Kosmos Energy has experienced an impressive second quarter as it generates a positive cash flow during the quarter, thus netting off about US$100 million from its outstanding debt.
Admittedly, this outcome was possible as a result of higher sales volumes, strong operational performance in Ghana and upward adjustment of oil prices.
Kosmos Energy, released this statement as part of its operational update on its production, development and exploration activities.
Andrew G. Inglis, Chairman and Chief Executive Officer of Kosmos remarked:
“Kosmos had a solid second quarter, generating positive cash flow which reduced net debt by around $100 million, driven by higher sales volumes, strong operational performance in Ghana and improving realized oil prices.
“We continue to see momentum build across our producing hubs with new wells drilled in Ghana and the U.S. Gulf of Mexico during the quarter and the arrival of the rig for development drilling in Equatorial Guinea.”
Andrew G. Inglis, Chief Executive Officer, Kosmos
Overall sales volumes in the quarter averaged around 66,000 barrels of oil equivalent per day (boepd) with 4.5 cargos lifted, in line with guidance, the statement said.
Particularly, operational performance in Ghana was strong with gross production of approximately 106,000 barrels of oil per day (bopd) including 71,000 bopd at the Jubilee field and 35,000 bopd at TEN.
According to the statement, the first two wells in its four-well campaign have been drilled and the rig has begun completion operations. Per the timelines by which the wells will be online, the first Jubilee producer well (J-56P) is expected online within a short while and the Jubilee injector well (J-55W) is expected online later in the third quarter.
Development of Kosmos Oil wells in Ghana and other countries
Per the statement, these wells are expected to add gross production of around 15,000-20,000 bopd. Accordingly, the rig is then scheduled to drill and complete a TEN gas injector well and a second Jubilee producer well later in the year. This will therefore mean that the Jubilee producer well is expected online around the end of the year, the statement indicated.
The statement further notes that the reliability of the Ghana production facilities continues to improve, with uptime of the Jubilee and TEN floating production, storage and offtake vessels (FPSOs) averaging about 98 percent year-to-date.
Moreover, consistently high levels of water injection (more than 200,000 barrels/day) and gas offtake from the Government of Ghana (more than 110 mmscf/day) are helping to optimize reservoir performance at Jubilee, which is expected to support long-term production levels.
Considering other developments in its production wells, Andrew G. Inglis indicated that:
“In Mauritania and Senegal, the Greater Tortue Ahmeyim project continued to make steady progress during the quarter with key milestones achieved across all major work streams. However, we are seeing cost inflation and supplier delays in the current environment together with some scope growth and, as a result, we are updating our estimates, with first gas now expected in the third quarter of 2023. Tortue is the right project at the right time with Phases 1 & 2 expected to deliver attractive returns in a strengthening LNG market.
“Kosmos has an active second half of the year with planned infill wells in all three hubs supporting our near-term production growth. We also expect to restart exploration and appraisal drilling in the U.S. Gulf of Mexico this quarter with the Winterfell appraisal and Zora ILX wells.”
Preferably, as oil prices continue to rise and its financial position improves, the CEO assures that Kosmos is well placed to create shareholder value through the rest of 2021.
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