Kosmos Energy Ltd. has announced its intention to offer US$400 million aggregate principal amount of senior notes due 2027.
The net proceeds from the offering, together with cash on hand, will be used to refinance the US$400 million aggregate principal amount of private placement notes, the Company has issued to fund its acquisition of Anadarko WCTP Company.
Kosmos Energy is listed under the New York Stock Exchange and London Stock Exchange. Considering the terms under which the securities will be regulated, Kosmos indicated that it will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws.
In its press release, Kosmos noted that the securities may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities.
Accordingly, the senior notes and the related guarantees “will be offered only to persons reasonably believed to be qualified institutional buyers”, Kosmos indicated. It further said, this includes buyers with exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States. Also, eligibility of the senior notes will cover non-US persons with exemption from registration set forth in Regulation ‘S’ under the Securities Act.
This notwithstanding, Kosmos recently launched a registered underwritten public offering of 37,500,000 shares of common stock. According to Kosmos, the underwriters will be granted a 30-day option to purchase up to an additional 5,625,000 shares of common stock.
Again, net proceeds from this public offering is intended to repay outstanding borrowings under its commercial debt facility. This includes borrowings incurred to finance a portion of the acquisition of Anadarko WCTP Company.
Net Debts Outstanding and other Future Senior Notes Offering
In its second quarter results, Kosmos’s finances showed a US$2.1 billion of net debt and available liquidity of approximately US$0.8 billion. Comparing the net debt for the second quarter to that of the first quarter, Kosmos said the net debt realized, decreased. According to Kosmos, the decrease in net debt was primarily driven by increased cash generation from higher sales volumes and improving realized oil prices.
For the same quarter, the Company generated a net loss of US$57 million, or US$0.14 per diluted share. The Company generated an adjusted net loss of US$10 million, or US$0.03 per diluted share for the second quarter of 2021.
The company’s recent Occidental asset purchase adds to its total debts as the transaction is said to have been funded by Barclays and Standard Chartered Bank. The total bridge loan amount provided Kosmos for a 29% stake in Occidental’s Jubilee (18%) and TEN fields (11%) is US$400 million. This bridge loan amount is expected to be refinanced by a future senior notes offering, Kosmos noted.