brad whitmarsh · investor presentation november 2012 11 increasing opportunity set to open...

Strictly Private and Confidential

Investor Presentation

November 2012

BRAD WHITMARSHInvestor Relations

[email protected]

Investor PresentationNovember 2012 2

Delivering value through exploration and development success

A Differentiated Investment Opportunity

• Proven Strategy of Finding and Exploiting New Petroleum Systems

– Excellent track record of exploration discovery

– Industry-leading development success

• Significant, De-risked Production and Reserves Growth

– Ramping up to an extended production plateau at Jubilee

– Second oil-focused development at TEN project

• Pursuing Substantial Exploration Upside

– Active 2012 drilling program with meaningful catalysts

– Building high-potential portfolio in multiple new basins for drilling from late 2012

• Robust Financial Capacity

– Substantial existing and growing cash flows

– Strong balance sheet to fully fund operating programs going forward

Investor PresentationNovember 2012

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Find and develop large quantities of high-value barrels

Proven Business Strategy


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Growth-focused asset base with Big E upside

High Quality, Oil-Levered Portfolio

• Opened Tano Basin (Ghana) With World-Class Discoveries

– Originator of the Upper Cretaceous stratigraphic play in West Africa

– Jubilee discovery de-risked follow-on prospects

– Expanding Ghana production with additional development

– Impactful 2012 exploration program delivering success

• Accessing New Petroleum Systems

– Building high-potential portfolio of strategic opportunities based on existing and new themes and geographies

– Drilling to open potential new basins commencing late 2012


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Foundation of the Company and platform for future growth

Tano Basin Petroleum System - Ghana

• Industry-leading Success at Jubilee

– Significantly improved Phase 1 productivity

– Implementing the next development phase (Phase 1A)

– Ramping up to facility capacity of 120 MBpd, gross

• Progressing Additional Developments

– Submitted PoD for TEN project on Deepwater Tano

– Multiple existing discoveries on West Cape Three Points

• Testing Further Exploration Upside

– Wawa success and 2 additional DeepwaterTano wells near-term


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World-class find and landmark development

Jubilee: Tano Basin-Opening Discovery

• Discovery Mid-2007, First Oil Late 2010

• Strong Reservoir and Field Performance

– 600 MMBoe +, dependent on ultimate recovery

– High per-well deliverability

– Field-wide pressure support confirmed

– Generating strong cash margins

• Multi-phase Development Project

– Phase 1 enhancement activity success

– First production from Phase 1A by YE12

– Additional phases expected to follow

• Long-life Production and Cash Flows

– Fully funds Tano Basin activities and new basin exploration program

FPSO Processing Capacity

Oil Production (MBpd) 120

Oil Storage (MBbl) 1,600

Water Injection (MBpd) 230

Gas Injection (MMcfpd) 140

Facility Uptime (%) > 95


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Near-term production upside from Jubilee

Growing Production to Facility Capacity

• Enhancing Phase 1 Deliverability

– Detailed diagnostic work identified cause and effective solution

– 5 acid treatments performed - resolved localized flow restriction

– Significantly increased well productivity

– Reducing cost of treatment application

• Implementing Phase 1A

– 5 new production wells, 3 injectors

– Optimizing drilling and completion designs

– Two production wells online by YE12

• Gross Average 70 to 80 MBpd in 2012

– YE12 exit rate anticipated >90 MBpd, gross

– Anticipated significantly higher production in 2013


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Near-term development for TEN oil fields

Second Major Offshore Project

• Appraisal Program Complete

– Substantial Enyenra and Ntomme oil discoveries

– Strong oil flow test rates

– High-quality reservoir characteristics

– Pmean 360 MMBoe for TEN fields with approximately 70% oil

• Finalizing FPSO Design and Scope

– Identifying necessary long-lead items

– Tendering equipment and installation

– Capacity to handle additional discoveries

• Plan of Development Submitted

– Declaration of commerciality


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Significant crude oil and natural gas found in multiple fields

Ongoing Appraisal of WCTP Discoveries

• Refining Resource Estimates

– Mahogany oil discovery

– Teak oil and gas condensate discovery

– Akasa light oil discovery

– Multiple reservoirs, pools distributed stratigraphically and geographically

• Optimizing Development Potential

– Assessing multiple scenarios, optimal development likely tie-back to Jubilee

– Strong recent flow rates at Akasa-1 DST

– Additional appraisal necessary to further determine development options


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Testing material unrisked potential to Kosmos

2012 Exploration Upside in Ghana

Wawa Discovery

– Oil and gas-condensate

– Turonian-aged reservoirs

– Separate accumulation from TEN fields

– Potential tie-in to TEN development

Sapele

– Downdip and analogous to Mahogany and Jubilee discoveries

– Pmean ~ 75 MMBoe

– Results expected early 2013

Okure

– Turonian-aged interval beneath Enyenra

– Stratigraphy intersected in Enyenra-2A

– Pmean 250 MMBoe +

– Results expected 4Q12


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Increasing opportunity set to open petroleum systems

Expanding Exploration Portfolio

• Accelerating Inventory Build

– Ongoing identification and evaluation of new basins with significant hydrocarbon potential

– Capturing strategic positions and operatorship

• Recent Acreage Adds in Suriname, Mauritania, and Morocco

– Focused on existing and new geologic themes and geographies

• Substantial Expansion Since IPO

– ~3X increase since early 2011

– Attracting significant industry interest


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Driven by technical strengths and core competencies

Focused Themes and Geographies

• Petroleum System Approach

– Existing theme, existing geography (Ghana, Mauritania, Morocco)

– Existing theme, new geography (Suriname)

– New theme, same geography (Cameroon)

– New theme, new geography (Morocco)

• Multi-billion Barrel Resource Potential

– License areas equate to over 4,200 GOM blocks in size

– Ability to replicate Tano Basin success

• Targeting Multiple Basin-opening Wells Per Year

– Beginning with Cameroon spud late 2012


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Cameroon – near-term drilling opportunity

Rio Del Rey Petroleum System

• Extension of a Proven Offshore Play

– Deepwater Tertiary trend onshore

– Analogous to >1BBoe Alba oil and natural gas condensate field offshore

• Built Substantial Acreage Position

– 720 K gross acres

– 100% WI, operated by KOS

• First Prospect to Spud Late 2012

• Multiple Follow-On Opportunities

– 3 to 4 additional prospects


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150 MMBoe mean unrisked potential with first operated well

Sipo Prospect Onshore Cameroon

Munge-1 Oil Shows Sipo Sipo South

• Sipo Planned to Start Late 2012

– Toe-thrust anticline prospect

– Results anticipated in 1Q13

– Proven oil shows in nearby location

• Preparing Well Location for Drilling

– Minimizing onshore footprint

– Heli-rig operationA B


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Morocco – overlooked frontier opportunity with huge potential

Multiple New Petroleum Systems

• Substantial Acreage Position

– 13.7 MM gross acres operated by KOS

– Equivalent to over 2,300 GOM blocks

• Aggressively Advancing Plans

– Recent 3D data acquisition in Agadir Basin

– Expanded Agadir Basin position

– Reprocessing seismic on Cap Boujdour

– Play diversity and prospect dependency

– Multiple leads and prospects identified

• Targeting Multiple Wells in 2013/2014

• Significant Recent Industry Focus

– Independents and majors


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Morocco – progressing for potential 2013 drilling

Agadir Basin Petroleum System

• Highly Prospective Position Captured

– 6.4 MM acres operated by KOS

• Combination of Exploration Concepts

– Proven source rock and reservoir quality

– Mid slope to basin floor fan reservoirs

– Cretaceous turbidites with subsalt trapping geometries

– Processing recent 3D seismic acquisition

B A

B A


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Cap Boujdour – multi-billion barrel potential

Aaiun Basin Petroleum System

• Substantial, Frontier Basin


• Multiple Plays and Fairways

– Unexplored deepwater compressional anticline trend

– Upper and Lower Cretaceous targets with 3 independent play fairways

• Multi-billion Barrel Potential

– Reprocessing existing 3D seismic data

– Approximately 20 prospects and leads identified

– Potentially drill as early as late 2013


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Suriname – expansion of African Transform theme across the Atlantic

Suriname – Guyana Petroleum System

• Premier Position in Proven Basin


– Same petroleum system as industry discovery in French Guiana

– Joint agreement with Chevron

• Significant 3D Seismic Program in 2H12

– Completed 3,800 km2 seismic acquisition

– First drilling targeted as early as 2014

A B

B

A


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Mauritania – core geologic theme in the same geography

Offshore Mauritania Petroleum System

• Substantial Deepwater Potential

– 6.7MM gross acres operated by KOS

– Untested play down-dip in the proven Mauritania salt basin

• Upper Cretaceous Stratigraphic/ Structural Play

– Plans for 2D and 3D seismic in early 2013

– First drilling targeted as early as 2014B A

B A


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Multiple new basin tests annually beginning late 2012

Catalyst-Rich Exploration Opportunity Set


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Maximizing current assets and opening new petroleum systems

2012 Capital Program

• Focused Development Investments

– Implementing Phase 1A at Jubilee

– Pre-development for TEN project

• Significant Exploration & Appraisal Activity

– Multiple appraisal wells drilled on Ghana discoveries

– 4 high-impact exploration wells testing significant resources – 3 Ghana, 1 Cameroon

– Large seismic programs offshore Morocco and Suriname

– New business development activity

• Anticipated Total Capital $500 MM


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Fully funded to execute forward exploration and development

Strong Financial Capacity

(1) Total liquidity reflects cash balance plus availability under the Company’s RBL credit facility.(2) Non-GAAP item. See Reconciliation to the applicable GAAP measure in the year-end 2011 Earnings Release

($ in millions) Sep 2012

Cash and cash equivalents 400$

Restricted cash 51$

Total cash 451$

Credit facility debt 1,000$

Shareholders' equity 972$

Total capitalization 1,972$

Total liquidity (1) 611$

Net Debt to Market Cap 13.3%

2012 Capital Program 500$

2011 EBITDAX (2) 530$

• Conservative Capital Structure with Liquidity of Approximately $840 Million as of end of October 2012(1)

• Strong and Growing Cash Flows from Jubilee– Ability to fund Tano Basin petroleum system

investments and global exploration program

• Disciplined, Returns-focused Investment Programs

• Commodity Downside Protection– Hedge target approximately 25-50% of near-

term volumes

– Additional 2013 and 2014 hedges expected


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Creating, maximizing, and delivering value for shareholders

Exciting Future for Kosmos

• Long-life Plateau Production at Jubilee

• Progressing Next Developments

– Multiple discoveries on WCTP and DT

– Second FPSO Project at TEN

• Executing Near-term Drilling Catalysts

– New discovery at Wawa

– 2 additional Ghana exploration prospects and first operated Cameroon well in 2012

• Delivering on Existing Exploration Portfolio

– Significant potential in Mauritania, Morocco, and Suriname

• Expanding Inventory of Opportunities

‒ Active new ventures program


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DisclaimerForward-Looking Statements

This presentation 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 presentation that address activities, events or developments that Kosmos Energy Ltd. (“Kosmos” or the “Company”) expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include the expectations of management regarding plans, strategies, objectives, anticipated financial and operating results of the Company, including as to estimated oil and gas in place and recoverability of the oil and gas, estimated reserves and drilling locations, capital expenditures, typical well results and well profiles and production and operating expenses guidance included in the presentation. The Company’s 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 the Company 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 the Company. When used in this presentation, 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 the Company, 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 the Company’s Securities and Exchange Commission (“SEC”) filings. The Company’s SEC filings are available on the Company’s website at www.kosmosenergy.com. 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 presentation, whether as a result of new information, future events or otherwise, 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 presentation. All forward-looking statements are qualified in their entirety by this cautionary statement.

Cautionary Statements regarding Oil and Gas Quantities

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. The Company uses terms in this presentation, such as “total unrisked resource potential,” “total discovered,” “net unriskedmean discovered resources,” “net unrisked resource exposure,” “de-risked plays,” “defined growth resources,” “de-risked prospectivity,” “discovered resources,” “potential,” “gross resources” and other descriptions of volumes of reserves potentially recoverable that the SEC’s guidelines strictly prohibit the Company from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. Investors are urged to consider closely the disclosures and risk factors in the Company’s SEC filings, available on the Company’s website at www.kosmosenergy.com.

–Potential drilling locations and resource potential estimates have not been risked by the Company. Actual locations drilled and quantities that may be ultimately recovered from the Company’s interest may differ substantially from these estimates. There is no commitment by the Company to drill all of the drilling locations that have been attributed these quantities. Factors affecting ultimate recovery include the scope of the Company’s ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling and completion services and equipment, drilling results, agreement terminations, regulatory approval and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of reserves and resource potential may change significantly as development of the Company’s oil and gas assets provides additional data.


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brad whitmarsh · investor presentation november 2012 11 increasing opportunity set to open...

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