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• 2P Reserves: 530 million barrels of oil equivalent, reserve replacement ratio of 137%.

• Capital Expenditure (CapEx): Expected to fall from over $800 million in 2023 and 2024 to $400 million in 2025, a reduction of over 50%.

• Debt Issuance: $900 million in new bonds issued, increasing average debt maturity to around four years.

• Production Guidance: Gross Jubilee production expected between 70,000 to 76,000 barrels of oil per day; gross TEN production between 15,000 to 16,000 barrels of oil per day.

• Free Cash Flow Yield: Focus on maximizing revenue and rigorous cost management to drive attractive free cash flow yield.

• Debt Maturity: Minimal near-term maturities with only $250 million due in 2026.

• Hedging Program: Approximately 60% of first half oil production hedged with downside protection of approximately $70 per barrel.

• Gulf of America Production Guidance: 17,000 to 20,000 barrels of oil equivalent per day net, an approximate 20% increase year over year.

• Equatorial Guinea Production Guidance: 9,000 to 11,000 barrels of oil per day net, an approximate 15% increase year over year.

• Warning! GuruFocus has detected 4 Warning Sign with KOS.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kosmos Energy Ltd (NYSE:KOS) has a diverse portfolio with a growing 2P reserve life of more than 20 years, indicating long-term sustainability.

• The company achieved a 2P reserve replacement ratio of 137% in 2024, highlighting successful reserve replenishment.

• Kosmos Energy Ltd (NYSE:KOS) expects a significant reduction in capital expenditure, from over $800 million in previous years to $400 million in 2025, enhancing free cash flow.

• The company has successfully raised $900 million in new bonds, improving its financial position and extending debt maturities.

• Kosmos Energy Ltd (NYSE:KOS) achieved first oil at Winterfell and first gas production in the GTA project, marking significant operational milestones.

Negative Points

• Fourth-quarter production was lower than guidance due to issues at the Jubilee field and delays in production ramp-up from other wells.

• The company faces planned maintenance programs in the first quarter of 2025, which may impact production levels.

• Start-up and commissioning costs for new projects are expected to be higher in 2025, affecting short-term financial performance.

• There are ongoing challenges with power generation reliability at the Jubilee field, impacting production efficiency.

• Kosmos Energy Ltd (NYSE:KOS) has a high leverage ratio, with plans to reduce it to below 1.5 times by the back half of 2026, indicating current financial constraints.