Kosmos Energy Ltd., Dallas, increased production 17% quarter-over-quarter to 68,200 boe/d with the startup of Tullow Oil plc-operated Jubilee South East development offshore Ghana, but production ramp-up is slower than expected.
“Production in the quarter increased by around 17% versus the second quarter following the successful startup of the Jubilee South East development [offshore Ghana], with three producers brought online taking gross field production up to around 100,000 barrels of oil per day, with continued growth expected,” said chairman and chief executive officer Andrew G. Inglis in a release Nov. 6.
Jubilee (Kosmos 38.6%) averaged 95,900 b/d of oil gross in this year’s third quarter—up 32% over the previous quarter—however two water injector wells online post-quarter end were delayed due to operational issues and downtime of the water injection pumps was longer than anticipated, leading to slower ramp up in the quarter which may defer one Jubilee lifting into first-quarter 2024, Jefferies analysts outlined in a research note Nov. 6.
Potentially impacting future production is the timing of first gas on Phase 1 of the Greater Tortue Ahmeyim project offshore Mauritania and Senegal, which could potentially move to second-quarter 2024 from first-quarter 2024.
Kosmos said the critical path to first gas is now through the arrival, hookup, and commissioning of the floating production, storage, and offloading (FPSO) vessel, but delivery of first gas—as noted by operator bp plc in its third quarter results—depends on the execution of this workstream, which has the potential to slip into second-quarter 2024 (OGJ Online, Aug. 7, 2023). According to bp’s Oct. 31 earnings call, Tortue Phase 1 is about 90% complete.
The project’s initial phase, together with the Winterfell project in the Green Canyon area of the US Gulf of Mexico and coupled with Jubilee South East, “are expected to increase production by around 50% from the second half of 2022” when online, said Inglis.
Development of Beacon Offshore Energy-operated Winterfell is progressing. Well drilling began in August and the first well has now been completed. Partners are targeting first oil around the end of first-quarter 2024.
In this year’s third-quarter, production in the US Gulf of Mexico averaged about 15,700 boe/d net (82% oil), above guidance due to lower storm activity than anticipated during the period, the company said.
Financials
Kosmos generated a net income of $85 million and an adjusted net income of $126 on revenues of $526 million for third-quarter 2023. Net capital expenditure for the quarter was $193 million, in line with guidance.
Kosmos exited the quarter with about $2.4 billion of total long-term debt and about $2.3 billion of net debt and available liquidity of $600 million. Net cash provided by operating activities was $249 million.
