Kosmos Energy Ltd. · NYSE:KOS
Kosmos Energy — Investor Presentation (August 2017)
41 slides from Kosmos Energy's investor presentation, August 2017
Slide 1: Investor Presentation
Investor Presentation NYSE: KOS August 2017 Strictly Private and Confidential
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation
Slide 3: Company Background
Company Background Investor Presentation August 2017 3
Slide 4: Kosmos History
Kosmos History FID Tortue Entry into Founded in 2003 Mauritania Suriname drill- with funding from / Suriname out program Warburg Pincus BP farm-ins to and Blackstone Kosmos’ Mauritania and Senegal assets Entry into Deepwater Tano block in Ghana TEN field Appointment of Andrew Inglis Yakaar discovery
Slide 5: Kosmos' Strategy
Kosmos’ Strategy Proven strategy targets frontier basins at the low end of the industry cost curve, maximizing returns in a low commodity price environment – no change since inception Business Objectives – Efficiency: Deliver high success rate – Effectiveness: Discover high-value / high- volume barr
Slide 6: How is Kosmos Differentiated?
How is Kosmos Differentiated? Self-funded explorer with preeminent exploration track record • Focused Strategy GEOGRAPHY GLOBAL OIL / GAS ATLANTIC MARGIN – Identify and capture high-volume BASINS MATURE FRONTIER and high-value barrels MULTIPLE / SINGLE / GEOLOGY DIVERSE FOCUSED FIRST MOVER / TIMING
Slide 7: Kosmos' Track Record of Success
Kosmos’ Track Record of Success Track record of opening new basins efficiently through disciplined execution of strategy… Source: REP Note: Data includes frontier wells drilled 2009 – August 7, 2015 Peer group includes Africa Oil, Anadarko, Cairn, ENI, Marathon, OMV, Petrobras, Petronas, Repsol, She
Slide 8: Development Pathfinders
Development Pathfinders …and history of using accelerated, phased development plans that utilize proven concepts and contractors to mitigate the risks to deliver early production and cash flow and enhance the returns of our projects Discovery to First Oil (years)1 Discovery to First Gas (years)2 Avg
Slide 9: Kosmos' Strategy is Delivering Value
Kosmos’ Strategy is Delivering Value Farm-out transaction demonstrates that Kosmos’ unique business model can deliver competitive returns when executed correctly Minimum returns of ~2.5x proportionate back Kosmos Exploration Returns 2 costs1 – Based solely on fixed consideration reflecting the value
Slide 10: Why the LSE?
Why the LSE? Listing on the LSE provides Kosmos with a broader potential investor base while offering European investors a differentiated investment opportunity Limited number of US-listed internationally focused E&Ps 1 Secondary listing is the next step in the 5% company’s evolution – Since IPO in
Slide 11: Investment Thesis
Investment Thesis Investor Presentation August 2017 11
Slide 12: Kosmos – A Unique Investment Thesis
Kosmos – A Unique Investment Thesis Proven, Repeatable, Differentiated Strategy that Delivers Value Firm Foundation in Ghana Visible & Funded Growth from Tortue Gas World-Class Basin Opened in Mauritania and Senegal Transformational with FID on Tortue project by 2018 Near-Term Exploration Potential
Slide 13: 2017-2018 Portfolio Drill Out in Context
2017-2018 Portfolio Drill Out in Context Kosmos has the highest impact exploration program in its peer group 2,000 1,800 Net Unrisked Resource Drill-Out 2017-18 (MMBoe) per REP 1,600 Higher Potential Higher Potential 1,400 Higher Impact Lower Impact 1,200 1,000 800 600 Lower Potential Lower Potentia
Slide 14: Ghana Overview
Ghana Overview Long-life assets position Kosmos as low end of cost curve from company-making Ghana fields Strong, growing reserve base PRODUCED ‒ Greater than 100% RRR last four years UPSIDE 200 RESOURCES Plateau production Jubilee Oil (Gross) 360 ‒ Minimal maintenance capital required to keep Poten
Slide 15: Ghana Asset Inflection Point Has Arrived
Ghana Asset Inflection Point Has Arrived Foundation asset delivering increasing production and cash flow as capex declines, providing free cash flow for growth 35 Ghana Net Production Volumes1 Production expected to grow ~40% as capex falls ~90% from 2015-2017 30 ‒ TEN first oil achieved in August 2
Slide 16: Opening Mauritania / Senegal
Opening Mauritania / Senegal The outboard Cretaceous petroleum system offshore Mauritania and Senegal is a super-major scale hydrocarbon province with world-class discovered gas resource and substantial follow-on potential, including for liquids Completed 1st Exploration Phase – Inboard • 5 wells wi
Slide 17: Defined, Efficient Path to First Gas from Tortue
Defined, Efficient Path to First Gas from Tortue Partnership with shared vision for fast-tracked gas development provides foundation for delivery of funded growth BP operates development of Tortue project targeting FID by 2018 Tortue-1 discovery – Partnership benefits from BP’s extensive LNG 2015 ma
Slide 18: Developing Discovered Gas
Developing Discovered Gas Project moving forward with significant below and above ground progress made Quality Resource Deliver ~15 Tcf with high resource density, high well deliverability Supportive Governments Anticipate signing of Intergovernmental Cooperation Agreement (ICA) by both governments
Slide 19: 1st Exploration Phase – Inboard
1st Exploration Phase – Inboard ~25 Tcf of discovered gas resource along inboard Senegal River fairway of northern Senegal and southern Mauritania with total potential of over 50 Tcf in well-delineated and calibrated sands Successfully tested three major fairways of Senegal River Trend Charge, trap,
Slide 20: Mauritania / Senegal Charge Model Summary
Mauritania / Senegal Charge Model Summary Hydrocarbon charge model explains results to date and predicts phase; we believe there is a strong chance of finding oil or liquid-rich gas on the outboard basin floor fan fairways, particularly in Mauritania Petroleum System Summary Three oil / gas sources
Slide 21: Yakaar Discovery
Yakaar Discovery Yakaar is the first successful test of the outboard basin floor fairway and continues 100% success rate in Mauritania / Senegal – Yakaar, combined with Teranga, discovered 20 Tcf Pmean gas resource, creating the C6 opportunity for a second cost competitive LNG hub in Senegal – De-ri
Slide 22: Hippocampe Prospect
Hippocampe Prospect 2 BBOE or 12 TCFE gross unrisked resource potential – Located in Block C-8, northwest and outboard of Marsouin discovery and believed to be C6 charged from more oil-prone / mature Neocomian-Valanginian, and potentially Albian, source kitchens C12 – Large basin floor fan with exte
Slide 23: Lamantin Prospect
Lamantin Prospect 2 – 3 BBOE gross unrisked resource potential – Located in the higher confidence Cenomanian-Turonian and Albian oil source C6 kitchen with increased probability for liquids Lamantin – C12 Large, basin floor fan of Upper Cretaceous (Campanian) age with stacked, amalgamated channel sy
Slide 24: Requin Tigre Prospect
Requin Tigre Prospect 60 TCFE gross unrisked resource potential – Located in northern Senegal, outboard of the Tortue gas discovery, charged from a C6 Neocomian-Valanginian source kitchen – C12 Very large basin floor fan on central arm of Senegal River, comprising stacked, amalgamated Lower Cenomani
Slide 25: Suriname-Guyana Basin
Suriname-Guyana Basin Up to two wells being matured to find oil in Suriname, including at least one in 2018 – ~11,000 km2 (~475 GoM blocks) position captures multiple plays – 3D seismic interpretation and prospect evaluation in progress / fairways on the south east margin of the Cretaceous Guyana- w
Slide 26: Substantial Drill Out in 2017-2018
Substantial Drill Out in 2017-2018 Drilling five wells over the next 18 months that are amongst the industry’s most significant exploration wells in the world’s two most promising offshore hot spots 4,000 3,500 Net Unrisked Resource (MMBoe) per REP 3,000 2,500 37 explorers represent 2,000 <1.8 BBOE
Slide 27: São Tomé
São Tomé Leveraging learnings and using industry down-cycle to re-enter Gulf of Guinea and find oil in an area we know well Play extension of proven Rio Muni oil province offshore Equatorial Guinea – Play diversity with follow-on dependent prospectivity Began acquiring Kosmos’ largest ever 3D seismi
Slide 28: Financial Strength
Financial Strength Significant liquidity and strong free cash flow generation enable execution Kosmos Liquidity2 $1,500 Substantial liquidity $1,250 – $1.2 billion as of 2Q:17 $1,000 $mm 2017E Capex decreasing >75% from 2016 $750 – 2017E Capex budget of $100 million1 $500 $250 Substantial free cash
Slide 29: Kosmos' Future Value Growth
Kosmos’ Future Value Growth Growing cash flow in Ghana combined with defined and funded growth in Mauritania/Senegal creates a unique investment opportunity – Growing production / cash flow with decreasing committed capex Growing cash flow in Ghana – ~40% production growth expected from 2016-171 – E
Slide 30: Appendix
Appendix Strictly Private and Confidential
Slide 31: Financials
Financials 2014 2015 2016 LTM4 Production1 24 24 22 26 (MBopd) Revenue ($MM)2 $874 $672 $573 687 Liquidity ($Bn)3 $1.9 $1.8 $1.2 $1.2 EBITDAX ($MM) $723 $500 $405 $546 Net Debt ($MM) $213 $614 $1,128 $943 Net Debt/EBITDAX 0.3x 1.2x 2.7x 1.7x (1) Net production includes Jubilee and TEN entitlement vo
Slide 32: Key Management Summary
Key Management Summary Andrew G. Inglis Brian F. Maxted Thomas P. Chambers CEO and Chairman of the Board of Chief Exploration Officer Senior VP and Chief Financial Officer Directors Director Founding Partner CEO and Chairman since March 2014 Director since January 2011 and served Joined Kosmos
Slide 33: Asset Summary
Asset Summary Kosmos Country & Block Fields / Discoveries Stage Partners Interest Ghana WCTP/DT Jubilee Production & Development 24.1% Tullow Oil, Anadarko, GNPC, PetroSA DT TEN Production & Development 17.0% Tullow Oil, Anadarko, GNPC, PetroSA Wawa Appraisal 18.0% Tullow Oil, Anadarko, GNPC, PetroS
Slide 34: Board Summary
Board Summary Yves-Louis Director since December 2015 (Age: 66) Darricarrère Currently a Senior Advisor to Lazard Frères Bank. Prior to joining Lazard Frères Bank in 2015, Mr. Darricarrère was CEO of Total's Upstream business, a position he held from 2012 until Director 2015 Sir Richard B. Dir
Slide 35: PA Summary: Ghana
PA Summary: Ghana Blocks West Cape Three Points Deepwater Tano Contract Type PA PA Exploration Period (years) 3 + 2 + 2 (+ 3 for deep water) [3 + 2 + 2 (+ 3 for deep water)] Exploitation Period (years) 30 (less exploration period) [30 (less exploration period)] Equity % Kosmos - Production 30% 17% N
Slide 36: PSC Summary: Mauritania
PSC Summary: Mauritania Blocks C-6, C-8, C-12, C13 Blocks C-6, C-8, C-12, C13 Contract Type PSC Bonuses Oil Gas Signature Bonus ($ mm) $1.0 $4.0 Exploration Period (years) 4 +3 +3 4+3+3 (+5 ext.) Production Bonuses: Exploitation Period (years) 25 + (10 etx.) 30 + (10 etx.) Rate Bonus Equity % C-8, C
Slide 37: PSC Summary: Senegal
PSC Summary: Senegal Blocks Cayar / Saint Louis Contract Type Production Sharing Contract Exploration Period (years) 2 + 3 + 2.5 Extension on Discovery (years) 3 (oil) / 5 (gas) Exploitation Period (years) 25 + (10 etx.) Equity Kosmos (%) 30% NOC (%) 10% (+ 10% Option) Royalty & Taxes Cost Recovery
Slide 38: PA Summary: Morocco & Western Sahara
PA Summary: Morocco & Western Sahara Blocks Boujdour Maritime Essaouira Contract Type PA PA Exploration Period (years) 4 +2 +2 2.5 + 3 + 2.5 Exploitation Period (years) 25 + (10 etx.) 25 + (10 etx.) Equity % Kosmos (%) 55% 75% ONHYM (%) 25% 25% Royalty & Taxes 1 Royalty - Depth < 200 m (%) 10% 5% 2
Slide 39: PSC Summary: Suriname
PSC Summary: Suriname Blocks Block 42 Block 45 Contract Type PSC PSC Exploration Period (years) 4+3+2 (+ 5 gas) 3+2+2 Exploitation Period (years) 25 25 Equity % Kosmos (%) 33% 50% NOC Participation (1) (%) 10% 15% Royalty (%) 6.25% 6.25% Cost Recovery (%) 80% 80% Income Tax (%) 36% Profit Oil Calcul
Slide 40: PSC Summary: Sao Tome & Principe
PSC Summary: Sao Tome & Principe Blocks Block 5 Block 6 Block 11 Block 12 Blocks Block 5 Block 6 Block 11 Block 12 Contract Type PSC PSC PSC PSC Bonuses Exploration Period (years) 4 + (1) + 2 + 2 4 +2 +2 4 +2 +2 4 +2 +2 Signature ($ mm) $2 $2 -- $2.5 Production Period (years) 20 20 20 20 Commerciali
Slide 41: Investor Presentation August 2017
Investor Presentation August 2017 41