Kosmos Energy Ltd., Dallas, generated a net loss of $57 million for second-quarter 2021, compared to a net loss of $199 million for second-quarter 2020. When adjusted for certain items that impact the comparability of results, the company generated an adjusted net loss of $10 million, compared to an adjusted net loss of $95 million for the year-ago quarter.
Revenues were $384 million, production expense was $116 million, and general and administrative expenses were $22 million.
The base business net capital expenditure for second-quarter 2021 was $68 million, in-line with guidance. Net capital expenditure related to Mauritania and Senegal in the quarter was $83 million.
Net cash provided by operating activities was $289 million and free cash flow was $115 million.
Kosmos exited second-quarter 2021 with $2.1 billion of net debt and available liquidity of $800 million. The decrease in net debt in the quarter was primarily driven by increased cash generation from higher sales volumes and improving realized oil prices.
Operations
Net production for the quarter was 51,600 boe/d with sales of 66,200 boepd, resulting in a slight net overlift position. The company’s year-end exit target of 60,000 boe/d remains on track, the company said.
Ghana
Production in Ghana averaged 21,900 b/d of oil net in second-quarter 2021.
At Jubilee, production averaged 70,900 b/d of oil gross during the quarter. At TEN, production averaged 35,000 b/d of oil gross for the quarter.
The first two wells in the four-well campaign were drilled in the quarter with the first Jubilee producer well (J-56P) completed and online with Jubilee currently producing around 80,000 b/d of oil. The Jubilee injector well (J-55W) is expected online later this quarter.
The rig is then scheduled to drill and complete a TEN gas injector well and a second Jubilee producer well later in the year with the Jubilee producer well expected online around yearend.
US Gulf of Mexico
Production in the US Gulf of Mexico averaged 20,400 boe/d net (82% oil) during the quarter.
In April, the Kodiak-3 infill well was brought online with one of two zones intermittently producing. The company is working with partners to evaluate the best intervention options to enhance production.
In late-July, operator Talos Energy completed and started the Tornado-5 infill well. The well was expected to add around 8,000-10,000 boe/d gross to field production and is performing at the top end of expectations. Injection rates in the structurally downdip Tornado injector well were increased, now injecting at a rate of over 30,000 b/d of water into the producing B-6 formation, providing pressure support to enhance overall production and recovery efficiency.
In July, Kosmos commenced drilling the Zora infrastructure-led exploration prospect located in Desoto Canyon Block 266 (37.5% working interest). The well encountered reservoir quality sands however did not find hydrocarbons. The well is currently being plugged and results will be integrated into the ongoing evaluation of the surrounding area. The company expects to record approximately $11 million of exploration expense in third-quarter 2021 related to the well.
During the year’s first half, Kosmos worked with partners on an appraisal plan for Winterfell, which is expected to begin with a well in the third quarter. The goal is to evaluate the adjacent fault block to the northwest of the original discovery, which has the same seismic signature as Winterfell, with an exploration tail into a deeper horizon. The Winterfell discovery lies within tie back distance to existing and planned host facilities.
Equatorial Guinea
Production in Equatorial Guinea averaged 29,100 b/d of oil gross and 9,400 b/d of oil net in second-quarter 2021.
The Okume upgrade project is expected to be completed in the fourth quarter, contributing additional power, water injection and gas lift capacity necessary for further de-bottlenecking of the facilities and additional electrical submersible pumps (ESPs). In April 2021, one ESP conversion was completed with additional ESP conversions planned following completion of the Okume upgrade project.
The first of three infill wells in the Okume Complex was spudded in June with positive initial results. The rig will now move to the second well location and hookup has commenced for the first well. All three wells are expected online in fourth-quarter 2021.
At Ceiba, a major infrastructure integrity project has been completed, which is expected to improve reliability and allow greater flexibility for gas lift to additional wells.
Mauritania & Senegal
The Greater Tortue Ahmeyim LNG project has made progress with milestones achieved in the second quarter and post quarter-end.
- Floating LNG vessel: The four remaining sponsons have been integrated in the final dry dock
- FPSO: The living quarters have been installed
- Breakwater: seven caissons have now been transported offshore with three caissons installed
- Subsea: All subsea trees have been constructed
