Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 18, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | Kosmos Energy Ltd. | ||
Entity Central Index Key | 1509991 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,506,618,282 | ||
Entity Common Stock, Shares Outstanding | 387,587,007 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $554,831 | $598,108 |
Restricted cash | 15,926 | 21,475 |
Receivables: | ||
Joint interest billings | 60,592 | 19,930 |
Oil sales | 61,731 | 281 |
Other | 41,221 | 1,115 |
Inventories | 55,354 | 47,424 |
Prepaid expenses and other | 25,278 | 27,010 |
Deferred tax assets | 32,268 | 19,618 |
Derivatives | 163,275 | |
Total current assets | 1,010,476 | 734,961 |
Property and equipment: | ||
Oil and gas properties, net | 1,773,186 | 1,508,062 |
Other property, net | 11,660 | 14,900 |
Property and equipment, net | 1,784,846 | 1,522,962 |
Other assets: | ||
Restricted cash | 16,125 | 31,500 |
Long-term receivables - joint interest billings | 14,174 | |
Deferred financing costs, net of accumulated amortization of $33,389 and $24,976 at December 31, 2014 and 2013, respectively | 48,753 | 40,111 |
Long-term deferred tax assets | 9,182 | 16,292 |
Derivatives | 89,210 | |
Total assets | 2,972,766 | 2,345,826 |
Current liabilities: | ||
Accounts payable | 184,400 | 94,172 |
Accrued liabilities | 201,967 | 115,212 |
Deferred tax liability | 61,683 | |
Derivatives | 721 | 9,940 |
Total current liabilities | 448,771 | 219,324 |
Long-term liabilities: | ||
Long-term debt | 794,269 | 900,000 |
Derivatives | 68 | 3,811 |
Asset retirement obligations | 44,023 | 39,596 |
Deferred tax liability | 337,961 | 170,226 |
Other long-term liabilities | 8,715 | 20,534 |
Total long-term liabilities | 1,185,036 | 1,134,167 |
Shareholders' equity: | ||
Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at December 31, 2014 and 2013 | ||
Common shares, $0.01 par value; 2,000,000,000 authorized shares; 392,443,048 and 391,974,287 issued at December 31, 2014 and 2013, respectively | 3,924 | 3,920 |
Additional paid-in capital | 1,860,190 | 1,781,535 |
Accumulated deficit | -494,850 | -774,220 |
Accumulated other comprehensive income | 767 | 2,158 |
Treasury stock, at cost, 5,555,088 and 4,400,135 shares at December 31, 2014 and 2013, respectively | -31,072 | -21,058 |
Total shareholders' equity | 1,338,959 | 992,335 |
Total liabilities and shareholders' equity | $2,972,766 | $2,345,826 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ||
Deferred financing costs, accumulated amortization (in dollars) | $33,389 | $24,976 |
Preference shares, par value (in dollars per share) | $0.01 | $0.01 |
Preference shares, authorized shares | 200,000,000 | 200,000,000 |
Preference shares, issued shares | 0 | 0 |
Common shares, par value (in dollars per share) | $0.01 | $0.01 |
Common shares, authorized shares | 2,000,000,000 | 2,000,000,000 |
Common shares, issued shares | 392,443,048 | 391,974,287 |
Treasury stock, shares | 5,555,088 | 4,400,135 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues and other income: | |||
Oil and gas revenue | $855,877 | $851,212 | $667,951 |
Gain on sale of assets | 23,769 | ||
Other income | 3,092 | 941 | 3,150 |
Total revenues and other income | 882,738 | 852,153 | 671,101 |
Costs and expenses: | |||
Oil and gas production | 100,122 | 96,791 | 95,109 |
Exploration expenses | 93,519 | 230,314 | 100,652 |
General and administrative | 135,231 | 158,421 | 157,087 |
Depletion and depreciation | 198,080 | 222,544 | 185,707 |
Interest and other financing costs, net | 45,548 | 47,590 | 65,425 |
Derivatives, net | -281,853 | 17,027 | 31,490 |
Restructuring charges | 11,742 | ||
Other expenses, net | 2,081 | 3,512 | 1,475 |
Total costs and expenses | 304,470 | 776,199 | 636,945 |
Income before income taxes | 578,268 | 75,954 | 34,156 |
Income tax expense | 298,898 | 166,998 | 101,184 |
Net income (loss) | $279,370 | ($91,044) | ($67,028) |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in dollars per share) | $0.73 | ($0.24) | ($0.18) |
Diluted (in dollars per share) | $0.72 | ($0.24) | ($0.18) |
Weighted average number of shares used to compute net income (loss) per share: | |||
Basic (in shares) | 379,195 | 376,819 | 371,847 |
Diluted (in shares) | 386,119 | 376,819 | 371,847 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income (loss) | $279,370 | ($91,044) | ($67,028) |
Other comprehensive income (loss): | |||
Reclassification adjustments for derivative (gains) losses included in net income (loss) | -1,391 | -1,527 | 163 |
Income tax benefit | 1,027 | ||
Other comprehensive income (loss) | -1,391 | -1,527 | 1,190 |
Comprehensive income (loss) | $277,979 | ($92,571) | ($65,838) |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Treasury Stock | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2011 | $3,905 | $1,629,453 | ($616,148) | $3,522 | ($6) | $1,020,726 |
Balance (in shares) at Dec. 31, 2011 | 390,531 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Equity-based compensation | 83,423 | 83,423 | ||||
Derivatives, net | 163 | 163 | ||||
Restricted stock awards and units | 9 | -9 | ||||
Restricted stock awards and units (in shares) | 893 | |||||
Restricted stock forfeitures | 13 | -13 | ||||
Purchase of treasury stock | -8,378 | -8,378 | ||||
Net income (loss) | -67,028 | -67,028 | ||||
Balance at Dec. 31, 2012 | 3,914 | 1,712,880 | -683,176 | 3,685 | -8,397 | 1,028,906 |
Balance (in shares) at Dec. 31, 2012 | 391,424 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Equity-based compensation | 69,101 | 69,101 | ||||
Derivatives, net | -1,527 | -1,527 | ||||
Restricted stock awards and units | 6 | -6 | ||||
Restricted stock awards and units (in shares) | 550 | |||||
Restricted stock forfeitures | 6 | -6 | ||||
Purchase of treasury stock | -446 | -12,655 | -13,101 | |||
Net income (loss) | -91,044 | -91,044 | ||||
Balance at Dec. 31, 2013 | 3,920 | 1,781,535 | -774,220 | 2,158 | -21,058 | 992,335 |
Balance (in shares) at Dec. 31, 2013 | 391,974 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Equity-based compensation | 79,741 | 79,741 | ||||
Derivatives, net | -1,391 | -1,391 | ||||
Restricted stock awards and units | 4 | -4 | ||||
Restricted stock awards and units (in shares) | 469 | |||||
Restricted stock forfeitures | 2 | -2 | ||||
Purchase of treasury stock | -1,084 | -10,012 | -11,096 | |||
Net income (loss) | 279,370 | 279,370 | ||||
Balance at Dec. 31, 2014 | $3,924 | $1,860,190 | ($494,850) | $767 | ($31,072) | $1,338,959 |
Balance (in shares) at Dec. 31, 2014 | 392,443 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income (loss) | $279,370 | ($91,044) | ($67,028) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depletion, depreciation and amortization | 208,628 | 233,598 | 194,691 |
Deferred income taxes | 216,409 | 82,380 | 80,036 |
Unsuccessful well costs | 1,105 | 107,565 | 32,229 |
Change in fair value of derivatives | -271,298 | 23,093 | 18,465 |
Cash settlements on derivatives | 4,460 | -33,411 | -28,594 |
Equity-based compensation | 79,541 | 69,026 | 83,423 |
Gain on sale of assets | -23,769 | ||
Loss on extinguishment of debt | 2,898 | 5,342 | |
Other | -3,875 | 4,916 | 7,890 |
Changes in assets and liabilities: | |||
(Increase) decrease in receivables | -156,192 | 111,677 | 176,905 |
Increase in inventories | -8,100 | -16,763 | -7,385 |
(Increase) decrease in prepaid expenses and other | 1,732 | -16,540 | 3,443 |
Increase (decrease) in accounts payable | 90,228 | -34,683 | -126,401 |
Increase (decrease) in accrued liabilities | 22,449 | 82,590 | -1,486 |
Net cash provided by operating activities | 443,586 | 522,404 | 371,530 |
Investing activities | |||
Oil and gas assets | -424,535 | -317,413 | -368,990 |
Other property | -2,383 | -4,970 | -9,994 |
Proceeds from sale of assets | 58,315 | ||
Restricted cash | 20,924 | -1,750 | -23,678 |
Net cash used in investing activities | -347,679 | -324,133 | -402,662 |
Financing activities | |||
Payments on long-term debt | -400,000 | -100,000 | -110,000 |
Net proceeds from issuance of senior secured notes | 294,000 | ||
Purchase of treasury stock | -11,096 | -13,101 | -8,378 |
Deferred financing costs | -22,088 | -2,226 | -8,418 |
Net cash used in financing activities | -139,184 | -115,327 | -126,796 |
Net increase (decrease) in cash and cash equivalents | -43,277 | 82,944 | -157,928 |
Cash and cash equivalents at beginning of period | 598,108 | 515,164 | 673,092 |
Cash and cash equivalents at end of period | 554,831 | 598,108 | 515,164 |
Cash paid for: | |||
Interest | 23,182 | 36,313 | 41,234 |
Income taxes | $108,068 | $68,437 | $22,020 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2014 | |
Organization | |
Organization | 1. Organization |
Kosmos Energy Ltd. was incorporated pursuant to the laws of Bermuda in January 2011 to become a holding company for Kosmos Energy Holdings. Kosmos Energy Holdings is a privately held Cayman Islands company that was formed in March 2004. As a holding company, Kosmos Energy Ltd.'s management operations are conducted through a wholly owned subsidiary, Kosmos Energy, LLC. The terms "Kosmos," the "Company," "we," "us," "our," "ours," and similar terms refer to Kosmos Energy Ltd. and its wholly owned subsidiaries, unless the context indicates otherwise. | |
Kosmos is a leading independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margin. Our assets include existing production and other major development projects offshore Ghana, as well as exploration licenses with significant hydrocarbon potential offshore Ireland, Mauritania, Morocco (including Western Sahara), Senegal and Suriname. Kosmos is listed on the New York Stock Exchange and is traded under the ticker symbol KOS. | |
We have one reportable segment, which is the exploration and production of oil and natural gas. Substantially all of our long-lived assets and product sales are related to production located offshore Ghana. | |
Accounting_Policies
Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies | |||
Accounting Policies | 2. Accounting Policies | ||
Principles of Consolidation | |||
The accompanying consolidated financial statements include the accounts of Kosmos Energy Ltd. and its wholly owned subsidiaries. All intercompany transactions have been eliminated. | |||
Use of Estimates | |||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Actual results could differ from these estimates. | |||
Reclassifications | |||
Certain prior period amounts have been reclassified to conform with the current year presentation. Such reclassifications had no impact on our reported net income, current assets, total assets, current liabilities, total liabilities or shareholders' equity. | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents includes demand deposits and funds invested in highly liquid instruments with original maturities of three months or less at the date of purchase. | |||
Restricted Cash | |||
In accordance with our commercial debt facility (the "Facility"), we are required to maintain a restricted cash balance that is sufficient to meet the payment of interest and fees for the next six-month period on the 7.875% Senior Secured Notes due 2021 ("Senior Notes") plus the Corporate Revolver or the Facility, whichever is greater. As of December 31, 2014 and 2013, we had $15.9 million and $18.6 million, respectively, in current restricted cash to meet this requirement. | |||
In addition, in accordance with certain of our petroleum contracts, we have posted letters of credit related to performance guarantees for our minimum work obligations. These letters of credit are cash collateralized in accounts held by us and as such are classified as restricted cash. Upon completion of the minimum work obligations and/or entering into the next phase of the petroleum contract, the requirement to post letters of credit will be satisfied and the cash collateral will be released. However, additional letters of credit may be required should we choose to move into the next phase of certain of our petroleum contracts. As of December 31, 2014 and 2013, we had zero and $2.9 million, respectively, of current restricted cash and $16.1 million and $31.5 million, respectively, of long-term restricted cash used to cash collateralize performance guarantees related to our petroleum contracts. | |||
Receivables | |||
Our receivables consist of joint interest billings, oil sales and other receivables. For our oil sales receivable, we require a letter of credit to be posted to secure the outstanding receivable. Receivables from joint interest owners are stated at amounts due, net of any allowances for doubtful accounts. We determine our allowance by considering the length of time past due, future net revenues of the debtor's ownership interest in oil and natural gas properties we operate, and the owner's ability to pay its obligation, among other things. We did not have any allowance for doubtful accounts as of December 31, 2014 and 2013. | |||
Inventories | |||
Inventories consisted of $55.3 million and $45.8 million of materials and supplies and $0.1 million and $1.6 million of hydrocarbons as of December 31, 2014 and 2013, respectively. The Company's materials and supplies inventory primarily consists of casing and wellheads and is stated at the lower of cost, using the weighted average cost method, or market. | |||
Hydrocarbon inventory is carried at the lower of cost, using the weighted average cost method, or market. Hydrocarbon inventory costs include expenditures and other charges incurred in bringing the inventory to its existing condition. Selling expenses and general and administrative expenses are reported as period costs and excluded from inventory costs. | |||
Exploration and Development Costs | |||
The Company follows the successful efforts method of accounting for its oil and gas properties. Acquisition costs for proved and unproved properties are capitalized when incurred. Costs of unproved properties are transferred to proved properties when a determination that proved reserves have been found. Exploration costs, including geological and geophysical costs and costs of carrying unproved properties, are expensed as incurred. Exploratory drilling costs are capitalized when incurred. If exploratory wells are determined to be commercially unsuccessful or dry holes, the applicable costs are expensed and recorded in exploration expense on the consolidated statement of operations. Costs incurred to drill and equip development wells, including unsuccessful development wells, are capitalized. Costs incurred to operate and maintain wells and equipment and to lift oil and natural gas to the surface are expensed as oil and gas production expense. | |||
The Company evaluates unproved property, other than well related costs, periodically for impairment. These costs are generally related to the acquisition of leasehold costs. The impairment assessment considers results of exploration activities, commodity price outlooks, planned future sales or expiration of all or a portion of such projects. If the quantity of potential future reserves determined by such evaluations is not sufficient to fully recover the cost invested in each project, the Company will recognize an impairment loss at that time. | |||
Depletion, Depreciation and Amortization | |||
Proved properties and support equipment and facilities are depleted using the unit-of-production method based on estimated proved oil and natural gas reserves. Capitalized exploratory drilling costs that result in a discovery of proved reserves and development costs are amortized using the unit-of- production method based on estimated proved developed oil and natural gas reserves for the related field. | |||
Depreciation and amortization of other property is computed using the straight-line method over the assets' estimated useful lives (not to exceed the lease term for leasehold improvements), ranging from one to eight years. | |||
Years | |||
Depreciated | |||
Leasehold improvements | 1 to 8 | ||
Office furniture, fixtures and computer equipment | 3 to 7 | ||
Vehicles | 5 | ||
Amortization of deferred financing costs is computed using the straight-line method over the life of the related debt. | |||
Capitalized Interest | |||
Interest costs from external borrowings are capitalized on major projects with an expected construction period of one year or longer. Capitalized interest is added to the cost of the underlying asset and is depleted on the unit-of-production method in the same manner as the underlying assets. | |||
Asset Retirement Obligations | |||
The Company accounts for asset retirement obligations as required by ASC 410—Asset Retirement and Environmental Obligations. Under these standards, the fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. If a reasonable estimate of fair value cannot be made in the period the asset retirement obligation is incurred, the liability is recognized when a reasonable estimate of fair value can be made. If a tangible long-lived asset with an existing asset retirement obligation is acquired, a liability for that obligation is recognized at the asset's acquisition date. In addition, a liability for the fair value of a conditional asset retirement obligation is recorded if the fair value of the liability can be reasonably estimated. We capitalize the asset retirement costs by increasing the carrying amount of the related long-lived asset by the same amount as the liability. We record increases in the discounted abandonment liability resulting from the passage of time in depletion and depreciation in the consolidated statement of operations. | |||
Impairment of Long-lived Assets | |||
The Company reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable, or at least annually. ASC 360—Property, Plant and Equipment requires an impairment loss to be recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. That assessment shall be based on the carrying amount of the asset at the date it is tested for recoverability, whether in use or under development. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value less cost to sell. | |||
Derivative Instruments and Hedging Activities | |||
We utilize oil derivative contracts to mitigate our exposure to commodity price risk associated with our anticipated future oil production. These derivative contracts consist of three-way collars, swaps with calls and purchased puts. We also use interest rate swap contracts to mitigate our exposure to interest rate fluctuations related to our long-term debt. Our derivative financial instruments are recorded on the balance sheet as either assets or liabilities and are measured at fair value. We do not apply hedge accounting to our oil derivative contracts. Effective June 1, 2010, we discontinued hedge accounting on our interest rate swap contracts. Therefore, from that date forward, the changes in the fair value of the instruments are recognized in earnings during the period of change. The effective portions of the discontinued hedges as of May 31, 2010, are included in accumulated other comprehensive income or loss ("AOCI") in the equity section of the accompanying consolidated balance sheets, and are being transferred to earnings when the hedged transactions settle. See Note 9—Derivative Financial Instruments. | |||
Estimates of Proved Oil and Natural Gas Reserves | |||
Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and assessment of impairment of our oil and natural gas properties. Proved oil and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions. As additional proved reserves are discovered, reserve quantities and future cash flows will be estimated by independent petroleum consultants and prepared in accordance with guidelines established by the Securities and Exchange Commission ("SEC") and the Financial Accounting Standards Board ("FASB"). The accuracy of these reserve estimates is a function of: | |||
• | the engineering and geological interpretation of available data; | ||
• | estimates of the amount and timing of future operating cost, production taxes, development cost and workover cost; | ||
• | the accuracy of various mandated economic assumptions; and | ||
• | the judgments of the persons preparing the estimates. | ||
Revenue Recognition | |||
We use the sales method of accounting for oil and gas revenues. Under this method, we recognize revenues on the volumes sold based on the provisional sales prices. The volumes sold may be more or less than the volumes to which we are entitled based on our ownership interest in the property. These differences result in a condition known in the industry as a production imbalance. A receivable or liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves on such property. As of December 31, 2014 and 2013, we had no oil and gas imbalances recorded in our consolidated financial statements. | |||
Our oil and gas revenues are based on provisional price contracts which contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from oil sales at the spot price on the date of sale. The embedded derivative, which is not designated as a hedge, is marked to market through oil and gas revenue each period until the final settlement occurs, which generally is limited to the month after the sale. | |||
Equity-based Compensation | |||
For equity-based compensation awards, compensation expense is recognized in the Company's financial statements over the awards' vesting periods based on their grant date fair value. The Company utilizes (i) the closing stock price on the date of grant to determine the fair value of service vesting restricted stock awards and restricted stock units and (ii) a Monte Carlo simulation to determine the fair value of restricted stock awards and restricted stock units with a combination of market and service vesting criteria. | |||
Restructuring Charges | |||
The Company accounts for restructuring charges in accordance with ASC 420—Exit or Disposal Cost Obligations. Under these standards, the costs associated with restructuring charges are recorded during the period in which the liability is incurred. During the year ended December 31, 2014, we recognized $11.7 million in restructuring charges for employee severance and related benefit costs incurred as part of a corporate reorganization, which includes $5.0 million of accelerated non-cash expense related to awards previously granted under our Long-Term Incentive Plan (the "LTIP"). | |||
Treasury Stock | |||
We record treasury stock purchases at cost. The majority of our treasury stock purchases are from our employees that surrendered shares to the Company to satisfy their minimum tax withholding requirements and were not part of a formal stock repurchase plan. The remainder of our treasury stock is forfeited restricted stock awards granted under our long-term incentive plan. | |||
Income Taxes | |||
The Company accounts for income taxes as required by ASC 740—Income Taxes. Under this method, deferred income taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. On a quarterly basis, management evaluates the need for and adequacy of valuation allowances based on the expected realizability of the deferred tax assets and adjusts the amount of such allowances, if necessary. | |||
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the technical merits of the position. Accordingly, we measure tax benefits from such positions based on the most likely outcome to be realized. | |||
Foreign Currency Translation | |||
The U.S. dollar is the functional currency for all of the Company's material foreign operations. Foreign currency transaction gains and losses and adjustments resulting from translating monetary assets and liabilities denominated in foreign currencies are included in other expenses. Cash balances held in foreign currencies are not significant, and as such, the effect of exchange rate changes is not material to any reporting period. | |||
Concentration of Credit Risk | |||
Our revenue can be materially affected by current economic conditions and the price of oil. However, based on the current demand for crude oil and the fact that alternative purchasers are readily available, we believe that the loss of our marketing agent and/or any of the purchasers identified by our marketing agent would not have a long-term material adverse effect on our financial position or results of operations. | |||
Recent Accounting Standards | |||
In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08 prospectively changes the criteria for reporting discontinued operations while enhancing disclosures around disposals of assets whether or not the disposal meets the definition of a discontinued operation. ASU 2014-08 is effective for annual and interim periods beginning after December 31, 2014 with early adoption permitted but only for disposals that have not been reported in financial statements previously issued. The adoption of this new guidance is not expected to have a material impact on the Company's consolidated financial statements. | |||
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition requirements in ASC Topic 605, "Revenue Recognition," and most industry-specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The new guidance is effective for annual reporting periods beginning after December 15, 2016 for public companies. Early adoption is not permitted. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements or decided upon the method of adoption. | |||
In June 2014, the FASB issued ASU 2014-12, "Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." ASU 2014-12 requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. It is effective for annual and interim periods beginning after December 15, 2015 with early adoption permitted. The standard may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. The adoption is not expected to have a material impact on the Company's consolidated financial statements. | |||
In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." ASU 2014-15 requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, to disclose that fact. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The adoption of this amendment is not expected to have a material impact on the Company's consolidated financial statements. | |||
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2014 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | 3. Acquisitions and Divestitures |
In November 2012, we finalized the assignment of a 50% participating interest in our blocks offshore Suriname, Block 42 and Block 45, to Chevron. We retain a 50% participating interest in the blocks and remain the operator for the exploration phase of the petroleum contracts. In the fourth quarter of 2012, we received $23.7 million in reimbursement of previously incurred expenses as a result of closing the transaction. Accordingly, exploration expense and general and administrative expense were reduced by $22.7 million and $1.0 million, respectively. | |
In January 2013, we closed an agreement to acquire an additional 37.5% participating interest in the Essaouira Offshore block from Canamens Energy Morocco SARL, one of our block partners. Government approvals for this acquisition were finalized in November 2013. | |
In April 2013, we entered into a farm-in agreement with Antrim Energy Inc., whereby we acquired a 75% participating interest and operatorship, covering Licensing Option 11/5 offshore the west coast of Ireland. As part of the agreement, we reimbursed a portion of previously-incurred exploration costs, as well as carry the partner on future 3D seismic costs. | |
In April 2013, we entered into a farm-in agreement with Europa Oil & Gas (Holdings) plc, whereby we acquired an 85% participating interest and operatorship, covering Licensing Option 11/7 and 11/8 offshore the west coast of Ireland. As part of the agreement, we reimbursed a portion of previously incurred exploration costs, as well as carry the partner on future 3D seismic costs. Contingent upon an election by us and our partner to enter into a subsequent exploration drilling phase on one or both of the blocks, we will also fund 100% of the costs of the first exploration well on each block, subject to an investment cap of $90.0 million and $110.0 million, respectively, on each block. | |
In August 2013, final government approvals and processes were completed for the acquisition of the additional 18.8% participating interest in the Foum Assaka block in the Agadir Basin offshore Morocco from Pathfinder Hydrocarbon Ventures Limited ("Pathfinder"), a wholly owned subsidiary of Fastnet Oil and Gas Plc ("Fastnet"), one of our block partners. | |
In the first quarter of 2014, we closed three farm-out agreements with BP Exploration (Morocco) Limited, a wholly owned subsidiary of BP plc ("BP"), covering our three blocks in the Agadir Basin, offshore Morocco. Under the terms of the agreements, BP acquired a non-operating interest in each of the Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore blocks. BP will fund Kosmos' share of the cost of one exploration well in each of the three blocks, subject to a maximum spend of $120.0 million per well, and pay its proportionate share of any well costs above the maximum spend. In the event a second exploration well is drilled in any block, BP will pay 150% of its share of costs subject to a maximum spend of $120.0 million per well. The sales proceeds of the farm-outs were $56.9 million. After giving effect to these farm-outs, our participating interests are 30.0%, 29.9% and 30.0% in the Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore blocks, respectively, and we remain the operator. The proceeds on the sale of the interests exceeded our book basis in the assets, resulting in a $23.8 million gain on the transaction. | |
In the first quarter of 2014, we closed a farm-out agreement with Capricorn Exploration and Development Company Limited, a wholly owned subsidiary of Cairn Energy PLC ("Cairn"), covering the Cap Boujdour Offshore block, offshore Western Sahara. Under the terms of the agreement, Cairn acquired a 20% non-operated interest in the exploration permits comprising the Cap Boujdour Offshore block. Under the terms of the agreement, Cairn will pay 150% of its share of costs of a 3D seismic survey capped at $25.0 million and one exploration well capped at $100.0 million. In the event the exploration well is successful, Cairn will pay 200% of its share of costs on two appraisal wells capped at $100.0 million per well. Additionally, Cairn will contribute $12.3 million towards our future costs. Cairn paid $1.5 million for their share of costs incurred from the effective date of the farm-out agreement through the closing date, which was recorded as a reduction in our basis. After giving effect to the farm-out, our participating interest in the Cap Boujdour Offshore block is 55.0% and we remain the operator. | |
In August 2014, we entered into a farm-in agreement with Timis Corporation Limited, whereby we acquired a 60% participating interest and operatorship, covering the Cayar Offshore Profond and Saint Louis Offshore Profond blocks offshore Senegal. As part of the agreement, we will carry the full costs of a planned 3D seismic program. Additionally, we will carry the full costs of two contingent exploration wells, subject to a maximum gross cost per well of $120.0 million, should Kosmos elect to drill such wells. We also retain the option to increase our equity to 65% in exchange for carrying the full cost of a third contingent exploration or appraisal well, subject to a maximum gross cost of $120.0 million. | |
In February 2015, we entered into a farm-out agreement with Chevron covering the C8, C12 and C13 petroleum contracts offshore Mauritania. Under the terms of the farm-out agreement, Chevron will acquire a 30% non-operated working interest in each of the contract areas. Chevron will pay a disproportionate share of the costs of one exploration well and a second contingent exploration well, subject to maximum expenditure caps. In addition, Chevron will pay its proportionate share of previously incurred exploration costs. Chevron will not initially fund drilling of the Tortue prospect, but retains the option to participate in this prospect after the transaction is completed. The transaction is subject to customary closing conditions. Once these farm-out agreements become effective, Kosmos, Chevron and SMHPM's participating interest in Block C8, Block C12 and Block C13 will be 60%, 30% and 10%, respectively. | |
Joint_Interest_Billings
Joint Interest Billings | 12 Months Ended |
Dec. 31, 2014 | |
Joint Interest Billings | |
Joint Interest Billings | 4. Joint Interest Billings |
The Company's joint interest billings consist of receivables from partners with interests in common oil and gas properties operated by the Company. Joint interest billings are classified on the face of the consolidated balance sheets as current and long-term receivables based on when collection is expected to occur. | |
In 2014, the Ghana National Petroleum Corporation ("GNPC") notified us and our block partners that it would exercise its right for the contractor group to pay its 5% share of the Tweneboa, Enyenra and Ntomme ("TEN") development costs. The block partners will be reimbursed for such costs plus interest out of a portion of GNPC's TEN production revenues under the terms of the DT petroleum contract. As of December 31, 2014, the joint interest billing receivables due from GNPC for the TEN development costs were $14.2 million, which were classified as long-term on the consolidated balance sheets. | |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | 5. Property and Equipment | |||||||
Property and equipment is stated at cost and consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Oil and gas properties: | ||||||||
Proved properties | $ | 1,156,868 | $ | 801,348 | ||||
Unproved properties | 363,717 | 524,257 | ||||||
Support equipment and facilities | 968,722 | 710,289 | ||||||
| | | | | | | | |
Total oil and gas properties | 2,489,307 | 2,035,894 | ||||||
Less: accumulated depletion | (716,121 | ) | (527,832 | ) | ||||
| | | | | | | | |
Oil and gas properties, net | 1,773,186 | 1,508,062 | ||||||
Other property | 33,718 | 31,658 | ||||||
Less: accumulated depreciation | (22,058 | ) | (16,758 | ) | ||||
| | | | | | | | |
Other property, net | 11,660 | 14,900 | ||||||
| | | | | | | | |
Total property and equipment, net | $ | 1,784,846 | $ | 1,522,962 | ||||
| | | | | | | | |
| | | | | | | | |
We recorded depletion expense of $188.3 million, $213.7 million and $178.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||
Suspended_Well_Costs
Suspended Well Costs | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Suspended Well Costs | |||||||||||
Suspended Well Costs | 6. Suspended Well Costs | ||||||||||
The Company capitalizes exploratory well costs into oil and gas properties until a determination is made that the well has either found proved reserves or is impaired. If proved reserves are found, the capitalized exploratory well costs are reclassified to proved properties. The well costs are charged to expense if the exploratory well is determined to be impaired. | |||||||||||
The following table reflects the Company's capitalized exploratory well costs on completed wells as of and during years ended December 31, 2014, 2013 and 2012. The table excludes $1.1 million, $78.5 million and $29.6 million in costs that were capitalized and subsequently expensed during the same year for the years ended December 31, 2014, 2013 and 2012, respectively. During 2014, the exploratory well costs associated with the TEN development were reclassified to proved property. | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Beginning balance | $ | 376,166 | $ | 372,492 | $ | 267,592 | |||||
Additions to capitalized exploratory well costs pending the determination of proved reserves | 71,039 | 32,804 | 107,527 | ||||||||
Reclassification due to determination of proved reserves | (220,491 | ) | — | — | |||||||
Capitalized exploratory well costs charged to expense | — | (29,130 | ) | (2,627 | ) | ||||||
| | | | | | | | | | | |
Ending balance | $ | 226,714 | $ | 376,166 | $ | 372,492 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The following table provides aging of capitalized exploratory well costs based on the date drilling was completed and the number of projects for which exploratory well costs have been capitalized for more than one year since the completion of drilling: | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands, except well counts) | |||||||||||
Exploratory well costs capitalized for a period of one year or less | $ | 16,814 | $ | 11,426 | $ | 106,635 | |||||
Exploratory well costs capitalized for a period one to two years | 40,865 | 229,140 | 179,933 | ||||||||
Exploratory well costs capitalized for a period three to five years | 169,035 | 135,600 | 85,924 | ||||||||
| | | | | | | | | | | |
Ending balance | $ | 226,714 | $ | 376,166 | $ | 372,492 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Number of projects that have exploratory well costs that have been capitalized for a period greater than one year | 5 | 8 | 7 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
As of December 31, 2014, the projects with exploratory well costs capitalized for more than one year since the completion of drilling are related to Mahogany, Teak-1, Teak-2 and Akasa discoveries in the West Cape Three Points ("WCTP") Block and the Wawa discovery in the Deepwater Tano ("DT") Block, which are all in Ghana. | |||||||||||
Mahogany—Three appraisal wells have been drilled. Additionally, we deepened a development well in the Jubilee Field to further appraise the Mahogany discovery. Following additional evaluation, a decision regarding commerciality of the Mahogany discovery is expected to be made by the WCTP Block partners in early 2015. Within six months of such a declaration, a PoD would be prepared and submitted to Ghana's Ministry of Energy, as required under the WCTP petroleum contract. | |||||||||||
Teak-1 Discovery—Two appraisal wells have been drilled. Following additional evaluation, a decision regarding commerciality of the Teak-1 discovery is expected to be made by the WCTP Block partners in early 2015. Within six months of such a declaration, a PoD would be prepared and submitted to Ghana's Ministry of Energy, as required under the WCTP petroleum contract. | |||||||||||
Teak-2 Discovery—We have performed a gauge installation on the well and reprocessed seismic data. Following additional evaluation, a decision regarding commerciality of the Teak-2 discovery is expected to be made by the WCTP Block partners in early 2015. Within six months of such a declaration, a PoD would be prepared and submitted to Ghana's Ministry of Energy, as required under the WCTP petroleum contract. | |||||||||||
Akasa Discovery—We performed a drill stem test and gauge installation on the discovery well and drilled one appraisal well, the Akasa-2A. Following additional evaluation, a decision regarding commerciality of the Akasa discovery is expected to be made by the WCTP Block partners in early 2015. Within six months of such a declaration, a PoD would be prepared and submitted to Ghana's Ministry of Energy, as required under the WCTP petroleum contract. | |||||||||||
Wawa Discovery—We are currently reprocessing seismic data and have acquired a high resolution seismic survey over the discovery area. Following additional evaluation and potential appraisal activities, a decision regarding commerciality of the Wawa discovery is expected to be made by the DT Block partners in 2016. Within six months of such declaration, a PoD would be prepared and submitted to Ghana's Ministry of Energy, as required under the DT petroleum contract. | |||||||||||
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Liabilities | ||||||||
Accrued Liabilities | 7. Accrued Liabilities | |||||||
Accrued liabilities consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Accrued liabilities: | ||||||||
Accrued exploration, development and production | $ | 139,393 | $ | 73,976 | ||||
Accrued general and administrative expenses | 21,926 | 4,255 | ||||||
Accrued taxes other than income | 20,315 | 15,188 | ||||||
Accrued interest | 10,271 | — | ||||||
Income taxes | 9,233 | 20,379 | ||||||
Accrued other | 829 | 1,414 | ||||||
| | | | | | | | |
$ | 201,967 | $ | 115,212 | |||||
| | | | | | | | |
| | | | | | | | |
Debt
Debt | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Debt | ||||||||||||||||||||
Debt | 8. Debt | |||||||||||||||||||
Debt consisted of the following: | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Outstanding debt principal balances: | ||||||||||||||||||||
Facility | $ | 500,000 | $ | 900,000 | ||||||||||||||||
Senior Notes | 300,000 | — | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total | 800,000 | 900,000 | ||||||||||||||||||
Unamortized issuance discounts | (5,731 | ) | — | |||||||||||||||||
| | | | | | | | |||||||||||||
Long-term debt | $ | 794,269 | $ | 900,000 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Facility | ||||||||||||||||||||
In March 2014, the Company amended and restated the Facility with a total commitment of $1.5 billion from a number of financial institutions, including the International Finance Corporation. The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. | ||||||||||||||||||||
As part of the debt refinancing in March 2014, the repayment of borrowings under the existing facility attributable to financial institutions that did not participate in the amended Facility was accounted for as an extinguishment of debt, and existing unamortized debt issuance costs attributable to those participants were expensed. As a result, we recorded a $2.9 million loss on the extinguishment of debt. As of December 31, 2014, we have $44.6 million of net deferred financing costs related to the Facility, which will be amortized over the remaining term of the Facility, including certain costs related to the amendment. | ||||||||||||||||||||
As of December 31, 2014, borrowings under the Facility totaled $500.0 million and the undrawn availability under the Facility was $1.0 billion. | ||||||||||||||||||||
Interest is the aggregate of the applicable margin (3.25% to 4.50%, depending on the length of time that has passed from the date the Facility was entered into); LIBOR; and mandatory cost (if any, as defined in the Facility). Interest is payable on the last day of each interest period (and, if the interest period is longer than six months, on the dates falling at six-month intervals after the first day of the interest period). We pay commitment fees on the undrawn and unavailable portion of the total commitments, if any. Commitment fees are equal to 40% per annum of the then-applicable respective margin when a commitment is available for utilization and, equal to 20% per annum of the then-applicable respective margin when a commitment is not available for utilization. We recognize interest expense in accordance with ASC 835—Interest, which requires interest expense to be recognized using the effective interest method. We determined the effective interest rate based on the estimated level of borrowings under the Facility. As part of the March 2014 amendment, the Facility's estimated effective interest rate was changed and, accordingly, we adjusted our estimate of deferred interest previously recorded during prior years by $4.5 million, which was recorded as a reduction to interest expense. | ||||||||||||||||||||
The Facility provides a revolving-credit and letter of credit facility. The availability period for the revolving-credit facility, as amended in March 2014 expires on March 31, 2018, however the Facility has a revolving-credit sublimit, which will be the lesser of $500.0 million and the total available facility at that time, that will be available for drawing until the date falling one month prior to the final maturity date. The letter of credit sublimit expires on the final maturity date. The available facility amount is subject to borrowing base constraints and, beginning on March 31, 2018, outstanding borrowings will be constrained by an amortization schedule. The Facility has a final maturity date of March 31, 2021. As of December 31, 2014, we had no letters of credit issued under the Facility. | ||||||||||||||||||||
Kosmos has the right to cancel all the undrawn commitments under the Facility. The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined each year on March 31 and September 30. The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets' reserves and/or resources in Ghana. | ||||||||||||||||||||
If an event of default exists under the Facility, the lenders can accelerate the maturity and exercise other rights and remedies, including the enforcement of security granted pursuant to the Facility over certain assets held by our subsidiaries. The Facility contains customary cross default provisions. | ||||||||||||||||||||
We were in compliance with the financial covenants contained in the Facility as of the September 30, 2014 (the most recent assessment date). | ||||||||||||||||||||
Corporate Revolver | ||||||||||||||||||||
In November 2012, we secured a Corporate Revolver from a number of financial institutions which, as amended, has an availability of $300.0 million. The Corporate Revolver is available for all subsidiaries for general corporate purposes and for oil and gas exploration; appraisal and development programs. As of December 31, 2014, we have $2.9 million of net deferred financing costs related to the Corporate Revolver, which will be amortized over the remaining term, or November 20, 2015. | ||||||||||||||||||||
As of December 31, 2014, there were no borrowings outstanding under the Corporate Revolver and the undrawn availability under the Corporate Revolver was $300.0 million. | ||||||||||||||||||||
Interest is the aggregate of the applicable margin (6.0%); LIBOR; and mandatory cost (if any, as defined in the Corporate Revolver). Interest is payable on the last day of each interest period (and, if the interest period is longer than six months, on the dates falling at six-month intervals after the first day of the interest period). We pay commitment fees on the undrawn portion of the total commitments. Commitment fees for the lenders are equal to 40% per annum of the respective margin when a commitment is available for utilization. | ||||||||||||||||||||
The available amount is not subject to borrowing base constraints. Kosmos has the right to cancel all the undrawn commitments under the Corporate Revolver. The Company is required to repay certain amounts due under the Corporate Revolver with sales of certain subsidiaries or sales of certain assets. If an event of default exists under the Corporate Revolver, the lenders can accelerate the maturity and exercise other rights and remedies, including the enforcement of security granted pursuant to the Corporate Revolver over certain assets held by us. | ||||||||||||||||||||
We were in compliance with the financial covenants contained in the Corporate Revolver as of September 30, 2014 (the most recent assessment date). The Corporate Revolver contains customary cross default provisions. | ||||||||||||||||||||
Revolving Letter of Credit Facility | ||||||||||||||||||||
In July 2013, we entered into a revolving letter of credit facility agreement ("LC Facility"). The size of the LC Facility is $100.0 million, with additional commitments up to $50.0 million being available if the existing lender increases its commitment or if commitments from new financial institutions are added. The LC Facility provides that we maintain cash collateral in an amount equal to at least 75% of all outstanding letters of credit under the LC Facility, provided that during the period of any breach of certain financial covenants, the required cash collateral amount shall increase to 100%. The fees associated with outstanding letters of credit issued will be 0.5% per annum. The LC Facility has an availability period which expires on June 1, 2016. We may voluntarily cancel any commitments available under the LC Facility at any time. As of December 31, 2014, there were seven outstanding letters of credit totaling $21.5 million under the LC Facility. The LC Facility contains customary cross default provisions. | ||||||||||||||||||||
7.875% Senior Secured Notes due 2021 | ||||||||||||||||||||
During August 2014, the Company issued $300.0 million of Senior Notes and received net proceeds of approximately $292.5 million after deducting discounts, commissions and deferred financing costs. The Company used the net proceeds to repay a portion of the outstanding indebtedness under the Facility and for general corporate purposes. | ||||||||||||||||||||
The Senior Notes mature on August 1, 2021. Interest is payable semi-annually in arrears each February 1 and August 1 commencing on February 1, 2015. The Senior Notes are secured (subject to certain exceptions and permitted liens) by a first ranking fixed equitable charge on all shares held by us in our direct subsidiary, Kosmos Energy Holdings. The Senior Notes are currently guaranteed on a subordinated, unsecured basis by our existing restricted subsidiaries that guarantee the Facility and the Corporate Revolver, and, in certain circumstances, the Senior Notes will become guaranteed by certain of our other existing or future restricted subsidiaries (the "Guarantees"). | ||||||||||||||||||||
Redemption and Repurchase. At any time prior to August 1, 2017 and subject to certain conditions, the Company may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of Senior Notes issued under the indenture dated August 1, 2014 related to the Senior Notes (the "Indenture") at a redemption price of 107.875%, plus accrued and unpaid interest, with the cash proceeds of certain eligible equity offerings. Additionally, at any time prior to August 1, 2017, the Company may, on any one or more occasions, redeem all or a part of the Senior Notes at a redemption price equal to 100%, plus any accrued and unpaid interest, and plus a make-whole premium. On or after August 1, 2017, the Company may redeem all or a part of the Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest: | ||||||||||||||||||||
Year | Percentage | |||||||||||||||||||
On or after August 1, 2017, but before August 1, 2018 | 103.9 | % | ||||||||||||||||||
On or after August 1, 2018, but before August 1, 2019 | 102.0 | % | ||||||||||||||||||
On or after August 1, 2019 and thereafter | 100.0 | % | ||||||||||||||||||
We may also redeem the Senior Notes in whole, but not in part, at any time if changes in tax laws impose certain withholding taxes on amounts payable on the Senior Notes at a price equal to the principal amount of the Senior Notes plus accrued interest and additional amounts, if any, as may be necessary so that the net amount received by each holder after any withholding or deduction on payments of the Senior Notes will not be less than the amount such holder would have received if such taxes had not been withheld or deducted. | ||||||||||||||||||||
Upon the occurrence of a change of control triggering event as defined under the Indenture, the Company will be required to make an offer to repurchase the Senior Notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase. | ||||||||||||||||||||
If we sell assets, under certain circumstances outlined in the Indenture, we will be required to use the net proceeds to make an offer to purchase the Senior Notes at an offer price in cash in an amount equal to 100% of the principal amount of the Senior Notes, plus accrued and unpaid interest to, but excluding, the repurchase date. | ||||||||||||||||||||
Covenants. The Indenture restricts our ability and the ability of our restricted subsidiaries to, among other things: incur or guarantee additional indebtedness, create liens, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, enter into agreements that restrict the ability of our subsidiaries to make dividends or other payments to us, enter into transactions with affiliates, or effect certain consolidations, mergers or amalgamations. These covenants are subject to a number of important qualifications and exceptions. Certain of these covenants will be terminated if the Senior Notes are assigned an investment grade rating by both Standard & Poor's Rating Services and Fitch Ratings Inc. and no default or event of default has occurred and is continuing. | ||||||||||||||||||||
Collateral. The Senior Notes are secured (subject to certain exceptions and permitted liens) by a first ranking fixed equitable charge on all currently outstanding shares, additional shares, dividends or other distributions paid in respect of such shares or any other property derived from such shares, in each case held by us in relation to the Company's direct subsidiary, Kosmos Energy Holdings, pursuant to the terms of the Charge over Shares of Kosmos Energy Holdings dated November 23, 2012, as amended and restated on March 14, 2014, between the Company and BNP Paribas as Security and Intercreditor Agent. The Senior Notes share pari passu in the benefit of such equitable charge based on the respective amounts of the obligations under the Indenture and the amount of obligations under the Corporate Revolver. The Guarantees are not secured. | ||||||||||||||||||||
At December 31, 2014, the estimated repayments of debt during the five years and thereafter are as follows: | ||||||||||||||||||||
Payments Due by Year | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Principal debt repayments(1) | $ | — | $ | — | $ | — | $ | — | $ | 57,571 | $ | 742,429 | ||||||||
-1 | Includes the scheduled principal maturities for the Senior Notes and the Facility. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the estimated future available borrowing base as of December 31, 2014. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. As of December 31, 2014, there were no borrowings under the Corporate Revolver. | |||||||||||||||||||
Interest and other financing costs, net | ||||||||||||||||||||
Interest and other financing costs, net incurred during the period comprised of the following: | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Interest expense | $ | 57,876 | $ | 49,317 | $ | 56,298 | ||||||||||||||
Amortization—deferred financing costs | 10,548 | 11,054 | 8,984 | |||||||||||||||||
Loss on extinguishment of debt | 2,898 | — | 5,342 | |||||||||||||||||
Capitalized interest | (20,577 | ) | (13,074 | ) | (10,302 | ) | ||||||||||||||
Deferred interest | (3,562 | ) | 1,658 | 3,584 | ||||||||||||||||
Interest rate derivatives, net | (1,106 | ) | (1,090 | ) | 2,627 | |||||||||||||||
Interest income | (529 | ) | (275 | ) | (1,108 | ) | ||||||||||||||
| | | | | | | | | | | ||||||||||
Interest and other financing costs, net | $ | 45,548 | $ | 47,590 | $ | 65,425 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||||||||
Derivative Financial Instruments | 9. Derivative Financial Instruments | |||||||||||||||||||||
We use financial derivative contracts to manage exposures to commodity price and interest rate fluctuations. We do not hold or issue derivative financial instruments for trading purposes. | ||||||||||||||||||||||
We manage market and counterparty credit risk in accordance with our policies and guidelines. In accordance with these policies and guidelines, our management determines the appropriate timing and extent of derivative transactions. We have included an estimate of nonperformance risk in the fair value measurement of our derivative contracts as required by ASC 820—Fair Value Measurements and Disclosures. | ||||||||||||||||||||||
Oil Derivative Contracts | ||||||||||||||||||||||
The following table sets forth the volumes in barrels underlying the Company's outstanding oil derivative contracts and the weighted average Dated Brent prices per Bbl for those contracts as of December 31, 2014. | ||||||||||||||||||||||
Weighted Average Dated Brent Price per Bbl | ||||||||||||||||||||||
Term | Type of Contract | MBbl | Deferred | Swap | Floor | Ceiling | Call | |||||||||||||||
Premium | ||||||||||||||||||||||
Payable | ||||||||||||||||||||||
2015:00:00 | ||||||||||||||||||||||
January—December | Three-way collars | 4,230 | $ | 0.46 | $ | — | $ | 87.43 | $ | 110.00 | $ | 133.82 | ||||||||||
January—December | Swaps with calls | 2,000 | — | 93.59 | — | — | 115.00 | |||||||||||||||
2016:00:00 | ||||||||||||||||||||||
January—December | Purchased puts | 2,000 | $ | 3.41 | $ | — | $ | 85.00 | $ | — | $ | — | ||||||||||
January—December | Three-way collars | 2,000 | — | — | 85.00 | 110.00 | 135.00 | |||||||||||||||
In January 2015, we entered into swap contracts and sold put contracts for 2.0 MMBbl from January 2016 through December 2016 with a fixed price of $75.00 per barrel and a short put price of $60.00 per barrel. In addition, we sold call contracts for 2.0 MMBbl from January 2017 through December 2017 with a strike price of $85.00 per barrel. The contracts are indexed to Dated Brent prices and we paid a net premium of $3.0 million. | ||||||||||||||||||||||
Interest Rate Swaps Derivative Contracts | ||||||||||||||||||||||
The following table summarizes our open interest rate swaps as of December 31, 2014, whereby we pay a fixed rate of interest and the counterparty pays a variable LIBOR-based rate: | ||||||||||||||||||||||
Term | Weighted Average | Weighted Average | Floating Rate | |||||||||||||||||||
Notional Amount | Fixed Rate | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
January 2015—December 2015 | 45,319 | 2.03 | % | 6-month LIBOR | ||||||||||||||||||
January 2016—June 2016 | 12,500 | 2.27 | % | 6-month LIBOR | ||||||||||||||||||
Subsequent to December 31, 2014, we entered into capped interest rate swaps for $200.0 million from January 2016 through December 2018. For $200.0 million of debt that is hedged, we expect to pay an average 1-month LIBOR rate of 1.23% if LIBOR is below 3.0%, and pay the market rate less 1.77% if LIBOR is above 3.0%, net of the capped interest rate swaps. | ||||||||||||||||||||||
Effective June 1, 2010, we discontinued hedge accounting on all interest rate derivative instruments. Therefore, from that date forward, changes in the fair value of the instruments are recognized in earnings during the period of change. The effective portions of the discontinued hedges as of May 31, 2010, are included in AOCI in the equity section of the accompanying consolidated balance sheets, and are being transferred to earnings when the hedged transaction settles. The Company expects to reclassify $0.6 million of gains from AOCI to interest expense within the next 12 months. See Note 10—Fair Value Measurements for additional information regarding the Company's derivative instruments. | ||||||||||||||||||||||
The following tables disclose the Company's derivative instruments as of December 31, 2014 and 2013 and gain/(loss) from derivatives during the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||
Estimated Fair Value | ||||||||||||||||||||||
Asset (Liability) | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
Type of Contract | Balance Sheet Location | 2014 | 2013 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||
Commodity(1) | Derivatives assets—current | $ | 163,275 | $ | — | |||||||||||||||||
Commodity(2) | Derivatives assets—long-term | 89,210 | — | |||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||
Commodity(3) | Derivatives liabilities—current | — | (7,873 | ) | ||||||||||||||||||
Interest rate | Derivatives liabilities—current | (721 | ) | (2,067 | ) | |||||||||||||||||
Commodity(4) | Derivatives liabilities—long-term | — | (3,144 | ) | ||||||||||||||||||
Interest rate | Derivatives liabilities—long-term | (68 | ) | (667 | ) | |||||||||||||||||
| | | | | | | | | | |||||||||||||
Total derivatives not designated as hedging instruments | $ | 251,696 | $ | (13,751 | ) | |||||||||||||||||
| | | | | | | | | | |||||||||||||
| | | | | | | | | | |||||||||||||
-1 | Includes net deferred premiums payable of $1.8 million and zero related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
-2 | Includes net deferred premiums payable of $6.9 million and zero related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
-3 | Includes net deferred premiums payable of zero and $0.1 million related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
-4 | Includes net deferred premiums payable of zero and $6.5 million related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
Amount of Gain/(Loss) | ||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||||
Type of Contract | Location of Gain/(Loss) | 2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Derivatives in cash flow hedging relationships: | ||||||||||||||||||||||
Interest rate(1) | Interest expense | $ | 1,391 | $ | 1,527 | $ | (163 | ) | ||||||||||||||
| | | | | | | | | | | | | ||||||||||
Total derivatives in cash flow hedging relationships | $ | 1,391 | $ | 1,527 | $ | (163 | ) | |||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||
Commodity(2) | Oil and gas revenue | $ | (11,661 | ) | $ | (7,156 | ) | $ | 15,652 | |||||||||||||
Commodity | Derivatives, net | 281,853 | (17,027 | ) | (31,490 | ) | ||||||||||||||||
Interest rate | Interest expense | (285 | ) | (437 | ) | (2,464 | ) | |||||||||||||||
| | | | | | | | | | | | | ||||||||||
Total derivatives not designated as hedging instruments | $ | 269,907 | $ | (24,620 | ) | $ | (18,302 | ) | ||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
-1 | Amounts were reclassified from AOCI into earnings upon settlement. | |||||||||||||||||||||
-2 | Amounts represent the change in fair value of our provisional oil sales contracts. | |||||||||||||||||||||
Offsetting of Derivative Assets and Derivative Liabilities | ||||||||||||||||||||||
Our derivative instruments which are subject to master netting arrangements with our counterparties only have the right of offset when there is an event of default. As of December 31, 2014 and 2013, there was not an event of default and, therefore, the associated gross asset or gross liability amounts related to these arrangements are presented on the consolidated balance sheets. Additionally, if an event of default occurred the offsetting amounts would be immaterial as of December 31, 2014 and 2013. | ||||||||||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair Value Measurements | 10. Fair Value Measurements | |||||||||||||
In accordance with ASC 820—Fair Value Measurements and Disclosures, fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. We prioritize the inputs used in measuring fair value into the following fair value hierarchy: | ||||||||||||||
• | Level 1—quoted prices for identical assets or liabilities in active markets. | |||||||||||||
• | Level 2—quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data by correlation or other means. | |||||||||||||
• | Level 3—unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. | |||||||||||||
The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2014 and 2013, for each fair value hierarchy level: | ||||||||||||||
Fair Value Measurements Using: | ||||||||||||||
Quoted Prices in | Significant Other | Significant | Total | |||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | ||||||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||||||
(Level 1) | ||||||||||||||
(In thousands) | ||||||||||||||
December 31, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Commodity derivatives | $ | — | $ | 252,485 | $ | — | $ | 252,485 | ||||||
Liabilities: | ||||||||||||||
Commodity derivatives | — | — | — | — | ||||||||||
Interest rate derivatives | — | (789 | ) | — | (789 | ) | ||||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | 251,696 | $ | — | $ | 251,696 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2013 | ||||||||||||||
Liabilities: | ||||||||||||||
Commodity derivatives | $ | — | $ | (11,017 | ) | $ | — | $ | (11,017 | ) | ||||
Interest rate derivatives | — | (2,734 | ) | — | (2,734 | ) | ||||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | (13,751 | ) | $ | — | $ | (13,751 | ) | ||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The book values of cash and cash equivalents and restricted cash approximate fair value based on Level 1 inputs. Joint interest billings, oil sales and other receivables, and accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. Our long-term receivables, if any, after any allowances for doubtful accounts approximate fair value. The estimates of fair value of these items are based on Level 2 inputs. | ||||||||||||||
Commodity Derivatives | ||||||||||||||
Our commodity derivatives represent crude oil three-way collars, purchased puts and swaps with calls for notional barrels of oil at fixed Dated Brent oil prices. The values attributable to our oil derivatives are based on (i) the contracted notional volumes, (ii) independent active futures price quotes for Dated Brent, (iii) a credit-adjusted yield curve applicable to each counterparty by reference to the CDS market and (iv) an independently sourced estimate of volatility for Dated Brent. The volatility estimate was provided by certain independent brokers who are active in buying and selling oil options and was corroborated by market-quoted volatility factors. The deferred premium is included in the fair market value of the commodity derivatives. See Note 9—Derivative Financial Instruments for additional information regarding the Company's derivative instruments. | ||||||||||||||
Provisional Oil Sales | ||||||||||||||
The value attributable to the provisional oil sales derivative is based on (i) the sales volumes subject to provisional pricing and (ii) an independently sourced forward curve over the term of the provisional pricing period. | ||||||||||||||
Interest Rate Derivatives | ||||||||||||||
We have interest rate swaps, whereby the Company pays a fixed rate of interest and the counterparty pays a variable LIBOR-based rate. The values attributable to the Company's interest rate derivative contracts are based on (i) the contracted notional amounts, (ii) LIBOR yield curves provided by independent third parties and corroborated with forward active market-quoted LIBOR yield curves and (iii) a credit-adjusted yield curve as applicable to each counterparty by reference to the CDS market. | ||||||||||||||
Debt | ||||||||||||||
The following table presents the carrying values and fair values of financial instruments that are not carried at fair value in the consolidated balance sheets: | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Value | Value | Value | Value | |||||||||||
(In thousands) | ||||||||||||||
Long-term debt | $ | 794,269 | $ | 755,000 | $ | 900,000 | $ | 900,000 | ||||||
The carrying value of the Facility approximates fair value since it is subject to short-term floating interest rates that approximate the rates available to us for those periods. The fair value of our Senior Notes is based on quoted market prices, which results in a Level 1 fair value measurement. | ||||||||||||||
Asset_Retirement_Obligations
Asset Retirement Obligations | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Asset Retirement Obligations | ||||||||
Asset Retirement Obligations | 11. Asset Retirement Obligations | |||||||
The following table summarizes the changes in the Company's asset retirement obligations: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Asset retirement obligations: | ||||||||
Beginning asset retirement obligations | $ | 39,596 | $ | 27,484 | ||||
Liabilities incurred during period | — | 8,558 | ||||||
Revisions in estimated retirement obligations | — | — | ||||||
Accretion expense | 4,427 | 3,554 | ||||||
| | | | | | | | |
Ending asset retirement obligations | $ | 44,023 | $ | 39,596 | ||||
| | | | | | | | |
| | | | | | | | |
The Ghanaian legal and regulatory regime regarding oil field abandonment and other environmental matters is evolving. Currently, no Ghanaian environmental regulations expressly require that companies abandon or remove offshore assets. Under the Environmental Permit for the Jubilee Field, a decommissioning plan will be prepared and submitted to the Ghana Environmental Protection Agency. ASC 410—Asset Retirement and Environmental Obligations requires the Company to recognize this liability in the period in which the liability was incurred. We have recorded an asset retirement obligation for fields that have commenced production. Additional asset retirement obligations will be recorded in the period in which wells within such producing fields are commissioned. | ||||||||
Equitybased_Compensation
Equity-based Compensation | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Equity-based Compensation | ||||||||||||||
Equity-based Compensation | 12. Equity-based Compensation | |||||||||||||
Restricted Stock Awards and Restricted Stock Units | ||||||||||||||
Prior to our corporate reorganization, Kosmos Energy Holdings issued common units designated as profit units with a threshold value ranging from $0.85 to $90 to employees, management and directors. Profit units were equity awards that were measured on the grant date and expensed over a vesting period of four years. Founding management and directors vested 20% as of the date of issuance and an additional 20% on the anniversary date for each of the next four years. Profit units issued to employees vested 50% on the second and fourth anniversaries of the issuance date. | ||||||||||||||
As part of the corporate reorganization, vested profit units were exchanged for 31.7 million common shares of Kosmos Energy Ltd., unvested profit units were exchanged for 10.0 million restricted stock awards and the $90 profit units were cancelled. Based on the terms and conditions of the corporate reorganization, the exchange of profit units for common shares of Kosmos Energy Ltd. resulted in no incremental compensation costs. | ||||||||||||||
In April 2011, the Board of Directors approved the LTIP, which provides for the granting of incentive awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, among other award types. The LTIP provides for the issuance of 24.5 million shares pursuant to awards under the plan, in addition to the 10.0 million restricted stock awards exchanged for unvested profit units. As of December 31, 2014, the Company had approximately 2.1 million shares that remain available for issuance under the LTIP. | ||||||||||||||
We record compensation expense equal to the fair value of share-based payments over the vesting periods of the LTIP awards. We recorded compensation expense from awards granted under our LTIP of $74.5 million, $69.0 million and $83.4 million during the years ended December 31, 2014, 2013 and 2012, respectively. During the year ended December 31, 2014, an additional $5.0 million of equity-based compensation was recorded as restructuring charges. The total tax benefit for the years ended December 31, 2014, 2013 and 2012 was $25.7 million, $23.5 million and $28.8 million, respectively. Additionally, we expensed a tax shortfall related to equity-based compensation of $6.5 million, $7.0 million and $8.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. The fair value of awards vested during 2014, 2013 and 2012 was approximately $37.0 million, $41.1 million, and $75.7 million, respectively. The Company granted both restricted stock awards and restricted stock units with service vesting criteria and granted both restricted stock awards and restricted stock units with a combination of market and service vesting criteria under the LTIP. These awards vest over a four year period. Restricted stock awards are issued and included in the number of outstanding shares upon the date of grant and, if such awards are forfeited, they become treasury stock. Upon vesting, restricted stock units become issued and outstanding stock. | ||||||||||||||
The following table reflects the outstanding restricted stock awards as of December 31, 2014: | ||||||||||||||
Service Vesting | Weighted- | Market / Service | Weighted- | |||||||||||
Restricted Stock | Average | Vesting | Average | |||||||||||
Awards | Grant-Date | Restricted Stock | Grant-Date | |||||||||||
Fair Value | Awards | Fair Value | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||
Outstanding at December 31, 2011 | 17,195 | $ | 13.36 | 3,522 | $ | 13.3 | ||||||||
Granted | 590 | 12.05 | 303 | 9.45 | ||||||||||
Forfeited | (994 | ) | 13.87 | (291 | ) | 12.68 | ||||||||
Vested | (6,893 | ) | 8.05 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | 9,898 | 16.92 | 3,534 | 12.93 | ||||||||||
Granted | 351 | 10.73 | — | — | ||||||||||
Forfeited | (462 | ) | 16.51 | (96 | ) | 12.35 | ||||||||
Vested | (3,403 | ) | 17.18 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | 6,384 | 16.48 | 3,438 | 12.95 | ||||||||||
Granted | — | — | — | — | ||||||||||
Forfeited | (122 | ) | 15.2 | (77 | ) | 10.74 | ||||||||
Vested | (3,022 | ) | 16.02 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 3,240 | 16.95 | 3,361 | 13 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The following table reflects the outstanding restricted stock units as of December 31, 2014: | ||||||||||||||
Service Vesting | Weighted- | Market / Service | Weighted- | |||||||||||
Restricted Stock | Average | Vesting | Average | |||||||||||
Units | Grant-Date | Restricted Stock | Grant-Date | |||||||||||
Fair Value | Units | Fair Value | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||
Outstanding at December 31, 2011 | — | $ | — | — | $ | — | ||||||||
Granted | 1,070 | 10.6 | 854 | 15.81 | ||||||||||
Forfeited | (47 | ) | 10.88 | (29 | ) | 15.81 | ||||||||
Vested | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | 1,023 | 10.59 | 825 | 15.81 | ||||||||||
Granted | 1,591 | 10.79 | 1,105 | 15.44 | ||||||||||
Forfeited | (133 | ) | 10.51 | (72 | ) | 15.74 | ||||||||
Vested | (243 | ) | 10.59 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | 2,238 | 10.74 | 1,858 | 15.59 | ||||||||||
Granted | 2,113 | 10.8 | 1,572 | 15.71 | ||||||||||
Forfeited | (412 | ) | 10.9 | (184 | ) | 15.48 | ||||||||
Vested | (572 | ) | 10.74 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 3,367 | 10.76 | 3,246 | 15.66 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
As of December 31, 2014, total equity-based compensation to be recognized on unvested restricted stock awards and restricted stock units is $80.2 million over a weighted average period of 1.61 years. | ||||||||||||||
For restricted stock awards and restricted stock units with a combination of market and service vesting criteria, the number of common shares to be issued is determined by comparing the Company's total shareholder return with the total shareholder return of a predetermined group of peer companies over the performance period and can vest in up to 100% of the awards granted for restricted stock awards and up to 200% of the awards granted for restricted stock units. The grant date fair value of these awards ranged from $6.70 to $13.57 per award for restricted stock awards and $15.44 to $15.81 per award for restricted stock units. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. The expected volatility utilized in the model was estimated using our historical volatility and the historical volatilities of our peer companies and ranged from 41.3% to 56.7% for restricted stock awards and 39.0% to 54.0% for restricted stock units. The risk-free interest rate was based on the U.S. treasury rate for a term commensurate with the expected life of the grant and ranged from 0.5% to 1.1% for restricted stock awards and 0.5% to 1.2% for restricted stock units. | ||||||||||||||
For profit units that were exchanged for restricted stock awards, the significant assumptions used to calculate the fair values of the profit units granted, as calculated using a binomial tree, were as follows: no dividend yield, expected volatility ranging from approximately 25% to 66%; risk-free interest rate ranging from 1.3% to 5.1%; expected life ranging from 1.2 to 8.1 years; and projected turnover rates ranging from 7.0% to 27.0% for employees and none for management. For profit units granted immediately prior to our initial public offering, we utilized the midpoint of the range of the estimated offering price, or $17.00 per share. | ||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 13. Income Taxes | ||||||||||
Kosmos Energy Ltd. is a Bermuda company that is not subject to taxation at the corporate level. We provide for income taxes based on the laws and rates in effect in the countries in which our operations are conducted. The relationship between our pre-tax income or loss from continuing operations and our income tax expense or benefit varies from period to period as a result of various factors which include changes in total pre-tax income or loss, the jurisdictions in which our income is earned and the tax laws in those jurisdictions. | |||||||||||
The components of income before income taxes were as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Bermuda | $ | (31,787 | ) | $ | (26,492 | ) | $ | (11,651 | ) | ||
United States | 15,684 | 11,872 | 14,342 | ||||||||
Foreign—other | 594,371 | 90,574 | 31,465 | ||||||||
| | | | | | | | | | | |
Income before income taxes | $ | 578,268 | $ | 75,954 | $ | 34,156 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The components of the provision for income taxes attributable to our income before income taxes consist of the following: | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Current: | |||||||||||
Bermuda | $ | — | $ | — | $ | — | |||||
United States | 27,167 | 14,182 | 21,148 | ||||||||
Foreign—other | 55,322 | 70,436 | — | ||||||||
| | | | | | | | | | | |
Total current | 82,489 | 84,618 | 21,148 | ||||||||
Deferred: | |||||||||||
Bermuda | — | — | — | ||||||||
United States | (14,403 | ) | (2,665 | ) | (7,908 | ) | |||||
Foreign—other | 230,812 | 85,045 | 87,944 | ||||||||
| | | | | | | | | | | |
Total deferred | 216,409 | 82,380 | 80,036 | ||||||||
| | | | | | | | | | | |
Income tax expense | $ | 298,898 | $ | 166,998 | $ | 101,184 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Our reconciliation of income tax expense computed by applying our Bermuda statutory rate and the reported effective tax rate on income from continuing operations is as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Tax at Bermuda statutory rate | $ | — | $ | — | $ | — | |||||
Foreign income taxed at different rates | 266,993 | 127,301 | 73,277 | ||||||||
Change in valuation allowance(1) | 16,401 | (4,065 | ) | 14,103 | |||||||
Non-deductible and other items(1) | 8,957 | 36,664 | 5,669 | ||||||||
Tax shortfall on equity-based compensation | 6,547 | 7,098 | 8,135 | ||||||||
| | | | | | | | | | | |
Total tax expense | $ | 298,898 | $ | 166,998 | $ | 101,184 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Effective tax rate(2) | 51.7 | % | 219.9 | % | 296.2 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
-1 | We took all actions required to voluntarily relinquish the Ndian River Block and Fako Block in Cameroon; therefore, the deferred tax asset and its corresponding valuation allowance were written off in 2013. As of December 31, 2012, we had a $40.1 million deferred tax asset and related valuation allowance, which were written off during 2013. The write off of the deferred tax asset and the related valuation allowance does not have an impact on the income tax expense. | ||||||||||
-2 | The effective tax rate during the years ended December 31, 2014, 2013 and 2012 was also impacted by losses of $159.9 million, $178.8 million and $168.5 million, respectively, incurred in jurisdictions in which we are not subject to taxes and, therefore, do not generate any income tax benefits. | ||||||||||
As of December 31, 2013, our Ghana operations were in a net deferred tax liability position. The Ghana net operating loss carryforward existing as of December 2012 was utilized during 2013. | |||||||||||
The effective tax rate for the United States is approximately 81%, 97% and 92% for the years ended December 31, 2014, 2013 and 2012, respectively. The effective tax rate in the United States is impacted by the effect of tax shortfalls related to equity-based compensation. The effective tax rate for Ghana is approximately 36% for the years ended December 31, 2014, 2013 and 2012. Our other foreign jurisdictions have a 0% effective tax rate because they reside in countries with a 0% statutory rate, or we have experienced losses in those countries and have a full valuation allowance reserved against the corresponding net deferred tax assets. | |||||||||||
Deferred tax assets and liabilities, which are computed on the estimated income tax effect of temporary differences between financial and tax bases in assets and liabilities, are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Foreign capitalized operating expenses(1) | $ | 60,401 | $ | 46,087 | |||||||
Foreign net operating losses(1) | 15,548 | 17,579 | |||||||||
Equity compensation | 36,711 | 28,112 | |||||||||
Unrealized derivative losses | — | 10,197 | |||||||||
Other | 20,657 | 9,582 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 133,317 | 111,557 | |||||||||
Valuation allowance(1) | (75,941 | ) | (59,540 | ) | |||||||
| | | | | | | | ||||
Total deferred tax assets, net | 57,376 | 52,017 | |||||||||
Deferred tax liabilities: | |||||||||||
Depletion, depreciation and amortization related to property and equipment | (322,895 | ) | (186,333 | ) | |||||||
Unrealized derivative gains | (92,675 | ) | — | ||||||||
| | | | | | | | ||||
Total deferred tax liabilities | (415,570 | ) | (186,333 | ) | |||||||
| | | | | | | | ||||
Net deferred tax asset (liability) | $ | (358,194 | ) | $ | (134,316 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
-1 | We took all actions required to voluntarily relinquish the Ndian River Block and Fako Block in Cameroon; therefore, the deferred tax asset and its corresponding valuation allowance were written off in 2013. As of December 31, 2012, we had a $40.1 million deferred tax asset and related valuation allowance, which were written off during 2013. The write off of the deferred tax asset and the related valuation allowance does not have an impact on the income tax expense. | ||||||||||
The Company has recorded a full valuation allowance against the net deferred tax assets in Ireland, Mauritania, Morocco, Senegal and Suriname. The net change in the valuation allowance of $16.4 million is due to additional losses generated in these countries. | |||||||||||
The Company has entered into various petroleum contracts in Morocco. These petroleum contracts provide for a tax holiday, at a 0% tax rate, for a period of 10 years beginning on the date of first production, if any. The Company currently has recorded deferred tax assets of $28.9 million, recorded at the Moroccan statutory rate of 30%, with an offsetting valuation allowance of $28.9 million. We will re-evaluate our deferred tax position upon entering the tax holiday period and at such time may reduce the statutory rate applied to the deferred tax assets in Morocco to the extent those deferred tax assets are realized within the tax holiday period. | |||||||||||
The Company has foreign net operating loss carryforwards of $52.4 million. Of these losses, we expect $0.8 million, $9.4 million, $35.5 million and $0.6 million to expire in 2014, 2015, 2016 and 2021, respectively, and $6.1 million do not expire. All of these losses currently have offsetting valuation allowances. | |||||||||||
A subsidiary of the Company files a U.S. federal income tax return and a Texas margin tax return. In addition to the United States, the Company files income tax returns in the countries in which the Company operates. The Company is open to U.S. federal income tax examinations for tax years 2012 through 2014 and to Texas margin tax examinations for the tax years 2010 through 2014. In addition, the Company is open to income tax examinations for years 2004 through 2014 in its significant other foreign jurisdictions (Ghana, Cameroon and Morocco). | |||||||||||
As of December 31, 2014, the Company had no material uncertain tax positions. The Company's policy is to recognize potential interest and penalties related to income tax matters in income tax expense, but has had no need to accrue any to date. | |||||||||||
Net_Income_Loss_Per_Share
Net Income (Loss) Per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Net Income (Loss) Per Share | |||||||||||
Net Income (Loss) Per Share | 14. Net Income (Loss) Per Share | ||||||||||
In the calculation of basic net income per common share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. We calculate basic net income per common share attributable to common shareholders under the two-class method. The Company's participating securities, which consist solely of service vesting restricted stock awards (See Note 12—Equity-based Compensation), do not participate in undistributed net losses because they are not contractually obligated to do so. The computation of diluted net income (loss) per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares or resulted in the issuance of common shares that would then share in the earnings of the Company. During periods in which the Company realizes a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed not to occur. Diluted net income (loss) per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented. | |||||||||||
Basic net income (loss) per share attributable to common shareholders is computed as (i) net income (loss) attributable to common shareholders, (ii) less income allocable to participating securities (iii) divided by weighted average basic shares outstanding. The Company's diluted net income (loss) per share attributable to common shareholders is computed as (i) basic net income (loss) attributable to common shareholders, (ii) plus diluted adjustments to income allocable to participating securities (iii) divided by weighted average diluted shares outstanding. | |||||||||||
Year Ended December 31, | |||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2012 | ||||||||
Numerator: | |||||||||||
Net income (loss) attributable to common shareholders | $ | 279,370 | $ | (91,044 | ) | $ | (67,028 | ) | |||
Less: Basic income allocable to participating securities(1) | 3,286 | — | — | ||||||||
| | | | | | | | | | | |
Basic net income (loss) allocable to common shareholders | 276,084 | (91,044 | ) | (67,028 | ) | ||||||
Diluted adjustments to income allocable to participating securities(1) | 58 | — | — | ||||||||
| | | | | | | | | | | |
Diluted net income (loss) allocable to common shareholders | $ | 276,142 | $ | (91,044 | ) | $ | (67,028 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average number of shares used to compute net income (loss) per share: | |||||||||||
Basic | 379,195 | 376,819 | 371,847 | ||||||||
Restricted stock awards and units(1)(2) | 6,924 | — | — | ||||||||
| | | | | | | | | | | |
Diluted | 386,119 | 376,819 | 371,847 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net income (loss) per share attributable to common shareholders: | |||||||||||
Basic | $ | 0.73 | $ | (0.24 | ) | $ | (0.18 | ) | |||
Diluted | $ | 0.72 | $ | (0.24 | ) | $ | (0.18 | ) | |||
-1 | Our service vesting restricted stock awards represent participating securities because they participate in non-forfeitable dividends with common equity owners. Income allocable to participating securities represents the distributed and undistributed earnings attributable to the participating securities. Our restricted stock awards with market and service vesting criteria and all restricted stock units are not considered to be participating securities and, therefore, are excluded from the basic net income (loss) per common share calculation. Our service vesting restricted stock awards do not participate in undistributed net losses and, therefore, are excluded from the basic net income (loss) per common share calculation in periods we are in a net loss position. | ||||||||||
-2 | For the years ended December 31, 2014, 2013 and 2012, we excluded 4.4 million, 13.9 million and 15.3 million outstanding restricted stock awards and restricted stock units, respectively, from the computations of diluted net income per share because the effect would have been anti-dilutive. | ||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||||
Commitments and Contingencies | 15. Commitments and Contingencies | ||||||||||||||||||||||
From time to time, we are involved in litigation, regulatory examinations and administrative proceedings primarily arising in the ordinary course of our business in jurisdictions in which we do business. Although the outcome of these matters cannot be predicted with certainty, management believes none of these matters, either individually or in the aggregate, would have a material effect upon the Company's financial position; however, an unfavorable outcome could have a material adverse effect on our results from operations for a specific interim period or year. | |||||||||||||||||||||||
The Jubilee Field in Ghana covers an area within both the WCTP and DT petroleum contract areas. Consistent with the Ghanaian Petroleum Law, the WCTP and DT petroleum contracts and as required by Ghana's Ministry of Energy, it was agreed the Jubilee Field would be unitized for optimal resource recovery. Kosmos and its partners executed a comprehensive unit operating agreement, the Jubilee UUOA, to unitize the Jubilee Field and govern each party's respective rights and duties in the Jubilee Unit, which was effective July 16, 2009. Pursuant to the terms of the Jubilee UUOA, the tract participations are subject to a process of redetermination. The initial redetermination process was completed on October 14, 2011. As a result of the initial redetermination process, our Unit Interest is 24.1%. These consolidated financial statements are based on these re-determined tract participations. Our unit interest may change in the future should another redetermination occur. | |||||||||||||||||||||||
The Company leases facilities under various operating leases that expire through 2019, including our office space. Rent expense under these agreements was $4.6 million, $4.1 million and $4.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||
In June 2013, we signed a long-term rig agreement with a subsidiary of Atwood Oceanics, Inc. for the new build 6th generation drillship "Atwood Achiever." | |||||||||||||||||||||||
We took delivery of the Atwood Achiever in September 2014. The rig agreement covers an initial period of three years at a day rate of approximately $0.6 million, with an option to extend the agreement for an additional three-year term. We have entered into a rig sharing agreement, whereby two rig slots (estimated to be 130 days during 2015 and 30 days during 2016) were assigned to a third-party. | |||||||||||||||||||||||
Future minimum rental commitments under these leases at December 31, 2014, are as follows: | |||||||||||||||||||||||
Payments Due By Year(1) | |||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Operating leases | $ | 16,095 | $ | 3,260 | $ | 3,158 | $ | 3,223 | $ | 3,323 | $ | 3,131 | $ | — | |||||||||
Atwood Achiever drilling rig contract(2) | $ | 486,115 | $ | 139,825 | $ | 199,920 | $ | 146,370 | $ | — | $ | — | $ | — | |||||||||
-1 | Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments, in our petroleum contracts. | ||||||||||||||||||||||
-2 | Commitments calculated using a day rate of $595,000, excluding applicable taxes. The rig commitments reflect the execution of a rig sharing agreement, whereby two rig slots (estimated to be 130 days during 2015 and 30 days during 2016) were assigned to a third party. | ||||||||||||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events |
January 2015 LTIP Grant | |
In January 2015, we granted 1.7 million service vesting restricted stock awards and restricted stock units and 3.3 million market and service vesting restricted stock units to our employees under our long-term incentive plan. We expect to recognize approximately $46.8 million of non-cash compensation expense related to these grants over the next 3 years. | |
Schedule_I_Condensed_Parent_Co
Schedule I Condensed Parent Company Financial Statements | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Schedule I Condensed Parent Company Financial Statements | |||||||||||
Schedule I-Condensed Parent Company Financial Statements | Schedule I—Condensed Parent Company Financial Statements | ||||||||||
Under the terms of agreements governing the indebtedness of subsidiaries of Kosmos Energy Ltd. for 2014, 2013 and 2012 (collectively "KEL," the "Parent Company"), such subsidiaries are restricted from making dividend payments, loans or advances to KEL. Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the Parent Company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. | |||||||||||
The following condensed parent-only financial statements of KEL have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X and included herein. The Parent Company's 100% investment in its subsidiaries has been recorded using the equity basis of accounting in the accompanying condensed parent-only financial statements. The condensed financial statements should be read in conjunction with the consolidated financial statements of Kosmos Energy Ltd. and subsidiaries and notes thereto. | |||||||||||
The terms "Kosmos," the "Company," and similar terms refer to Kosmos Energy Ltd. and its wholly owned subsidiaries, unless the context indicates otherwise. Certain prior period amounts have been reclassified to conform with the current year presentation. Such reclassifications had no impact on our reported net income, current assets, total assets, current liabilities, total liabilities or shareholders equity. | |||||||||||
KOSMOS ENERGY LTD. | |||||||||||
CONDENSED PARENT COMPANY BALANCE SHEETS | |||||||||||
(In thousands, except share data) | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 165,894 | $ | 35,092 | |||||||
Receivables from subsidiaries | 154 | — | |||||||||
Prepaid expenses and other | 435 | 524 | |||||||||
| | | | | | | | ||||
Total current assets | 166,483 | 35,616 | |||||||||
Investment in subsidiaries at equity | 1,474,105 | 955,460 | |||||||||
Deferred financing costs, net of accumulated amortization of $6,488 and $3,300, respectively | 4,163 | 5,950 | |||||||||
| | | | | | | | ||||
Total assets | $ | 1,644,751 | $ | 997,026 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Liabilities and shareholders' equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | — | $ | 35 | |||||||
Accounts payable to subsidiaries | — | 3,761 | |||||||||
Accrued liabilities | 11,523 | 895 | |||||||||
| | | | | | | | ||||
Total current liabilities | 11,523 | 4,691 | |||||||||
Long-term debt | 294,269 | — | |||||||||
Shareholders' equity: | |||||||||||
Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at December 31, 2014 and 2013 | — | — | |||||||||
Common shares, $0.01 par value; 2,000,000,000 authorized shares; 392,443,048 and 391,974,287 issued at December 31, 2014 and 2013, respectively | 3,924 | 3,920 | |||||||||
Additional paid-in capital | 1,860,190 | 1,781,535 | |||||||||
Accumulated deficit | (494,850 | ) | (774,220 | ) | |||||||
Accumulated other comprehensive income | 767 | 2,158 | |||||||||
Treasury stock, at cost, 5,555,088 and 4,400,135 shares at December 31, 2014 and 2013, respectively | (31,072 | ) | (21,058 | ) | |||||||
| | | | | | | | ||||
Total shareholders' equity | 1,338,959 | 992,335 | |||||||||
| | | | | | | | ||||
Total liabilities and shareholders' equity | $ | 1,644,751 | $ | 997,026 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
KOSMOS ENERGY LTD. | |||||||||||
CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS | |||||||||||
(In thousands) | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues and other income: | |||||||||||
Oil and gas revenue | $ | — | $ | — | $ | — | |||||
| | | | | | | | | | | |
Total revenues and other income | — | — | — | ||||||||
| | | | | | | | | | | |
Costs and expenses: | |||||||||||
General and administrative | 88,789 | 84,306 | 93,472 | ||||||||
General and administrative recoveries—related party | (78,880 | ) | (67,865 | ) | (82,370 | ) | |||||
Interest and other financing costs, net | 20,559 | 9,997 | 542 | ||||||||
Other expenses, net | 1,319 | 54 | 6 | ||||||||
Equity in (earnings) losses of subsidiaries | (311,157 | ) | 64,552 | 55,378 | |||||||
| | | | | | | | | | | |
Total costs and expenses | (279,370 | ) | 91,044 | 67,028 | |||||||
| | | | | | | | | | | |
Income (loss) before income taxes | 279,370 | (91,044 | ) | (67,028 | ) | ||||||
Income tax expense | — | — | — | ||||||||
| | | | | | | | | | | |
Net income (loss) | $ | 279,370 | $ | (91,044 | ) | $ | (67,028 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
KOSMOS ENERGY LTD. | |||||||||||
CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOWS | |||||||||||
(In thousands) | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating activities | |||||||||||
Net income (loss) | $ | 279,370 | $ | (91,044 | ) | $ | (67,028 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Equity in (earnings) losses of subsidiaries | (311,157 | ) | 64,552 | 55,378 | |||||||
Equity-based compensation | 79,741 | 69,101 | 83,423 | ||||||||
Amortization | 3,188 | 3,017 | 283 | ||||||||
Other | 269 | — | — | ||||||||
Changes in assets and liabilities: | |||||||||||
(Increase) decrease in prepaid expenses and other | 89 | (149 | ) | 19 | |||||||
(Increase) decrease due to/from related party | (3,915 | ) | 4,134 | (1,531 | ) | ||||||
Increase in accounts payable and accrued liabilities | 10,593 | 794 | 136 | ||||||||
| | | | | | | | | | | |
Net cash provided by operating activities | 58,178 | 50,405 | 70,680 | ||||||||
Investing activities | |||||||||||
Investment in subsidiaries | (208,879 | ) | (133,066 | ) | (275,070 | ) | |||||
| | | | | | | | | | | |
Net cash used in investing activities | (208,879 | ) | (133,066 | ) | (275,070 | ) | |||||
Financing activities | |||||||||||
Net proceeds from issuance of senior secured notes | 294,000 | — | — | ||||||||
Purchase of treasury stock | (11,096 | ) | (13,101 | ) | (8,378 | ) | |||||
Deferred financing costs | (1,401 | ) | (1,720 | ) | (7,530 | ) | |||||
| | | | | | | | | | | |
Net cash provided by (used in) financing activities | 281,503 | (14,821 | ) | (15,908 | ) | ||||||
| | | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | 130,802 | (97,482 | (220,298 | ||||||||
) | ) | ||||||||||
Cash and cash equivalents at beginning of period | 35,092 | 132,574 | 352,872 | ||||||||
| | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 165,894 | $ | 35,092 | $ | 132,574 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule_II_Valuation_and_Qual
Schedule II Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Schedule II Valuation and Qualifying Accounts | |||||||||||||||||
Schedule II Valuation and Qualifying Accounts | Kosmos Energy Ltd. | ||||||||||||||||
Valuation and Qualifying Accounts | |||||||||||||||||
For the Years Ended December 31, 2014, 2013 and 2012 | |||||||||||||||||
Additions | |||||||||||||||||
Description | Balance | Charged to | Charged | Deductions | Balance | ||||||||||||
January 1, | Costs and | To Other | From | December 31, | |||||||||||||
Expenses | Accounts | Reserves | |||||||||||||||
2014 | |||||||||||||||||
Allowance for doubtful receivables | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Allowance for deferred tax asset | $ | 59,540 | $ | 16,401 | $ | — | $ | — | $ | 75,941 | |||||||
2013 | |||||||||||||||||
Allowance for doubtful receivables | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Allowance for deferred tax asset | $ | 63,605 | $ | 28,040 | $ | — | $ | 32,105 | $ | 59,540 | |||||||
2012 | |||||||||||||||||
Allowance for doubtful receivables | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Allowance for deferred tax asset | $ | 49,502 | $ | 14,103 | $ | — | $ | — | $ | 63,605 | |||||||
Schedules other than Schedule I and Schedule II have been omitted because they are not applicable or the required information is presented in the consolidated financial statements or the notes to consolidated financial statements. | |||||||||||||||||
Accounting_Policies_Policies
Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies | |||
Principles of Consolidation | Principles of Consolidation | ||
The accompanying consolidated financial statements include the accounts of Kosmos Energy Ltd. and its wholly owned subsidiaries. All intercompany transactions have been eliminated. | |||
Use of Estimates | Use of Estimates | ||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Actual results could differ from these estimates. | |||
Reclassifications | Reclassifications | ||
Certain prior period amounts have been reclassified to conform with the current year presentation. Such reclassifications had no impact on our reported net income, current assets, total assets, current liabilities, total liabilities or shareholders' equity. | |||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||
Cash and cash equivalents includes demand deposits and funds invested in highly liquid instruments with original maturities of three months or less at the date of purchase. | |||
Restricted Cash | Restricted Cash | ||
In accordance with our commercial debt facility (the "Facility"), we are required to maintain a restricted cash balance that is sufficient to meet the payment of interest and fees for the next six-month period on the 7.875% Senior Secured Notes due 2021 ("Senior Notes") plus the Corporate Revolver or the Facility, whichever is greater. As of December 31, 2014 and 2013, we had $15.9 million and $18.6 million, respectively, in current restricted cash to meet this requirement. | |||
In addition, in accordance with certain of our petroleum contracts, we have posted letters of credit related to performance guarantees for our minimum work obligations. These letters of credit are cash collateralized in accounts held by us and as such are classified as restricted cash. Upon completion of the minimum work obligations and/or entering into the next phase of the petroleum contract, the requirement to post letters of credit will be satisfied and the cash collateral will be released. However, additional letters of credit may be required should we choose to move into the next phase of certain of our petroleum contracts. As of December 31, 2014 and 2013, we had zero and $2.9 million, respectively, of current restricted cash and $16.1 million and $31.5 million, respectively, of long-term restricted cash used to cash collateralize performance guarantees related to our petroleum contracts. | |||
Receivables | Receivables | ||
Our receivables consist of joint interest billings, oil sales and other receivables. For our oil sales receivable, we require a letter of credit to be posted to secure the outstanding receivable. Receivables from joint interest owners are stated at amounts due, net of any allowances for doubtful accounts. We determine our allowance by considering the length of time past due, future net revenues of the debtor's ownership interest in oil and natural gas properties we operate, and the owner's ability to pay its obligation, among other things. We did not have any allowance for doubtful accounts as of December 31, 2014 and 2013. | |||
Inventories | Inventories | ||
Inventories consisted of $55.3 million and $45.8 million of materials and supplies and $0.1 million and $1.6 million of hydrocarbons as of December 31, 2014 and 2013, respectively. The Company's materials and supplies inventory primarily consists of casing and wellheads and is stated at the lower of cost, using the weighted average cost method, or market. | |||
Hydrocarbon inventory is carried at the lower of cost, using the weighted average cost method, or market. Hydrocarbon inventory costs include expenditures and other charges incurred in bringing the inventory to its existing condition. Selling expenses and general and administrative expenses are reported as period costs and excluded from inventory costs. | |||
Exploration and Development Costs | Exploration and Development Costs | ||
The Company follows the successful efforts method of accounting for its oil and gas properties. Acquisition costs for proved and unproved properties are capitalized when incurred. Costs of unproved properties are transferred to proved properties when a determination that proved reserves have been found. Exploration costs, including geological and geophysical costs and costs of carrying unproved properties, are expensed as incurred. Exploratory drilling costs are capitalized when incurred. If exploratory wells are determined to be commercially unsuccessful or dry holes, the applicable costs are expensed and recorded in exploration expense on the consolidated statement of operations. Costs incurred to drill and equip development wells, including unsuccessful development wells, are capitalized. Costs incurred to operate and maintain wells and equipment and to lift oil and natural gas to the surface are expensed as oil and gas production expense. | |||
The Company evaluates unproved property, other than well related costs, periodically for impairment. These costs are generally related to the acquisition of leasehold costs. The impairment assessment considers results of exploration activities, commodity price outlooks, planned future sales or expiration of all or a portion of such projects. If the quantity of potential future reserves determined by such evaluations is not sufficient to fully recover the cost invested in each project, the Company will recognize an impairment loss at that time. | |||
Depletion, Depreciation and Amortization | Depletion, Depreciation and Amortization | ||
Proved properties and support equipment and facilities are depleted using the unit-of-production method based on estimated proved oil and natural gas reserves. Capitalized exploratory drilling costs that result in a discovery of proved reserves and development costs are amortized using the unit-of- production method based on estimated proved developed oil and natural gas reserves for the related field. | |||
Depreciation and amortization of other property is computed using the straight-line method over the assets' estimated useful lives (not to exceed the lease term for leasehold improvements), ranging from one to eight years. | |||
Years | |||
Depreciated | |||
Leasehold improvements | 1 to 8 | ||
Office furniture, fixtures and computer equipment | 3 to 7 | ||
Vehicles | 5 | ||
Amortization of deferred financing costs is computed using the straight-line method over the life of the related debt. | |||
Capitalized Interest | Capitalized Interest | ||
Interest costs from external borrowings are capitalized on major projects with an expected construction period of one year or longer. Capitalized interest is added to the cost of the underlying asset and is depleted on the unit-of-production method in the same manner as the underlying assets. | |||
Asset Retirement Obligations | Asset Retirement Obligations | ||
The Company accounts for asset retirement obligations as required by ASC 410—Asset Retirement and Environmental Obligations. Under these standards, the fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. If a reasonable estimate of fair value cannot be made in the period the asset retirement obligation is incurred, the liability is recognized when a reasonable estimate of fair value can be made. If a tangible long-lived asset with an existing asset retirement obligation is acquired, a liability for that obligation is recognized at the asset's acquisition date. In addition, a liability for the fair value of a conditional asset retirement obligation is recorded if the fair value of the liability can be reasonably estimated. We capitalize the asset retirement costs by increasing the carrying amount of the related long-lived asset by the same amount as the liability. We record increases in the discounted abandonment liability resulting from the passage of time in depletion and depreciation in the consolidated statement of operations. | |||
Impairment of Long-lived Assets | Impairment of Long-lived Assets | ||
The Company reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable, or at least annually. ASC 360—Property, Plant and Equipment requires an impairment loss to be recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. That assessment shall be based on the carrying amount of the asset at the date it is tested for recoverability, whether in use or under development. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value less cost to sell. | |||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities | ||
We utilize oil derivative contracts to mitigate our exposure to commodity price risk associated with our anticipated future oil production. These derivative contracts consist of three-way collars, swaps with calls and purchased puts. We also use interest rate swap contracts to mitigate our exposure to interest rate fluctuations related to our long-term debt. Our derivative financial instruments are recorded on the balance sheet as either assets or liabilities and are measured at fair value. We do not apply hedge accounting to our oil derivative contracts. Effective June 1, 2010, we discontinued hedge accounting on our interest rate swap contracts. Therefore, from that date forward, the changes in the fair value of the instruments are recognized in earnings during the period of change. The effective portions of the discontinued hedges as of May 31, 2010, are included in accumulated other comprehensive income or loss ("AOCI") in the equity section of the accompanying consolidated balance sheets, and are being transferred to earnings when the hedged transactions settle. See Note 9—Derivative Financial Instruments. | |||
Estimates of Proved Oil and Natural Gas Reserves | Estimates of Proved Oil and Natural Gas Reserves | ||
Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and assessment of impairment of our oil and natural gas properties. Proved oil and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions. As additional proved reserves are discovered, reserve quantities and future cash flows will be estimated by independent petroleum consultants and prepared in accordance with guidelines established by the Securities and Exchange Commission ("SEC") and the Financial Accounting Standards Board ("FASB"). The accuracy of these reserve estimates is a function of: | |||
• | the engineering and geological interpretation of available data; | ||
• | estimates of the amount and timing of future operating cost, production taxes, development cost and workover cost; | ||
• | the accuracy of various mandated economic assumptions; and | ||
• | the judgments of the persons preparing the estimates. | ||
Revenue Recognition | Revenue Recognition | ||
We use the sales method of accounting for oil and gas revenues. Under this method, we recognize revenues on the volumes sold based on the provisional sales prices. The volumes sold may be more or less than the volumes to which we are entitled based on our ownership interest in the property. These differences result in a condition known in the industry as a production imbalance. A receivable or liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves on such property. As of December 31, 2014 and 2013, we had no oil and gas imbalances recorded in our consolidated financial statements. | |||
Our oil and gas revenues are based on provisional price contracts which contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from oil sales at the spot price on the date of sale. The embedded derivative, which is not designated as a hedge, is marked to market through oil and gas revenue each period until the final settlement occurs, which generally is limited to the month after the sale. | |||
Equity-based Compensation | Equity-based Compensation | ||
For equity-based compensation awards, compensation expense is recognized in the Company's financial statements over the awards' vesting periods based on their grant date fair value. The Company utilizes (i) the closing stock price on the date of grant to determine the fair value of service vesting restricted stock awards and restricted stock units and (ii) a Monte Carlo simulation to determine the fair value of restricted stock awards and restricted stock units with a combination of market and service vesting criteria. | |||
Restructuring charges | Restructuring Charges | ||
The Company accounts for restructuring charges in accordance with ASC 420—Exit or Disposal Cost Obligations. Under these standards, the costs associated with restructuring charges are recorded during the period in which the liability is incurred. During the year ended December 31, 2014, we recognized $11.7 million in restructuring charges for employee severance and related benefit costs incurred as part of a corporate reorganization, which includes $5.0 million of accelerated non-cash expense related to awards previously granted under our Long-Term Incentive Plan (the "LTIP"). | |||
Treasury Stock | Treasury Stock | ||
We record treasury stock purchases at cost. The majority of our treasury stock purchases are from our employees that surrendered shares to the Company to satisfy their minimum tax withholding requirements and were not part of a formal stock repurchase plan. The remainder of our treasury stock is forfeited restricted stock awards granted under our long-term incentive plan. | |||
Income Taxes | Income Taxes | ||
The Company accounts for income taxes as required by ASC 740—Income Taxes. Under this method, deferred income taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. On a quarterly basis, management evaluates the need for and adequacy of valuation allowances based on the expected realizability of the deferred tax assets and adjusts the amount of such allowances, if necessary. | |||
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the technical merits of the position. Accordingly, we measure tax benefits from such positions based on the most likely outcome to be realized. | |||
Foreign Currency Translation | Foreign Currency Translation | ||
The U.S. dollar is the functional currency for all of the Company's material foreign operations. Foreign currency transaction gains and losses and adjustments resulting from translating monetary assets and liabilities denominated in foreign currencies are included in other expenses. Cash balances held in foreign currencies are not significant, and as such, the effect of exchange rate changes is not material to any reporting period. | |||
Concentration of Credit Risk | Concentration of Credit Risk | ||
Our revenue can be materially affected by current economic conditions and the price of oil. However, based on the current demand for crude oil and the fact that alternative purchasers are readily available, we believe that the loss of our marketing agent and/or any of the purchasers identified by our marketing agent would not have a long-term material adverse effect on our financial position or results of operations. | |||
Recent Accounting Standards | Recent Accounting Standards | ||
In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08 prospectively changes the criteria for reporting discontinued operations while enhancing disclosures around disposals of assets whether or not the disposal meets the definition of a discontinued operation. ASU 2014-08 is effective for annual and interim periods beginning after December 31, 2014 with early adoption permitted but only for disposals that have not been reported in financial statements previously issued. The adoption of this new guidance is not expected to have a material impact on the Company's consolidated financial statements. | |||
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition requirements in ASC Topic 605, "Revenue Recognition," and most industry-specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The new guidance is effective for annual reporting periods beginning after December 15, 2016 for public companies. Early adoption is not permitted. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements or decided upon the method of adoption. | |||
In June 2014, the FASB issued ASU 2014-12, "Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." ASU 2014-12 requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. It is effective for annual and interim periods beginning after December 15, 2015 with early adoption permitted. The standard may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. The adoption is not expected to have a material impact on the Company's consolidated financial statements. | |||
In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." ASU 2014-15 requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, to disclose that fact. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The adoption of this amendment is not expected to have a material impact on the Company's consolidated financial statements. | |||
Accounting_Policies_Tables
Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies | |||
Schedule of estimated useful lives of other property | |||
Years | |||
Depreciated | |||
Leasehold improvements | 1 to 8 | ||
Office furniture, fixtures and computer equipment | 3 to 7 | ||
Vehicles | 5 | ||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Schedule of property and equipment | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Oil and gas properties: | ||||||||
Proved properties | $ | 1,156,868 | $ | 801,348 | ||||
Unproved properties | 363,717 | 524,257 | ||||||
Support equipment and facilities | 968,722 | 710,289 | ||||||
| | | | | | | | |
Total oil and gas properties | 2,489,307 | 2,035,894 | ||||||
Less: accumulated depletion | (716,121 | ) | (527,832 | ) | ||||
| | | | | | | | |
Oil and gas properties, net | 1,773,186 | 1,508,062 | ||||||
Other property | 33,718 | 31,658 | ||||||
Less: accumulated depreciation | (22,058 | ) | (16,758 | ) | ||||
| | | | | | | | |
Other property, net | 11,660 | 14,900 | ||||||
| | | | | | | | |
Total property and equipment, net | $ | 1,784,846 | $ | 1,522,962 | ||||
| | | | | | | | |
| | | | | | | | |
Suspended_Well_Costs_Tables
Suspended Well Costs (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Suspended Well Costs | |||||||||||
Schedule of capitalized exploratory well costs | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Beginning balance | $ | 376,166 | $ | 372,492 | $ | 267,592 | |||||
Additions to capitalized exploratory well costs pending the determination of proved reserves | 71,039 | 32,804 | 107,527 | ||||||||
Reclassification due to determination of proved reserves | (220,491 | ) | — | — | |||||||
Capitalized exploratory well costs charged to expense | — | (29,130 | ) | (2,627 | ) | ||||||
| | | | | | | | | | | |
Ending balance | $ | 226,714 | $ | 376,166 | $ | 372,492 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of aging of capitalized exploratory well costs and number of projects for which exploratory well costs were capitalized for more than one year | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands, except well counts) | |||||||||||
Exploratory well costs capitalized for a period of one year or less | $ | 16,814 | $ | 11,426 | $ | 106,635 | |||||
Exploratory well costs capitalized for a period one to two years | 40,865 | 229,140 | 179,933 | ||||||||
Exploratory well costs capitalized for a period three to five years | 169,035 | 135,600 | 85,924 | ||||||||
| | | | | | | | | | | |
Ending balance | $ | 226,714 | $ | 376,166 | $ | 372,492 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Number of projects that have exploratory well costs that have been capitalized for a period greater than one year | 5 | 8 | 7 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Liabilities | ||||||||
Accrued Liabilities | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Accrued liabilities: | ||||||||
Accrued exploration, development and production | $ | 139,393 | $ | 73,976 | ||||
Accrued general and administrative expenses | 21,926 | 4,255 | ||||||
Accrued taxes other than income | 20,315 | 15,188 | ||||||
Accrued interest | 10,271 | — | ||||||
Income taxes | 9,233 | 20,379 | ||||||
Accrued other | 829 | 1,414 | ||||||
| | | | | | | | |
$ | 201,967 | $ | 115,212 | |||||
| | | | | | | | |
| | | | | | | | |
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Debt | ||||||||||||||||||||
Schedule of debt | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Outstanding debt principal balances: | ||||||||||||||||||||
Facility | $ | 500,000 | $ | 900,000 | ||||||||||||||||
Senior Notes | 300,000 | — | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total | 800,000 | 900,000 | ||||||||||||||||||
Unamortized issuance discounts | (5,731 | ) | — | |||||||||||||||||
| | | | | | | | |||||||||||||
Long-term debt | $ | 794,269 | $ | 900,000 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Schedule of redemption prices (expressed as percentages of principal amount) of all or a part of the Senior Notes | ||||||||||||||||||||
Year | Percentage | |||||||||||||||||||
On or after August 1, 2017, but before August 1, 2018 | 103.9 | % | ||||||||||||||||||
On or after August 1, 2018, but before August 1, 2019 | 102.0 | % | ||||||||||||||||||
On or after August 1, 2019 and thereafter | 100.0 | % | ||||||||||||||||||
Schedule of estimated repayments of debt | ||||||||||||||||||||
Payments Due by Year | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Principal debt repayments(1) | $ | — | $ | — | $ | — | $ | — | $ | 57,571 | $ | 742,429 | ||||||||
-1 | Includes the scheduled principal maturities for the Senior Notes and the Facility. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the estimated future available borrowing base as of December 31, 2014. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. As of December 31, 2014, there were no borrowings under the Corporate Revolver. | |||||||||||||||||||
Schedule of interest and other financing costs, net | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Interest expense | $ | 57,876 | $ | 49,317 | $ | 56,298 | ||||||||||||||
Amortization—deferred financing costs | 10,548 | 11,054 | 8,984 | |||||||||||||||||
Loss on extinguishment of debt | 2,898 | — | 5,342 | |||||||||||||||||
Capitalized interest | (20,577 | ) | (13,074 | ) | (10,302 | ) | ||||||||||||||
Deferred interest | (3,562 | ) | 1,658 | 3,584 | ||||||||||||||||
Interest rate derivatives, net | (1,106 | ) | (1,090 | ) | 2,627 | |||||||||||||||
Interest income | (529 | ) | (275 | ) | (1,108 | ) | ||||||||||||||
| | | | | | | | | | | ||||||||||
Interest and other financing costs, net | $ | 45,548 | $ | 47,590 | $ | 65,425 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||||||||
Schedule of oil derivative contracts | The following table sets forth the volumes in barrels underlying the Company's outstanding oil derivative contracts and the weighted average Dated Brent prices per Bbl for those contracts as of December 31, 2014. | |||||||||||||||||||||
Weighted Average Dated Brent Price per Bbl | ||||||||||||||||||||||
Term | Type of Contract | MBbl | Deferred | Swap | Floor | Ceiling | Call | |||||||||||||||
Premium | ||||||||||||||||||||||
Payable | ||||||||||||||||||||||
2015:00:00 | ||||||||||||||||||||||
January—December | Three-way collars | 4,230 | $ | 0.46 | $ | — | $ | 87.43 | $ | 110.00 | $ | 133.82 | ||||||||||
January—December | Swaps with calls | 2,000 | — | 93.59 | — | — | 115.00 | |||||||||||||||
2016:00:00 | ||||||||||||||||||||||
January—December | Purchased puts | 2,000 | $ | 3.41 | $ | — | $ | 85.00 | $ | — | $ | — | ||||||||||
January—December | Three-way collars | 2,000 | — | — | 85.00 | 110.00 | 135.00 | |||||||||||||||
Schedule of interest rate swaps derivative contracts | The following table summarizes our open interest rate swaps as of December 31, 2014, whereby we pay a fixed rate of interest and the counterparty pays a variable LIBOR-based rate: | |||||||||||||||||||||
Term | Weighted Average | Weighted Average | Floating Rate | |||||||||||||||||||
Notional Amount | Fixed Rate | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
January 2015—December 2015 | 45,319 | 2.03 | % | 6-month LIBOR | ||||||||||||||||||
January 2016—June 2016 | 12,500 | 2.27 | % | 6-month LIBOR | ||||||||||||||||||
Schedule of derivative instruments by balance sheet location | ||||||||||||||||||||||
Estimated Fair Value | ||||||||||||||||||||||
Asset (Liability) | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
Type of Contract | Balance Sheet Location | 2014 | 2013 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||
Commodity(1) | Derivatives assets—current | $ | 163,275 | $ | — | |||||||||||||||||
Commodity(2) | Derivatives assets—long-term | 89,210 | — | |||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||
Commodity(3) | Derivatives liabilities—current | — | (7,873 | ) | ||||||||||||||||||
Interest rate | Derivatives liabilities—current | (721 | ) | (2,067 | ) | |||||||||||||||||
Commodity(4) | Derivatives liabilities—long-term | — | (3,144 | ) | ||||||||||||||||||
Interest rate | Derivatives liabilities—long-term | (68 | ) | (667 | ) | |||||||||||||||||
| | | | | | | | | | |||||||||||||
Total derivatives not designated as hedging instruments | $ | 251,696 | $ | (13,751 | ) | |||||||||||||||||
| | | | | | | | | | |||||||||||||
| | | | | | | | | | |||||||||||||
-1 | Includes net deferred premiums payable of $1.8 million and zero related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
-2 | Includes net deferred premiums payable of $6.9 million and zero related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
-3 | Includes net deferred premiums payable of zero and $0.1 million related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
-4 | Includes net deferred premiums payable of zero and $6.5 million related to commodity derivative contracts as of December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
Schedule of derivative instruments by location of gain/(loss) | ||||||||||||||||||||||
Amount of Gain/(Loss) | ||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||||
Type of Contract | Location of Gain/(Loss) | 2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Derivatives in cash flow hedging relationships: | ||||||||||||||||||||||
Interest rate(1) | Interest expense | $ | 1,391 | $ | 1,527 | $ | (163 | ) | ||||||||||||||
| | | | | | | | | | | | | ||||||||||
Total derivatives in cash flow hedging relationships | $ | 1,391 | $ | 1,527 | $ | (163 | ) | |||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||
Commodity(2) | Oil and gas revenue | $ | (11,661 | ) | $ | (7,156 | ) | $ | 15,652 | |||||||||||||
Commodity | Derivatives, net | 281,853 | (17,027 | ) | (31,490 | ) | ||||||||||||||||
Interest rate | Interest expense | (285 | ) | (437 | ) | (2,464 | ) | |||||||||||||||
| | | | | | | | | | | | | ||||||||||
Total derivatives not designated as hedging instruments | $ | 269,907 | $ | (24,620 | ) | $ | (18,302 | ) | ||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
-1 | Amounts were reclassified from AOCI into earnings upon settlement. | |||||||||||||||||||||
-2 | Amounts represent the change in fair value of our provisional oil sales contracts. | |||||||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | ||||||||||||||
Fair Value Measurements Using: | ||||||||||||||
Quoted Prices in | Significant Other | Significant | Total | |||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | ||||||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||||||
(Level 1) | ||||||||||||||
(In thousands) | ||||||||||||||
December 31, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Commodity derivatives | $ | — | $ | 252,485 | $ | — | $ | 252,485 | ||||||
Liabilities: | ||||||||||||||
Commodity derivatives | — | — | — | — | ||||||||||
Interest rate derivatives | — | (789 | ) | — | (789 | ) | ||||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | 251,696 | $ | — | $ | 251,696 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2013 | ||||||||||||||
Liabilities: | ||||||||||||||
Commodity derivatives | $ | — | $ | (11,017 | ) | $ | — | $ | (11,017 | ) | ||||
Interest rate derivatives | — | (2,734 | ) | — | (2,734 | ) | ||||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | (13,751 | ) | $ | — | $ | (13,751 | ) | ||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of carrying values and fair values of financial instruments that are not carried at fair value | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Value | Value | Value | Value | |||||||||||
(In thousands) | ||||||||||||||
Long-term debt | $ | 794,269 | $ | 755,000 | $ | 900,000 | $ | 900,000 | ||||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Asset Retirement Obligations | ||||||||
Schedule of changes in asset retirement obligations | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Asset retirement obligations: | ||||||||
Beginning asset retirement obligations | $ | 39,596 | $ | 27,484 | ||||
Liabilities incurred during period | — | 8,558 | ||||||
Revisions in estimated retirement obligations | — | — | ||||||
Accretion expense | 4,427 | 3,554 | ||||||
| | | | | | | | |
Ending asset retirement obligations | $ | 44,023 | $ | 39,596 | ||||
| | | | | | | | |
| | | | | | | | |
Equitybased_Compensation_Table
Equity-based Compensation (Tables) (LTIP) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Restricted stock awards | ||||||||||||||
Equity-based Compensation | ||||||||||||||
Schedule of plan activity | ||||||||||||||
Service Vesting | Weighted- | Market / Service | Weighted- | |||||||||||
Restricted Stock | Average | Vesting | Average | |||||||||||
Awards | Grant-Date | Restricted Stock | Grant-Date | |||||||||||
Fair Value | Awards | Fair Value | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||
Outstanding at December 31, 2011 | 17,195 | $ | 13.36 | 3,522 | $ | 13.3 | ||||||||
Granted | 590 | 12.05 | 303 | 9.45 | ||||||||||
Forfeited | (994 | ) | 13.87 | (291 | ) | 12.68 | ||||||||
Vested | (6,893 | ) | 8.05 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | 9,898 | 16.92 | 3,534 | 12.93 | ||||||||||
Granted | 351 | 10.73 | — | — | ||||||||||
Forfeited | (462 | ) | 16.51 | (96 | ) | 12.35 | ||||||||
Vested | (3,403 | ) | 17.18 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | 6,384 | 16.48 | 3,438 | 12.95 | ||||||||||
Granted | — | — | — | — | ||||||||||
Forfeited | (122 | ) | 15.2 | (77 | ) | 10.74 | ||||||||
Vested | (3,022 | ) | 16.02 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 3,240 | 16.95 | 3,361 | 13 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Restricted stock units | ||||||||||||||
Equity-based Compensation | ||||||||||||||
Schedule of plan activity | ||||||||||||||
Service Vesting | Weighted- | Market / Service | Weighted- | |||||||||||
Restricted Stock | Average | Vesting | Average | |||||||||||
Units | Grant-Date | Restricted Stock | Grant-Date | |||||||||||
Fair Value | Units | Fair Value | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||
Outstanding at December 31, 2011 | — | $ | — | — | $ | — | ||||||||
Granted | 1,070 | 10.6 | 854 | 15.81 | ||||||||||
Forfeited | (47 | ) | 10.88 | (29 | ) | 15.81 | ||||||||
Vested | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | 1,023 | 10.59 | 825 | 15.81 | ||||||||||
Granted | 1,591 | 10.79 | 1,105 | 15.44 | ||||||||||
Forfeited | (133 | ) | 10.51 | (72 | ) | 15.74 | ||||||||
Vested | (243 | ) | 10.59 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | 2,238 | 10.74 | 1,858 | 15.59 | ||||||||||
Granted | 2,113 | 10.8 | 1,572 | 15.71 | ||||||||||
Forfeited | (412 | ) | 10.9 | (184 | ) | 15.48 | ||||||||
Vested | (572 | ) | 10.74 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 3,367 | 10.76 | 3,246 | 15.66 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of components of income before income taxes | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Bermuda | $ | (31,787 | ) | $ | (26,492 | ) | $ | (11,651 | ) | ||
United States | 15,684 | 11,872 | 14,342 | ||||||||
Foreign—other | 594,371 | 90,574 | 31,465 | ||||||||
| | | | | | | | | | | |
Income before income taxes | $ | 578,268 | $ | 75,954 | $ | 34,156 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of the provision for income taxes attributable to the entity's income (loss) before income taxes | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Current: | |||||||||||
Bermuda | $ | — | $ | — | $ | — | |||||
United States | 27,167 | 14,182 | 21,148 | ||||||||
Foreign—other | 55,322 | 70,436 | — | ||||||||
| | | | | | | | | | | |
Total current | 82,489 | 84,618 | 21,148 | ||||||||
Deferred: | |||||||||||
Bermuda | — | — | — | ||||||||
United States | (14,403 | ) | (2,665 | ) | (7,908 | ) | |||||
Foreign—other | 230,812 | 85,045 | 87,944 | ||||||||
| | | | | | | | | | | |
Total deferred | 216,409 | 82,380 | 80,036 | ||||||||
| | | | | | | | | | | |
Income tax expense | $ | 298,898 | $ | 166,998 | $ | 101,184 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of income tax expense and the reported effective tax rate | |||||||||||
Years Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(In thousands) | |||||||||||
Tax at Bermuda statutory rate | $ | — | $ | — | $ | — | |||||
Foreign income taxed at different rates | 266,993 | 127,301 | 73,277 | ||||||||
Change in valuation allowance(1) | 16,401 | (4,065 | ) | 14,103 | |||||||
Non-deductible and other items(1) | 8,957 | 36,664 | 5,669 | ||||||||
Tax shortfall on equity-based compensation | 6,547 | 7,098 | 8,135 | ||||||||
| | | | | | | | | | | |
Total tax expense | $ | 298,898 | $ | 166,998 | $ | 101,184 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Effective tax rate(2) | 51.7 | % | 219.9 | % | 296.2 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
-1 | We took all actions required to voluntarily relinquish the Ndian River Block and Fako Block in Cameroon; therefore, the deferred tax asset and its corresponding valuation allowance were written off in 2013. As of December 31, 2012, we had a $40.1 million deferred tax asset and related valuation allowance, which were written off during 2013. The write off of the deferred tax asset and the related valuation allowance does not have an impact on the income tax expense. | ||||||||||
-2 | The effective tax rate during the years ended December 31, 2014, 2013 and 2012 was also impacted by losses of $159.9 million, $178.8 million and $168.5 million, respectively, incurred in jurisdictions in which we are not subject to taxes and, therefore, do not generate any income tax benefits. | ||||||||||
Schedule of tax effects of significant temporary differences to deferred tax assets and liabilities | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Foreign capitalized operating expenses(1) | $ | 60,401 | $ | 46,087 | |||||||
Foreign net operating losses(1) | 15,548 | 17,579 | |||||||||
Equity compensation | 36,711 | 28,112 | |||||||||
Unrealized derivative losses | — | 10,197 | |||||||||
Other | 20,657 | 9,582 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 133,317 | 111,557 | |||||||||
Valuation allowance(1) | (75,941 | ) | (59,540 | ) | |||||||
| | | | | | | | ||||
Total deferred tax assets, net | 57,376 | 52,017 | |||||||||
Deferred tax liabilities: | |||||||||||
Depletion, depreciation and amortization related to property and equipment | (322,895 | ) | (186,333 | ) | |||||||
Unrealized derivative gains | (92,675 | ) | — | ||||||||
| | | | | | | | ||||
Total deferred tax liabilities | (415,570 | ) | (186,333 | ) | |||||||
| | | | | | | | ||||
Net deferred tax asset (liability) | $ | (358,194 | ) | $ | (134,316 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
-1 | We took all actions required to voluntarily relinquish the Ndian River Block and Fako Block in Cameroon; therefore, the deferred tax asset and its corresponding valuation allowance were written off in 2013. As of December 31, 2012, we had a $40.1 million deferred tax asset and related valuation allowance, which were written off during 2013. The write off of the deferred tax asset and the related valuation allowance does not have an impact on the income tax expense. | ||||||||||
Net_Income_Loss_Per_Share_Tabl
Net Income (Loss) Per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Net Income (Loss) Per Share | |||||||||||
Schedule of reconciliation between net income and the amounts used to compute basic and diluted net income per share and the weighted average shares outstanding used to compute basic and diluted net income per share | |||||||||||
Year Ended December 31, | |||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2012 | ||||||||
Numerator: | |||||||||||
Net income (loss) attributable to common shareholders | $ | 279,370 | $ | (91,044 | ) | $ | (67,028 | ) | |||
Less: Basic income allocable to participating securities(1) | 3,286 | — | — | ||||||||
| | | | | | | | | | | |
Basic net income (loss) allocable to common shareholders | 276,084 | (91,044 | ) | (67,028 | ) | ||||||
Diluted adjustments to income allocable to participating securities(1) | 58 | — | — | ||||||||
| | | | | | | | | | | |
Diluted net income (loss) allocable to common shareholders | $ | 276,142 | $ | (91,044 | ) | $ | (67,028 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average number of shares used to compute net income (loss) per share: | |||||||||||
Basic | 379,195 | 376,819 | 371,847 | ||||||||
Restricted stock awards and units(1)(2) | 6,924 | — | — | ||||||||
| | | | | | | | | | | |
Diluted | 386,119 | 376,819 | 371,847 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net income (loss) per share attributable to common shareholders: | |||||||||||
Basic | $ | 0.73 | $ | (0.24 | ) | $ | (0.18 | ) | |||
Diluted | $ | 0.72 | $ | (0.24 | ) | $ | (0.18 | ) | |||
-1 | Our service vesting restricted stock awards represent participating securities because they participate in non-forfeitable dividends with common equity owners. Income allocable to participating securities represents the distributed and undistributed earnings attributable to the participating securities. Our restricted stock awards with market and service vesting criteria and all restricted stock units are not considered to be participating securities and, therefore, are excluded from the basic net income (loss) per common share calculation. Our service vesting restricted stock awards do not participate in undistributed net losses and, therefore, are excluded from the basic net income (loss) per common share calculation in periods we are in a net loss position. | ||||||||||
-2 | For the years ended December 31, 2014, 2013 and 2012, we excluded 4.4 million, 13.9 million and 15.3 million outstanding restricted stock awards and restricted stock units, respectively, from the computations of diluted net income per share because the effect would have been anti-dilutive. | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||||
Schedule of estimated future minimum commitments | Future minimum rental commitments under these leases at December 31, 2014, are as follows: | ||||||||||||||||||||||
Payments Due By Year(1) | |||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Operating leases | $ | 16,095 | $ | 3,260 | $ | 3,158 | $ | 3,223 | $ | 3,323 | $ | 3,131 | $ | — | |||||||||
Atwood Achiever drilling rig contract(2) | $ | 486,115 | $ | 139,825 | $ | 199,920 | $ | 146,370 | $ | — | $ | — | $ | — | |||||||||
-1 | Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments, in our petroleum contracts. | ||||||||||||||||||||||
-2 | Commitments calculated using a day rate of $595,000, excluding applicable taxes. The rig commitments reflect the execution of a rig sharing agreement, whereby two rig slots (estimated to be 130 days during 2015 and 30 days during 2016) were assigned to a third party. | ||||||||||||||||||||||
Organization_Details
Organization (Details) | 12 Months Ended |
Dec. 31, 2014 | |
segment | |
Organization | |
Number of reportable segments | 1 |
Accounting_Policies_Details
Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Restricted Cash | ||
Current restricted cash | $15,926,000 | $21,475,000 |
Long-term restricted cash | 16,125,000 | 31,500,000 |
Receivables | ||
Allowance for doubtful accounts | 0 | 0 |
Inventories | ||
Materials and supplies inventory | 55,300,000 | 45,800,000 |
Hydrocarbons inventory | 100,000 | 1,600,000 |
Restricted Cash | Facility | ||
Restricted Cash | ||
Restricted cash period required as per commercial debt facility to meet interest and commitment fee payments | 6 months | |
Current restricted cash | 15,900,000 | 18,600,000 |
Restricted Cash | Petroleum agreements - performance guarantees | ||
Restricted Cash | ||
Current restricted cash | 0 | 2,900,000 |
Long-term restricted cash | $16,100,000 | $31,500,000 |
Senior Notes | 7.875% senior notes due 2021 | ||
Restricted Cash | ||
Interest rate | 7.88% |
Accounting_Policies_Details_2
Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | |
Depreciation and amortization | |
Estimated useful lives (in years) | 1 year |
Maximum | |
Depreciation and amortization | |
Estimated useful lives (in years) | 8 years |
Leasehold improvements | Minimum | |
Depreciation and amortization | |
Estimated useful lives (in years) | 1 year |
Leasehold improvements | Maximum | |
Depreciation and amortization | |
Estimated useful lives (in years) | 8 years |
Office furniture, fixtures and computer equipment | Minimum | |
Depreciation and amortization | |
Estimated useful lives (in years) | 3 years |
Office furniture, fixtures and computer equipment | Maximum | |
Depreciation and amortization | |
Estimated useful lives (in years) | 7 years |
Vehicles | |
Depreciation and amortization | |
Estimated useful lives (in years) | 5 years |
Capitalized interest | Minimum | |
Capitalized Interest | |
Expected construction period for capitalization of interest costs on major projects | 1 year |
Accounting_Policies_Details_3
Accounting Policies (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue Recognition | ||
Oil and gas imbalances | $0 | $0 |
Restructuring Charges | ||
Restructuring charges | 11,742,000 | |
LTIP | ||
Restructuring Charges | ||
Non-cash expense included in restructuring charges | $5,000,000 |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||
Dec. 31, 2014 | Nov. 30, 2012 | Feb. 23, 2015 | Jan. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Aug. 31, 2014 | |
item | site | |||||||||
agreement | ||||||||||
Acquisitions and Divestitures | ||||||||||
Proceeds on sale of assets | $58,315,000 | |||||||||
Gain on sale of assets | 23,769,000 | |||||||||
Farm-out agreements | Block 42 and Block 45 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 50.00% | |||||||||
Farm-out agreements | Essaouira Offshore Block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 30.00% | |||||||||
Farm-out agreements | Foum Assaka Offshore Block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 29.90% | |||||||||
Farm-out agreements | Tarhazoute Offshore Block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 30.00% | |||||||||
Farm-out agreements | Cap Boujdour Offshore block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 55.00% | |||||||||
Farm-out agreements | Block C8 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 60.00% | |||||||||
Farm-out agreements | Block C12 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 60.00% | |||||||||
Farm-out agreements | Block C13 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 60.00% | |||||||||
Essaouria Offshore Petroleum Agreement | Essaouira Offshore Block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participation interest acquired (as a percent) | 37.50% | |||||||||
Foum Assaka Offshore Petroleum Agreement | Foum Assaka Offshore Block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participation interest acquired (as a percent) | 18.80% | |||||||||
Chevron | Farm-out agreements | Block 42 and Block 45 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Reimbursement of shared costs previously incurred | 23,700,000 | |||||||||
Reduction in exploration expense | 22,700,000 | |||||||||
Reduction in general and administrative expense | 1,000,000 | |||||||||
Participation interest acquired (as a percent) | 50.00% | |||||||||
Chevron | Farm-out agreements | Block C8, Block 12 and Block 13 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Number of exploration wells for which a third party will pay a disproportionate amount | 1 | |||||||||
Participation interest acquired (as a percent) | 30.00% | |||||||||
Chevron | Farm-out agreements | Block C8 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 30.00% | |||||||||
Chevron | Farm-out agreements | Block C12 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 30.00% | |||||||||
Chevron | Farm-out agreements | Block C13 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 30.00% | |||||||||
Antrim Energy Inc. | Farm-in agreement | Licensing Option 11/5 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participation interest acquired (as a percent) | 75.00% | |||||||||
Europa Oil & Gas (Holdings) plc | Farm-in agreement | Licensing Option 11/7 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participation interest acquired (as a percent) | 85.00% | |||||||||
Percentage of costs of the first exploration well to be funded | 100.00% | |||||||||
Europa Oil & Gas (Holdings) plc | Farm-in agreement | Licensing Option 11/7 | Maximum | ||||||||||
Acquisitions and Divestitures | ||||||||||
Investment cap amount | 90,000,000 | |||||||||
Europa Oil & Gas (Holdings) plc | Farm-in agreement | Licensing Option 11/8 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participation interest acquired (as a percent) | 85.00% | |||||||||
Percentage of costs of the first exploration well to be funded | 100.00% | |||||||||
Europa Oil & Gas (Holdings) plc | Farm-in agreement | Licensing Option 11/8 | Maximum | ||||||||||
Acquisitions and Divestitures | ||||||||||
Investment cap amount | 110,000,000 | |||||||||
BP | Farm-out agreements | Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore blocks | ||||||||||
Acquisitions and Divestitures | ||||||||||
Number of farm-out agreements | 3 | |||||||||
Number of blocks covered by farm-out agreements | 3 | |||||||||
Proceeds on sale of assets | 56,900,000 | |||||||||
Gain on sale of assets | 23,800,000 | |||||||||
Number of exploration wells in each block for which our share of costs will be paid for by a third party | 1 | |||||||||
Percentage of third party's share of drilling costs to be paid in the event of drilling a second exploration well in each block | 150.00% | |||||||||
BP | Farm-out agreements | Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore blocks | Maximum | ||||||||||
Acquisitions and Divestitures | ||||||||||
Spending per well by third party for first exploration well | 120,000,000 | |||||||||
Spending per well by third party in the event of drilling a second exploration well | 120,000,000 | |||||||||
Cairn | Farm-out agreements | ||||||||||
Acquisitions and Divestitures | ||||||||||
Number of exploration wells for which a third party will pay a disproportionate amount | 1 | |||||||||
Cairn | Farm-out agreements | Cap Boujdour Offshore block | ||||||||||
Acquisitions and Divestitures | ||||||||||
Reimbursement of shared costs previously incurred | 1,500,000 | |||||||||
Participation interest acquired (as a percent) | 20.00% | |||||||||
Percentage of third party's share of seismic and drilling costs | 150.00% | |||||||||
Percentage of third party's share of drilling costs for two appraisal wells | 200.00% | |||||||||
Number of appraisal wells for which a third party will pay a disproportionate amount | 2 | |||||||||
Amount of our future costs to be paid for by third party | 12,300,000 | |||||||||
Cairn | Farm-out agreements | Cap Boujdour Offshore block | Maximum | ||||||||||
Acquisitions and Divestitures | ||||||||||
Spending by third party for seismic costs | 25,000,000 | |||||||||
Spending by third party for an exploration well | $100,000,000 | |||||||||
Spending per well by third party for each appraisal well | 100,000,000 | |||||||||
Timis Corporation Limited | Farm-in agreement | Cayar Offshore Profond and Saint Louis Offshore Profond blocks | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participation interest acquired (as a percent) | 60.00% | |||||||||
Maximum cost per contingent exploration well | 120,000,000 | |||||||||
Number of contingent exploration wells | 2 | |||||||||
Participating interest for carrying the full cost of third contingent exploration or appraisal well (as a percent) | 65.00% | |||||||||
SMHPM | Farm-out agreements | Block C8 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 10.00% | |||||||||
SMHPM | Farm-out agreements | Block C12 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 10.00% | |||||||||
SMHPM | Farm-out agreements | Block C13 | ||||||||||
Acquisitions and Divestitures | ||||||||||
Participating interests (as a percent) | 10.00% |
Joint_Interest_Billings_Detail
Joint Interest Billings (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Joint interest billings | |
Long-term receivables - joint interest billings | 14,174 |
GNPC | |
Joint interest billings | |
Long-term receivables - joint interest billings | 14,200 |
TEN Discoveries | GNPC | |
Joint interest billings | |
GNPC's paying interest (as a percent) | 5.00% |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Oil and gas properties: | |||
Proved properties | $1,156,868,000 | $801,348,000 | |
Unproved properties | 363,717,000 | 524,257,000 | |
Support equipment and facilities | 968,722,000 | 710,289,000 | |
Total oil and gas properties | 2,489,307,000 | 2,035,894,000 | |
Less: accumulated depletion | -716,121,000 | -527,832,000 | |
Oil and gas properties, net | 1,773,186,000 | 1,508,062,000 | |
Other property | 33,718,000 | 31,658,000 | |
Less: accumulated depreciation | -22,058,000 | -16,758,000 | |
Other property, net | 11,660,000 | 14,900,000 | |
Property and equipment, net | 1,784,846,000 | 1,522,962,000 | |
Depletion expense | $188,300,000 | $213,700,000 | $178,600,000 |
Suspended_Well_Costs_Details
Suspended Well Costs (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
project | project | project | |
Suspended Well Costs | |||
Capitalized exploratory well costs subsequently expensed in the same period | $1,100,000 | $78,500,000 | $29,600,000 |
Reconciliation of capitalized exploratory well costs on completed wells | |||
Beginning balance | 376,166,000 | 372,492,000 | 267,592,000 |
Additions to capitalized exploratory well costs pending the determination of proved reserves | 71,039,000 | 32,804,000 | 107,527,000 |
Reclassification due to determination of proved reserves | -220,491,000 | ||
Capitalized exploratory well costs charged to expense | -29,130,000 | -2,627,000 | |
Balance at the end of the period | 226,714,000 | 376,166,000 | 372,492,000 |
Aging of capitalized exploratory well costs and number of projects for which exploratory well costs were capitalized for more than one year | |||
Exploratory well costs capitalized for a period of one year or less | 16,814,000 | 11,426,000 | 106,635,000 |
Exploratory well costs capitalized for a period one to two years | 40,865,000 | 229,140,000 | 179,933,000 |
Exploratory well costs capitalized for a period three to five years | 169,035,000 | 135,600,000 | 85,924,000 |
Ending balance | $226,714,000 | $376,166,000 | $372,492,000 |
Number of projects that have exploratory well costs that have been capitalized for a period greater than one year | 5 | 8 | 7 |
Mahogany Discovery | |||
Projects with exploratory well costs capitalized for more than one year | |||
Number of appraisal wells | 3 | ||
Mahogany Discovery | Maximum | |||
Projects with exploratory well costs capitalized for more than one year | |||
Submission of PoD to Ghana's Ministry of Energy, period | 6 months | ||
Teak-1 Discovery | |||
Projects with exploratory well costs capitalized for more than one year | |||
Number of appraisal wells | 2 | ||
Teak-1 Discovery | Maximum | |||
Projects with exploratory well costs capitalized for more than one year | |||
Submission of PoD to Ghana's Ministry of Energy, period | 6 months | ||
Teak-2 Discovery | Maximum | |||
Projects with exploratory well costs capitalized for more than one year | |||
Submission of PoD to Ghana's Ministry of Energy, period | 6 months | ||
Akasa Discovery | |||
Projects with exploratory well costs capitalized for more than one year | |||
Number of appraisal wells | 1 | ||
Akasa Discovery | Maximum | |||
Projects with exploratory well costs capitalized for more than one year | |||
Submission of PoD to Ghana's Ministry of Energy, period | 6 months | ||
Wawa Discovery | Maximum | |||
Projects with exploratory well costs capitalized for more than one year | |||
Submission of PoD to Ghana's Ministry of Energy, period | 6 months |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued liabilities: | ||
Accrued exploration, development and production | $139,393 | $73,976 |
Accrued general and administrative expenses | 21,926 | 4,255 |
Accrued taxes other than income | 20,315 | 15,188 |
Accrued interest | 10,271 | |
Income taxes | 9,233 | 20,379 |
Accrued other | 829 | 1,414 |
Accrued liabilities | $201,967 | $115,212 |
Debt_Details
Debt (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2012 | Mar. 31, 2014 | Jul. 31, 2013 | Aug. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2012 | |
Debt | |||||||
Outstanding debt principal | $800,000,000 | $900,000,000 | |||||
Unamortized issuance discounts | 5,731,000 | ||||||
Long-term debt | 794,269,000 | 900,000,000 | |||||
Loss on extinguishment of debt | 2,898,000 | 5,342,000 | |||||
Net deferred financing costs | 48,753,000 | 40,111,000 | |||||
Scheduled maturities of debt during the five year period and thereafter | |||||||
2019 | 57,571,000 | ||||||
Thereafter | 742,429,000 | ||||||
Parent company | |||||||
Debt | |||||||
Net deferred financing costs | 4,163,000 | 5,950,000 | |||||
Facility | |||||||
Debt | |||||||
Outstanding debt principal | 500,000,000 | 900,000,000 | |||||
Total commitment | 1,500,000,000 | ||||||
Loss on extinguishment of debt | 2,900,000 | ||||||
Net deferred financing costs | 44,600,000 | ||||||
Amount outstanding | 500,000,000 | ||||||
Undrawn availability | 1,000,000,000 | ||||||
Variable rate basis | LIBOR | ||||||
Commitment fee percentage of the then-applicable margin when commitment is available for utilization | 40.00% | ||||||
Commitment fee percentage of the then-applicable margin when commitment is not available for utilization | 20.00% | ||||||
Adjustment in estimate of deferred interest | 4,500,000 | ||||||
Revolving-credit sublimit amount after March 31, 2018 | 500,000,000 | ||||||
Availability period of revolving-credit sublimit | 1 month | ||||||
Amount outstanding under letters of credit | 0 | ||||||
Interval period for payment of interest | 6 months | ||||||
Facility | Minimum | LIBOR | |||||||
Debt | |||||||
Applicable margin (as a percent) | 3.25% | ||||||
Facility | Maximum | LIBOR | |||||||
Debt | |||||||
Applicable margin (as a percent) | 4.50% | ||||||
Corporate Revolver | |||||||
Debt | |||||||
Total commitment | 300,000,000 | ||||||
Net deferred financing costs | 2,900,000 | ||||||
Amount outstanding | 0 | ||||||
Undrawn availability | 300,000,000 | ||||||
Applicable margin (as a percent) | 6.00% | ||||||
Variable rate basis | LIBOR | ||||||
Interval period for payment of interest | 6 months | ||||||
Percentage of the margin used to calculate commitment fees | 40.00% | ||||||
Revolving Letter of Credit Facility | |||||||
Debt | |||||||
Total commitment | 100,000,000 | ||||||
Amount outstanding | 21,500,000 | ||||||
Number of letters of credit | 7 | ||||||
Other disclosures | |||||||
Cash collateral required as a percentage of outstanding letters of credit under breach of certain financial covenants | 100.00% | ||||||
Letter of credit fee (as a percent) | 0.50% | ||||||
Revolving Letter of Credit Facility | Minimum | |||||||
Other disclosures | |||||||
Cash collateral maintained as a percentage of outstanding letters of credit | 75.00% | ||||||
Revolving Letter of Credit Facility | Maximum | |||||||
Debt | |||||||
Additional commitments | 50,000,000 | ||||||
Senior Notes | |||||||
Debt | |||||||
Outstanding debt principal | 300,000,000 | ||||||
Senior Notes | 7.875% senior notes due 2021 | |||||||
Debt | |||||||
Interest rate | 7.88% | ||||||
Senior notes offering face amount | 300,000,000 | ||||||
Proceeds, net of offering discounts and deferred financing costs | $292,500,000 | ||||||
Other disclosures | |||||||
Redemption price percentage following change of control | 101.00% | ||||||
Redemption price percentage following sell of certain assets | 100.00% | ||||||
Senior Notes | 7.875% senior notes due 2021 | Prior to August 1, 2017 | |||||||
Other disclosures | |||||||
Senior notes redemption, start date | 1-Aug-14 | ||||||
Senior notes redemption, end date | 1-Aug-17 | ||||||
Maximum percentage of principal amount available to be redeemed with proceeds from equity offerings | 35.00% | ||||||
Redemption price percentage using proceeds from equity offerings | 107.88% | ||||||
Redemption price percentage, excluding proceeds from equity offerings | 100.00% | ||||||
Senior Notes | 7.875% senior notes due 2021 | On or after August 1, 2017, but before August 1, 2018 | |||||||
Other disclosures | |||||||
Senior notes redemption, start date | 1-Aug-17 | ||||||
Senior notes redemption, end date | 1-Aug-18 | ||||||
Redemption price, as a percent of the of principal amount | 103.90% | ||||||
Senior Notes | 7.875% senior notes due 2021 | On or after August 1, 2018, but before August 1, 2019 | |||||||
Other disclosures | |||||||
Senior notes redemption, start date | 1-Aug-18 | ||||||
Senior notes redemption, end date | 1-Aug-19 | ||||||
Redemption price, as a percent of the of principal amount | 102.00% | ||||||
Senior Notes | 7.875% senior notes due 2021 | On or after August 1, 2019 and thereafter | |||||||
Other disclosures | |||||||
Senior notes redemption, start date | 1-Aug-19 | ||||||
Redemption price, as a percent of the of principal amount | 100.00% |
Debt_Details_2
Debt (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Expense | $57,876 | $49,317 | $56,298 |
Amortization-deferred financing costs | 10,548 | 11,054 | 8,984 |
Loss on extinguishment of debt | 2,898 | 5,342 | |
Capitalized interest | -20,577 | -13,074 | -10,302 |
Deferred interest | -3,562 | 1,658 | 3,584 |
Interest rate derivatives, net | -1,106 | -1,090 | 2,627 |
Interest income | -529 | -275 | -1,108 |
Interest and other financing costs, net | 45,548 | 47,590 | 65,425 |
Parent company | |||
Interest and other financing costs, net | $20,559 | $9,997 | $542 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 12 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jan. 31, 2015 |
MBbls | MBbls | |
Three-way Collars | Term January 2015 to December 2015 | Price risk derivatives | ||
Derivative Financial Instruments | ||
Volumes (in MBbl) | 4,230 | |
Weighted average deferred premium payable per Bbl | 0.46 | |
Weighted average floor price per Bbl | 87.43 | |
Weighted average ceiling price per Bbl | 110 | |
Weighted average call price per Bbl | 133.82 | |
Three-way Collars | Term January 2016 to December 2016 | Price risk derivatives | ||
Derivative Financial Instruments | ||
Volumes (in MBbl) | 2,000 | |
Weighted average floor price per Bbl | 85 | |
Weighted average ceiling price per Bbl | 110 | |
Weighted average call price per Bbl | 135 | |
Purchased puts | Term January 2016 to December 2016 | Price risk derivatives | ||
Derivative Financial Instruments | ||
Volumes (in MBbl) | 2,000 | |
Weighted average deferred premium payable per Bbl | 3.41 | |
Weighted average floor price per Bbl | 85 | |
Swaps with calls | Term January 2015 to December 2015 | Price risk derivatives | ||
Derivative Financial Instruments | ||
Volumes (in MBbl) | 2,000 | |
Weighted average swap price per Bbl | 93.59 | |
Weighted average call price per Bbl | 115 | |
Call contract | Term January 2017 to December 2017 | ||
Derivative Financial Instruments | ||
Volumes (in MBbl) | 2,000 | |
Weighted average call price per Bbl | 85 | |
Swap with sold puts | Term January 2016 to December 2016 | ||
Derivative Financial Instruments | ||
Volumes (in MBbl) | 2,000 | |
Weighted average swap price per Bbl | 75 | |
Weighted average floor price per Bbl | 60 | |
Net premium paid | $3 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Jan. 31, 2015 | |
Derivative Financial Instruments | ||
Gains expected to be reclassified from AOCI to interest expense | $600,000 | |
Interest Rate Swap | Term January 2015 to December 2015 | ||
Derivative Financial Instruments | ||
Weighted Average Notional Amount | 45,319,000 | |
Weighted Average Fixed Rate (as a percent) | 2.03% | |
Floating Rate | 6-monthB LIBOR | |
Interest Rate Swap | Term January 2016 to June 2016 | ||
Derivative Financial Instruments | ||
Weighted Average Notional Amount | 12,500,000 | |
Weighted Average Fixed Rate (as a percent) | 2.27% | |
Floating Rate | 6-monthB LIBOR | |
Interest Rate Swap | Term January 2016 to December 2018 | ||
Derivative Financial Instruments | ||
Weighted Average Notional Amount | $200,000,000 | |
Weighted Average Fixed Rate (as a percent) | 1.23% | |
Interest Rate Swap | Term January 2016 to December 2018 | London Interbank Offered Rate (LIBOR) One Month [Member] | ||
Derivative Financial Instruments | ||
Interest rate cap | 3.00% | |
Percentage points deducted when reference rate is above the cap rate | 1.77% |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative instruments, Balance Sheet Location | ||
Derivatives assets - current | $163,275,000 | |
Derivatives assets-long-term | 89,210,000 | |
Derivatives liabilities - current | -721,000 | -9,940,000 |
Derivatives liabilities - long-term | -68,000 | -3,811,000 |
Not designated as hedging instruments | ||
Derivative instruments, Balance Sheet Location | ||
Total | 251,696,000 | -13,751,000 |
Commodity derivatives | Not designated as hedging instruments | ||
Derivative instruments, Balance Sheet Location | ||
Derivatives assets - current | 163,275,000 | |
Derivatives assets-long-term | 89,210,000 | |
Derivatives liabilities - current | -7,873,000 | |
Derivatives liabilities - long-term | -3,144,000 | |
Net deferred premiums payable related to commodity derivative contracts | 1,800,000 | 0 |
Net deferred premiums payable related to commodity derivative contracts | 6,900,000 | 0 |
Net deferred premiums payable related to commodity derivative contracts | 0 | 100,000 |
Net deferred premiums payable related to commodity derivative contracts | 0 | 6,500,000 |
Interest rate contracts | Not designated as hedging instruments | ||
Derivative instruments, Balance Sheet Location | ||
Derivatives liabilities - current | -721,000 | -2,067,000 |
Derivatives liabilities - long-term | ($68,000) | ($667,000) |
Derivative_Financial_Instrumen5
Derivative Financial Instruments (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative instruments, Location of Gain/(Loss) | |||
Total derivatives in cash flow hedging relationships | $1,106 | $1,090 | ($2,627) |
Amount of Gain/(Loss), derivatives not designated as hedging instruments | 269,907 | -24,620 | -18,302 |
Commodity derivatives | Derivatives, net | |||
Derivative instruments, Location of Gain/(Loss) | |||
Amount of Gain/(Loss), derivatives not designated as hedging instruments | 281,853 | -17,027 | -31,490 |
Commodity derivatives | Provisional Oil Sales | Oil and gas revenue | |||
Derivative instruments, Location of Gain/(Loss) | |||
Amount of Gain/(Loss), derivatives not designated as hedging instruments | -11,661 | -7,156 | 15,652 |
Interest rate contracts | Interest expense | |||
Derivative instruments, Location of Gain/(Loss) | |||
Amount of Gain/(Loss), derivatives not designated as hedging instruments | -285 | -437 | -2,464 |
Derivatives in cash flow hedging relationships | |||
Derivative instruments, Location of Gain/(Loss) | |||
Total derivatives in cash flow hedging relationships | 1,391 | 1,527 | -163 |
Derivatives in cash flow hedging relationships | Interest rate contracts | Interest expense | |||
Derivative instruments, Location of Gain/(Loss) | |||
Amount of Gain/(Loss) reclassified from AOCI into earnings | $1,391 | $1,527 | ($163) |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Recurring basis | Level 2 | ||
Liabilities: | ||
Total fair value, net | $251,696 | ($13,751) |
Recurring basis | Level 2 | Commodity derivatives | ||
Assets: | ||
Derivative asset, fair value | 252,485 | |
Liabilities: | ||
Derivative liability, fair value | -11,017 | |
Recurring basis | Level 2 | Interest rate contracts | ||
Liabilities: | ||
Derivative liability, fair value | -789 | -2,734 |
Recurring basis | Total Fair Value | ||
Liabilities: | ||
Total fair value, net | 251,696 | -13,751 |
Recurring basis | Total Fair Value | Commodity derivatives | ||
Assets: | ||
Derivative asset, fair value | 252,485 | |
Liabilities: | ||
Derivative liability, fair value | -11,017 | |
Recurring basis | Total Fair Value | Interest rate contracts | ||
Liabilities: | ||
Derivative liability, fair value | -789 | -2,734 |
Carrying Value | ||
Liabilities: | ||
Long-term debt | 794,269 | 900,000 |
Total Fair Value | ||
Liabilities: | ||
Long-term debt | $755,000 | $900,000 |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Asset retirement obligations: | ||
Beginning asset retirement obligations | $39,596 | $27,484 |
Liabilities incurred during period | 8,558 | |
Accretion expense | 4,427 | 3,554 |
Ending asset retirement obligations | $44,023 | $39,596 |
Equitybased_Compensation_Detai
Equity-based Compensation (Details) (USD $) | 12 Months Ended | 36 Months Ended | 0 Months Ended | 4 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | 16-May-11 | 15-May-11 | 16-May-11 | Apr. 30, 2011 | |
Compensation agreement | ||||||||
Tax shortfall related to equity-based compensation | $6,547,000 | $7,098,000 | $8,135,000 | |||||
LTIP | ||||||||
Equity-based Compensation | ||||||||
Vesting period | 4 years | |||||||
Compensation agreement | ||||||||
Compensation expense recognized | 74,500,000 | 69,000,000 | 83,400,000 | |||||
Tax benefit | 25,700,000 | 23,500,000 | 28,800,000 | |||||
Tax shortfall related to equity-based compensation | 6,500,000 | 7,000,000 | 8,100,000 | |||||
Other disclosures | ||||||||
Approved and authorized awards (in shares) | 24,500,000 | |||||||
Number of shares remaining available for grant | 2,100,000 | 2,100,000 | ||||||
Service Vesting Restricted Stock Awards | LTIP | ||||||||
Outstanding unvested awards activity | ||||||||
Outstanding at the beginning of the period (in shares) | 6,384,000 | 9,898,000 | 17,195,000 | 17,195,000 | ||||
Granted (in shares) | 351,000 | 590,000 | ||||||
Forfeited (in shares) | -122,000 | -462,000 | -994,000 | |||||
Vested (in shares) | -3,022,000 | -3,403,000 | -6,893,000 | |||||
Outstanding at the end of the period (in shares) | 3,240,000 | 6,384,000 | 9,898,000 | 3,240,000 | ||||
Weighted-Average Grant-Date Fair Value | ||||||||
Outstanding at beginning of the period (in dollars per share) | $16.48 | $16.92 | $13.36 | $13.36 | ||||
Granted (in dollars per share) | $10.73 | $12.05 | ||||||
Forfeited (in dollars per share) | $15.20 | $16.51 | $13.87 | |||||
Vested (in dollars per share) | $16.02 | $17.18 | $8.05 | |||||
Outstanding at the end of the period (in dollars per share) | $16.95 | $16.48 | $16.92 | $16.95 | ||||
Market/Service Vesting Restricted Stock Awards | LTIP | ||||||||
Outstanding unvested awards activity | ||||||||
Outstanding at the beginning of the period (in shares) | 3,438,000 | 3,534,000 | 3,522,000 | 3,522,000 | ||||
Granted (in shares) | 303,000 | |||||||
Forfeited (in shares) | -77,000 | -96,000 | -291,000 | |||||
Outstanding at the end of the period (in shares) | 3,361,000 | 3,438,000 | 3,534,000 | 3,361,000 | ||||
Weighted-Average Grant-Date Fair Value | ||||||||
Outstanding at beginning of the period (in dollars per share) | $12.95 | $12.93 | $13.30 | $13.30 | ||||
Granted (in dollars per share) | $9.45 | |||||||
Forfeited (in dollars per share) | $10.74 | $12.35 | $12.68 | |||||
Outstanding at the end of the period (in dollars per share) | $13 | $12.95 | $12.93 | $13 | ||||
Market/Service Vesting Restricted Stock Awards | Minimum | LTIP | ||||||||
Weighted-Average Grant-Date Fair Value | ||||||||
Granted (in dollars per share) | $6.70 | |||||||
Significant assumptions used to calculate fair values | ||||||||
Expected volatility (as a percent) | 41.30% | |||||||
Risk-free interest rate (as a percent) | 0.50% | |||||||
Market/Service Vesting Restricted Stock Awards | Maximum | LTIP | ||||||||
Weighted-Average Grant-Date Fair Value | ||||||||
Granted (in dollars per share) | $13.57 | |||||||
Significant assumptions used to calculate fair values | ||||||||
Expected volatility (as a percent) | 56.70% | |||||||
Risk-free interest rate (as a percent) | 1.10% | |||||||
Other disclosures | ||||||||
Vesting percentage of the awards granted | 100.00% | |||||||
Service Vesting Restricted Stock Units | LTIP | ||||||||
Outstanding unvested awards activity | ||||||||
Outstanding at the beginning of the period (in shares) | 2,238,000 | 1,023,000 | ||||||
Granted (in shares) | 2,113,000 | 1,591,000 | 1,070,000 | |||||
Forfeited (in shares) | -412,000 | -133,000 | -47,000 | |||||
Vested (in shares) | -572,000 | -243,000 | ||||||
Outstanding at the end of the period (in shares) | 3,367,000 | 2,238,000 | 1,023,000 | 3,367,000 | ||||
Weighted-Average Grant-Date Fair Value | ||||||||
Outstanding at beginning of the period (in dollars per share) | $10.74 | $10.59 | ||||||
Granted (in dollars per share) | $10.80 | $10.79 | $10.60 | |||||
Forfeited (in dollars per share) | $10.90 | $10.51 | $10.88 | |||||
Vested (in dollars per share) | $10.74 | $10.59 | ||||||
Outstanding at the end of the period (in dollars per share) | $10.76 | $10.74 | $10.59 | $10.76 | ||||
Market/Service Vesting Restricted Stock Units | LTIP | ||||||||
Outstanding unvested awards activity | ||||||||
Outstanding at the beginning of the period (in shares) | 1,858,000 | 825,000 | ||||||
Granted (in shares) | 1,572,000 | 1,105,000 | 854,000 | |||||
Forfeited (in shares) | -184,000 | -72,000 | -29,000 | |||||
Outstanding at the end of the period (in shares) | 3,246,000 | 1,858,000 | 825,000 | 3,246,000 | ||||
Weighted-Average Grant-Date Fair Value | ||||||||
Outstanding at beginning of the period (in dollars per share) | $15.59 | $15.81 | ||||||
Granted (in dollars per share) | $15.71 | $15.44 | $15.81 | |||||
Forfeited (in dollars per share) | $15.48 | $15.74 | $15.81 | |||||
Outstanding at the end of the period (in dollars per share) | $15.66 | $15.59 | $15.81 | $15.66 | ||||
Market/Service Vesting Restricted Stock Units | Minimum | LTIP | ||||||||
Weighted-Average Grant-Date Fair Value | ||||||||
Granted (in dollars per share) | $15.44 | |||||||
Significant assumptions used to calculate fair values | ||||||||
Expected volatility (as a percent) | 39.00% | |||||||
Risk-free interest rate (as a percent) | 0.50% | |||||||
Market/Service Vesting Restricted Stock Units | Maximum | LTIP | ||||||||
Weighted-Average Grant-Date Fair Value | ||||||||
Granted (in dollars per share) | $15.81 | |||||||
Significant assumptions used to calculate fair values | ||||||||
Expected volatility (as a percent) | 54.00% | |||||||
Risk-free interest rate (as a percent) | 1.20% | |||||||
Other disclosures | ||||||||
Vesting percentage of the awards granted | 200.00% | |||||||
Restricted Stock Awards and Restricted Stock Units | ||||||||
Weighted-Average Grant-Date Fair Value | ||||||||
Compensation expense not yet recognized | 80,200,000 | 80,200,000 | ||||||
Weighted average period over which compensation expense is to be recognized | 1 year 7 months 10 days | |||||||
Restricted Stock Awards and Restricted Stock Units | LTIP | ||||||||
Compensation agreement | ||||||||
Fair value of awards vested | 37,000,000 | 41,100,000 | 75,700,000 | |||||
Profit units | Kosmos Energy Holdings | ||||||||
Equity-based Compensation | ||||||||
Vesting period | 4 years | |||||||
Weighted-Average Grant-Date Fair Value for awards | ||||||||
Granted (in dollars per share) | $17 | |||||||
Other disclosures | ||||||||
Number of common shares into which the units were exchanged | 31,700,000 | |||||||
Incremental compensation costs | 0 | |||||||
Threshold value of awards cancelled (in dollars per unit) | $90 | |||||||
Profit units | Kosmos Energy Holdings | Employees | ||||||||
Equity-based Compensation | ||||||||
Vesting rights on the second and fourth anniversary of issuance date (as a percent) | 50.00% | |||||||
Profit units | Kosmos Energy Holdings | Founding Management and Directors | ||||||||
Equity-based Compensation | ||||||||
Vesting rights as of the date of issuance (as a percent) | 20.00% | |||||||
Additional vesting rights on the anniversary date for each of the next four years (as a percent) | 20.00% | |||||||
Profit units | Kosmos Energy Holdings | Minimum | ||||||||
Equity-based Compensation | ||||||||
Threshold value to employees, management and directors (in dollars per units) | 0.85 | |||||||
Significant assumptions used to calculate fair values | ||||||||
Expected volatility (as a percent) | 25.00% | |||||||
Risk-free interest rate (as a percent) | 1.30% | |||||||
Expected life | 1 year 2 months 12 days | |||||||
Profit units | Kosmos Energy Holdings | Minimum | Employees | ||||||||
Significant assumptions used to calculate fair values | ||||||||
Projected turnover rate (as a percent) | 7.00% | |||||||
Profit units | Kosmos Energy Holdings | Maximum | ||||||||
Equity-based Compensation | ||||||||
Threshold value to employees, management and directors (in dollars per units) | 90 | |||||||
Significant assumptions used to calculate fair values | ||||||||
Expected volatility (as a percent) | 66.00% | |||||||
Risk-free interest rate (as a percent) | 5.10% | |||||||
Expected life | 8 years 1 month 6 days | |||||||
Profit units | Kosmos Energy Holdings | Maximum | Employees | ||||||||
Significant assumptions used to calculate fair values | ||||||||
Projected turnover rate (as a percent) | 27.00% | |||||||
Restricted stock awards | ||||||||
Outstanding unvested awards activity | ||||||||
Exchanged (in shares) | 10,000,000 | |||||||
Restricted stock awards | LTIP | ||||||||
Outstanding unvested awards activity | ||||||||
Exchanged (in shares) | 10,000,000 | |||||||
Restructuring Charges | LTIP | ||||||||
Compensation agreement | ||||||||
Compensation expense recognized | $5,000,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes | |||
Income before income taxes | $578,268,000 | $75,954,000 | $34,156,000 |
Components of the provision for income taxes attributable to income (loss) before income taxes | |||
Current | 82,489,000 | 84,618,000 | 21,148,000 |
Deferred | 216,409,000 | 82,380,000 | 80,036,000 |
Income tax expense | 298,898,000 | 166,998,000 | 101,184,000 |
Reconciliation of income tax expense and the reported effective tax rate | |||
Foreign income taxed at different rates | 266,993,000 | 127,301,000 | 73,277,000 |
Change in valuation allowance | 16,401,000 | -4,065,000 | 14,103,000 |
Non-deductible and other items | 8,957,000 | 36,664,000 | 5,669,000 |
Tax shortfall related to equity-based compensation | 6,547,000 | 7,098,000 | 8,135,000 |
Income tax expense | 298,898,000 | 166,998,000 | 101,184,000 |
Effective tax rate (as a percent) | 51.70% | 219.90% | 296.20% |
Impact of losses incurred in jurisdictions in which company is not subject to taxes on effective tax rate | 159,900,000 | 178,800,000 | 168,500,000 |
Deferred tax assets: | |||
Foreign capitalized operating expenses | 60,401,000 | 46,087,000 | |
Foreign net operating losses | 15,548,000 | 17,579,000 | |
Equity compensation | 36,711,000 | 28,112,000 | |
Unrealized derivative losses | 10,197,000 | ||
Other | 20,657,000 | 9,582,000 | |
Total deferred tax assets | 133,317,000 | 111,557,000 | |
Valuation allowance | -75,941,000 | -59,540,000 | |
Total deferred tax assets, net | 57,376,000 | 52,017,000 | |
Deferred tax liabilities: | |||
Depletion, depreciation and amortization related to property and equipment | -322,895,000 | -186,333,000 | |
Unrealized derivative gains | -92,675,000 | ||
Total deferred tax liabilities | -415,570,000 | -186,333,000 | |
Net deferred tax asset (liability) | -358,194,000 | -134,316,000 | |
Bermuda | |||
Income Taxes | |||
Income before income taxes | -31,787,000 | -26,492,000 | -11,651,000 |
United States | |||
Income Taxes | |||
Income before income taxes | 15,684,000 | 11,872,000 | 14,342,000 |
Components of the provision for income taxes attributable to income (loss) before income taxes | |||
Current | 27,167,000 | 14,182,000 | 21,148,000 |
Deferred | -14,403,000 | -2,665,000 | -7,908,000 |
Reconciliation of income tax expense and the reported effective tax rate | |||
Effective tax rate (as a percent) | 81.00% | 97.00% | 92.00% |
Foreign-other | |||
Income Taxes | |||
Income before income taxes | 594,371,000 | 90,574,000 | 31,465,000 |
Components of the provision for income taxes attributable to income (loss) before income taxes | |||
Current | 55,322,000 | 70,436,000 | |
Deferred | 230,812,000 | 85,045,000 | 87,944,000 |
Reconciliation of income tax expense and the reported effective tax rate | |||
Effective tax rate (as a percent) | 0.00% | ||
Statutory tax rate (as a percent) | 0.00% | ||
Ghana | |||
Reconciliation of income tax expense and the reported effective tax rate | |||
Effective tax rate (as a percent) | 36.00% | 36.00% | 36.00% |
Cameroon | |||
Deferred tax assets: | |||
Total deferred tax assets | 40,100,000 | ||
Valuation allowance | ($40,100,000) |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes | |||
Total deferred tax assets | $133,317,000 | $111,557,000 | |
Valuation allowance | 75,941,000 | 59,540,000 | |
Foreign net operating loss carryforwards | 52,400,000 | ||
Foreign net operating loss carryforwards expiring in 2014 | 800,000 | ||
Foreign net operating loss carryforwards expiring in 2015 | 9,400,000 | ||
Foreign net operating loss carryforwards expiring in 2016 | 35,500,000 | ||
Foreign net operating loss carryforwards expiring in 2021 | 600,000 | ||
Foreign net operating loss carryforwards not expiring | 6,100,000 | ||
Morocco | |||
Income Taxes | |||
Total deferred tax assets | 28,900,000 | ||
Tax rate applicable relating to tax holiday (as a percent) | 0.00% | ||
Period of income tax holiday from date of first production | 10 years | ||
Applicable foreign statutory tax rate (as a percent) | 30.00% | ||
Valuation allowance | 28,900,000 | ||
Cameroon | |||
Income Taxes | |||
Total deferred tax assets | 40,100,000 | ||
Deferred tax assets written off | 40,100,000 | ||
Valuation allowance | 40,100,000 | ||
Ireland, Mauritania, Morocco, Senegal and Suriname | |||
Income Taxes | |||
Net change in valuation allowance on deferred tax assets | $16,400,000 |
Net_Income_Loss_Per_Share_Deta
Net Income (Loss) Per Share (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||
Net income (loss) | $279,370 | ($91,044) | ($67,028) |
Less: Basic income allocable to participating securities | 3,286 | ||
Basic net income (loss) allocable to common shareholders | 276,084 | -91,044 | -67,028 |
Diluted adjustments to income allocable to participating securities | 58 | ||
Diluted net income (loss) allocable to common shareholders | $276,142 | ($91,044) | ($67,028) |
Weighted average number of shares used to compute net income per share: | |||
Basic (in shares) | 379,195,000 | 376,819,000 | 371,847,000 |
Restricted stock awards and units (in shares) | 6,924,000 | ||
Diluted (in shares) | 386,119,000 | 376,819,000 | 371,847,000 |
Net income (loss) per share: | |||
Basic (in dollars per share) | $0.73 | ($0.24) | ($0.18) |
Diluted (in dollars per share) | $0.72 | ($0.24) | ($0.18) |
Outstanding restricted stock awards excluded from the computations of diluted net income per share (in shares) | 4,400,000 | 13,900,000 | 15,300,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 14, 2011 | |
Commitments and contingencies | ||||
Rent expense | $4,600,000 | $4,100,000 | $4,300,000 | |
Jubilee UUOA | ||||
Commitments and contingencies | ||||
Unit interest after redetermination process (as a percent) | 24.10% | |||
Operating leases | ||||
Future minimum rental commitments | ||||
2015 | 3,260,000 | |||
2016 | 3,158,000 | |||
2017 | 3,223,000 | |||
2018 | 3,323,000 | |||
2019 | 3,131,000 | |||
Total | 16,095,000 | |||
Atwood Achiever drilling rig contract | ||||
Offshore drilling rig contract commitments | ||||
Drilling rig contract period | 3 years | |||
Initial rig rate per day | 600,000 | |||
Optional extension period | 3 years | |||
Number of rig slots taken by third-party | 2 | |||
Estimated number of days of rig slots assigned to third party in 2015 | 130 days | |||
Estimated Number of Days of Rig Slots Taken by Third Party Year Two | 30 days | |||
Future minimum rental commitments | ||||
2015 | 139,825,000 | |||
2016 | 199,920,000 | |||
2017 | 146,370,000 | |||
Total | 486,115,000 | |||
Rig rate per day | $595,000 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 12 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jan. 31, 2015 |
Restricted Stock Awards and Restricted Stock Units | ||
Subsequent events | ||
Compensation expense not yet recognized | $80.20 | |
Period over which compensation expense is to be recognized | 1 year 7 months 10 days | |
Subsequent event | Service Vesting Restricted Stock Awards And Restricted Stock Units | LTIP | ||
Subsequent events | ||
Granted (in shares) | 1.7 | |
Subsequent event | Market/Service Vesting Restricted Stock Units | LTIP | ||
Subsequent events | ||
Granted (in shares) | 3.3 | |
Subsequent event | Restricted Stock Awards and Restricted Stock Units | LTIP | ||
Subsequent events | ||
Compensation expense not yet recognized | 46.8 | |
Period over which compensation expense is to be recognized | 3 years |
Schedule_I_Condensed_Parent_Co1
Schedule I Condensed Parent Company Financial Statements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $554,831 | $598,108 | $515,164 | $673,092 |
Prepaid expenses and other | 25,278 | 27,010 | ||
Total current assets | 1,010,476 | 734,961 | ||
Deferred financing costs, net of accumulated amortization of $6,488 and $3,300, at December 31 2014 and 2013, respectively | 48,753 | 40,111 | ||
Total assets | 2,972,766 | 2,345,826 | ||
Current liabilities: | ||||
Accounts payable | 184,400 | 94,172 | ||
Accrued liabilities | 201,967 | 115,212 | ||
Total current liabilities | 448,771 | 219,324 | ||
Long-term debt | 794,269 | 900,000 | ||
Shareholders' equity: | ||||
Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at December 31, 2014 and 2013 | ||||
Common shares, $0.01 par value; 2,000,000,000 authorized shares; 392,443,048 and 391,974,287 issued at December 31, 2014 and 2013, respectively | 3,924 | 3,920 | ||
Additional paid-in capital | 1,860,190 | 1,781,535 | ||
Accumulated deficit | -494,850 | -774,220 | ||
Accumulated other comprehensive income | 767 | 2,158 | ||
Treasury stock, at cost, 5,555,088 and 4,400,135 shares at December 31, 2014 and 2013, respectively | -31,072 | -21,058 | ||
Total shareholders' equity | 1,338,959 | 992,335 | 1,028,906 | 1,020,726 |
Total liabilities and shareholders' equity | 2,972,766 | 2,345,826 | ||
Parent company | ||||
Investment in subsidiaries (as a percent) | 100.00% | |||
Current assets: | ||||
Cash and cash equivalents | 165,894 | 35,092 | 132,574 | 352,872 |
Receivables from subsidiaries | 154 | |||
Prepaid expenses and other | 435 | 524 | ||
Total current assets | 166,483 | 35,616 | ||
Investment in subsidiaries at equity | 1,474,105 | 955,460 | ||
Deferred financing costs, net of accumulated amortization of $6,488 and $3,300, at December 31 2014 and 2013, respectively | 4,163 | 5,950 | ||
Total assets | 1,644,751 | 997,026 | ||
Current liabilities: | ||||
Accounts payable | 35 | |||
Accounts payable to subsidiaries | 3,761 | |||
Accrued liabilities | 11,523 | 895 | ||
Total current liabilities | 11,523 | 4,691 | ||
Long-term debt | 294,269 | |||
Shareholders' equity: | ||||
Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at December 31, 2014 and 2013 | ||||
Common shares, $0.01 par value; 2,000,000,000 authorized shares; 392,443,048 and 391,974,287 issued at December 31, 2014 and 2013, respectively | 3,924 | 3,920 | ||
Additional paid-in capital | 1,860,190 | 1,781,535 | ||
Accumulated deficit | -494,850 | -774,220 | ||
Accumulated other comprehensive income | 767 | 2,158 | ||
Treasury stock, at cost, 5,555,088 and 4,400,135 shares at December 31, 2014 and 2013, respectively | -31,072 | -21,058 | ||
Total shareholders' equity | 1,338,959 | 992,335 | ||
Total liabilities and shareholders' equity | $1,644,751 | $997,026 |
Schedule_I_Condensed_Parent_Co2
Schedule I Condensed Parent Company Financial Statements (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Deferred financing costs, accumulated amortization (in dollars) | $33,389 | $24,976 |
Preference shares, par value (in dollars per share) | $0.01 | $0.01 |
Preference shares, authorized shares | 200,000,000 | 200,000,000 |
Preference shares, issued shares | 0 | 0 |
Common shares, par value (in dollars per share) | $0.01 | $0.01 |
Common shares, authorized shares | 2,000,000,000 | 2,000,000,000 |
Common shares, issued shares | 392,443,048 | 391,974,287 |
Treasury stock, shares | 5,555,088 | 4,400,135 |
Parent company | ||
Deferred financing costs, accumulated amortization (in dollars) | $6,488 | $3,300 |
Preference shares, par value (in dollars per share) | $0.01 | $0.01 |
Preference shares, authorized shares | 200,000,000 | 200,000,000 |
Preference shares, issued shares | 0 | 0 |
Common shares, par value (in dollars per share) | $0.01 | $0.01 |
Common shares, authorized shares | 2,000,000,000 | 2,000,000,000 |
Common shares, issued shares | 392,443,048 | 391,974,287 |
Treasury stock, shares | 5,555,088 | 4,400,135 |
Schedule_I_Condensed_Parent_Co3
Schedule I Condensed Parent Company Financial Statements (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Costs and expenses: | |||
General and administrative | $135,231 | $158,421 | $157,087 |
Interest and other financing costs, net | 45,548 | 47,590 | 65,425 |
Other expenses, net | 2,081 | 3,512 | 1,475 |
Total costs and expenses | 304,470 | 776,199 | 636,945 |
Income before income taxes | 578,268 | 75,954 | 34,156 |
Income tax expense | 298,898 | 166,998 | 101,184 |
Net income (loss) | 279,370 | -91,044 | -67,028 |
Parent company | |||
Costs and expenses: | |||
General and administrative | 88,789 | 84,306 | 93,472 |
General and administrative recoveries-related party | -78,880 | -67,865 | -82,370 |
Interest and other financing costs, net | 20,559 | 9,997 | 542 |
Other expenses, net | 1,319 | 54 | 6 |
Equity in (earnings) losses of subsidiaries | -311,157 | 64,552 | 55,378 |
Total costs and expenses | -279,370 | 91,044 | 67,028 |
Income before income taxes | 279,370 | -91,044 | -67,028 |
Net income (loss) | $279,370 | ($91,044) | ($67,028) |
Schedule_I_Condensed_Parent_Co4
Schedule I Condensed Parent Company Financial Statements (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income (loss) | $279,370 | ($91,044) | ($67,028) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Equity-based compensation | 79,541 | 69,026 | 83,423 |
Other | -3,875 | 4,916 | 7,890 |
Changes in assets and liabilities: | |||
(Increase) decrease in prepaid expenses and other | 1,732 | -16,540 | 3,443 |
Net cash provided by operating activities | 443,586 | 522,404 | 371,530 |
Investing activities | |||
Net cash used in investing activities | -347,679 | -324,133 | -402,662 |
Financing activities | |||
Net proceeds from issuance of senior secured notes | 294,000 | ||
Purchase of treasury stock | -11,096 | -13,101 | -8,378 |
Deferred financing costs | -22,088 | -2,226 | -8,418 |
Net cash used in financing activities | -139,184 | -115,327 | -126,796 |
Net increase (decrease) in cash and cash equivalents | -43,277 | 82,944 | -157,928 |
Cash and cash equivalents at beginning of period | 598,108 | 515,164 | 673,092 |
Cash and cash equivalents at end of period | 554,831 | 598,108 | 515,164 |
Parent company | |||
Operating activities | |||
Net income (loss) | 279,370 | -91,044 | -67,028 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Equity in (earnings) losses of subsidiaries | -311,157 | 64,552 | 55,378 |
Equity-based compensation | 79,741 | 69,101 | 83,423 |
Amortization | 3,188 | 3,017 | 283 |
Other | 269 | ||
Changes in assets and liabilities: | |||
(Increase) decrease in prepaid expenses and other | 89 | -149 | 19 |
(Increase) decrease due to/from related party | -3,915 | 4,134 | -1,531 |
Increase in accounts payable and accrued liabilities | 10,593 | 794 | 136 |
Net cash provided by operating activities | 58,178 | 50,405 | 70,680 |
Investing activities | |||
Investment in subsidiaries | -208,879 | -133,066 | -275,070 |
Net cash used in investing activities | -208,879 | -133,066 | -275,070 |
Financing activities | |||
Net proceeds from issuance of senior secured notes | 294,000 | ||
Purchase of treasury stock | -11,096 | -13,101 | -8,378 |
Deferred financing costs | -1,401 | -1,720 | -7,530 |
Net cash used in financing activities | 281,503 | -14,821 | -15,908 |
Net increase (decrease) in cash and cash equivalents | 130,802 | -97,482 | -220,298 |
Cash and cash equivalents at beginning of period | 35,092 | 132,574 | 352,872 |
Cash and cash equivalents at end of period | $165,894 | $35,092 | $132,574 |
Schedule_II_Valuation_and_Qual1
Schedule II Valuation and Qualifying Accounts (Details) (Allowance for deferred tax asset, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for deferred tax asset | |||
Changes in valuation and qualifying Accounts | |||
Balance at the beginning of the period | $59,540 | $63,605 | $49,502 |
Charged to Costs and Expenses | 16,401 | 28,040 | 14,103 |
Deductions From Reserves | 32,105 | ||
Balance at the end of the period | $75,941 | $59,540 | $63,605 |