Kosmos Energy (KOS) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $45 million, down from $85.2 million in Q3 2023, with nine-month net income at $196.4 million, up year-over-year.

• Achieved strong operational momentum in Q3 2024, with net production averaging 65,400 boepd, up 5% sequentially, and ramping toward a 90,000 boepd year-end target.

• Key milestones included first production at Winterfell, completion of enhancement projects at Kodiak and Odd Job, and progress on the Greater Tortue Ahmeyim (GTA) LNG project, with first LNG expected by year-end.

• Focus remains on disciplined capital allocation, free cash flow generation, and deleveraging, with 2025 capex guidance reduced to $400 million.

• Issued $500 million in new Senior Notes due 2031 at 8.75%, repurchased $500 million of existing notes, and increased RBL facility to $1.35 billion.

Financial highlights

• Q3 2024 production was 65,400 boepd, up 5% sequentially; Q3 revenue was $407.8 million, down 22% year-over-year, with realized price at $69.7/boe and opex at $16.1/boe.

• Q3 2024 net income was $45 million ($0.09 per diluted share), with adjusted net income at $38 million ($0.08 per diluted share).

• CapEx for 2024 expected at $800 million, with a sharp reduction to ~$100 million in Q4.

• Oil and gas production costs for Q3 2024 were $133.5 million ($22.97/boe), up from $20.63/boe in Q3 2023.

• EBITDAX for Q3 2024 was $259 million, down from $369 million in Q3 2023.

Outlook and guidance

• Q4 2024 production guidance: 70,000–74,000 boepd; FY 2024 average ~67,000 boepd.

• 2025 capex guidance reduced to $400 million, focusing on base maintenance, selective growth, and cash generation.

• Free cash flow prioritized for debt reduction and leverage improvement; shareholder returns considered once leverage is below 1.5x.

• First LNG from GTA expected by end of Q4 2024.

• Opex for Q4 2024 expected at $17.50–$19.50/boe; DD&A at $20.50–$22.50/boe.