Greater Jubilee Gas Price Agreed: Kosmos
Kosmos has reported an increased loss in 3Q, partly due to costs incurred on a recent dry well offshore Mauritania, but had more positive news from Ghana.
The US independent reported November 6 a net 3Q loss of $63.4mn in 3Q2017, compared with a net loss of $59.8mn in 3Q2016. But it said strong free cash flow had allowed it to reduce debt, with CEO Andrew Inglis noting: "We have ramped up production at the TEN fields [offshore Ghana], progressed the Tortue [gas] project offshore Mauritania and Senegal with our partner BP, and acquired a strategic exploration and production position in Equatorial Guinea which is immediately accretive.”
He added that four “world-class prospects” are to be tested in Mauritania, Senegal, and Suriname over the next 12 months. A recent well off Mauritania proved dry, suspending its spate of exploration success in that region: “While Kosmos was carried for the Hippocampe-1 exploration well by BP, $21mn of expenses related to the drilling rig that are not eligible for reimbursement were expensed during the quarter.” Realised oil revenues, including the impact of Kosmos' hedging program, were $55.57/b of oil sold in 3Q2017.
Greater Jubilee gas price, plan to remedy turret, agreed
Kosmos reported that remediation of the Jubilee floating production ship (FPSO) turret offshore Ghana had enabled that field to produce in excess of 100,000 b/d gross and, further, that partners (with Tullow as operator) and the Ghanaian government “have now agreed on the need to stabilise the turret bearing and rotate the FPSO. The operator estimates stabilisation will require two shutdowns in early 2018, resulting in approximately four weeks of downtime. Planning for the rotation of the vessel to its optimal heading is ongoing, with work expected to begin around year-end 2018.”
In mid-October, the partnership received approval for the Greater Jubilee Full Field Development Plan (GJFFDP) from the Ghanaian government, which “establishes a price for gas sales”, and allows for drilling to resume in 2018 which is expected to boost production. Kosmos' results statement did not disclose the gas contract price. Until now, associated gas from Jubilee oil and gas field has been supplied free to the government.
Following the ITLOS arbitration ruling in September, Tullow and Kosmos expect to resume TEN development drilling early 2018 to ramp up production with additional wells to the FPSO capacity of 80,000 b/d.
Update 4.15pm: Kosmos chief exploration officer Brian Maxted told analysts that its Lamantin oil exploration well on Mauritania's offshore block C-12 was "spudded at the weekend" [Nov.4-5] and that results would be announced shortly. The company said October 30 that the well would be drilled by the Ensco DS 12 drillship. Speaking November 6, Maxted said Lamantin offered the "best chance of finding oil" of their current four-well exploration programme in the area, begun last month with the unsuccessful Hippocampe-1 well, and to be followed by the Requin-Tigre well.
Mark Smedley