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11.05.2020 Oil and Gas

Kosmos Lost $183m In Q1

Kosmos Lost $183m In Q1
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More oil companies keep struggling because of low crude oil price on the world market due to COVID-19 outbreak as Kosmos Energy registered a loss of US$183 million in the first quarter of 2020.

This is compared to the loss of $52.9 million in the first quarter of last year.

The company linked its poor performance to impairment and lower oil price on the world market.

Its asset impairments in the first quarter totalled US$151 million. These impairments it said are largely related to the Kodiak and Tornado fields in the Gulf of Mexico and are due to the change in the oil prices since Kosmos acquired the assets in late 2018.

The impairments represent around 10% of the total consideration paid for Deep Gulf Energy at the time.

Kosmos also registered revenue of US$178 million in the first quarter of 2020 compared to revenue of US$296.8 million in the same period of 2019.

The company’s capital expenditure for the period was US$84 million.

In addition to the timing mismatch between production and the lifting of cargos,

Shut-ins in the Gulf of Mexico to affect 2Q

Kosmos’ net production in Quarter One 2020 was 66,300 barrels of oil equivalent per day (boepd), at the upper end of guidance.

This is compared to the production of 79,799 boepd in the same period of 2019.

Sales in Q1 2020 were 43,700 boepd, resulting in a material net underlift position of approximately 1.7 million barrels of oil equivalent (boe).

Production in the U.S. Gulf of Mexico was unaffected by COVID-19 and averaged approximately 28,300 boepd net (80% oil) during the first quarter, at the top end of guidance.

As a result of current market conditions, the operator of the Delta House host platform in the U.S. Gulf of Mexico, Llog Exploration, has chosen to shut-in the facility during the month of May 2020 and accelerate planned maintenance.

The shut-in of Delta House will impact the second-quarter production by approximately 5,500 boepd (net) from fields processed through this facility.

In addition, Kosmos will temporarily shut-in approximately 1,500 boepd (net) at other facilities during 2Q, resulting in approximately 7,000 boepd of net Kosmos production shut-in during the second quarter.

Kosmos currently expects the shut-ins to last through the end of May, however, timing will depend on future market conditions.

Kosmos’ full-year net production guidance in the U.S. Gulf of Mexico is expected at the lower end of the of 24,000-28,000 boepd range assuming the shut-ins last through May.

In Ghana, full-year net production guidance is 27,000-29,000 bopd and it is unchanged.

In Equatorial Guinea, Kosmos’ full-year net production guidance is 11,000-13,000 bopd and cargo guidance of 4.5 cargos is unchanged.

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