
|
$
|
4,501,856
|
|
(1)
|
Interest expense is recorded based on actual third-party and intercompany debt agreements. Capitalized interest is recorded on the business unit where the assets reside.
|
|
Ghana
|
|
Equatorial Guinea(1)
|
|
Mauritania/Senegal
|
|
U.S. Gulf of Mexico(2)
|
|
Corporate & Other
|
|
Eliminations(3)
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues and other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil and gas revenue
|
$
|
127,196
|
|
|
$
|
123,177
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(123,177
|
)
|
|
$
|
127,196
|
|
Other income, net
|
(18
|
)
|
|
143
|
|
|
—
|
|
|
—
|
|
|
65,060
|
|
|
(65,204
|
)
|
|
(19
|
)
|
|||||||
Total revenues and other income
|
127,178
|
|
|
123,320
|
|
|
—
|
|
|
—
|
|
|
65,060
|
|
|
(188,381
|
)
|
|
127,177
|
|
|||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil and gas production
|
46,768
|
|
|
25,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,850
|
)
|
|
46,768
|
|
|||||||
Facilities insurance modifications, net
|
8,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,449
|
|
|||||||
Exploration expenses
|
224
|
|
|
869
|
|
|
3,198
|
|
|
—
|
|
|
16,902
|
|
|
—
|
|
|
21,193
|
|
|||||||
General and administrative
|
5,253
|
|
|
985
|
|
|
1,291
|
|
|
—
|
|
|
39,111
|
|
|
(24,757
|
)
|
|
21,883
|
|
|||||||
Depletion, depreciation and amortization
|
53,351
|
|
|
53,998
|
|
|
15
|
|
|
—
|
|
|
911
|
|
|
(53,998
|
)
|
|
54,277
|
|
|||||||
Interest and other financing costs, net(4)
|
21,254
|
|
|
(1
|
)
|
|
(3,921
|
)
|
|
—
|
|
|
10,146
|
|
|
(1,784
|
)
|
|
25,694
|
|
|||||||
Derivatives, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,478
|
|
|
—
|
|
|
38,478
|
|
|||||||
(Gain) loss on equity method investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,696
|
)
|
|
(18,696
|
)
|
|||||||
Other expenses, net
|
40,809
|
|
|
121
|
|
|
1
|
|
|
—
|
|
|
1,254
|
|
|
(38,480
|
)
|
|
3,705
|
|
|||||||
Total costs and expenses
|
176,108
|
|
|
81,822
|
|
|
584
|
|
|
—
|
|
|
106,802
|
|
|
(163,565
|
)
|
|
201,751
|
|
|||||||
Income (loss) before income taxes
|
(48,930
|
)
|
|
41,498
|
|
|
(584
|
)
|
|
—
|
|
|
(41,742
|
)
|
|
(24,816
|
)
|
|
(74,574
|
)
|
|||||||
Income tax expense (benefit)
|
(24,408
|
)
|
|
24,816
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
(24,816
|
)
|
|
(24,348
|
)
|
|||||||
Net income (loss)
|
$
|
(24,522
|
)
|
|
$
|
16,682
|
|
|
$
|
(584
|
)
|
|
$
|
—
|
|
|
$
|
(41,802
|
)
|
|
$
|
—
|
|
|
$
|
(50,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated capital expenditures
|
$
|
18,102
|
|
|
$
|
6,891
|
|
|
$
|
3,256
|
|
|
$
|
—
|
|
|
$
|
29,380
|
|
|
$
|
—
|
|
|
$
|
57,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property and equipment, net
|
$
|
1,868,283
|
|
|
$
|
7,931
|
|
|
$
|
385,386
|
|
|
$
|
—
|
|
|
$
|
44,937
|
|
|
$
|
—
|
|
|
$
|
2,306,537
|
|
Total assets
|
$
|
2,165,726
|
|
|
$
|
214,546
|
|
|
$
|
499,082
|
|
|
$
|
—
|
|
|
$
|
8,516,046
|
|
|
$
|
(8,364,872
|
)
|
|
$
|
3,030,528
|
|
(1)
|
Includes our proportionate share of our equity method investment in KTIPI, including our basis difference which is reflected in depletion, depreciation and amortization for the three months ended March 31, 2018, except for capital expenditures. See Note 7 - Equity Method Investments for additional information regarding our equity method investments.
|
(2)
|
No activity prior to September 14, 2018, the DGE acquisition date.
|
(3)
|
Includes elimination of proportionate consolidation amounts recorded for KTIPI to reconcile to (Gain) loss on equity method investments, net as reported in the consolidated statements of operations.
|
(4)
|
Interest expense is recorded based on actual third-party and intercompany debt agreements. Capitalized interest is recorded on the business unit where the assets reside.
|
|
Three Months Ended March 31,
|
|
||||||
|
2019
|
|
2018
|
|
||||
|
(In thousands)
|
|
||||||
Consolidated capital expenditures:
|
|
|
|
|
||||
Consolidated Statements of Cash Flows - Investing activities:
|
|
|
|
|
||||
Oil and gas assets
|
$
|
78,377
|
|
|
$
|
34,712
|
|
|
Other property
|
1,071
|
|
|
1,757
|
|
|
||
Adjustments:
|
|
|
|
|
||||
Changes in capital accruals
|
14,925
|
|
|
4,684
|
|
|
||
Exploration expense, excluding unsuccessful well costs(1)
|
30,504
|
|
|
21,150
|
|
|
||
Capitalized interest
|
(7,251
|
)
|
|
(4,820
|
)
|
|
||
Other
|
(7,398
|
)
|
|
146
|
|
|
||
Total consolidated capital expenditures
|
$
|
110,228
|
|
|
$
|
57,629
|
|
|
(1)
|
Unsuccessful well costs are included in oil and gas assets when incurred.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
March 31, 2019 |
|||
|
(In thousands, except per volume data)
|
|||
Sales volumes:
|
|
|
||
Oil (MBbl)
|
4,690
|
|
|
|
Gas (MMcf)
|
1,801
|
|
|
|
NGL (MBbl)
|
113
|
|
|
|
Total (MBoe)
|
5,103
|
|
|
|
|
|
|
||
Revenues:
|
|
|
||
Oil sales
|
$
|
290,864
|
|
|
Gas sales
|
3,662
|
|
|
|
NGL sales
|
2,264
|
|
|
|
Total revenues
|
$
|
296,790
|
|
|
|
|
|
||
Average oil sales price per Bbl
|
$
|
62.02
|
|
|
Average gas sales price per Mcf
|
2.03
|
|
|
|
Average NGL sales price per Bbl
|
20.13
|
|
|
|
Average total sales price per Boe
|
58.16
|
|
|
|
|
|
|
||
Costs:
|
|
|
||
Oil and gas production, excluding workovers
|
$
|
72,715
|
|
|
Oil and gas production, workovers
|
7,084
|
|
|
|
Total oil and gas production costs
|
$
|
79,799
|
|
|
|
|
|
||
Depletion, depreciation and amortization
|
$
|
118,095
|
|
|
|
|
|
||
Average cost per Boe:
|
|
|
||
Oil and gas production, excluding workovers
|
$
|
14.25
|
|
|
Oil and gas production, workovers
|
1.39
|
|
|
|
Total oil and gas production costs
|
15.64
|
|
|
|
|
|
|
||
Depletion, depreciation and amortization
|
23.14
|
|
|
|
Oil and gas production cost and depletion costs
|
$
|
38.78
|
|
|
|
Three Months Ended
March 31, 2018 |
||||||||||
|
Kosmos
|
|
Equity Method Investment - Equatorial Guinea(1)
|
|
Total
|
||||||
|
(In thousands, except per volume data)
|
||||||||||
Sales volumes:
|
|
|
|
|
|
||||||
Oil (MBbl)
|
1,934
|
|
|
1,880
|
|
|
3,814
|
|
|||
Gas (MMcf)
|
—
|
|
|
—
|
|
|
—
|
|
|||
NGL (MBbl)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total (MBoe)
|
1,934
|
|
|
1,880
|
|
|
3,814
|
|
|||
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Oil sales
|
$
|
127,196
|
|
|
$
|
123,177
|
|
|
$
|
250,373
|
|
Gas sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
NGL sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total revenues
|
$
|
127,196
|
|
|
$
|
123,177
|
|
|
$
|
250,373
|
|
|
|
|
|
|
|
||||||
Average oil sales price per Bbl
|
$
|
65.77
|
|
|
$
|
65.52
|
|
|
$
|
65.65
|
|
Average gas sales price per Mcf
|
—
|
|
|
—
|
|
|
—
|
|
|||
Average NGL sales price per Bbl
|
—
|
|
|
—
|
|
|
—
|
|
|||
Average total sales price per Boe
|
65.77
|
|
|
65.52
|
|
|
65.65
|
|
|||
|
|
|
|
|
|
||||||
Costs:
|
|
|
|
|
|
||||||
Oil and gas production, excluding workovers
|
$
|
42,260
|
|
|
$
|
25,850
|
|
|
$
|
68,110
|
|
Oil and gas production, workovers
|
4,508
|
|
|
—
|
|
|
4,508
|
|
|||
Total oil and gas production costs
|
$
|
46,768
|
|
|
$
|
25,850
|
|
|
$
|
72,618
|
|
|
|
|
|
|
|
||||||
Depletion, depreciation and amortization
|
$
|
54,277
|
|
|
$
|
53,997
|
|
|
$
|
108,274
|
|
|
|
|
|
|
|
||||||
Average cost per Boe:
|
|
|
|
|
|
||||||
Oil and gas production, excluding workovers
|
$
|
21.85
|
|
|
$
|
13.75
|
|
|
$
|
17.86
|
|
Oil and gas production, workovers
|
2.33
|
|
|
—
|
|
|
1.18
|
|
|||
Total oil and gas production costs
|
24.18
|
|
|
13.75
|
|
|
19.04
|
|
|||
|
|
|
|
|
|
||||||
Depletion, depreciation and amortization
|
28.06
|
|
|
28.73
|
|
|
28.39
|
|
|||
Oil and gas production cost and depletion costs
|
$
|
52.24
|
|
|
$
|
42.48
|
|
|
$
|
47.43
|
|
(1)
|
For the
three
months ended
March 31, 2018
, we have presented our 50% share of the results of operations, including our basis difference which is reflected in depletion, depreciation and amortization. Under the equity method of accounting, we only recognize our share of the net income of KTIPI as adjusted for our basis differential, which is recorded in (gain) loss on equity method investments, net in the consolidated statement of operations.
|
|
Actively Drilling or
|
|
Wells Suspended or
|
||||||||||||||||||||
|
Completing
|
|
Waiting on Completion
|
||||||||||||||||||||
|
Exploration
|
|
Development
|
|
Exploration
|
|
Development
|
||||||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||
Ghana
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Jubilee Unit
|
—
|
|
|
—
|
|
|
1
|
|
|
0.24
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
2.17
|
|
TEN
|
—
|
|
|
—
|
|
|
1
|
|
|
0.17
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
1.02
|
|
Deepwater Tano
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
U.S. Gulf of Mexico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nearly Headless Nick
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
0.22
|
|
|
—
|
|
|
—
|
|
Odd Job 214#2
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
0.61
|
|
Tornado #3
|
—
|
|
|
—
|
|
|
1
|
|
|
0.35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gladden Deep
|
1
|
|
|
0.20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mauritania
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
C8
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
0.84
|
|
|
—
|
|
|
—
|
|
Senegal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Saint Louis Offshore Profond
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
0.30
|
|
|
—
|
|
|
—
|
|
Cayar Profond
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
0.60
|
|
|
—
|
|
|
—
|
|
Total
|
1
|
|
|
0.20
|
|
|
3
|
|
|
0.76
|
|
|
7
|
|
|
1.96
|
|
|
16
|
|
|
3.80
|
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
Increase
|
||||||||
|
2019
|
|
2018
|
|
(Decrease)
|
||||||
|
(In thousands)
|
||||||||||
Revenues and other income:
|
|
|
|
|
|
|
|
|
|||
Oil and gas revenue
|
$
|
296,790
|
|
|
$
|
127,196
|
|
|
$
|
169,594
|
|
Other income, net
|
—
|
|
|
(19
|
)
|
|
19
|
|
|||
Total revenues and other income
|
296,790
|
|
|
127,177
|
|
|
169,613
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Oil and gas production
|
79,799
|
|
|
46,768
|
|
|
33,031
|
|
|||
Facilities insurance modifications, net
|
(20,021
|
)
|
|
8,449
|
|
|
(28,470
|
)
|
|||
Exploration expenses
|
30,344
|
|
|
21,193
|
|
|
9,151
|
|
|||
General and administrative
|
35,908
|
|
|
21,883
|
|
|
14,025
|
|
|||
Depletion, depreciation and amortization
|
118,095
|
|
|
54,277
|
|
|
63,818
|
|
|||
Interest and other financing costs, net
|
35,041
|
|
|
25,694
|
|
|
9,347
|
|
|||
Derivatives, net
|
77,085
|
|
|
38,478
|
|
|
38,607
|
|
|||
(Gain) loss on equity method investment, net
|
—
|
|
|
(18,696
|
)
|
|
18,696
|
|
|||
Other expenses, net
|
2,119
|
|
|
3,705
|
|
|
(1,586
|
)
|
|||
Total costs and expenses
|
358,370
|
|
|
201,751
|
|
|
156,619
|
|
|||
Loss before income taxes
|
(61,580
|
)
|
|
(74,574
|
)
|
|
12,994
|
|
|||
Income tax benefit
|
(8,674
|
)
|
|
(24,348
|
)
|
|
15,674
|
|
|||
Net loss
|
$
|
(52,906
|
)
|
|
$
|
(50,226
|
)
|
|
$
|
(2,680
|
)
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Sources of cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||
Net cash used in operating activities
|
$
|
(17,347
|
)
|
|
$
|
(17,016
|
)
|
Return of investment from KTIPI
|
—
|
|
|
41,070
|
|
||
Borrowings under long-term debt
|
175,000
|
|
|
—
|
|
||
|
157,653
|
|
|
24,054
|
|
||
Uses of cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||
Oil and gas assets
|
78,377
|
|
|
34,712
|
|
||
Other property
|
1,071
|
|
|
1,757
|
|
||
Payments on long-term debt
|
100,000
|
|
|
—
|
|
||
Purchase of treasury stock
|
1,980
|
|
|
11,874
|
|
||
Dividends
|
18,147
|
|
|
—
|
|
||
Deferred financing costs
|
1,160
|
|
|
24,969
|
|
||
|
200,735
|
|
|
73,312
|
|
||
Decrease in cash, cash equivalents and restricted cash
|
$
|
(43,082
|
)
|
|
$
|
(49,258
|
)
|
|
March 31, 2019
|
||
|
(In thousands)
|
||
Cash and cash equivalents
|
$
|
134,423
|
|
Restricted cash
|
8,111
|
|
|
Senior Notes at par
|
525,000
|
|
|
Borrowings under the Facility
|
1,500,000
|
|
|
Borrowings under the Corporate Revolver
|
225,000
|
|
|
Net debt
|
$
|
2,107,466
|
|
|
|
|
|
Availability under the Facility
|
$
|
200,000
|
|
Availability under the Corporate Revolver
|
$
|
175,000
|
|
Available borrowings plus cash and cash equivalents
|
$
|
509,423
|
|
•
|
drill additional wells and execute exploitation activities in Ghana, Equatorial Guinea and in the U.S. Gulf of Mexico;
|
•
|
execute infrastructure-led exploration efforts in the U.S. Gulf of Mexico and Equatorial Guinea;
|
•
|
execute appraisal and exploration activities in a number of our exploration license areas; and
|
•
|
acquire and analyze seismic on existing licenses and purchase seismic over new prospective areas.
|
Year
|
|
Percentage
|
|
On or after April 4, 2022, but before April 4, 2023
|
|
103.6
|
%
|
On or after April 4, 2023, but before April 4, 2024
|
|
101.8
|
%
|
On or after April 4, 2024 and thereafter
|
|
100.0
|
%
|
|
Payments Due By Year(4)
|
||||||||||||||||||||||||||
|
Total
|
|
2019(5)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Principal debt repayments(1)
|
$
|
2,250,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
799,800
|
|
|
$
|
509,200
|
|
|
$
|
271,600
|
|
|
$
|
669,400
|
|
Interest payments on long-term debt(2)
|
525,767
|
|
|
101,996
|
|
|
144,258
|
|
|
132,250
|
|
|
69,788
|
|
|
45,999
|
|
|
31,476
|
|
|||||||
Operating leases(3)
|
37,820
|
|
|
2,078
|
|
|
4,522
|
|
|
3,852
|
|
|
3,903
|
|
|
3,916
|
|
|
19,549
|
|
(1)
|
Includes the scheduled principal maturities for the $525.0 million aggregate principal amount of Senior Secured Notes issued in August 2014 and April 2015, borrowings under the Facility and the Corporate Revolver. The scheduled maturities of debt related to the Facility are based on, as of
March 31, 2019
, our level of borrowings and our estimated future available borrowing base commitment levels in future periods. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. In April 2019, the Senior Secured Notes were redeemed with the proceeds from the issuance of the Senior Notes which increased the borrowings to
$650 million
and extended the maturity date to 2026.
|
(2)
|
Based on outstanding borrowings as noted in (1) above and the LIBOR yield curves at the reporting date and commitment fees related to the Facility and Corporate Revolver and the interest on the Senior Secured Notes.
|
(3)
|
Primarily relates to corporate office and foreign office leases.
|
(4)
|
Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments and seismic obligations, in our petroleum contracts. The Company's liabilities for asset retirement obligations associated with the dismantlement, abandonment and restoration costs of oil and gas properties are not included. See Note 15 — Additional Financial Information for additional information regarding these liabilities.
|
(5)
|
Represents the period from
April 1, 2019
through
December 31, 2019
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(Liability)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
||||||||||||||
|
Years Ending December 31,
|
|
March 31,
|
||||||||||||||||||||||||
|
2019(3)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
2019
|
||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
525,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(535,337
|
)
|
Fixed interest rate
|
7.88
|
%
|
|
7.88
|
%
|
|
7.88
|
%
|
|
7.88
|
%
|
|
—
|
|
|
—
|
|
|
|
||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Facility(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
274,800
|
|
|
$
|
284,200
|
|
|
$
|
271,600
|
|
|
$
|
669,400
|
|
|
$
|
(1,500,000
|
)
|
Corporate Revolver
|
—
|
|
|
—
|
|
|
—
|
|
|
225,000
|
|
|
—
|
|
|
—
|
|
|
(225,000
|
)
|
|||||||
Weighted average interest rate(2)
|
5.91
|
%
|
|
5.63
|
%
|
|
5.56
|
%
|
|
5.70
|
%
|
|
5.85
|
%
|
|
6.45
|
%
|
|
|
|
(1)
|
The amounts included in the table represent principal maturities only. The scheduled maturities of debt are based on the level of borrowings and the available borrowing base as of
March 31, 2019
. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter.
|
(2)
|
Based on outstanding borrowings as noted in (1) above and the LIBOR yield curves plus applicable margin at the reporting date. Excludes commitment fees related to the Facility and Corporate Revolver.
|
(3)
|
Represents the period
April 1, 2019
through
December 31, 2019
.
|
•
|
our ability to find, acquire or gain access to other discoveries and prospects and to successfully develop and produce from our current discoveries and prospects;
|
•
|
uncertainties inherent in making estimates of our oil and natural gas data;
|
•
|
the successful implementation of our and our block partners’ prospect discovery and development and drilling plans;
|
•
|
projected and targeted capital expenditures and other costs, commitments and revenues;
|
•
|
termination of or intervention in concessions, rights or authorizations granted to us by the governments of the countries in which we operate (or their respective national oil companies) or any other federal, state or local governments or authorities;
|
•
|
our dependence on our key management personnel and our ability to attract and retain qualified technical personnel;
|
•
|
the ability to obtain financing and to comply with the terms under which such financing may be available;
|
•
|
the volatility of oil, natural gas and NGL prices;
|
•
|
the availability, cost, function and reliability of developing appropriate infrastructure around and transportation to our discoveries and prospects;
|
•
|
the availability and cost of drilling rigs, production equipment, supplies, personnel and oilfield services;
|
•
|
other competitive pressures;
|
•
|
potential liabilities inherent in oil and natural gas operations, including drilling and production risks and other operational and environmental risks and hazards;
|
•
|
current and future government regulation of the oil and gas industry or regulation of the investment in or ability to do business with certain countries or regimes;
|
•
|
cost of compliance with laws and regulations;
|
•
|
changes in environmental, health and safety or climate change or greenhouse gas (“GHG”) laws and regulations or the implementation, or interpretation, of those laws and regulations;
|
•
|
adverse effects of sovereign boundary disputes in the jurisdictions in which we operate;
|
•
|
environmental liabilities;
|
•
|
geological, geophysical and other technical and operations problems, including drilling and oil and gas production and processing;
|
•
|
military operations, civil unrest, outbreaks of disease, terrorist acts, wars or embargoes;
|
•
|
the cost and availability of adequate insurance coverage and whether such coverage is enough to sufficiently mitigate potential losses and whether our insurers comply with their obligations under our coverage agreements;
|
•
|
our vulnerability to severe weather events, including tropical storms and hurricanes in the Gulf of Mexico;
|
•
|
our ability to meet our obligations under the agreements governing our indebtedness;
|
•
|
the availability and cost of financing and refinancing our indebtedness;
|
•
|
the amount of collateral required to be posted from time to time in our hedging transactions, letters of credit, performance bonds and other secured debt;
|
•
|
the result of any legal proceedings, arbitrations, or investigations we may be subject to or involved in;
|
•
|
our success in risk management activities, including the use of derivative financial instruments to hedge commodity and interest rate risks; and
|
•
|
other risk factors discussed in the “Item 1A. Risk Factors” section of this quarterly report on Form 10-Q and our annual report on Form 10-K.
|
|
Derivative Contracts Assets (Liabilities)
|
|
||
|
Commodities
|
|
||
|
(In thousands)
|
|
||
Fair value of contracts outstanding as of December 31, 2018
|
$
|
30,744
|
|
|
Changes in contract fair value
|
(73,807
|
)
|
|
|
Contract maturities
|
3,576
|
|
|
|
Fair value of contracts outstanding as of March 31, 2019
|
$
|
(39,487
|
)
|
|
|
|
|
|
|
|
|
|
Weighted Average Price per Bbl
|
Asset (Liability)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Net Deferred
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
|||||||||||||
|
|
|
|
|
|
|
|
Premium
|
|
|
|
|
|
|
|
|
|
March 31,
|
|||||||||||||
Term
|
|
Type of Contract
|
|
Index
|
|
MBbl
|
|
Payable/(Receivable)
|
|
Swap
|
|
Sold Put
|
|
Floor
|
|
Ceiling
|
|
2019(3)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|||||||||
2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Apr — Dec
|
|
Three-way collars
|
|
Dated Brent
|
|
7,880
|
|
|
$
|
1.17
|
|
|
$
|
—
|
|
|
$
|
43.81
|
|
|
$
|
53.33
|
|
|
$
|
73.57
|
|
|
$
|
(18,157
|
)
|
Apr — Dec
|
|
Sold calls(1)
|
|
Dated Brent
|
|
688
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80.00
|
|
|
(7,099
|
)
|
||||||
Apr — Dec
|
|
Swaps
|
|
NYMEX WTI
|
|
1,224
|
|
|
—
|
|
|
52.22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,568
|
)
|
||||||
Apr — Jun
|
|
Collars
|
|
NYMEX WTI
|
|
169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.77
|
|
|
63.70
|
|
|
51
|
|
||||||
Apr — Dec
|
|
Collars
|
|
Argus LLS
|
|
750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60.00
|
|
|
88.75
|
|
|
1,521
|
|
||||||
2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Jan — Dec
|
|
Three-way collars
|
|
Dated Brent
|
|
4,500
|
|
|
$
|
0.58
|
|
|
$
|
—
|
|
|
$
|
45.00
|
|
|
$
|
57.50
|
|
|
$
|
81.91
|
|
|
$
|
2,274
|
|
Jan — Dec
|
|
Sold calls(1)(2)
|
|
Dated Brent
|
|
8,000
|
|
|
1.17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85.00
|
|
|
(8,509
|
)
|
(1)
|
Represents call option contracts sold to counterparties to enhance other derivative positions.
|
(2)
|
Deferred premium payable to be paid April 1, 2019 — December 31, 2019.
|
(3)
|
Fair values are based on the average forward oil prices on
March 31, 2019
.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information.
|
|
|
Kosmos Energy Ltd.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date
|
May 6, 2019
|
|
/s/ THOMAS P. CHAMBERS
|
|
|
Thomas P. Chambers
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Exhibit
Number
|
|
Description of Document
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
a.
|
Vesting Benefits
. Exhibit A hereto sets forth each outstanding restricted share unit (“
RSU
”) award and performance share unit (“
PSU
”) award previously granted to Retiree under the Kosmos Energy Ltd. Long Term Incentive Plan (as amended from time to time, the “
LTIP
”) and described in applicable award agreements (“
Award Agreements
”). With respect to each outstanding RSU award and PSU award held by Retiree that, as of the Retirement Date, has been outstanding for at least one year following the applicable grant date (collectively, the “
Eligible Awards
”), Company hereby agrees to amend and waive, in accordance with the terms of the LTIP and the individual RSU and PSU Award Agreements granted to Retiree thereunder, all or any portion of the continued service-based vesting conditions applicable to such Eligible Awards (the “
Vesting Benefits
”) and delete any forfeiture requirements based on Retiree’s termination of service; provided that (i) in the case of any Eligible Award that is subject to performance-vesting conditions, the vesting of such award will remain subject to the satisfaction of the applicable performance-vesting conditions in accordance with its terms, (ii) the Eligible Awards will remain subject to all other terms and conditions applicable to such Eligible Awards pursuant to the LTIP and the applicable Award Agreements, and (iii) the Eligible Awards will convert into common stock of Company in accordance with their original vesting/settlement schedule (the latest date on which any Eligible Award (or any portion thereof) will convert into common stock of Company, the “
Last Full Vest Date
”).
|
b.
|
General Release
. In exchange for the Post-Termination Benefit, Retiree releases, acquits, and forever discharges (i) Company, (ii) any parent, subsidiary, or affiliated entity of Company, (iii) any current or former officer, stockholder, member, director, partner, agent, manager, employee, representative, insurer, or attorney of the entities described in (i) or (ii), (iv) any employee benefit plan sponsored or administered by any person or entity described in (i), (ii), or (iii), and (v) any successor or assign of any person or entity described in (i), (ii), (iii), or (iv) (collectively, the “
Company Parties
”) from, and waive to the maximum extent permitted by applicable law, any and all claims, liabilities, demands, and causes of action of whatever character, whether known or unknown, fixed or contingent, or vicarious, derivative, or direct, that Retiree may have or claim against Company or any of the other Company Parties. Retiree understands that this general release includes, but is not limited to, any and all claims arising under federal, state, or local laws prohibiting employment discrimination, including the Age Discrimination in Employment Act, or other claims growing out of, resulting from, or connected in any way with Retiree’s employment with or retirement from Company. Retiree understands that this Agreement does not waive any rights or claims against Company or any of the other Company Parties that may arise after the date on which Retiree signs it. Retiree further understands that nothing in this Agreement waives (i) any benefits to which Retiree has a vested entitlement under the terms of the applicable employee benefit plans established by Company, (ii) any rights or claims arising after the Effective Date, or (iii) any right or claim to indemnification or defense of any claims arising out Retiree’s prior employment with the Company.
|
c.
|
Effective Date
. Retiree understands that the terms of this Agreement will become effective and enforceable eight days after Retiree signs it (the “
Effective Date
”), unless before then Retiree revokes Retiree’s acceptance in writing and delivers Retiree’s written revocation to Amy Wynn-Steffek by email to awynn-steffek@kosmosenergy.com or at the address above, in which case Retiree will not be entitled to receive the Post-Termination Benefit. Retiree acknowledges and agrees that Company has no legal obligation to provide the Post-Termination Benefit to Retiree. Signing this Agreement constitutes Retiree’s agreement to all terms and conditions set forth in it and is in consideration of Company’s agreement to provide the Post-Termination Benefit.
|
d.
|
Permitted Activities
. Retiree understands that nothing in this Agreement precludes Retiree from (i) voluntarily filing a charge or complaint with, providing truthful information to, or cooperating with an investigation conducted by a government
|
e.
|
Jury Waiver
. Retiree irrevocably waives the right to trial by jury with respect to any claim or cause of action against Company or any of the other Company Parties arising from Retiree’s employment with or retirement from Company or from this Agreement (either for alleged breach or enforcement).
|
f.
|
Voluntary Agreement
. Retiree acknowledges that (i) Retiree read this Agreement (ii) by this paragraph, Company specifically has advised Retiree to consult an attorney and Retiree has had the opportunity to consult an attorney, (iii) Retiree has had at least 21 days to consider and fully understand the meaning and effect of Retiree’s action in signing this Agreement, (iv) Retiree’s signing of this Agreement is knowing, voluntary, and based solely on Retiree’s own judgment in consultation with Retiree’s attorney, if any, and (v) Retiree is not relying on any written or oral statement or promise other than as set out in this Agreement or the Advisory Agreement.
|
g.
|
Miscellaneous
.
This Agreement contains and constitutes the entire understanding and agreement between Company and Retiree with respect to its subject matter and may not be released, discharged, abandoned, supplemented, changed, or modified in any manner except by a writing of concurrent or subsequent date signed by both an authorized Company official and Retiree. This Agreement is governed by and construed in accordance with the laws of the State of Texas without regard to its rules regarding conflict of laws. Exclusive venue for purposes of any dispute, controversy, claim, or cause of action between the Parties concerning, arising out of, or related to this Agreement or Retiree’s employment with or retirement from Company is in any state district of competent jurisdiction presiding over Dallas County, Texas. Retiree further consents to receive service of process related to any such action by any method permitted by statute or rule and—whether or not expressly authorized by statute or rule—through any email or social-media account established, maintained, or used by Retiree.
|
|
RETIREE
/s/ Brian F. Maxted
|
|
|
KOSMOS ENERGY, LLC
/s/ Jason E. Doughty
|
|
|
Brian F. Maxted
|
|
|
By: Jason E. Doughty
|
|
|
Date: 1 March 2019
|
|
|
Date: 1 March 2019
|
|
Type of Eligible Award
|
Grant Date
|
Vesting Date
|
Number of Shares
|
RSU
|
January 23, 2017
|
January 1, 2020
|
29,834
|
PSU
|
January 23, 2017
|
January 3, 2020
|
134,500*
|
RSU
|
January 31, 2018
|
January 2, 2020
|
29,833
|
RSU
|
January 31, 2018
|
January 2, 2021
|
29,833
|
PSU
|
January 31, 2018
|
January 4, 2021
|
134,500*
|
/s/ Richard Clark
|
|
August 3, 2018
|
Richard Clark
|
|
Date
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Kosmos Energy Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 6, 2019
|
/s/ ANDREW G. INGLIS
|
|
Andrew G. Inglis
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Kosmos Energy Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 6, 2019
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/s/ THOMAS P. CHAMBERS
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Thomas P. Chambers
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Senior Vice President and Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 6, 2019
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/s/ ANDREW G. INGLIS
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Andrew G. Inglis
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Chairman of the Board of Directors and Chief Executive Officer
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(Principal Executive Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 6, 2019
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/s/ THOMAS P. CHAMBERS
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Thomas P. Chambers
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Senior Vice President and Chief Financial Officer
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(Principal Financial Officer)
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