Kosmos Energy has announced financial and operating results for the Q3 of 2017. For the Q3 of 2017, the company generated a net loss of US$63.4 million, or US$0.16 per diluted share as compared to net loss of US$59.8 million or US$0.15 per diluted share in the same period last year. When adjusted for certain items that impact the comparability of results, the company generated an adjusted net loss of US$36.9 million or US$0.09 per diluted share for the Q3 of 2017.
“Over the first nine months of 2017, our strong free cash flow has allowed us to reduce debt and to grow the value of our company through both organic and inorganic opportunities,” said Andrew G. Inglis, chairman and chief executive officer. “We have ramped up production at the TEN fields, progressed the Tortue project offshore Mauritania and Senegal with our partner BP, and acquired a strategic exploration and production position in Equatorial Guinea which is immediately accretive. Our exploration portfolio remains strong with four world-class prospects to be tested in Mauritania, Senegal, and Suriname over the next 12 months.”
Q3 2017 oil revenues were US$151.2 million versus US$46.6 million in the same quarter of 2016, on sales of 2.9 million boe in 2017 as compared to 0.9 million barrels in 2016. Q3 2017 oil revenues exclude US$12.1 million of derivative settlements. Realised oil revenues, including the impact of the Company’s hedging program, were US$55.57 per boe sold in the Q3 of 2017. At the end of the quarter, the Company was in a net underlift position of approximately 0.4 million boe.
Production expense for the Q3 was US$39 million, or US$13.33 per barrel, versus US$14 million, or US$14.33 per barrel, in the Q3 of 2016. The increase in total production expense was attributable to lifting two more cargoes than in the year ago quarter.
Exploration expenses totalled US$37 million for the Q3, compared to US$66 million in the same period of 2016 primarily the result of lower geologic and geophysical costs. While Kosmos was carried for the Hippocampe-1 exploration well by BP, US$21 million of expenses related to the drilling rig that are not eligible for reimbursement were expensed during the quarter.
Depletion and depreciation expense for the quarter was US$73 million, or US$25.01 per barrel. This was an increase from US$18.84 per barrel in the Q3 of 2016, primarily a result of production from the TEN fields coming online, which has a higher depletion rate.
General and administrative expenses were US$20 million during the Q3, slightly less than the same period in 2016. This amount includes approximately US$10 million in cash expense and US$10 million in non-cash equity based compensation expense.
Q3 results included a mark-to-market loss of US$27 million related to the company’s oil derivative contracts. At 30 September 2017, the company’s hedging position had a total commodity net asset value of US$1.6 million. As of quarter end, Kosmos had approximately 14 million boe hedged from 2017 to 2019.
Total capital expenditures in the Q3 were US$61 million. In the first nine months of 2017 Kosmos spent approximately US$217 million which was offset by the initial proceeds from the BP transaction of US$222 million resulting in a credit to the capital budget of US$5 million.
Kosmos exited the Q3 of 2017 with approximately US$1.3 billion of liquidity and US$890 million of net debt, including a year-to-date voluntary repayment of US$250 million on our reserves-based lending facility in 2017.
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