Kosmos Energy (KOS) Q4 2024 earnings summary

Executive summary

• Achieved significant milestones in 2024, including first oil at Winterfell and first gas and LNG production at GTA, with 2P reserves growing to ~530 mmboe and a 137% reserve replacement ratio.

• Production averaged ~66,800 boe/d in Q4 2024 and ~65,300 boe/d for FY24, with realized prices of ~$65.4/boe and ~$70.7/boe.

• Enhanced financial resilience through $900 million in new bonds, extending average debt maturity to ~4 years and increasing the RBL facility to $1.35 billion.

• Focused on maximizing free cash flow, reducing capital expenditures, and disciplined cost management, with net leverage targeted below 1.5x.

• Reported a Q4 2024 net loss of $7 million and adjusted net loss of $16 million, with full-year revenues of $1.68 billion.

Financial highlights

• FY24 capex totaled $829 million, with 2025 capex expected at or below $400 million, a reduction of over 50%.

• Q4 revenues were $398 million; Q4 EBITDAX was $229 million and full-year EBITDAX was $1.07 billion.

• Q4 free cash flow was $14 million; full-year free cash flow was negative at -$255 million.

• Net interest expense for FY24 was $89 million; tax benefit of ~$6.8/boe.

• 2P reserves-to-production ratio at year-end 2024 was 22 years.

Outlook and guidance

• 2025 production guidance: 70,000–80,000 boe/d; Q1 2025: 62,000–66,000 boe/d.

• 2025 capex targeted at $400 million or below, with potential for further reductions.

• 2025 opex expected at $18–$20/boe; DD&A at $22–$24/boe; G&A at $80–$100 million.

• Free cash flow prioritized for debt paydown, with leverage expected to fall below 1.5x by late 2026.

• Targeting $25 million annual overhead reduction by year-end 2025.