Kosmos Energy Ltd. · NYSE:KOS
Kosmos Energy — Merger or Acquisition (August 2018)
19 slides from Kosmos Energy's merger presentation, Aug 6, 2018
Slide 1: Creating The Premier Atlantic Margin Deepwater E&P
Creating The Premier Atlantic Margin Deepwater E&P NYSE/LSE: KOS August 2018 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: DGE Acquisition – A Natural Step in Kosmos' Continued Evolution
DGE Acquisition – A Natural Step in Kosmos’ Continued Evolution Kosmos’ Evolution to Full-Cycle E&P Pure Explorer / 2C Delineator Exploration-Led Diversified E&P Full-Cycle E&P • Larger production / cash flow base • Explorer, drill bit led • High-impact, focused exploration • Balanced growth • Equit
Slide 4: Transaction Overview
Transaction Overview A highly attractive, immediately accretive entry point into the Gulf of Mexico • Kosmos to acquire Deep Gulf Energy1 (DGE) Transaction • Entry point into GoM with ~25 Mboed production / ~80 MMboe 2P reserves2 • Creates operating platform for growth • Purchase Price of $1,225 mil
Slide 5: DGE – A Leading Gulf Of Mexico Operator
DGE – A Leading Gulf Of Mexico Operator High-quality asset base with experienced management team establishes complementary GoM business for Kosmos DGE – Key Highlights DGE – Asset Overview • A Leading Deepwater GoM Company Mobile Louisiana Florida – Founded in 2005, headquartered in Houston Texas La
Slide 6: DGE – Track Record of Creating Value
DGE –Track Record of Creating Value High success rates and short-cycle times lead to repeatable production and reserves growth and attractive returns DGE – Net Historical Production (Mboed) DGE – Net 2P Reserve Growth (MMboe) 120 20 100 CAGR +20% 15 CAGR +41% 80 10 60 89 85 40 71 5 55 20 40 0 0 2013
Slide 7: A Highly Complementary Acquisition
A Highly Complementary Acquisition Building on Kosmos’ strategy and accelerating the Company’s evolution to a full-cycle E&P GoM complements Kosmos’ deepwater strategy — Short-cycle deepwater assets with low costs driving attractive returns Creating the premier Atlantic Margin deepwater E&P — Entry
Slide 8: Why Invest In the GoM Now?
Why Invest In the GoM Now? Attractive economics and a favorable competitive landscape in a proven basin GoM Highly Competitive Source of Supply1 GoM Operators & Historical Leasing Activity2 Independent companies in the Top 20 during Independent companies in FY08-15 the Top 20 during FY16-18 100 1,20
Slide 9: Creating The Premier Atlantic Margin Deepwater E&P
Creating The Premier Atlantic Margin Deepwater E&P Combined company with a portfolio of high quality, low cost deepwater assets creates platform to double production and EBITDAX over 4 years Kosmos & DGE Production (Mboed)1 CAGR 8-10% NORTH AMERICA Atlantic US GoM Ocean 2017 2018E 2021E MAURITANIA F
Slide 10: A Strong Combination
A Strong Combination Acquisition creates scale and diversifies portfolio 2P Reserves1 (MMboe) Production 2018E (Mboed)2 ~280 ~70 +40% 34% US 28% +50% production GOM post- ~200 ~45 transaction 12% EG 60% Ghana Ghana Equatorial Guinea Gulf of Mexico 8 1. Kosmos 2P reserves as per Kosmos Energy 2017 10
Slide 11: Immediately Accretive
Immediately Accretive Accretive to shareholders with significant free cash flow generation, supporting dividend payment Immediately Accretive to Shareholders EV / 2018E EBITDAX1 6.4x 3.4x DGE Acquisition Multiple Kosmos Consensus Trading Multiple − Acquisition EBITDAX and EV / 2P EV / 2P Reserves ($
Slide 12: A Financially Resilient Company
A Financially Resilient Company Strong balance sheet maintained, supports strategy execution Prudent Leverage Profile We expect to reduce net debt / EBITDAX to below pre-transaction levels by YE2019 ~2.2x ~1.6x ~1.7x ~1.2x Awaiting Data to add Pro Forma LTM with 12 mos GoM 2Q:18 LTM 2Q:18 LTM Pro Fo
Slide 13: Delivering Balanced, Full-Cycle Growth… Disciplined Capital Allocation
Delivering Balanced, Full-Cycle Growth… Leveraged the downturn to our advantage; building a balanced production, development and exploration portfolio for sustainable growth Well work and infill drilling PRODUCTION • Ghana OPTIMIZATION • Equatorial Guinea & EXPLOITATION • Gulf of Mexico Well-positio
Slide 14: …And Shareholder Returns
…And Shareholder Returns Robust, sustainable free cash flow and growth underpin dividend • Commitment to return excess capital to shareholders • Targeting first annual dividend of ~$0.17/share for FY2019 2019 Dividend – Expected to be paid quarterly commencing 1Q 2019 ~$75mm • Dividend payment expec
Slide 15: The Path to Full-Cycle E&P
The Path to Full-Cycle E&P The Premier Deepwater • Building scale Atlantic Margin E&P • Sustainable growth in cash flow • Balanced portfolio – High-margin production World-Class Asset Base – High-return, short-cycle exploration around infrastructure – World-class developments – Frontier exploration
Slide 16: Appendix
Appendix Strictly Private and Confidential
Slide 17: Ownership & Liquidity
Ownership & Liquidity Ownership Structure Liquidity & Debt Capital Structure Current Shareholder Ownership (US$ in millions) 2Q:18 Pro Forma1 Warburg Revolving Credit Facility – Undrawn 400 275 Pincus 23% Reserve Based Lending – Undrawn2 800 200 Other Unrestricted Cash 117 117 Shareholders Blackston
Slide 18: Current Production & Costs
Current Production & Costs Current Production Other 10% • ~25 Mboed as of July 2018 Tornado SSC + – 16 gross producing wells Barataria 28% 11% – ~85% oil Total Net – 50%+ operated Boed Kodiak 17% ~25,000 • Costs Odd Job – ~$10/boe of LOE and 19% Marmalard transportation expense 15% • Capex – ~$50-$1
Slide 19: August 6, 2018
Investor Presentation August 6, 2018 17