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Kosmos Energy NYSE: KOS reported higher second-quarter production, lower operating costs and continued balance-sheet progress as new wells in Ghana and the ramp-up of its Greater Tortue Ahmeyim LNG project supported first-half performance.Chairman and Chief Executive Officer Andy Inglis said the company had made progress on its four priorities for 2026: increasing production, reducing costs, lowering debt and advancing its growth portfolio while limiting capital spending.
Production in the first half was up 18% from the same period of 2025, while absolute operating costs declined 24%, Inglis said. Chief Financial Officer Neal Shah said second-quarter production was approximately 12% higher year over year, driven by new Jubilee wells and GTA's ramp-up. Absolute operating costs during the quarter were about 25% lower than a year earlier.
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Jubilee wells support Ghana outlook Kosmos said its Jubilee field offshore Ghana continued to benefit from an active drilling campaign. Two producer wells, J76 and J77, began production following the company’s first-quarter report, while J50, the completion of a previously drilled well, was expected to start in the coming days.
With J50 online, Kosmos expects Jubilee gross production to exceed 90,000 barrels of oil per day. The company maintained its full-year Jubilee guidance of 70,000 to 80,000 barrels per day, with Inglis saying the latest well performance supported the upper end of that range.
Inglis described J76 as the best Jubilee well drilled in more than a decade. He said the well identified up-dip, unswept opportunities in the core part of the field and encountered deeper horizons that could provide additional resources.
The company is working with the field operators to secure a rig for a 2027-28 drilling campaign of up to 10 wells, targeted to begin around the middle of 2027. The program is expected to incorporate fully processed 4D seismic data and fast-track ocean-bottom-node seismic results.
Management also identified water injection as an operational focus. Inglis said water replacement volumes were about 130% in the first quarter but fell to roughly 65% in the second quarter, partly because of planned maintenance and water-pump availability. He said the issue was operational rather than reservoir-related and would be a focus through the remainder of 2026.
GTA meets LNG cargo expectations as domestic gas work advances At the Greater Tortue Ahmeyim project offshore Mauritania and Senegal, gross LNG production in the second quarter was approximately 2.65 million tonnes per annum equivalent. The project lifted nine gross LNG cargoes during the quarter, bringing first-half cargoes to 18.5.
Kosmos maintained its full-year guidance for 32 to 36 gross LNG cargoes. The company said daily LNG production is expected to be somewhat lower during the summer because warmer air and sea temperatures affect operations, with volumes expected to improve later in the year.
The project also lifted one condensate cargo during the second quarter, representing about 300,000 barrels net to Kosmos. A further condensate cargo, estimated at about 400,000 barrels net to Kosmos, is expected late in the third quarter.
Kosmos said it remains on track to reduce GTA operating expense per MMBtu by 50% this year and sees potential for further reductions in 2027. Inglis said increased domestic gas sales could further reduce unit costs because additional gas volumes can be processed without material added costs.
In Senegal, land has been cleared for the onshore section of a pipeline intended to connect GTA gas to the 250-megawatt Gandon power station near Saint Louis. In Mauritania, the country signed a 25-year agreement with Saudi Power Company for a 230-megawatt gas-fired power plant in Nouadhibou that is expected to use GTA gas.
Gulf of Mexico portfolio advances Gulf of Mexico production was in line with Kosmos’ expectations, supported by its operated Odd Job and Kodiak fields. However, the operator of the Winterfell development temporarily abandoned the No. 5 well after encountering casing issues during drilling.
Shah said Winterfell contains significant reserves and has shown good pay, but Kosmos was dissatisfied with the drilling performance and resulting additional costs. The partners have paused activity to understand and resolve the issues before committing further capital, he said.
Kosmos also completed a farm-down of its Tiberius project, bringing Navitas in as a 33.33% partner. Kosmos will remain operator with a 33.34% interest, while OXY will hold the remaining 33.33% interest and operates the nearby Lucius facility.
Shah said the transaction included upfront cash, a development capital carry and future milestone payments. The carry is expected to cover Kosmos’ Tiberius capital expenditures in 2026 and fund its share of development through the first half of 2027. First oil remains expected in the second half of 2028.
The first Tiberius well is targeting roughly 40 million barrels of recovery, according to Shah, with production estimated at about 10,000 barrels per day gross per well. Kosmos also said Shell plans to drill the Trailblazer prospect in the first quarter of 2027 under their exploration alliance. Trailblazer is targeting about 200 million barrels of oil equivalent gross, with Kosmos holding an interest representing just under 60 million barrels, Shah said.
Debt reduction and refinancing plans Kosmos paid down approximately $420 million of debt in the first half through free cash flow, an equity raise and proceeds from the sale of its Equatorial Guinea assets. It ended the quarter with more than $500 million of available liquidity.
The company said S&P and Fitch upgraded its rating to B-minus. Kosmos is targeting about a 20% reduction in net debt for 2026 and expects leverage to move toward two times by year-end, depending in part on commodity prices.
Shah said Kosmos has started discussions with lenders to amend and extend its reserve-based lending facility, targeting completion in the fourth quarter and a facility size of about $1.2 billion. After addressing that facility, the company expects to consider options for its 2028 notes, including opportunistic repurchases or refinancing.
About Kosmos Energy (NYSE:KOS)Kosmos Energy Ltd. is an independent oil and gas exploration and production company headquartered in Dallas, Texas. Since its founding in 2003, the company has focused on identifying and developing hydrocarbon reserves in frontier and emerging basins around the world. Kosmos combines geological and geophysical expertise with a disciplined approach to acreage acquisition and partner selection to pursue high‐impact offshore exploration opportunities.
The company's portfolio is anchored by assets in West Africa and the Gulf of Mexico.
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