Kosmos Energy Ltd. Q4 FY2025 earnings call

Key priorities: building sustainable, lower-cost business, growing production from core assets, cost reduction, debt reduction. 2025 was transitional year with safe operations, strong reserve replacement, Ghana licenses extended, production growth, balance sheet resilience. 2026 progress: Jubilee drilling delivering, GTA production high, Gulf of America performing well; targeting capex ~$350M, opex reduction over $100M year-on-year, completed $350M Nordic bond, received RBL covenant waiver, sold producing assets in EG.

Production: Jubilee drilling program continues, second producer well came online in January contributing ~13,000 bbl/day gross, with five more Jubilee wells due online this year; GTA production averaged ~2.9 million tonnes per annum equivalent year-to-date with 6.5 gross LNG cargo shipped year-to-date in 2026; Gulf of America production performs well. Reserves: 1P reserves to production life ~10 years, reserve replacement ratio ~90% (adjusting for EG disposal ~120%); 2P reserve base ~500 million barrels of oil equivalent with ~20 years reserve life, slightly down year-on-year reflecting revisions in EG.

2026 production: target 15% year-on-year growth from core assets; operating costs: target >$100M net reduction, rising to ~$250M post EG sale; debt: target at least 10% reduction, with good start from EG asset sale; hedging: taken advantage of price trends to commence 2027 hedging program, now have hedges for 2026 and 2027.

No specific risks explicitly detailed in the provided transcript regarding operational failures, but mentions that actual results could differ materially due to factors noted in presentations and filings.

Q: Charles Mead asked about net additions from new Jubilee wells and cannibalization; A: Andy responded it varies by well, some like J74 had close to zero net back out, rule of thumb some wells have net additions after considering cannibalization.

Q: Alexa Patrick asked about amended debt cover ratio and cost per BOE at TOR2; A: Neil explained covenant waiver covers next periods and runway for deleveraging, Andy and Neil explained cost per BOE reduction is from production growth and nominal cost reduction.

Q: David Round asked about 10 FPSO purchase impact on Ghana and Jubilee well performance; A: Andy said 10 FPSO purchase lowers break-even and creates longer economic life, J74 well was exceptional due to being in new riser but there are more strong wells in Jubilee.

Q: Christopher Bucky asked about RBL borrowing base and further divestments; A: Neil said RBL underpinned by Ghana reserves and EG, further divestments for lower-cost portfolio, capital redirected to high-return projects.

Q: Stella Cridge asked about Tiberius farm down and Shell loan amortization; A: Andy explained Tiberius farm down structure and Neil explained base case for addressing Shell loan amortization from cash flow.

Q: Mark Wilson asked about Tiberius FID and farm down and Shell strategic alliance; A: Andy said FID and farm down are sequential, Shell strategic alliance involves license exchange, knowledge share, and joint development of prospects.