Kosmos Energy (KOS) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $60 million, up from $23.3 million in Q2 2023, with adjusted net income at $80 million, driven by higher sales volumes and prices, especially from Jubilee Field in Ghana.

• Achieved strong operational momentum with major milestones: Jubilee South East, Winterfell first oil, and GTA project progress, targeting year-end production of ~90,000 boepd.

• Revenue for Q2 2024 reached $450.9 million, a 65% increase year-over-year, with total sales volumes up 45% to 5,954 MBoe.

• Liquidity remains strong with $173.8 million in cash and $620 million in undrawn credit facilities as of June 30, 2024.

• Free cash flow is projected to inflect to $100–$150 million per quarter once all projects are online, with initial focus on debt reduction.

Financial highlights

• Q2 2024 production was ~62,100 boepd, up 7% year-over-year, but at the lower end of guidance due to Jubilee underperformance and Winterfell delay.

• Q2 2024 revenues were $450.9 million, up from $273.3 million in Q2 2023; average realized oil price was $83.51/Bbl, up from $75.32/Bbl.

• Operating costs, DD&A, G&A, and exploration expenses were at or below guidance, supporting an earnings beat versus consensus.

• CapEx for Q2 was $215 million, lower than anticipated due to timing of GTA project accruals.

• Net cash from operating activities was $224 million; free cash flow was negative in Q2 due to high capex, expected to improve as capex falls in H2.

Outlook and guidance

• Full-year 2024 production guidance is 67,000–71,000 boepd, reflecting Jubilee and Winterfell impacts; Q3 guidance: 65,000–69,000 boepd.

• CapEx for 2024 expected at ~$750 million, with lower spend in H2 as major projects ramp up.

• Opex guidance for FY 2024: $16.50–$18.50/boe, excluding GTA costs; DD&A at $18.00–$20.00/boe.

• First gas from Greater Tortue LNG expected in Q3 2024, with first LNG in Q4 2024; infill wells in Equatorial Guinea expected online in Q4.

• Company expects to exit 2024 at ~90,000 boepd as new projects come online.