Kosmos Energy Ltd. · NYSE:KOS
Kosmos Energy — Investor Presentation (March 2018)
28 slides from Kosmos Energy's investor presentation, March 2018
Slide 1: Investor Presentation
Investor Presentation NYSE/LSE: KOS March 2018 Strictly Private and Confidential
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation
Slide 3: 2017: A year of strong operational and strategic delivery
2017 A year of strong operational and strategic delivery • Cashflow – Strong operating performance: Net free cash flow of ~$320mm ~$230mm used for Equatorial Guinea acquisition ~$90mm of net debt reduction • Balance Sheet – Entering 2018 with RBL refinancing complete – $1.3bn of liquidity to sup
Slide 4: Kosmos – The Case for Investment
Kosmos – The Case for Investment Kosmos is positioned for the upturn: well-capitalized, pure-play deepwater company with growing production, a pipeline of development opportunities, and a balanced exploration portfolio • To meet growing energy demand, the world needs both deepwater and shale – The s
Slide 5: Kosmos: Stronger Portfolio, More Balanced Growth
Kosmos: Stronger Portfolio, More Balanced Growth Leveraged the downturn to our advantage, built a balanced production, development and exploration portfolio 1. High-margin production assets delivering growth – ~$40 operating cash margin at $60 Brent in 20181 2. Low-cost, competitively positioned Tor
Slide 6: Deepwater Now More Attractive
Deepwater Now More Attractive Kosmos is ideally positioned as a pure deepwater company with a substantial portfolio of prospectivity to take advantage of lower costs and reduced competition Net Active Exploration Acreage North American Shale vs. Offshore Capital Costs In West Africa & Northeast Sout
Slide 7: The Best Deepwater & Shale Companies Will Win
The Best Deepwater & Shale Companies Will Win High-quality deepwater assets can compete for capital with the best of shale; execution efficiency and quality of acreage matter to both Breakeven Price of Top Quartile Assets Global Oil Supply2 $50 2017 12% Breakeven Price1 $45 7% Jubilee $40 Deepwater
Slide 8: Strong Reserve Base
Strong Reserve Base Delivering growing, high-margin production 7
Slide 9: Ghana: Big Fields Get Bigger
Ghana: Big Fields Get Bigger Jubilee and TEN fields provide foundation of high-margin cash flow Jubilee & TEN Net Production1 • High-margin barrels 35 – Growing production into improving macro environment 30 – Declining opex/bbl supports margin expansion 25 – ~$40/bbl operating margin at $60/bbl Bre
Slide 10: Equatorial Guinea: A Good Deal Gets Better
Equatorial Guinea: A Good Deal Gets Better Acquisition of high-margin production at Ceiba/Okume and capture of exploration blocks provides multiple avenues to create value with rapid payback…already exceeding expectations 43 • Strategic Rationale 37 – Diversifies existing production base 2018E Gross
Slide 11: Equatorial Guinea: 2018 Work Program
Equatorial Guinea: 2018 Work Program Activities focused on maximizing existing resource value and finding new resources, with 2018 work program enabling 2019 tie-back focused drilling Maximizing Value of Existing Resource1 Finding New Resource 80 Further Value 70 Enhancement Decreased ARO via: 60 En
Slide 12: Solid Reserve Base Underpins Company Value
Solid Reserve Base Underpins Company Value Big fields get bigger, good deals get better, delivering capital efficient resource expansion and value growth Ghana & EG 2P Reserves & Production (MMBoe)1 200 20 • Growing reserve base provides Production (MMBbls) 2P Reserves (MMBoe) 150 15 foundational va
Slide 13: Pipeline of World-Scale Developments
Pipeline of World-Scale Developments Delivering sustainable cash flow for the long term 12
Slide 14: Greater Tortue: World-Scale, Fast-Track Gas Project
Greater Tortue: World-Scale, Fast-Track Gas Project Kosmos-BP partnership aligned to deliver low cost, highly competitive gas project on accelerated pace with room for expansion • 15 Tcf gas resource – World scale gas field underpins leading LNG project – 10 mmtpa project would be expected to genera
Slide 15: Greater Tortue: Cost Competitive LNG
Greater Tortue: Cost Competitive LNG BP project team has made significant progress towards FID • BP plan for 2.5 mmtpa first phase selected – Innovative near-shore solution provides cost-competitive LNG and establishes infrastructure for future expansion • Approval of ICA provides clear path to FID
Slide 16: Sustainable and Balanced Exploration Portfolio
Sustainable and Balanced Exploration Portfolio Delivering Long-Term Growth 15
Slide 17: Top Quartile Exploration Performance – Strategy and Execution
Top Quartile Exploration Performance – Strategy and Execution Kosmos’ exploration strategy is being executed with discipline, creating a balanced portfolio which has delivered top quartile success and provides a sustainable drilling program going forward Kosmos vs. Industry Exploration Activity • St
Slide 18: Proven Basin Exploration – Equatorial Guinea
Proven Basin Exploration – Equatorial Guinea Nearfield exploration in the proven, but underexplored Rio Muni basin includes lower risk, short- cycle time, high-value, tie-back exploration opportunities to the Ceiba /Okume facilities • Underexplored opportunity involves three primary Cretaceous fairw
Slide 19: Emerging Basin Exploration – Mauritania / Senegal
Emerging Basin Exploration – Mauritania / Senegal Giant gas resource base found at best-in-class metrics with significant remaining potential • Exploration to date – Two phases of exploration completed 7 prospects tested with a success rate of ~60% Explore Discovered 40 Tcf of gas and derisked/d
Slide 20: Emerging Basin Exploration – Suriname
Emerging Basin Exploration – Suriname Extension of emerging oil petroleum system recently opened in Guyana, provides up to five independent plays and multi-billion barrel potential, with drilling to commence 2Q’18 • Multi-billion barrel prospectivity to be tested Liza-1 Turbot Apetina Aurora Tertiar
Slide 21: Frontier Basin Exploration – STP / CDI
Frontier Basin Exploration – STP / CDI Executing frontier basin exploration strategy through the BP / KOS strategic alliance to provide new drilling opportunities in 2020 and beyond • Re-entry into the Transform Margin and Gulf of Guinea • Leveraging new learnings to pursue contrarian technical conc
Slide 22: Strong Financial Platform
Strong Financial Platform 21
Slide 23: Financial Strength To Execute Through Cycle
Financial Strength To Execute Through Cycle Prudent balance sheet management has enabled strategy execution $2.0 $120 Strategy targets self-funded business plan $1.5 $100 – Strong operating cash flow from producing assets $1.0 $80 – Liquidity : $1.3 bn post refinancing of RBL 1 $0.5 $60 $0.0 $40 Dis
Slide 24: 2018 Guidance
2018 Guidance Kosmos Equatorial Guinea - Equity Method Investment1 1Q FY 1Q FY Cargos 2018 2018 2018 2018 Gross Production 43,000 Jubilee 1 7 (Bopd) TEN 1 4 Ghana 2 11 Cargos2 3 10 Avg. Cargo Size Avg. Cargo Size (MBbls) ~975 ~975 (MBbls) ~1,000 ~1,000 Opex ($/bbl) $21.00 - $23.00 $14.00 - $17.00 Op
Slide 25: Kosmos: Stronger Portfolio, More Balanced Growth
Kosmos: Stronger Portfolio, More Balanced Growth A balanced production, development, and exploration portfolio with multiple sources of upside 1. High-margin production assets delivering growth − 2P reserves underpin current share price − 3P resources offers significant upside 2. Low-cost, competiti
Slide 26: Appendix
Appendix Strictly Private and Confidential
Slide 27: Kosmos Reserve Summary
Kosmos Reserve Summary Summary Reserve Information Preparer: Ryder Scott Ryder Scott Ryder Scott Ryder Scott Parameters: SEC PRMS PRMS PRMS Reserve Case: 1P 1P 2P 3P Brent Oil Price ($/bbl) $54.42 $60/$65/$70 $60/$65/$70 $60/$65/$70 Greater Jubilee Oil (MMBbls) 50.5 50.5 99.8 140.1 Fuel Gas (Bcf) 11
Slide 28: Kosmos PV-10 Summary
Kosmos PV-10 Summary Summary PV-10 Information ($MM) Preparer: Ryder Scott Ryder Scott Ryder Scott Ryder Scott Parameters: SEC PRMS PRMS PRMS Reserve Case: 1P 1P 2P 3P Brent Oil Price ($/bbl) $54.42 $60/$65/$70 $60/$65/$70 $60/$65/$70 Greater Jubilee Future Gross Revenue $2,753.1 $3,434.2 $7,177.2 $