Kosmos Energy Ltd. · NYSE:KOS
Kosmos Energy — Credit Suisse 2014 Energy Summit
30 slides from Kosmos Energy's conference presentation, February 2014
Slide 1: 2014 Energy Summit
2014 Energy Summit Credit Suisse February 2014 JON CAPPON Investor Relations 214.445.9669 [email protected]
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: What Differentiates Kosmos?
What Differentiates Kosmos? An asymmetric risk / reward opportunity • Self-Funded Explorer • World-Class Production / Development Asset in Ghana • Same Team, Same Exploration Strategy, New Transformational Portfolio Morocco Coastline Polarcus Amani Credit Suisse February 2014 3
Slide 4: A Self-funded Explorer
A Self-funded Explorer World-class, de-risked Jubilee field organically funds ongoing development and transformational exploration program Jubilee Production • Long-life production plateau • Significant production / reserve growth • Low cost, efficient operations • Steady, free cash flow Strong Bala
Slide 5: Executing the "Second Inning"
Executing the “Second Inning” Kosmos poised to create substantial value Credit Suisse February 2014 5
Slide 6: Ghana Discoveries
Ghana Discoveries Kosmos “First Inning” grand slam • Opening the Tano Basin – Architect of the basin-opening Jubilee discovery – Eight proven hydrocarbon discovery areas – High value barrels with 2+ to 4 BBO in place – Secures Company as a self-funded explorer – Top quartile F&D cost performance • G
Slide 7: Jubilee Field Summary
Jubilee Field Summary World-class, de-risked asset • Field History – Discovered in 2007 – First oil late 2010 – Phased development approach – Produced over 87 MMBO at year-end 2013 • Strong Reservoir and Field Performance – 600+ MMBO recoverable – 2013 net reserve replacement ratio of 140% – Growing
Slide 8: Appraisal of Greater Jubilee
Appraisal of Greater Jubilee High value barrels found in multiple discoveries to be tied back into Jubilee FPSO • Multiple Discoveries – Mahogany oil discovery – Teak oil and gas condensate discovery – Akasa oil discovery • Refining Resource Estimates – Multiple reservoirs – Pools distributed strati
Slide 9: TEN Development Project
TEN Development Project Second major deepwater oil development project in Ghana • TEN Project Summary – Development of three discovery areas – P50 Case ~250 MMBO – Second FPSO-based development in Ghana – Additional gas development planned • Phased Development Approach – FPSO with 80 MBopd initial d
Slide 10: Proven Exploration Strategy
Proven Exploration Strategy Maximizing value by discovering and developing high volume, high value barrels • Business – Frontier and emerging basins New Ventures Ireland Mauritania • Geography Suriname – Atlantic Margin focus Ghana • Geology – Core Cretaceous theme – Salt basin concepts Morocco • Po
Slide 11: Top Quartile Explorer
Top Quartile Explorer Disciplined strategy allows us to operate efficiently and with high success • “First Inning” Results – Emerging / frontier basin petroleum system success rate was 1 in 5 in initial portfolio – Exploration strategy and performance has resulted in lower finding costs than peers S
Slide 12: Kosmos' "Second Inning"
Kosmos’ “Second Inning” Capturing transformational exploration upside in a highly competitive environment • Atlantic Margin Focus – Export of core Cretaceous theme Latin America (Suriname) North Atlantic (Ireland) – First-mover into Northwest Africa Salt basins (Northern Morocco) Export of core Core
Slide 13: Transformational Exploration Portfolio
Transformational Exploration Portfolio Opportunity through execution discipline and focused expansion Credit Suisse February 2014 13
Slide 14: Super Major Scale Portfolio
Super Major Scale Portfolio Maturation of opportunities to the drilling stage • Significant Exploration Upside – Total gross recoverable resource Pmean of >30 BBoe un-risked (>5 BBoe risked) – Substantial follow-on potential Select Prospects and Leads Gargaa-1 FA-1 (Eagle-1) Boilers-1 Low to High Po
Slide 15: Exploration Drilling Calendar
Exploration Drilling Calendar Rig capacity secured to drill two to four petroleum systems per year 2014 2015 2016 2017 • Atwood Achiever Northern Morocco – New-build 6th generation drillship – Three year contract Western Sahara – Morocco (Western Sahara) well late 2014 Ireland Mauritania • Maersk Di
Slide 16: Northwest Africa Portfolio
Northwest Africa Portfolio Major acreage position offers several significant frontier basin opportunities • Three Large Potential Petroleum Systems – First-mover advantage – Strategic positions of choice – Competitive fiscal terms – Offshore Agadir basin, northern Morocco – Offshore Aaiun basin, Mor
Slide 17: Successful Morocco Farm-out
Successful Morocco Farm-out Farm-out results validate potential of Kosmos’ Moroccan portfolio • Highly Successful Farm-out Initiative – Among the best terms in West Africa • Agadir Farm-out (KOS 30%) – BP farmed into all three Agadir Basin licenses – Potential carry of up to ~$240MM – Up to three fi
Slide 18: Offshore Agadir Basin Petroleum System
Offshore Agadir Basin Petroleum System One of the last undrilled salt basins along the Atlantic Margin • An Unexplored Salt Basin – Salt-related structures similar to Gulf of Mexico – Evidence of a working petroleum system – Play diversity and prospect dependency – Multiple exploration wells planned
Slide 19: Foum Assaka Block – FA-1 Well
Foum Assaka Block – FA-1 Well Eagle prospect is a large, salt-cored structure with significant resource potential FA-1 • FA-1 Summary - Pmean 360 MMBO SW NE – Formally Eagle-1 well – Targeting Lower Cretaceous reservoirs – Multiple deepwater reservoir objectives – Well scheduled for 1H 2014 – Water
Slide 20: Essaouira Block – Boilers-1 Well
Essaouira Block – Boilers-1 Well Boilers prospect is a well-defined structure with multiple stacked objectives Boilers-1 • Boilers-1 Summary - Pmean 465 MMBO SW NE – Test Upper / Lower Cretaceous interval – Multiple, deepwater reservoir objectives – Well scheduled for 2H 2015 – Water depth ~750 mete
Slide 21: Offshore Aaiun Basin Petroleum System
Offshore Aaiun Basin Petroleum System One of the last undrilled Cretaceous Basins along the South Atlantic Margin • High Impact Exploration Potential – Unexplored Cretaceous Delta – Similar in size to the Niger Fan – Evidence for a working petroleum system – Independent play concepts / fairways • Mu
Slide 22: Cap Boujdour Area – Gargaa-1 Well
Cap Boujdour Area – Gargaa-1 Well Gargaa prospect is a large, simple four-way anticline with AVO support • Gargaa-1 Well Summary - Pmean 1+ BBO – Targeting Lower Cretaceous deepwater reservoirs with AVO support – Multiple, independent objectives within greater structural area – Well scheduled for 2H
Slide 23: Offshore Mauritania Petroleum System
Offshore Mauritania Petroleum System Second-cycle West Africa Transform Margin exploration opportunity • Cretaceous-age Basin-Floor Fans – Significant untested potential – Down-dip of proven working petroleum system – Structural and stratigraphic trapping elements – 6,300 km 2D and 10,300 km2 3D sei
Slide 24: Suriname – Guyana Petroleum System
Suriname – Guyana Petroleum System Expansion of our core geologic theme west across the Atlantic • Key Position in a Proven Basin – Down-dip of the producing Tambaredjo oil field – 2D / 3D seismic acquired – Seismic interpretation ongoing – Chevron 50% non-operating partner B Kosmos Block 42 Kosmos
Slide 25: Ireland – Porcupine Basin
Ireland – Porcupine Basin Exploring the North Atlantic with a South Atlantic perspective • Premier Basin-flank Acreage Position FEL 1/13 – Under-explored basin with existing nearby discoveries – Up-dip of a working oil kitchen FEL 2/13 – Potential for multiple source rocks Dunquin-1 – Overlooked Cre
Slide 26: Fully-Funded Financial Strategy
Fully-Funded Financial Strategy Current financial strength of Kosmos is the best in our history • 2013 Year-End Total Liquidity ~$1.2 Billion • Stable Free Cash Flow – Jubilee production contributes to our self-funded capital expenditure program • Disciplined Risk Management Philosophy Source: FactS
Slide 27: Capital Expenditures Outlook
Capital Expenditures Outlook 2014 program is focused on continuing to develop Ghana as well as advancing our high impact drilling program • 2014 Capital Program Summary – Forecast at approximately $575mm – Increased exploration activity planned – Exploration capital reduced from benefits of Morocco
Slide 28: De-risking Cash Flows
De-risking Cash Flows Reducing oil price exposure through robust commodity hedging program • Hedging Philosophy – Significant forward production hedged Hedged Production – Reduces near-term cash flow volatility (mmbbl) – Adds capacity to debt facility’s borrowing base availability • Hedging Targets
Slide 29: Key Messages
Key Messages Forging ahead; • Delivering Ghana Development / Production Asset – Highly visible long-term reserves, production, and cash flow growth • Focused on “Second Inning” Exploration – Differentiated strategy and excellent track record of delivering out-sized returns to shareholders – Same con
Slide 30: Credit Suisse February 2014
Credit Suisse February 2014 30