Kosmos Q2 Earnings Misses Street View

Kosmos Energy Ltd KOS reported Q2 2023 revenue of $273.3 million, missing the consensus of $289.5 million.

Net production came in at around 58,000 barrels of oil equivalent per day (boepd), with sales of about 45,200 boepd in the quarter.

Realized pricing declined to $65.40 per boe (including derivative cash settlements) from $86.50 per boe, on lower commodity prices.

Pro Forma EBITDAX decreased to $193.4 million from $388.0 million a year ago. 

Adjusted EPS of $0.06, missing the consensus of $0.09.

Net capital expenditure stood at $170 million in the quarter, coming below guidance, mainly due to lower accruals related to the delay in the subsea workscope on Tortue Phase 1.

Operating cash flow stood at around $18 million in the quarter.

As of June 30, 2023, cash and cash equivalents stood at $85.7 million, and total long-term debt of around $2.4 billion. 

Outlook: KOS expects the production of 67,000 - 70,000 boe per day and capital expenditure of $175 million - $200 million in Q3.

The company reaffirmed the 2023 outlook for capital expenditure of $700 million - $750 million and production of 65,000 - 69,000 boe per day. 

Andrew G. Inglis, Chairman and Chief Executive Officer, said, "The start up of the first of three key development projects for Kosmos is an important step to realizing the free cash flow inflection point we expect as production rises and capital spending starts to fall. With the additional production from Jubilee year-to-date, we are currently around half way to achieving our 50% production growth target from 2022 levels."

"Further production growth is expected later in the year as additional Jubilee wells come online. Our other key projects, Greater Tortue Ahmeyim Phase 1 in Mauritania and Senegal, and Winterfell in the U.S. Gulf of Mexico continue to progress with first gas at Tortue expected in the first quarter of 2024 and first oil at Winterfell expected around the end of the first quarter of 2024."

Price Action: KOS shares closed higher by 1.39% at $7.31 on Friday.