Kosmos Energy Announces Third Quarter Results
Kosmos Energy Ltd. (“Kosmos”) (NYSE: KOS) announced today financial and
operating results for the third quarter of 2016. For the third quarter
of 2016, the Company generated a net loss of $59.8 million,
or $0.15 per diluted share as compared to net income of $60.3 million or
$0.15 per share in the same period last year. When adjusted for certain
items that impact the comparability of results, the Company generated an
adjusted net loss(1) of $36.5 million or $0.09 per diluted
share for the third quarter of 2016.
Commenting today, Andrew G. Inglis, chairman and chief executive
officer, said:
“With the delivery of first oil from the TEN project and progress toward
restoring full operating capability at Jubilee, our asset in Ghana has
reached an important inflection point. We are now generating the free
cash flow that will enable Kosmos to continue to grow organically. In
addition, the quality of our exploration portfolio has never been
stronger. Following our world-class gas discoveries offshore Mauritania
and Senegal, we are currently designing a multi-well drilling program,
to begin mid-2017, that we believe will target some of the largest
un-drilled exploration prospects identified along the Atlantic Margins.”
Third quarter 2016 oil revenues were $47 million versus $97 million in
the same quarter of 2015, on sales of 0.9 million barrels of oil for
2016 as compared to 1.9 million barrels in 2015. Third quarter 2016 oil
revenues exclude $45 million of derivative settlements. Realized oil
revenues, including the impact of the Company’s hedging program, were
$96.49 per barrel of oil sold in the third quarter of 2016 compared to
$85.09 per barrel of oil sold in the year-ago quarter. At the end of the
quarter, the Company was in a net underlift position of approximately
1.0 million barrels of oil.
Other income during the quarter was $20 million, which is the first
payment for loss of production income (LOPI) insurance coverage
associated with the Jubilee turret bearing issue.
Production expense for the current quarter was $14 million, or $14.33
per barrel, versus $23 million, or $12.52 per barrel, in the third
quarter of 2015. The decrease in total production expense was primarily
attributable to selling one cargo during the third quarter 2016 as
compared to two cargos sold in 2015. The increase on a per barrel basis
was impacted by the additional operating costs related to the turret
bearing issue.
Facilities insurance modifications expense during the third quarter was
$6 million. These costs are related to converting the Jubilee FPSO into
a permanently spread moored production facility, which we have
previously referred to as capital costs.
Exploration expenses totaled $66 million for the third quarter, compared
to $19 million in the same period of 2015. Included in the quarter were
approximately $47 million of costs associated with the stacking of the Atwood
Achiever.
Depletion and depreciation expense for the quarter was $18 million, or
$18.84 per barrel. This was a decrease from $19.46 per barrel in the
third quarter of 2015, primarily attributable to reserve additions at
Jubilee at year-end 2015.
General and administrative expenses were $22 million during the third
quarter, an 18 percent decrease compared to the same period in 2015.
The third quarter results included a mark-to-market gain of $16.9
million related to the Company’s oil derivative contracts. At September
30, 2016, the Company’s hedging position had a total mark-to-market
value of $57 million.
We recognized income tax expense for the third quarter of 2016 of $8
million, primarily related to income tax expense in Ghana.
Total capital expenditures in the third quarter were $123 million.
Through the third quarter, capital expenditures totaled $557 million,
with the full-year 2016 forecast remaining at approximately $650 million.
During the third quarter Kosmos successfully concluded its semi-annual
bank re-determination process on our reserves-based lending facility
which resulted in a $40 million increase to the borrowing base. The
borrowing base is now approximately $1,467 million with $617 million of
undrawn availability.
Kosmos exited the third quarter of 2016 with approximately $1.1 billion
of liquidity and $1.2 billion of net debt.
Operational Update
During the third quarter, gross sales volumes from the Jubilee field
averaged approximately 91,000 barrels of oil per day (bopd). Production
during the quarter was impacted by downtime associated with the turret
bearing issue identified on the Jubilee FPSO in February 2016. This
issue required the implementation of new operating procedures, including
the use of tug boats for heading control and a dynamically positioned
(DP) shuttle tanker and a storage vessel for offloading. These new
operating procedures are working effectively, underpinning the
operator’s guidance for gross sales volumes from the Jubilee field of
85,000 bopd in the second half of 2016.
Kosmos and its partners have made good progress towards converting the
Jubilee FPSO to a permanently spread moored facility. The first phase of
this work involves the interim spread mooring of the FPSO, and includes
locking the turret and the installation of a stern anchoring system. In
early September locking of the turret was completed, and the remaining
interim spread moor work commenced in early October. The first phase of
work is on schedule and is expected to be complete by year-end 2016,
eliminating the need for tug boats currently being used for heading
control.
The partners then plan a second phase of work to permanently spread moor
the FPSO at its optimal heading, subject to government review. This
phase of work is expected to be completed in the first half of 2017 and
would require an 8-12 week shutdown. Upon completion of the second
phase, production is expected to return to the levels achieved before
the turret bearing issue occurred. These two phases of work are expected
to cost up to $150 million gross which will be accounted for as
facilities insurance modifications expense. A deepwater offloading buoy,
anticipated to be installed in the first half 2018, is intended to
restore full offloading functionality and remove the need for the DP
shuttle and storage tankers and associated operating costs.
Kosmos anticipates that the financial impact of lower Jubilee production
as well as the additional expenditures associated with the repair to the
FPSO and the additional costs of the interim operating procedures will
be mitigated through a combination of the Hull and Machinery (H&M)
insurance, procured on behalf of the partnership, and the Loss of
Production Income (LOPI) insurance procured by Kosmos. During the
quarter, Kosmos made good progress on advancing the insurance recovery
process, and coverage under both policies has now been confirmed by the
insurers. In the third quarter, we reached an agreement with our LOPI
insurers on the payment terms and process, and the agreement is now
functioning smoothly with over $40 million in claims accepted as of
October 31, 2016. Currently, the partnership is working on a similar
agreement for claims and reimbursements under the H&M policy.
In mid-August, we achieved first oil on the TEN project and the 11
development wells in the initial phase of drilling have been completed
as of early October. The field produced an average of 24,000 bopd gross
when on line during the third quarter and is currently producing
approximately 50,000 bopd gross. During startup, ramp-up of field
production has been managed along with water injection to ensure proper
management of the reservoir. Water injection has now increased to
approximately 100,000 barrels of water per day, which we expect will
allow a gradual ramp-up in oil production to test the TEN FPSO capacity
around the end of the year. Gas commissioning is ongoing with the
objective to begin gas injection into the Ntomme reservoir by year-end.
Kosmos anticipates to lift its first cargo from TEN in the fourth
quarter.
During the third quarter Kosmos began 3D seismic surveys over Blocks C8
and C13 offshore Mauritania as well as Blocks 42 and 45 in Suriname. In
October, Kosmos acquired Block C6 in Mauritania with a 90% interest and
operatorship. Block C6 offers an extension of the play and prospects
identified in Kosmos’ Block C12, and Kosmos plans to acquire additional
seismic over Blocks C12 and C6 later this year.
Recently, Kosmos reached an agreement with a subsidiary of Galp Energia,
SGPS S.A. (GALP) to farm out a twenty percent non-operated stake of the
Company’s interest in Blocks 5, 11, and 12 offshore Sao Tome and
Principe. Based on the terms of the agreement, Galp will pay a
proportionate share of Kosmos’ past costs in the form of a partial carry
on the 3D seismic survey expected to begin in the first quarter of 2017.
The transaction is expected to close prior to year-end, subject to
government approval and other customary closing conditions.
(1) A Non-GAAP measure, see attached reconciliation of adjusted net
income.
Conference Call and Webcast Information
Kosmos will host a conference call and webcast to discuss third quarter
2016 financial and operating results today at 10:00 a.m. Central time
(11:00 a.m. Eastern time). A live webcast of the event can be accessed
on the Investors page of Kosmos’ website at investors.kosmosenergy.com.
The dial-in telephone number for the call is +1.877.407.3982. Callers
outside the United States should dial +1.201.493.6780. A replay of the
webcast will be available on the Investors page of Kosmos’ website for
approximately 90 days following the event.
About Kosmos Energy
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 development projects
offshore Ghana, large discoveries offshore Mauritania and Senegal, as
well as exploration licenses with significant hydrocarbon potential
offshore Portugal, Sao Tome and Principe, Suriname, Morocco and Western
Sahara. As an ethical and transparent company, Kosmos is committed to
doing things the right way. The Company’s Business
Principles articulate our commitment to transparency, ethics, human
rights, safety and the environment. Read more about this commitment in
the Kosmos 2015
Corporate Responsibility Report. For additional information, visit www.kosmosenergy.com.
Non-GAAP Financial Measures
EBITDAX, Adjusted net income (loss) and Adjusted net income (loss)
per share are supplemental non-GAAP financial measures used by
management and external users of the Company's consolidated financial
statements, such as industry analysts, investors, lenders and rating
agencies. The Company defines EBITDAX as net income (loss) plus
(i) depletion and depreciation, (ii) exploration expenses, (iii)
interest and other financing costs, net, (iv) unrealized (gain) loss on
commodity derivatives, (v) income tax expense, (vi) equity-based
compensation, (vii) (gain) loss on sale of oil and gas properties,
(viii) restructuring charges and (ix) similar other material items,
which management believes affect the comparability of operating results.
The Company defines adjusted net income (loss) as net income (loss)
after adjusting for the impact of certain non-cash and non-recurring
items, including non-cash changes in the fair value of derivative
instruments, cash settlements on commodity derivatives, gain on sale of
assets, and other similar non-cash and non-recurring charges, and then
the non-cash and related tax impacts in the same period.
We believe that EBITDAX, Adjusted net income (loss), and Adjusted net
income (loss) per share and other similar measures are useful to
investors because they are frequently used by securities analysts,
investors and other interested parties in the evaluation of companies in
the oil and gas sector and will provide investors with a useful tool for
assessing the comparability between periods, among securities analysts,
as well as company by company. Because EBITDAX, Adjusted net income
(loss), and Adjusted net income (loss) per share excludes some, but not
all, items that affect net income, these measures as presented by us may
not be comparable to similarly titled measures of other companies.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that Kosmos expects, believes
or anticipates will or may occur in the future are forward-looking
statements. Kosmos’ estimates and forward-looking statements are mainly
based on its current expectations and estimates of future events and
trends, which affect or may affect its businesses and operations.
Although Kosmos believes that these estimates and forward-looking
statements are based upon reasonable assumptions, they are subject to
several risks and uncertainties and are made in light of information
currently available to Kosmos. When used in this press release, the
words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will” or
other similar words are intended to identify forward-looking statements.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of Kosmos, which may
cause actual results to differ materially from those implied or
expressed by the forward-looking statements. Further information on such
assumptions, risks and uncertainties is available in Kosmos’ Securities
and Exchange Commission (“SEC”) filings. Kosmos
undertakes no obligation and does not intend to update or correct these
forward-looking statements to reflect events or circumstances occurring
after the date of this press release, except as required by applicable
law. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in their
entirety by this cautionary statement.
|
Kosmos Energy Ltd.
Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues and other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas revenue
|
|
|
|
$
|
46,628
|
|
$
|
96,584
|
|
$
|
154,259
|
|
$
|
324,948
|
Gain on sale of assets
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,651
|
Other income
|
|
|
|
|
20,001
|
|
|
(1,266)
|
|
|
20,179
|
|
|
89
|
Total revenues and other income
|
|
|
|
|
66,629
|
|
|
95,318
|
|
|
174,438
|
|
|
349,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas production
|
|
|
|
|
13,574
|
|
|
23,157
|
|
|
75,647
|
|
|
75,481
|
Facilities insurance modifications
|
|
|
|
|
5,946
|
|
|
—
|
|
|
5,946
|
|
|
—
|
Exploration expenses
|
|
|
|
|
66,238
|
|
|
18,904
|
|
|
126,498
|
|
|
132,384
|
General and administrative
|
|
|
|
|
21,914
|
|
|
26,692
|
|
|
59,672
|
|
|
106,538
|
Depletion and depreciation
|
|
|
|
|
17,838
|
|
|
35,995
|
|
|
66,031
|
|
|
110,534
|
Interest and other financing costs, net
|
|
|
|
|
11,066
|
|
|
9,926
|
|
|
30,268
|
|
|
29,675
|
Derivatives, net
|
|
|
|
|
(16,891)
|
|
|
(142,129)
|
|
|
33,752
|
|
|
(129,579)
|
Other expenses, net
|
|
|
|
|
(795)
|
|
|
290
|
|
|
13,768
|
|
|
5,184
|
Total costs and expenses
|
|
|
|
|
118,890
|
|
|
(27,165)
|
|
|
411,582
|
|
|
330,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
|
|
(52,261)
|
|
|
122,483
|
|
|
(237,144)
|
|
|
19,471
|
Income tax expense (benefit)
|
|
|
|
|
7,502
|
|
|
62,218
|
|
|
(10,064)
|
|
|
113,307
|
Net income (loss)
|
|
|
|
$
|
(59,763)
|
|
$
|
60,265
|
|
$
|
(227,080)
|
|
$
|
(93,836)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
(0.15)
|
|
$
|
0.16
|
|
$
|
(0.59)
|
|
$
|
(0.25)
|
Diluted
|
|
|
|
$
|
(0.15)
|
|
$
|
0.15
|
|
$
|
(0.59)
|
|
$
|
(0.25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
386,026
|
|
|
383,924
|
|
|
385,130
|
|
|
382,603
|
Diluted
|
|
|
|
|
386,026
|
|
|
390,586
|
|
|
385,130
|
|
|
382,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kosmos Energy Ltd.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
109,040
|
|
$
|
275,004
|
Receivables
|
|
|
|
|
91,875
|
|
|
138,032
|
Other current assets
|
|
|
|
|
185,686
|
|
|
321,112
|
Total current assets
|
|
|
|
|
386,601
|
|
|
734,148
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
2,758,218
|
|
|
2,322,839
|
Other non-current assets
|
|
|
|
|
156,998
|
|
|
146,063
|
Total assets
|
|
|
|
$
|
3,301,817
|
|
$
|
3,203,050
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
173,972
|
|
$
|
295,689
|
Accrued liabilities
|
|
|
|
|
100,430
|
|
|
159,897
|
Other current liabilities
|
|
|
|
|
8,055
|
|
|
1,155
|
Total current liabilities
|
|
|
|
|
282,457
|
|
|
456,741
|
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
1,319,094
|
|
|
860,878
|
Deferred tax liabilities
|
|
|
|
|
483,740
|
|
|
502,189
|
Other non-current liabilities
|
|
|
|
|
88,280
|
|
|
57,729
|
Total long-term liabilities
|
|
|
|
|
1,891,114
|
|
|
1,420,796
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
|
|
|
1,128,246
|
|
|
1,325,513
|
Total liabilities and shareholders’ equity
|
|
|
|
$
|
3,301,817
|
|
$
|
3,203,050
|
|
|
|
|
|
|
|
|
|
|
Kosmos Energy Ltd.
Condensed Consolidated Statements of Cash Flow
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
(59,763)
|
|
$
|
60,265
|
|
$
|
(227,080)
|
|
$
|
(93,836)
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and amortization
|
|
|
|
|
20,389
|
|
|
38,549
|
|
|
73,684
|
|
|
118,307
|
Deferred income taxes
|
|
|
|
|
3,108
|
|
|
54,214
|
|
|
(16,821)
|
|
|
77,229
|
Unsuccessful well costs
|
|
|
|
|
309
|
|
|
776
|
|
|
2,609
|
|
|
87,379
|
Change in fair value of derivatives
|
|
|
|
|
(17,996)
|
|
|
(139,311)
|
|
|
37,179
|
|
|
(127,706)
|
Cash settlements on derivatives, net(1)
|
|
|
|
|
44,707
|
|
|
59,790
|
|
|
144,522
|
|
|
153,065
|
Equity-based compensation
|
|
|
|
|
9,229
|
|
|
13,873
|
|
|
30,391
|
|
|
62,400
|
Gain on sale of assets
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,651)
|
Loss on extinguishment of debt
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
Other
|
|
|
|
|
(1,711)
|
|
|
754
|
|
|
13,358
|
|
|
6,731
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net changes in working capital
|
|
|
|
|
(39,817)
|
|
|
100,116
|
|
|
(123,465)
|
|
|
13,396
|
Net cash provided by (used in) operating activities
|
|
|
|
|
(41,545)
|
|
|
189,026
|
|
|
(65,623)
|
|
|
272,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas assets
|
|
|
|
|
(88,552)
|
|
|
(175,148)
|
|
|
(506,256)
|
|
|
(559,342)
|
Other property
|
|
|
|
|
(402)
|
|
|
(257)
|
|
|
(1,003)
|
|
|
(793)
|
Proceeds from sale of assets
|
|
|
|
|
14
|
|
|
89
|
|
|
210
|
|
|
28,692
|
Restricted cash
|
|
|
|
|
1,840
|
|
|
(20)
|
|
|
(41,362)
|
|
|
(9,594)
|
Net cash used in investing activities
|
|
|
|
|
(87,100)
|
|
|
(175,336)
|
|
|
(548,411)
|
|
|
(541,037)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under long-term debt
|
|
|
|
|
125,000
|
|
|
100,000
|
|
|
450,000
|
|
|
100,000
|
Payments on long-term debt
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200,000)
|
Net proceeds from issuance of senior secured notes
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
206,774
|
Purchase of treasury stock
|
|
|
|
|
(132)
|
|
|
(26)
|
|
|
(1,930)
|
|
|
(17,981)
|
Deferred financing costs
|
|
|
|
|
—
|
|
|
(240)
|
|
|
—
|
|
|
(9,031)
|
Net cash provided by financing activities
|
|
|
|
|
124,868
|
|
|
99,734
|
|
|
448,070
|
|
|
79,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
(3,777)
|
|
|
113,424
|
|
|
(165,964)
|
|
|
(188,796)
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
112,817
|
|
|
252,611
|
|
|
275,004
|
|
|
554,831
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
109,040
|
|
$
|
366,035
|
|
$
|
109,040
|
|
$
|
366,035
|
__________________________
|
(1)
|
|
Cash settlements on commodity hedges were $44.7 million and $60.8
million for the three months ended September 30, 2016 and 2015,
respectively, and $146.5 million and $154.3 million for the nine
months ended September 30, 2016 and 2015, respectively.
|
|
|
|
|
Kosmos Energy Ltd.
EBITDAX
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
Net income (loss)
|
|
|
$
|
(59,763)
|
|
$
|
60,265
|
|
$
|
(227,080)
|
|
$
|
(93,836)
|
|
$
|
(203,080)
|
Exploration expenses
|
|
|
|
66,238
|
|
|
18,904
|
|
|
126,498
|
|
|
132,384
|
|
|
150,317
|
Facilities insurance modifications
|
|
|
|
5,946
|
|
|
—
|
|
|
5,946
|
|
|
—
|
|
|
5,946
|
Depletion and depreciation
|
|
|
|
17,838
|
|
|
35,995
|
|
|
66,031
|
|
|
110,534
|
|
|
111,463
|
Equity-based compensation
|
|
|
|
9,229
|
|
|
13,873
|
|
|
30,391
|
|
|
62,400
|
|
|
43,048
|
Derivatives, net
|
|
|
|
(16,891)
|
|
|
(142,129)
|
|
|
33,752
|
|
|
(129,579)
|
|
|
(47,318)
|
Cash settlements on commodity derivatives
|
|
|
|
44,748
|
|
|
60,823
|
|
|
146,514
|
|
|
154,324
|
|
|
217,683
|
Inventory impairment and other
|
|
|
|
(1,221)
|
|
|
—
|
|
|
12,823
|
|
|
—
|
|
|
12,823
|
Gain on sale of assets
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,651)
|
|
|
—
|
Interest and other financing costs, net
|
|
|
|
11,066
|
|
|
9,926
|
|
|
30,268
|
|
|
29,675
|
|
|
37,802
|
Income tax expense (benefit)
|
|
|
|
7,502
|
|
|
62,218
|
|
|
(10,064)
|
|
|
113,307
|
|
|
31,901
|
EBITDAX
|
|
|
$
|
84,692
|
|
$
|
119,875
|
|
$
|
215,079
|
|
$
|
354,558
|
|
$
|
360,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(In thousands, except per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income (loss)
|
|
|
|
$
|
(59,763)
|
|
$
|
60,265
|
|
$
|
(227,080)
|
|
$
|
(93,836)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives, net
|
|
|
|
|
(16,891)
|
|
|
(142,129)
|
|
|
33,752
|
|
|
(129,579)
|
Cash settlements on commodity derivatives
|
|
|
|
|
44,748
|
|
|
60,823
|
|
|
146,514
|
|
|
154,324
|
Gain on sale of assets
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,651)
|
Facilities insurance modifications
|
|
|
|
|
5,946
|
|
|
—
|
|
|
5,946
|
|
|
—
|
Inventory impairment and other
|
|
|
|
|
(1,221)
|
|
|
—
|
|
|
12,823
|
|
|
4,316
|
Total selected items before tax
|
|
|
|
|
32,582
|
|
|
(81,306)
|
|
|
199,035
|
|
|
4,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense on adjustments(1)
|
|
|
|
|
(9,323)
|
|
|
28,457
|
|
|
(66,769)
|
|
|
(10,114)
|
Income tax expense related to tax shortfall associated with IPO
equity awards
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,371
|
Adjusted net income (loss)
|
|
|
|
$
|
(36,504)
|
|
$
|
7,416
|
|
$
|
(94,814)
|
|
$
|
(83,169)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted share
|
|
|
|
$
|
(0.15)
|
|
$
|
0.15
|
|
$
|
(0.59)
|
|
$
|
(0.25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives, net
|
|
|
|
|
(0.04)
|
|
|
(0.36)
|
|
|
0.09
|
|
|
(0.34)
|
Cash settlements on commodity derivatives
|
|
|
|
|
0.11
|
|
|
0.16
|
|
|
0.38
|
|
|
0.40
|
Gain on sale of assets
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.06)
|
Facilities insurance modifications
|
|
|
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|
—
|
Inventory impairment and other
|
|
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
0.01
|
Total selected items before tax
|
|
|
|
|
0.08
|
|
|
(0.20)
|
|
|
0.52
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense on adjustments(1)
|
|
|
|
|
(0.02)
|
|
|
0.07
|
|
|
(0.18)
|
|
|
(0.02)
|
Income tax expense related to tax shortfall associated with IPO
equity awards
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
Adjusted net income (loss) per diluted share
|
|
|
|
$
|
(0.09)
|
|
$
|
0.02
|
|
$
|
(0.25)
|
|
$
|
(0.22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of diluted shares
|
|
|
|
|
386,026
|
|
|
390,586
|
|
|
385,130
|
|
|
382,603
|
_______________________
|
(1)
|
|
Income tax expense is calculated at the statutory rate in which such
item(s) reside. Statutory rate for Ghana is 35%.
|
|
|
|
|
Oil Revenue Summary
(In thousands, except barrel and per barrel data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Oil Volume Sold (MMBbls)
|
|
|
|
|
|
0.947
|
|
|
1.850
|
|
|
3.791
|
|
|
5.695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil revenue
|
|
|
|
|
$
|
46,628
|
|
$
|
96,584
|
|
$
|
154,259
|
|
$
|
324,948
|
Cash settlements on commodity derivatives
|
|
|
|
|
|
44,748
|
|
|
60,823
|
|
|
146,514
|
|
|
154,324
|
Realized oil revenue
|
|
|
|
|
$
|
91,376
|
|
$
|
157,407
|
|
$
|
300,773
|
|
$
|
479,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Barrel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil revenue
|
|
|
|
|
$
|
49.24
|
|
$
|
52.21
|
|
$
|
40.69
|
|
$
|
57.06
|
Cash settlements on commodity derivatives
|
|
|
|
|
|
47.25
|
|
|
32.88
|
|
|
38.65
|
|
|
27.10
|
Realized oil revenue
|
|
|
|
|
$
|
96.49
|
|
$
|
85.09
|
|
$
|
79.34
|
|
$
|
84.16
|
Underlifted by approximately 1,040 thousand barrels as of September
30, 2016.
|
|
|
Hedging Summary
As of September 30, 2016(1)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
Floor(2)
|
|
Short Put
|
|
Ceiling
|
|
Long Call
|
|
|
|
|
|
|
(MMBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-way collars
|
|
|
|
|
|
0.503
|
|
$
|
85.00
|
|
$
|
—
|
|
$
|
110.00
|
|
$
|
135.00
|
Swaps with puts
|
|
|
|
|
|
0.500
|
|
$
|
75.00
|
|
$
|
60.00
|
|
$
|
—
|
|
$
|
—
|
Purchase puts
|
|
|
|
|
|
0.501
|
|
$
|
85.00
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps with puts/calls
|
|
|
|
|
|
2.000
|
|
$
|
72.50
|
|
$
|
55.00
|
|
$
|
—
|
|
$
|
90.00
|
Swaps with puts
|
|
|
|
|
|
2.000
|
|
$
|
64.95
|
|
$
|
50.00
|
|
$
|
—
|
|
$
|
—
|
Three-way collars
|
|
|
|
|
|
3.002
|
|
$
|
45.00
|
|
$
|
30.00
|
|
$
|
57.50
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-way collars
|
|
|
|
|
|
2.913
|
|
$
|
56.57
|
|
$
|
41.57
|
|
$
|
65.90
|
|
$
|
—
|
_______________________________
|
(1)
|
|
Please see the Company’s filed 10-Q for full disclosure on hedging
material. Includes hedging position as of September 30, 2016 and
hedges added since quarter-end.
|
(2)
|
|
“Floor” represents floor price for collars or swaps and strike price
for purchased puts.
|
Note: Excludes 2.0 MMBbls of sold (short) calls with a strike price of
$85.00/Bbl in 2017, 2.0 MMBbls of sold (short) calls with a strike price
of $65.00/Bbl in 2018, and 0.9 MMBbls of sold (short) calls with a
strike price of $80.00/Bbl in 2019.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161107005366/en/ Copyright Business Wire 2016
Source: Business Wire
(November 7, 2016 - 6:45 AM EST)
News by QuoteMedia
www.quotemedia.com
|