Kosmos Energy has indicated the successful completion of a proposed amendment and extension of its recent issuance of a reserve based lending (RBL) facility.
Per the amended credit facility, the Company reduced the total credit facility size from $1.5 billion to $1.25 billion. This action, Kosmos Energy averred would reduce the reliance on the RBL facility and other commitment costs associated.
According to the Company, this follows the successful completion of the issuance of senior notes in February 2021. Also, the amendment involves a two-year tenor extension with the RBL facility’s maturity currently extended into 2027.
This comes alongside an approval of a borrowing base capacity of US$1.24 billion by the Company’s lending group, with current outstanding borrowings of US$1.0 billion. The reduced borrowing capacity reflects the impact of an earlier agreed lower long-term oil price deck with the company’s bank group.
Furthermore, Kosmos Energy noted that total commitments as of May 7, 2021 stood at US$1.21 billion. Thus, following an expected increase in total commitments to US$1.25 billion. This increase hinges on the completion of final credit approval process by additional lenders.
Moreover, the margin on the credit facility increased by 50 basis points compared to previous facility. This margin reflects the current banking environment, which offers a margin of London Interbank Offered Rate +375 basis points. This is to be effective for the first three years of the amended RBL facility.
Meanwhile, Kosmos Energy underscored that the RBL facility holds security against the Company’s production assets in Ghana and Equatorial Guinea. Settlement of the loan facility warrants the first amortization payment scheduled for March 2024. However, this does not include the Company’s assets in Mauritania and Senegal.
Summary of Company’s Q1 performance
For Q1 of 2021, the company’s financial statement revealed a net loss of US$91 million. Considering adjustments with other items, the company generated an adjusted net loss of $33 million, equivalent to $0.08 per diluted share for the first quarter.
Production in Ghana reached an average of roughly 22,400 barrels of oil per day (bopd) in the first quarter. Production in Equatorial Guinea averaged roughly 30, 200 bopd gross and 10, 200 bopd net.
For its U.S. Gulf of Mexico assets, production averaged 20, 500 boepd net (81% oil) during the first quarter.
With its Mauritania and Senegal assets, Kosmos hinted that the ongoing production activities that are 58% complete in the first quarter are set to be 80% compete by the end of the year.
Neal Shah, Chief Financial Officer of Kosmos Energy commented:
“We are pleased to have successfully completed this RBL amendment and extension, and we thank our bank group for its continued support. Following the recent senior notes offering, Kosmos has increased liquidity and cleared any material debt maturities until late 2024.
“For the first time, we are incorporating ESG KPIs into our RBL framework, which will offer an economic incentive to maintain and further improve our strong ESG credentials. With two important financing transactions completed so far in 2021, the Company is well-positioned to meet its strategic and financial objectives for the year.”
Neal Shah, Chief Financial Officer of Kosmos Energy
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