DALLAS -- Kosmos Energy (NYSE: KOS) on May 7 announced financial and operating results for the first quarter of 2012, including a net loss attributable to common shareholders of $38 million, or $0.10 per basic and diluted share. This compares to a net loss attributable to common unit holders of $71 million for the first quarter of 2011. Net cash provided by operating activities was $145 million for the first quarter of 2012, as compared to net cash used in operating activities of $10 million in the same period of last year.

Highlights for the quarter ended March 31, 2012, include:

  • Sold one Jubilee lifting, totaling 931 thousand barrels of oil, at a realized price of $124.30 per barrel
  • Performed an acid stimulation on one of the Phase 1 wells at Jubilee
  • Drilled the successful Enyenra-4A appraisal well, confirming a significant downdip extension of the Enyenra oil field
  • Flow tested the Owo-1RA well (discovery well of the Enyenra oil field) at more than 20 thousand barrels of oil per day combined from three zones
  • Discovered a significant oil leg in the Ntomme field with the Ntomme-2A well
  • Expanded the Company’s onshore Cameroon acreage position with the 320 thousand acre Fako block, adjacent to Kosmos’ existing acreage on the Ndian River Block
  • Captured significant new acreage offshore Mauritania, adding 6.7 million gross acres to the Company’s exploration portfolio
  • Completed a 4,940 square kilometer 3D seismic acquisition program offshore Morocco in the Agadir Basin

Brian F. Maxted, Chief Executive Officer, said, “Our first quarter results included a number of significant results for Kosmos, as we made good progress on our 2012 initiatives. We have continued to strengthen our portfolio of exploration opportunities with new acreage acquired onshore Cameroon and offshore Mauritania, and we recently completed our 3D seismic acquisition offshore Morocco. At the TEN project on Deepwater Tano, we have had exceptional appraisal results, and we are progressing to submit the Plan of Development in the near future.”

Maxted commented further, “We generated strong cash flows in the quarter, despite being in an underlifted position, with our crude continuing to trade above Brent. As part of our production enhancement program at Jubilee, we have had encouraging early results from the acid stimulation program, and we and our partners are planning additional acid stimulations through the second quarter. At the same time, we are implementing the next phase of development at the field, with first production from phase 1A expected in the third quarter this year. In addition, our exciting 2012 exploration campaign is just in front of us, with a number of impactful prospects in the near-term between our Ghana and Cameroon programs.”

First quarter 2012 oil revenues were $116 million, up 25 percent from the first quarter of 2011. Kosmos sold one lifting in the first quarter of both 2012 (931 thousand barrels) and 2011 (989 thousand barrels). The first quarter 2012 lifting priced at $124.30 per barrel, or a premium to Dated Brent of approximately $1.10 per barrel. Realized pricing for the first quarter 2011 lifting was $93.56 per barrel. Kosmos was underlifted in the first quarter of 2012 by approximately 450 thousand net barrels, as field production was higher than sales volumes due to the timing of the Company’s liftings.

Production expense for the first quarter of 2012 was $7 million, or $7.87 per barrel sold. The per barrel rate was down significantly from the first quarter of 2011, primarily as a result of the purchase of the Jubilee floating, production, storage and offloading vessel (FPSO) in late 2011, which capitalized the asset and ceased all forward lease payments. In addition, the Company encountered certain field startup costs that impacted the 2011 period as well.

Exploration expense in the first quarter of 2012 was $40 million, with a significant portion of the costs related to the Company’s 3D seismic acquisition offshore Morocco in the Agadir Basin, as well as other geologic and geophysical costs in the Company’s other regions. Also included in exploration expenses for the first quarter of 2012 is a portion of costs associated with the Teak-4A appraisal well. General and administrative costs were $39 million for the quarter ended March 31, 2012, of which over 50 percent was non-cash, equity-based compensation.

Depletion and depreciation expense was $32 million in the first quarter of 2012, up from the first quarter of 2011 primarily as a result of the capitalization of the Jubilee FPSO in late 2011 and the ongoing capital spending for development of the field. In addition, the recording of year-end 2011 reserves impacted the 2012 depletion rate.

The Company’s income tax expense for the first quarter of 2012 was $16 million, which primarily represented expense incurred in the Company’s Ghana operations.