Kosmos Energy Ltd. has seen net earnings more than triple to $85.19 million for the third quarter against the prior three-month period, and announced a pending takeover of the operatorship of Senegal’s Yakaar-Teranga gas field. Production rose about 17 percent quarter-on-quarter to 68,200 barrels of oil equivalent per day (boepd) net. Sales volumes increased to around 73,100 boepd, the oil and gas exploration and production company said in a press release.
The higher output was due to the startup of the Jubilee Southeast project in Ghana, which added about 100,000 bopd in capacity. “In addition, Kosmos advanced its two key development projects at Winterfell and Tortue Phase 1”, chair and chief executive Andrew G. Inglis noted in comments for the quarterly report, referring to projects in the USA Gulf of Mexico and the Mauritania-Senegal maritime border respectively. “When online, these projects together with Jubilee South East are expected to increase production by around 50 percent from the second half of 2022, generating the cash flow inflection we have been working towards”.
In Senegal, the Dallas, Texas-based company has raised its stake in the Cayar Offshore Profond block, which contains the Yakaar-Teranga gas discoveries, to 90 percent and will assume operatorship from BP PLC pending approvals by the Senegal government. As it stands Kosmos holds a 30 percent interest, BP has 60 percent and Senegal’s state-owned Petrosen holds the remaining 10 percent.
BP’s exit comes some six years after the Teranga-1 and Yakaar-1 discoveries, made 2016 and 2017 respectively. Kosmos is now in talks with Petrosen and the government for the development concept. Currently the plan is for a production capacity of about 550 million cubic feet of gas per day, to be supplied to the domestic market by pipeline and overseas buyers through a floating liquefied natural gas vessel, Kosmos said.
“Yakaar-Teranga is one of the world’s largest gas discoveries in recent years and holds around 25 trillion cubic feet of advantaged gas in place, with negligible carbon dioxide content and minimal impurities, reducing the need for processing ahead of transportation/liquefaction”, it said. Kosmos said it wants Petrosen “to participate as an equal partner in the full value chain with a greater working interest”.
Inglis said in a statement, “Yakaar-Teranga is one of the crown jewels of Senegal’s growing energy sector and this aligned partnership allows Kosmos and PETROSEN to accelerate the development of a cost-competitive gas project supporting Senegal’s goal of providing universal and reliable access to low-cost energy”.
“The project is also expected to lower emissions by displacing heavy fuel oil in the country’s energy mix”, the Kosmos boss added. Meanwhile in the USA Kosmos expects to confirm by yearend the production potential of the Tiberius ILX well discovery in Keathley Canyon after the completion of drilling data analysis. Kosmos announced the discovery last month. Kosmos closed the third quarter with about $600 million in liquidity and $2.3 billion in net debt.
For the first nine months of the year, its net income totaled $191.84 million, down from $340.83 million for the same period last year. Net cash from operating activities during the January–September 2023 period totaled $471.39 million, compared to $863.24 million for the corresponding 2022 period. Kosmos paid $166 million in dividends for the first nine months of 2023, compared to $655 million for the same period a year ago.