Petroleum Africa
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Tuesday, February 4, 2014
The capital spending program for Kosmos Energy has been released and the company has tagged spending at approximately $575 million. In 2013 the company came in under budget at $425 million, primarily due to its deferral of certain development and appraisal activities until this year.
Coming in under budget in 2013 resulted in Kosmos’overall liquidity position at year-end 2013 being stronger than expected with cash and cash equivalents of $598 million and total available liquidity of $1.2 billion.
The company’s Ghana-related development and appraisal capital spending comprises approximately two-thirds of the 2014 forecast program, with around $70 million of the Ghana expenditure ascribed to spending deferred from 2013. The remaining one-third is allocated for exploration activities and reflects the benefits of last year’s farm-out initiatives in Morocco.
The 2014 Ghana development and appraisal activity is targeted at around $400 million, about equally divided between the Greater Jubilee and TEN (Tweneboa, Enyenra and Ntomme) projects. This includes funds for further development at Jubilee, including the remaining activities associated with the Phase 1A development, facility upgrades, and long-lead equipment and engineering for the next phase of development, as well as additional appraisal activities for the Mahogany, Teak and Akasa discoveries. The capital program also provides funds for continued development at TEN.
As part of the company’s planned exploration activities, which total approximately $175 million for the year, Kosmos expects to participate in the drilling of two offshore exploration wells. The FA-1 well is anticipated to spud on the Eagle prospect in the first half of 2014 on the Foum Assaka Offshore block, and late in the year, the company plans to spud a well on the Gargaa prospect in the Cap Boujdour Contract Area. Each well is expected to take about three months to complete. Additionally, two large 3D seismic surveys are planned, one in the Tarhazoute Offshore block and the other in the Cap Boujdour Contract Area. Exploration-based new venture activities are also included in the forecast program.
“Our foundation as a self-funded explorer underlies our capital program for the year as we continue the momentum we have created to deliver new, meaningful value for our shareholders,” stated Brian F. Maxted, CEO and chief exploration officer at Kosmos. “In addition to advancing our development projects in Ghana, we are highly focused on our upcoming exploration drilling campaign. Further, we are continuing to build and mature our potentially transformational exploration portfolio.”
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