KOS - Earnings call transcript Q3 2017

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Operator

Good day everyone and welcome to Kosmos Energy's Third Quarter 2017 Conference Call.

Just a reminder, today's call is being recorded. At this time, let me turn the call over to Neal Shah, Vice President of Finance and Treasurer at Kosmos Energy.

Neal Shah

Thank you, operator and thanks to all of you for joining us today. This morning, we issued our releases regarding our third quarter earnings, which is available on the Investors page of the kosmosenergy.com website. XX-Q third our SEC with filing today. later anticipate for quarter the the We

the are Officer; call and on me Joining today Officer; Chief Officer. Maxted, Chambers, Chief Andy Brian Chief Tom Exploration and Financial Executive Chairman Inglis,

looking may earnings to SEC forward-looking Before that refer call in outlined statements also based our have this statements filings. at time, risks Andy. GAAP The read and with, the mention current we prepared been important forward-looking filings. I'd the believes expectations. These are non-GAAP certain metrics. release measures associated with in these certain conference the our financial are our started, SEC At discussion. in on this get our information We and such provided accordance like in the includes contained are with over measures in and to conjunction in in turn the to Company's measures financial be and Management performance in statements included referred should industry to future commonly our call to addition I'll in historical and

Andy Inglis

an our accretive. solidified and our Thanks the exploration We immediately for of superior on acquired at maintained focus has good Mauritania growing and everyone. investors to delivering while balance Equatorial our position company that a production Senegal sheet. strengthening is Kosmos. strong fields, our our returns and morning production Neal We been the partnership and TEN ramped and our in year with BP Guinea value in XXXX

to our continue attributes next Kosmos few us differentiate shareholders. deliver to returns the three superior key to will Over years enabling

prospects company accessed process months. unparalleled size. using of rigorous XX drilled and of quality four our that been disciplined opportunity First, we Each are planned build be an portfolio next in in impact to and scale the a high evaluated has resulting for exploration a

counter continue which all and producing position Second defined of robust are cost. top quartile growth in on to from we resources company have we and We portfolio time their as as portfolio scattered first opportunities invest supply to strong characterized liquidity full our when been. allowing financial breakeven of it and are maintain our ever us remains to exploration costs assets at by you lower. which third, our strong cycle grow has a combination would update cyclically like the And

of with our position Suriname, Tome Senegal Our deliver opportunities a providing of success. significant and combined very is acreage program Sao Mauritania promising to

result focused means to best to of Brian the turn in well activities. the week, the well well exploration While results in deliver now we our implications be as ongoing exploration program everyone to over Mauritania. only is successfully which call drill exploration in the will and of frontier unlikely discuss detail I'll to more we high-quality goal the announced is Hippocampe-X our Last prospects.

Before on business. of I provide you the our rest with an update

Brian Maxted

Thanks, Andy and good everyone. morning,

disclosed press in we haul. Hippocampe-X dry a was As week release last the

of a reservoirs Cenomanian reservoir by from mature the test discoveries. kilometers XX Senegal. Albian from the Tortue charge Approximately Hippocampe low last our was significant likely fan. other different charge out kilometers Along the and on well systems. a in source suggested portion to of a Hippocampe-X was fully and XXX of basin second combination key failed Each analysis outboard evaluate our is of due deeper of acreage The of mostly includes Valanginian, charged Neocomian was well Hippocampe-X Lower the lack from four to ongoing fairway different fairway designed more and step a Marsouin. designed post Our moment. access, floor the the kitchen. well tests this part prospects independent offshore to of and a Mauritania western the which

will Senegal related flows heat south proved In in chance for a several present respects, lower that anticipated geology understanding or we correct. our our further of stronger Here oil. liquids to acreage

the expectations Lower proven quality. and outcome encountered both intervals prognosis from on to terms in actual sands thickness nearly were target the the XXX our Yakaar floor in exceeding the the Cenomanian This the of the discovery. kilometers extent extends as Firstly, basin and fan the well importantly of upper well Albian Hippocampe-X fairway as

successfully Given also were wells other well exploration. the that more extends quality for with the they the The buried than of the depth reservoir to-date. outcome in fact targets coupled drilled window also deeply commercially

to grade oil our Secondly, likely compared source. predicted and discoveries southern test western that consistent by charged pre-drill liquids our we're acreage in This we thesis thermal also the encountered Mauritania and along and with a to Senegal. of the find lower more our is flank deeper

the in with mentioned, is the combination while low petroleum hydrocarbon source have deeper believe Albian days brines continuing, vertical regime the of early of factors less the access Blended Cenomanian lack part more our the prospect it's we buoyancy I to filled finding We Together in the from and believe verticals to presence well of several maturity due charge to as localized ensured mobile to lean its migration. difficult. announces sands Neocomian barriers gas. the these charge reason rock due liquids source drivers still the reservoirs access for no of this greater post shows not and the oil this another seals, of migration, and Valanginian, system. most fairly on gravity and a likely upper coupled i.e. in including a with may and pressure As prevailing

analysis well post false on focused Our explaining the anomaly. also has positive AVO

basin, indicator. in to the Hippocampe to part predictor. the in the fairway. of of this This it is first the highly only It being proven hydrocarbon reliable at seismic here's be basin. signature part velocities has lithology AVO is and believe The another believe, rock of due instead properties in the we've we We encountered differences

is greater is will supported fundamental important prospects, when need an our not calibrated use the the we to is as important valid by attributes approximate to geophysical exploration two need employed tool This what by it While that ensure be with continue the AVO of into remains forward. wells. Where going an be the particularly geology. to de-risking and caution

Turning Mauritania in and Senegal. to the program forward

of As of forward the also a independence primarily charge our to but prospects, remains program our reservoirs in result relation unchanged.

independent seals spuded targeted within Lamantin, and results next a reservoir age Cenomanian Our rocks at target this reduce is different best the Campanian any days. with petroleum charge well, and model test source separate expect Albian an should younger we oil and finding we Lamantin well from above our which reservoir and is the source at reservoir different in oil virtual of risk. rocks. weekend system. deeper not It is chance uniquely in and The expect over the migration on source not do dependence located XX mature the remains major

Although another AVO the significant has by step this calibrated well approximately is well XX away. out, kilometers

of in a calibration the Yakkar. the mature from X billion Tortue suggesting wells. similar test the geothermal as reservoir and encountered the discussed significantly. Requin-Tigre the quarter the down is in giant billion for target. resort prospect Yakkar geological update exploration in of past, rocks on fan be and this setting lower oil vertical thrust Valanginian, has want dip grow upper you and the gas the trend believe Following last Cenomanian Lamantin, continue nearby potential Yakkar with from to test XX there successful we at barrel that to during full to this With migration Neocomian progress AVO we've I discoveries we grade basin basin you gas and fairway to the offsetting higher The therefore from to good into sort rest the conclude, X be facilitating and well cf benefit we to expect as and Albian to Lamantin, super will To located the Tortue long our the deep Requin-Tigre located in of provide same an portfolio.

drilling that spud our high we to XXX prospect. to basin Suriname, reservoir in drill evaluating the followed year in prospect Anapie XX. additional quarter expect test geological we're barrel both of to second proved one the involves negative million half XXXX positive of in XX our oil of On we XX Turning geophysical This we a and on drilling XX high by next plan begin early Block for first On plan in structural-stratigraphic basin. one two graded We to XX year. in high second along flank Block quality prospects and the the strapped the wells exploration number alongside in Suriname on of as models. and Block a Block Recent next Anapie are cretaceous partners to XXXX. validation

presence process as proprietary Sao traps. square quarter, in potential through Secondly last XX,XXX of approximately fairways large early as in seismic confirming particularly of well the plate the of multiple are completed these acquisition the encouraging for structural-stratigraphic we kilometers seismic. combination stacked reservoir volumes The results Tome number very

prospectivity evaluate We expect drilling to this in XXXX. ahead to continue of through next year planned

Given already as the this about demonstrated of system we the working previously presence of petroleum islands through very we've excited the in to something continue opportunity. oil be we've reported

most opportunities exploration that Senegal they're enable with drilling to the and Mauritania two decade. Suriname in expect through three inactive of each follow-on We and high and maturing in or cost for next in of impact Tome XXXX exploration XXXX well wells the together with year explorer wells the Sao respectively

the identify with bear both XXXX I ventures new Kosmos In over together to pursue independently and alliance. the strategic addition, the call together for with back Andy. and countercyclical ideas, partnership knowledge, of to turn initiatives to capabilities strongly opportunities new and soon. to we new edge At exploration combination and our big this BP as our sharing leading part beyond continue leveraging to actively exploration access our We're we time, efforts in in as expect will fruit Kosmos of drilling

Andy Inglis

milestones ruling a or Jubilee the day. in assets milestones growth paved drill for We of Brian. averaging regard Related focus starting been XXX,XXX the partnership the fields. the XXXX. existing to resources. and per Jubilee, of achieved we've way recently for approval during strong Greater the XXXX in Law of and barrels sales TEN both position from Sea received XXXX. quarter also to September growth our development the growth producing Full approximately portfolio has received Tribunal fields oil from Thanks, with additional wells In Field ITLOS late two discovered These and which of production for last important the the in my to favorable International turn Ghana, to Program I'll Development assets

of increase partners We've to issue. year in important shutdown foundation XX our of been existing Program after two a working of to TEN, extends weeks partnership year volume allowing increase received work FPSO at in production, late now limited stabilization early resume for and the an Alongside original have end. in ensure stock. to ruling field and around agreed reserves XXXX possible expect favorable the to the to approximately Mahogany the downtime. levels average this At Teak It to boundary the the Development our resolving to up of approval With in is Full the and drilling barrels end ITLOS include XX,XXX is fields. turret addition short with additional field shorter to we produced for it the four expected a to third early it Field and Kosmos of oil for we weeks the gross and Jubilee sales by gas now government the rotation of minimize continues capacity. XXXX is turret. allows the during per to drilling resume unit towards book to However, result that of year, in quarter it establishes price the shutdowns delivered bearing shutdown with on and hard the as as September shutdown on to approximately day periods production partners the wild FPSO vessel XXXX. From the completion Planning ongoing the the

by Kosmos assets. the a technology add As I of Guinea relationship these [ph] has assets. weeks in high taken source Principe team portfolio and two opened years our increases also production little our of nearly entry bring differential Members discussed basin Sabe has our our ago, of maximize announced discovered ago special fields production - cost, field Sabre place. and [ph] basin through result, these margin and modern on Equatorial Remuni a and We knowledge exploration position. call the producing Kosmos as XX establishing our strategic we exploration an was value assets new which XX%. and The apply of additional the very to Ekume low production exploration current thinking almost with

flow on the our we financial acquire strong targeted cash position attractive what very significant assets Energy generate exploration while is Triton enhances Triton We production on resource Kosmos and transaction upside focus the with valuation accretive. and drilling. us optimizing to defined the free to partnership operations do Our allows focuses financial metrics. which best The asset immediately infill through improves and

number Farm-Out is We world underpin our announced on approximately the out development just designs time. were we main fill has Tortue-X which you constrained closing results flow floated which made day equipment XXX expect the low The before drawed we drill at confirmed that Initial with the is well. remind by end pre-FID rate liquefaction LNG fluid the one providing collected is stem a samples Senegal they've The impurities. per the connected aligned test to for you year. in development after continues equivalent validating DST scheme this finalizing current or XXXX well producing governments that well schemes. per assumptions a during the year achieve together importance to taken the at XXXX. together hours rate with engineering feet on Tortue now to results right this is and and well DST the from our is of and a to year liquefaction With of suited believe The period the and of projects. compared timely bringing In of during capable to completed the wells indicate well work and gas confirm minimal well high ongoing connected of feet Greenfield BP cubic to the well pressure per with sustained million of rates approximately work FID that's engagement the To result both how already been a confidence that DST well in one given we in control and is volume which suited cost the August, currently right work to concepts. have for later reach low development that expected consistent invested. I'll ICA, XX approve Tortue day. pre-FEED update standard the Tortue extended partnership resource partner fashion project, we levels The volume of regard gas well Tortue class gas cubic for our rapidly minimal liquid to positive just combination high large first significant plans ago the test progress. in XX,XXX why lowest man of full extensive agreement In a Mauritania late of demonstrating on million and

Senegal. our as in for summary, to and agenda with we in strong Mauritania well recently gas So, our producing growth acquisition our have assets strengthen EG as clear a path resource from in first discovered

over exceed cash million announced $XXX flow guidance and year already third I'd Lastly, on discuss to end to through financial our of like $XXX transaction. million of track full the recently delivered are strong excluding we've the of the our quarter EG position free

to through counter cycle free enviable liquidity cash and generation and Our have us flow advantages cyclically. solid opportunities invest of the take allowed

recent Guinea I'll turn is clear third Tom our call Our of quarter in Equatorial entry example our discuss into over to a the results. action. to strategy now

Tom Chambers

good Andy you, morning, Thank everyone.

approximately begins to plan. full free other and we continue allocation to liquidity, to cash execute $X.X returns, between reaches quarter We We capital our total facilities exited set liquidity our with with debt. by cycle RCF improved, cash. with Through to and regard the living headroom debt With both including the our and we period on operators. billion within robust the net capacity strong using in our E&P the significant continue means our growth to and from our combined third of rigorous plan flow commitment prices to commodity RBL available have facilities of apart will recently well independent million Our facilities maintaining our RBL financial Kosmos strength corporate liquidity process plan in amortization we continue as $XXX $XXX RBL RCF quarter, repaid extend million RCF the ensuring maturity. or exited

incremental adding incorporating EG closes. assets RBL anticipate capacity transaction also by the We the once

results per the three oil liftings, two oil in $XX crude a sold reflects Now line quarter revenues million our I'll price When We of our quarter from with and $XX.XX for Jubilee the with hedges, finished sell of to revenue million, excluding our generated second quarter. the guidance. of turn approximately settlements. to the TEN quarter. one it from This $XXX derivative in you XXXX add barrel realized

in compared XXXX the cargoes to of up same a two the lifting were quarter. revenues as more quarter in quarter Third result

quarter, $XX diluted affect for share. share, million we loss generated third a or loss impact adjusting $XX the hedging of a of company or million including loss, net that The mark-to-market net million the $XX $X.XX per comparability, $X.XX items one-time per generated diluted of

cost KBSL. totaled activities quarter, in expense which charges expense Also exploration difference incurred the associated seismic the non-cash the with covered $XX.XX for were of included and net the regular charge in and $XX.XX was with million the the transaction. attributable the of $X offset of geologic geophysical ongoing quarter Suriname. and approximately was primarily attributed between Farm-Out Exploration side, million second well million revise expense recoveries. rate of $XX million in Mauritania, other $XX per expense third our most cost BP $XX versus and or operating related per remaining On costs quarter and the $XX million to operating third in million of in or expense barrel This under Sao to contracted million $X Hippocampe-X barrel Tome quarter $X million was to partnership operating associated $XX for the rate to procedures, [indiscernible] insurance which by The for included the XXXX.

occur Our activity the administrative were the and allowing per under Senegal. non-cash expenses Senegal joint to venture third our inclusive which compensation. of unwind we consolidation equity the JV, fourth the during a expense three BP with continues $X was volatile quarter accounting included in million. accounted balance General were to the the of supporting in prices. million deferred be million Taxes approximately method. agreed quarter expect and our quarter liftings. benefit of a Hedging based depreciation barrel $XX.XX and million of for approximately now million $XX We've to normal a $XX in proportionate strength and in sheet, to quarter $XX environment play and second oil or Depletion $X for benefit key role consistent

solid initiatives a As XX the million Kosmos and now which barrels to we our like planned allows fund with financial years. deliver plan We our shareholders. balance work volumes out operations and flow XXXX. to open of of we operator and and within our projected summary, to September questions. to we'd hedge us EG prepared project sheet lock-in payback to With to to that concludes our for our that, XX, to flexibility maintain from had the ensure the program, cash hedged enhance approximately our value we XXXX continue remarks of consistent ongoing that In call execute for preserve strategy three growth the

Operator

Charles Instructions] [Operator Rice. line first of comes Meade Please proceed the with with your Johnson question. our question from

Charles Meade

this of but it's prospects. we your after you're can we're view prospects how dry these then and I'm same of days certainly of risks don't recognized changed basing. dealing about the that bit perhaps the median least the early hole have seems with but you refer the size have limitations share visuals the and view high perhaps perhaps what to prospectivity and about a that that like Brian, I more well recognized this risk, best of can they Hippocampe the it this post at grade I point any the independent you. hoping we talk the these how what learned you to, is my little all it thinking also has be chute in and for of maybe with

on little elaborate there? So, bit comments can just prepared your you

Brian Maxted

Certainly, Charles. I'll happy be to.

point note of first drilling first to do, program to independent of the we is in prospectivity test the that defined as this note. of deliberate we've this in all that's and the all I current want this point elements phase we is to think initial the petroleum the what to in because exploration system out see that's board,

read rest or throughs to limited the the So, Hippocampe of the zero. prospectivity from

So, at as remarks I mentioned all. in prepared the program isn't the changing

big probably The first out our our dry And good second point we've this hole, step obviously far consistency into success the and confirming has how most expect to size note, remember several and system and across one XXX we're difficult is whilst basin. thus to was it had this long to was and significant basin this to be petroleum wide of very kilometers extent. talking is, kilometers is perfectly its hundred a that

reservoir didn't work some went working fact the right, for that able AVO west the AVO, saw - but we fully now. petroleum it information Mauritania. the no would better that early, So, we the Northern we drilled didn't the to one or that both enclosing geographically and give have it, and is the those - reasons so to changes understanding be, and work geological changes drilling through do the part we believe independent of believe do different and density us both program next we they first feeding the Hippocampe was objectives then and particularly do And explain we're here them sonic right different thing further wells question in there a to really well have or and that that rocks question we they're outboard related call, our force all the it setting to-date wells us in we they the geologically and the the we in within different we'll part than mentioned. was major I this or how it on right and and was be relative the just on as in qualities surprise, by source was itself I we in rocks that objectives one base in for variations felt significant the basin, sense get system offsetting and this calibrated stratigraphically is the will across We more of and reservoir all of got to And well of shales that as The mentioned the our north whilst started. the was. geophysical where understand

on across prospect. to in It prospectivity and that of much hub but area, this it's I touch delineated significant times many you're the to-date. here This was that think defined So overall much in to are test. and where discovered last is learn through we basin so that obviously holes understanding just this translate occupational you dry results degree going from an which wells there was we've will follow-on how than more success a you the or basin the of significantly to - add think hopefully just big three big potential absolutely had on drill is here a do two dry point often successful the holes got I to to test and significant remaining from more still potential more and case resources next our it our potential to hubs the significant potential see and on continuing basin to enhancing across that we a of the years the lot

Charles Meade

sorry? sharing. great. that's I'm for Thanks Brian,

Brian Maxted

your make question, Charles. answers No sure to that wanted just

Charles Meade

there does, lot small a and great your It quick of on just follow-up. elaboration one detail

worse. in in modeling your Lamantin thermal Hippocampe, or comments you the that at gradient or found just was lower line for was mentioned You what it was prepared your right that better consistent

Brian Maxted

the with model switching Yakkar that Hippocampe and that why that the geological It's are Cenomanian, underpin part went for we're from Lamantin charging gas was after source consistent gradient this, and area you that some one rocks lean which through we we absolutely that source the And on/off possible the that right of detail the Albian the confirmed prospect obviously while could in in not Turonian it's argue explaining using through in were Mauritania line actually, importantly read geothermal key Northern oil. itself. the in the and result rocks

Charles Meade

Great. Thank Brian. you,

Operator

you. Thank

Our with question. the Bob next Morris Please of Citigroup. question your line with comes from proceed

Bob Morris

to my Andy reach, the there talked indicated a got you'd reach level? XXX,XXX to one you'd question ultimately have likelihood with about approval, expanding that ITLOS sort get production at first how day that TEN, of what to regard can and play which that the you've to does that is the further barrels capacity now point facilities you in

Andy Inglis

Yes, thanks Bob.

to partnership I anticipated well first We to the build out for procuring do XXXX, is think do beginning the objective at a early the TEN in starting the commence of drilling we're the stock. to intend that to on rig that year.

has of to but liquid at tested I a throughput capacity of we full are around have think capacity plate the XX,XXX that. day, the which test ultimately It is name stock FPSO. than a comments higher read then building the the rates well barrels

and test partnership hopefully to beyond with able and think will be build be drilling of I to stock objective at FPSO then the is it to able test it to then the So, to well capacity be successful the that. the

is I think So, that think potential from through TEN real production the there's I in real for message XXXX. improving XXXX

Bob Morris

Okay, understand they're to good determine prospects but better indicating to high AVO across given on distance be the to you're that AVO the figure the are question give you understand what to to AVO there and still ability just is you going likely out mentioned not that studying better the and to into better insight lithology elsewhere to and basin. from try the this, Hippocampe, that is, is you other my grade as that that second what learn you how hydrocarbons indicated that,

Andy Inglis

Yes, like Brian think, you big I'll the frank and I message take calibration. the about there's is if cover that away that AVO from one positive the false let to

Yakaar have that calibration Lamantin away, good of given in the calibration is slope the Requin-Tigre We analog so up Tortue. good then the the in well the about area and feel Lamantin. on the We really about kilometers XX we feel setting

is as maybe from a use So done is, with as did of XX away as therefore able gets Brian? challenge but point have the big I then is to tool believe importance But be and as which two going were, calibrate think I and nearest itself we to kilometers my away to as to be of in the basin takeaway the step will it calibration up, the non-geologist work more you we're to calibration to is there Hippocampe calibration and more now drilled be means the it more predictable. the more going become that

Brian Maxted

it into in false I hit about head close we AVO, AVO improve Hippocampe-X is in the response. we've drives and rock It things, other losses filled we didn't the to what the It's properties that a pre-drill understand subtle recognize. sand brine it been does replicate and positive think, Andy when does far, about two hydrocarbons to you words with you there saw which so AVO the on nail difference positive there. done give able the gives and response AVO put seismic a we've and what it's a so successfully

well by sands, Lamantin kilometers that to rock, seismic of a calibrated calibration for no calibrated south And - calibration Yakaar where the similar within seismic higher it by potentially question has XX Tortue, and have velocities to is there's well the in causing velocities within bearing here but calibration and XX east occurring. we Requin-Tigre this varied key kilometers it. see driver a well of denser the hydrocarbon a is and the is response AVO So, didn't

Lamantin be indicators. time to and we those at lithology that oppose predictors hydrocarbon AVOs as So, sufficient calibration got for this point Requin-Tigre think actually we've in to true in in

Bob Morris

Thank you. Great.

Operator

Thank you.

Our your Please of with Herrlin with question proceed the line from question. Societe John next comes Generale.

John Herrlin

you cores Couple at any do Did quick Brian. the all? ones for sands wall side on

Brian Maxted

We thought, did have obviously. crucial these enough John, are we of to a that us going than why denser to rocks information they understand piece be. were helps That's we

the have post [technical got part We be analysis. our you of we analysis issues, important drill as side an in that the wall point, got will haven't difficulty] but rightly core yet

John Herrlin

on - after affiliated they I'm mistaken. long EG properties do some with correctly a if I bought any the I with remember you they has compartmentalization the it have thoughts you're did [ph] had then Okay ago Siba issues that? if think not with time because

Brian Maxted

themselves of them one injection [ph] Yes. think that mean problems in justify the caused a by ago, time of production potential a that's compartmentalization having significant but individual water early recollection compartments It there's were was well those or on many enough overlooked among was not off place - in unsweat oil it. see the and large my compartments think were demonstrated - we initial to and amount of the project value Siba long the sources pads and we in I producer alongside the injected of I undeveloped part others. in in whilst

John Herrlin

back last be the price to one Great. you don't going And for be produced to you'll able is disclose for in net selling me Are or gas what you gas and you? price. potential it what's for is gas report, on Ghana be is get couldn't

Andy Inglis

foundation gas the price Mcf which the $X.XX Post agreed is basis. a of volume on MMBtu Andy. on but $X.XX XXX Bcf MMBtu an John its gross

John Herrlin

Great. Thanks very much.

Operator

you. Thank

line of Please Warn Markets. BMO Capital question. from Brendan question next comes with proceed with the Our your

Brendan Warn

number positive if I there's been couple obviously I guess Talos think Suriname, made comments of switch recently of one to by led Exxon, a had unsuccessful you year, rows just drilling from and be both learned talk rolls second was you through terms a you in of can and from what it I just Apache sets over chasing year have quarter. you'll what earlier your next of this you

Andy Inglis

handle Brian that. Good Brendan. let I'll Great. question,

Brian Maxted

Block we then the interbasin direct partners the on the Yes, Tullow prospect. through. is is the look diversity for the to largely Brendan. is so at plays. different west we XX have that about go think you first and in working and Thanks XX these systems to on chasing play And but show directly and the the are XX. to basins with which Anapie of which of and stop the is course of there's note actually and primary in should drilled so Block reason through which acreage flanks always the to calibration the a and Exxon understanding the bold into fairway reason paths bringing part XX how when play excited that most Block good well There Block no and recent a is results XX to our into drilling positive XX charge read or XX play in for system read well know Block basin and in Guyana-Suriname story as so the you the been the the Raku XX involved Raku as borderline, the, really struggled east, we've really partners extension and part is XX we Raku. are Lisa the southern The part on through [indiscernible] that in read had the of block are is to up adjacent geophysical have so is geologic hike that Not the go so systems it stone XX is east river is the in very the further working for when no you play story recent the we just borderline point operating essentially of of doing geographically right are the southern deeper well prospect [indiscernible] working that and prospect reservoir positive, and to the of we through read direct in story a in of reservoir as is you that but Block have with art Anapie the partnership Blocks Raku know from Raku. as Block recent well

that's explain was charge see As depth another charge but didn't thought the we charge in calibrates that which I remarks to to difficult, deep area, in that be very might it reservoir expect port condensate. probably we from our either it's from or was mentioned going the it interpretation gas

So, there versus Tullow is really Exxon geophysics the so the Dependence well AVO independence good that the in the and well. certainly the we're there strong are, Anapie we in the which hopeful versus Raku and is complements they responses have story

So, we next remain year. extremely bullish and exciting about that potential that out we'll drill

Brendan Warn

the Okay back are question, thanks the signing of on and of terms where to in just Mauritania Mauritania and but come BP border Senegal development, second the to if update agreements operator that up you given the and then just up in my I know concept - already selection. or

or to catalyst we of of year end should Tortue, fourth before end expecting if quarter Just you regards in be what the sort can please?

Andy Inglis

in Yes, talk the the then sure Brendan. intergovernmental pick that about and I'll two and projects cooperation parts agreement. up

progress of select. in go on concept year announced the a the short of remarks we gas, think sort in about Mauritania first first time. period said the made since BP completing project think about And you less which around the man significant Senegal time get to to I end of they've ago, Farm-in about than is spent define my stages have all and you actually which engineering engineering XX,XXX select as appraise, It's execute, front rounds a takes BP FID, projects I really that hours the through to is got gas. if the to four it concept, significantly,

the finalize water the define the all results, to allow with to need then of back a bunch break year the break done the is timeline, of water be exact do positive border location to engineering decisions is it the we concept the the for into So comfort that us on big praise where select soil by of through completed example survey to positioned. properly taken done, we gate They've select, end. BPX DST, are in go sort

the sort So which to of that FID define do to some XX allows months is front analyze you by end of that. us of of the year the to XXXX, define end enable nine, XX. taking sort takes is engineering execute it months at will around is end select out program yearend to which XX post have gas go about done place pre-qualification and with to various vendors we

think I So, track. on we're of all that

sort think a the was that rigor did during at we us to discipline has feel decision project as absolutely to time demonstrates BP I helped the it of enormously brings the major, made BP, we me and it super right. I

agreements agreement as of process XXXX need said [technical in difficulty] remarks of by But should NOCs. intergovernmental importantly both Kosmos. my in National Have supported say, It's President's. both a engagement actually finalize of They're by to the approved cooperation now For both the FID and full more ministries, Treaty fashion the by in what its both a by aware agreement governments. timely terms allow I personal to both that assurances. the anticipated. etc. both several countries, getting those Both bureaucracy longer BP supported it of a in But agreement to degree affairs, process governments and given so novel think from including of which to absolutely say clear we is foreign requires targeting more through we year absolute taking President the process. it's I countries, end done we honest nature than sense across the and ministries forward from it's finance, the FEED that are both both can get have engagement engagement Presidents down therefore it the

yet? having it it difference. and I huge a now process all made they're a of it's but lot the of progress, BP done think is driving No, So,

Brendan Warn

lot. great. Thanks a That's

Operator

you. Thank

from with the proceed Merrill Please Bank comes your question next America of Our question. line Rafal Lynch. Gutaj with of

Rafal Gutaj

questions both two got If may. I Ghana. I've on

and the you barrels that just the a achieved quarter. in on TEN XX,XXX one First third day

Just year. to thinking back earlier in the

a when then approved is production reserve CapEx kind then you is oil Jubilee ahead QX color intentional owing that. the barrels you. further basically, on Plan. us color some continue now you the to coming And at to and Full should we could give wondered has been more end that greater XX,XXX the could I on the booking And XXXX? give first we is achieved with that the expect question some QX the pressure of issues into day, Thank about what keep plan how should incremental and drilling. of run year Development Field that also, if at associated a us that over think so field you Enyenra to the more I running little and and to rate expect bit

Andy Inglis

there, questions Rafal. of Lots

is day. regimes, the in we a that been and I the through on actually quarter we off is what injection [indiscernible] and in think to third production I that potential etc. for XXXX. we've is XX,XXX both to pressures, the the at at to barrels different improvement spend think the barrel looking becoming I which the flowing through the role new different well the ways build-up looking you've stock, fourth not The ability a level TEN XX,XXX clearly, I field in production well I up maintain getting production bottom sustain And demonstrated objective partnership production to think increase an through reservoir in think We limited to a fourth the innovative. rate important the able hand, the a that had. very actual despite optimize more of think but the can hats of seen would inability With of about being rate but to that so organization production then the the loss the quarter performance quarter. in Again, carry and real start then stock we've day

drilling coming rig know Jubilee will the is in that, both potential field there on program. real rig you we the On is full at at it see to greater We're partnership what guidance in all second accelerate initially look too spend the the to development because moment Ghana working time TEN we there. give and to do the where bringing It's XXXX have with we early Jubilee. a the to

we February for So, I guidance just about, we to reserves, production, in CapEx will think, which dimensions all XQ talked need conversations results then customary as we in the you our XXXX in from conclude those the the and our give etc. partnership

now on I awaiting ITLOS now the get full the both there's back we in great sort drilling fields Jubilee or pushing opportunity and have the rate. think of issues on the and filed business start development ports program to drilling real that production opportunity given to in

Rafal Gutaj

you. Thank Great.

Operator

Thank you.

question. Molchanov of your question the with comes proceed line Please Pavel Raymond from with next Our James.

Pavel Molchanov

Certain we've or EG, going how of run quarter. number state be more can cargos to steady quarter Is production each kind both function from to quarter? TEN On analyst been that that we Jubilee right. accustomed at works there expect to and as production a of as EG is it cargos, to with your of rate be going modeling

Andy Inglis

want the right by. received get production to on Tom? that behind think clearly - and you'll from to give perspective think give cash I be But the is cargoes. I will you you Pavel, that cash numbers we're All able flow guidance a Tom. you model going to

Tom Chambers

it expenses going for into G&A right, you operating the the the some currently on we're We're to detail you bit quarter February. have So, working what that of a Pavel. call partnership? extra that that the for give countered be to what what we're to That's the will understand cargos differently, going fact allow call through is, our at are, to the our provide next details the and we'll the way in - fourth production

Pavel Molchanov

help follow-up just I on Suriname, just is to quick prospects for XXXX. catalyst it that be next out anything then sequence year the kind to supposed should a or those Okay, we of thinking two did in spud Requin-Tigre the of mentioned about in three? you miss and spuds QX XXXX

Andy Inglis

three In the most took perspective. Requin-Tigre terms to XXXX XX well you Pavel you likely spuds which Block exploration big as the you from in wells you then say XQ. got Block an obviously of in XX docked then XQ, and exploration wells, big

Pavel Molchanov

clear. Very Appreciated.

Operator

Thank you.

Gamboa with of line David Tudor, your next and Pickering Please proceed question. the Our comes Holt. from with question

David Gamboa

keys. two have I

double we you to the just about one, check I were talking First for thought Andy something very wanted with next catalyst the clear project. you.

FID just yet. risk be range color delay, mix alongside the expect the potential you market year. and at new the second around been I think Thank to getting that ramp first and could been what haven't of good at thought comment or have field you this it announced I us that or can wondering earlier first a you potentially pace plateau being if half seen the you should we a some a price and we mentioned you. if FPSO us one, that was this was to pre-market of gas how this half expect plateau have point to mentioned the in pressure the time previous in the to year issues of mid-year production. then give TEN given wells sense and terms you, if this drill towards by the around and XXXX you that slipping the And could into expect that give second toward up that if could gas, how's within mentioned for you to be reach solution

Andy Inglis

great. solution back process following. the Tortue I Yes, rigorously concept which first. of about the David. been If select questions is Thanks go The question BP part Midstream the

for work execute solution. phase phase or etc Midstream the One is fully like was of the the to praise concept key decisions work that through define,

work that made FLNG by a carry into we've the on will end first stage i.e. of the now think we is year, so with solution the be the is decision and that on with defined of the to the vessel I the concept the that through for FLNG done. completion concept want used the what BP

brought In testing and a great out moving so, is solutions terms we know, we're to and the add market thing that really partnership. you started the going will the That we at for other BP about process portfolio. gas. be competitive global quite of to their reason a good the option of it's this a potential actually is it other take it independent have buyers it partnership in gas actually project long BP pace of is that with simple BP as one gas that in, the Clearly they have ability of Tortue and

defining so aligned absolutely balanced all companies think, that and oil marketing We're in don't well to the outcome being get terms the in I us step national the FID. BP gas process. see Ourselves, rate through I of

gave the up, second in a come the year we TEN rates first terms the earnings ramp fatter All in say to our the right. of guidance full up half but February of half of anticipate you the year. In you we as should than ramp when rather you to

David Gamboa

you. Thank Right.

Operator

Thank you.

question line RBC question. the comes of with Al Capital from proceed your Our Stanton with next Markets. Please

Al Stanton

Can an strat upside size base talking Brian, what been a sort did of mean learn couple from bit lessons or as quite Suriname of you terms about of whether past. a the was the more range can also the I learned drivers and questions Ghana X in about key it's Tullow the case we I lot barrels, about there I and worlds structural and trap [ph] trap billion the a to vintage there's of is wide. ask Lamantin? prospect? wondering were X

you've helping the in you drilling So than is the more is there AVO's. from really anything vicinity just learned that

if think prospect. I this your on confidence

Brian Maxted

Brian Al. Hi, here.

of trap - of the In and actually size Lamantin. definition very the extents shape range the and the It's terms potential good. is of primarily of the of trap

and And distribution pay, the across net driven so, the geometry potential a of the trap. particularly variation in terms net large the is trap, is really by quite which internal gross, and net pay

we quality reflects that's uncertain we're a to closing reflects recall the this volume, you then really of that thickness from a the system because range wells. south reservoir getting come much in well existing further the and for [indiscernible] as river of So Senegal site area, Lamantin in further are predicting in river to quite from is which bit its as reservoir and we're if that more really influence different north we're oppose calibrated

that's volumes range drives So of the for Lamantin. what

believe and [indiscernible]. is risk it's several the The primary the in but Campignian one get we've XX we in our the its In objective, of into in down didn't mentioned shows of the times calibration the horizon meters own mean terms dry and context Lamantin and had one because have quite a was part Which a prospects from dry and about we is properties. it things I what and above got sense geological it de-risk on got in story well holes well of a seismic have it. hydrocarbon support was, each reason hole or so the and important two that Hippocampe but hundred of geophysical the believe it context now different we The of and the couple the we other. AVO, others story to away very kilometers to the some is geophysical the story velocities rock

in sands geophysically a [technical water sands obviously the we then with Lamantin-X bearing difference. of the that And enabled that got a we and response compare those in to situation clear in and so, see difficulty] it's calibrate the us

south property much we're a we the were rock unless more Tortue, in better that kilometers Yakaar. calibrated further parameters than XX in So, got geophysical sense we've within parameters Teranga, Hippocampe. calibrated in significant the or change the Much in we the

penetrated and And with rocks the Albian will basin, we know be the a which source Hippocampe in The second haven't we so they it, is still note point we're we the they're the is is, not recall it's penetrated geological that and program Lamantin. you the We've directly prone penetrated They Lamantin Valanginian, trap. different. source the still that area story we're in to big system particular actually CT migration Campignian mature we deep of in is rocks, we there, actually in reservoir and believe dealing oil but speculative know haven't a problem it. drainage believe was in should proven Neocomian underlie

itself. story and And much the seeing prospect the geophysical and the different quite is in Hippocampe of supportive that than we're model consistent Lamantin so, geological more

reason. those So, for

Al Stanton

And prospect? will this will or the make break

Brian Maxted

for Will make Lamantin or prospect break sure. the

with different written a be dependency is this necessarily geometries. Lamantin have We if some prospects some example. track number different in along system, trend other dry for They have other won't some reservoir a of off help but

kind of we over fairway yet a will the well scale giving obviously this northern you Hippocampe test in of drilled. road, down the an So, this but which of XXX well of potential well of important possibly kilometers It there going sense a this haven't play very basin area basin. not opening to is part again other be

So, an important well for us.

Al Stanton

thank Okay, you.

Operator

you. Thank

Tullis of from comes Securities. with question. next with the proceed line your Capital question Richard One Our Please

Richard Tullis

oil to improving price. next EG Are given opportunities somewhat in Brent dollar looking to could the year exploitation there attractive even that each development back up keep going more increase production especially and acquisition tracked or Andy, the uptick all be current price? is from oil guess the Brent levels fast I with that

Andy Inglis

existing fully if we grade a XXXX ability and bring from going back we're we what you have there as see pursuing the start the understanding we're would technology we the near doing, the the that, new which high those field. new infrastructure that as right. will the to Richard exploration, data a do across which and in opportunities phases From be infill We're potential significant all But XD field mix we've from XX, SW of and prospects modern we opportunities to Yes, and XX things To through graded see some and way existing lines prospects across first. survey, surrounding shoot will rigorous of we drilling for it sure that. drilling. opportunities we it, a and to we've think about best some very well of across to seismic WS the potential blocks the want in the either drilling high make done infill tie

will So be the that's really XXXX is XXXX execution. the dart and

what recovery really has XXXX the become, of resources. So, XXXX developed about is improving the existing

to how ESPs, advancing wells lift you're conversion to you that's able focus further, is a able what gas need capacity it's can't said got that lift XXXX certain - so program do lift that's we on increasing in, so more injection, to the at As to put we the is to to call life and fluid lift water to we be on the about constrained, got the a go to today going really it's actually you of point more any it, of about gas production big it's intend be that to do. fields water

water operatorship current allows water that lifts, then and So and us the the to to wells Triton-Kosmos ESPs the optimization getting about gas obviously the increase venture from of it's' of joint to key with capacity. injection to the lift on ourselves transition of then conversion the

opportunity increasing by going opportunities well to going then product. Plenty program production is with near lift of into term field is of best so is to good the driving supplemented exploration. comment and from the go XXXX, the a the to through the phase time approach then we're today your near that capacity we're but follow infill of it and sort which up think it, I the which it So, a in to made, do is of hell continuation

Richard Tullis

and that's Thank Appreciated. all from Andy helpful that's you, me.

Operator

Thank you.

Our Kouzmanov final line with question proceed your Niki of Jefferies. comes from the with Please question.

Niki Kouzmanov

see bit Thank out on you exploration just of to you you with as to you then And confirm you can this Lamantin, think TEN, gas, can been wanted I've you, Maybe in what on? maybe recently back confirmed and media deal had side just but we in need well just you. CXX go in and of update just farm-in have give I - is CXX in early is I the gas time, gas quickly. just the soon you for rigging TEN there's the seen during treating locations go specific actual inject. gas any Kosmos might for us can if terms the start different and at which think get if on which very if a permit to to as what XXXX people to you Jubilee talking on so then Block, after about morning you more production that from this maybe about talked Block partner about sales a you this interest foundation volumes, taking but including stage

Andy Inglis

field, questions the actually identify yes, the hard is field. you have benefit [indiscernible] production to you the the impact. If to inter we clear at obviously We've the then the go very dynamic were around to losses going TEN, on around the back the do positive most when drilling look as which have the high had has to to allowed year, we over which opportunities of drill the just come a are of objectives the little us that response ones grade of to

analyses to going So, whilst well locations the the production, worse by are the positives most which to have pick early negative which having impact. and

drilling So in would those TEN allow us on well to locations are which well defined and the start early year. in

done there's both on and terms agreed So TEN, that's - no the the in associated of kind so done, gas for gas work of further non-associated was to gas be that. price

We that's have there. sales to sort of finalize gas terms that, done. of been But of already agreements in pricing on the

We you're pressures depletion the being the So you reservoir we challenges Jubilee about have in day correct. certainly as the will created ensuring be from and about take Mauritania then is right through at gas on Block there which seismic integrating planning field shooting ultimately really and Mauritania water you're Senegal, optimize the able off we're On balance. injection maintaining didn't finalized XXXX. more that the on take planning CXX know the the to that of optimization in farm-in, and gas off one, creating it

there a see I acreage, think often Mauritania around I detail as a at comment Brian program more I place it. define in same we fully with that unexplored few and us surrounding end significant think are large the potential comments. believe exploration this your permits To add is on front and basin to will we're

in seven Let's remember have the we whole only basin wells now.

as have We wells. In about leave in Is with the basin, Mauritania detail. you multiple I In to and rather two piece that's systems significant And four Marsouin the message with see get Tortue, a rocks, reservoir a Hippocampe, it that wells. of multiple acreage. source the I think that want huge into we unexplored.

beginning So, which entry is the into what battle that that position best the the at getting ourselves the is, end we're won. is acreage strategic by we at front doing ensuring when ultimately of

potential of CXX we've around itself today of drilling TF and well campaign but differential targets the is the value result our we that a knowledge when is at as see done different to on we petroleum part the we all So basin got that. we've of and TF believe this as area, of real the front work which is for also created. system aim the end optimize

to acreage expect So, of type you can build. this us continue

Brian Maxted

upper further the system part slow to window on same and I full get that. petroleum to more to got TF actually different just exploration that extended exploration than It's that area, the it's to TF the we bigger add-on exploration probably again. basin recall, just out defined it it's channel system Hippocampe the processes. is of of in system play a many that window nail imagined. think deeper continue the the no to is really previously geological board, oppose remember result of commercial I the big and a going mean The you plays it's fan in well, a mentioned of cretaceous Niki Yes, head remarks the a pursuing the by but the of as we're I

capability our the very and all essentially now. and that knowledge Albian of the much like to and early Miocene potential [indiscernible] that our its over north through all the kitchens and the this potential formed further is and is we of in a acreage to in of exploration to is But source ourselves saw to CXX terms and the part the mature continuation it good believe to basin is expand didn't see Hippocampe. going is us in the the entry program insight going we where restart cretaceous way our we get overall the it in see base, hiccups example in there and way Lamantin we bigger a CXX BP CT So, potential partner have going things from for into leverage trend the to and incumbent

opportunity it in good follow-on us So, will that Lamantin the for works. be event

Niki Kouzmanov

that to you production XXXX gas back gas and soon expecting test as into something are start is briefly very on just well? pushed so or Thank to that's much you be and TEN, going Understood.

Andy Inglis

got be the in finalized. not finalized we gas possible. sales is sales Once as said to gas I gas which agreement The be needs will needs agreement sales sale agreement be gas gas finalized the faraway price, sense, production a to gas is

Niki Kouzmanov

Thank Understood. you.

Operator

you. are call questions to to further time. back at over any would Shah for I the this closing like Thank no There turn Neal comments.

Neal Shah

the today call your in all on appreciate us Kosmos. of We joining interest you operator. and you, Thank

any reach hesitate please very have much. you to questions, you out. further don't If Thank

Operator

gentlemen. and teleconference. conclude ladies you, today's Thank This does

participation at a you have You this may Thank your your disconnect and day. lines nice for time.

Kosmos Energy (KOS) 6 Nov 172017 Q3 Earnings call transcript