Kosmos Energy has said that an “active” hedging programme has cushioned it against the slump in crude oil prices, putting it in “an enviable financial position” compared to its peers.
“That is definitely what has provided the cushion for us.
Everybody feels the pinch, but we are not feeling it as much,” said Joe Mensah, Vice President and Country Manager of the company in an interview.
The company’s hedging position as of December 31, 2015 was 10.9 million barrels through 2018.
Jubilee, which is a major asset of the company, exceeded its production target of 100,000 barrels of oil per day gross; averaging 102,500 bpd in 2015.
Kosmos exited the fourth quarter of 2015 with US$1.8billion of liquidity and US$614million of net debt.
This is compared to US$1.9billion of liquidity and US$517million of net debt as of September 30, 2015.
Total capital expenditures in the fourth quarter were approximately US$265million.
For the full year ended December 31, 2015, total capital expenditures were approximately US$780million — below previous guidance of US$800million.
Although crude oil prices are expected to remain lower and 2016 is likely to be another challenging year for the industry, Kosmos Energy is hopeful it can maintain a strong financial position with the coming on-stream of the TEN project and the full field development of Greater Jubilee.
“Our focus for 2016 is to maintain our financial strength through the continued strong operating performance from Ghana, together with the disciplined allocation of capital,” Joe Mensah said.
“I am confident that Kosmos with its partners will continue to deliver success.
Following our commitment to be a partner in energising Ghana, we will continue to look for opportunities which have the potential of supporting and impacting positively the country’s development efforts,” he said.
The Jubilee partners have submitted a Plan of Development for the Greater Jubilee full field to government, and according to Joe Mensah they expect approval in the first half of the year.
Greater Jubilee is an integration of the nearby Mahogany and Teak discoveries in the West Cape Three Points Block with the Jubilee Field.
The integration all wells will be produced through the current Jubilee FPSO vessel with the expansion of existing subsea architecture to accommodate the additional wells required for economical exploitation of the discoveries.
“This important milestone will ultimately result in increased production and revenue from Jubilee and its satellite fields for the benefit of all stakeholders,” Joe Mensah said.
Source: B&FT Online