Kosmos Energy Ltd.

11/02/2026 | Press release | Distributed by Public on 11/02/2026 14:00

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto contained herein and our annual financial statements for the year ended December 31, 2025, included in our annual report on Form 10-K along with the section Management's Discussion and Analysis of financial condition and Results of Operations contained in such annual report. Any terms used but not defined in the following discussion have the same meaning given to them in the annual report. Our discussion and analysis includes forward-looking statements that involve risks and uncertainties and should be read in conjunction with "Risk Factors" under Item 1A of this report and in the annual report, along with "Forward-Looking Information" at the end of this section for information about the risks and uncertainties that could cause our actual results to be materially different than our forward-looking statements.
Overview
Kosmos Energy is a leading deepwater exploration and production company focused on meeting the world's growing demand for energy. We have diversified oil and gas production from assets offshore Ghana, Mauritania, Senegal and the Gulf of America. Additionally, in the proven basins where we operate, we are advancing high-quality development opportunities which have come from our exploration success.
Recent Developments
Corporate
In October 2026, the Company amended and restated the Facility, extending the final maturity date to April 2033 from December 2029. The Facility size has been reduced to $1.2 billion in line with total commitments.
In September 2026, the Company completed redemptions of an aggregate principal amount of $50.0 million of the 7.750% Senior Notes due 2027.
Ghana
During the third quarter of 2026, Ghana production averaged approximately 117,500 Boepd gross (40,500 Boepd net). Three Jubilee cargo liftings were completed during the third quarter of 2026, including one cargo that commenced lifting on June 30, 2026 and finished loading on July 2, 2026.
The recent Jubilee development drilling campaign concluded during the third quarter of 2026, with a total of five producer wells and one water injector successfully brought online during the year. Tullow Oil plc, as operator of the Jubilee partnership, has contracted a drilling rig for the next drilling campaign in Ghana, which is targeted to commence around the middle of 2027 and is planned to include up to ten wells.
Gulf of America
Production from the Gulf of America averaged approximately 14,100 Boepd net (~83% oil) for the third quarter of 2026.
On Tiberius, Kosmos (operator) continues to progress the development with our partners. We achieved a final investment decision in March 2026 with first oil targeted in the second half of 2028. In July 2026, Kosmos and Occidental completed a farm-down transaction with Navitas Petroleum US, LLC, resulting in Navitas acquiring a 33.33% interest in the project alongside Kosmos (33.34%) and Occidental (33.33%), an owner and operator of the host facility. Consideration included upfront cash proceeds, a carry of future development capital expenditure that is expected to fund Kosmos' share of project spending through 2026 and into mid-2027, and contingent future milestone payments.
At Winterfell, the partnership spud Winterfell-5 in April 2026. Winterfell-5 was designed as a twin well to Winterfell-3 in order to restore production from the Winterfell-3 fault block. The Winterfell-5 well was temporarily abandoned in July 2026 by the operator due to challenges experienced during drilling operations arising from issues with the production casing. In April 2026, production from Winterfell-2 was shut-in while the partnership evaluates plans to restore production. The Company maintains insurance coverage that it expects will offset a significant portion of any remediation costs that may be incurred to restore the Winterfell-2 well to normal operations.
Mauritania and Senegal
Greater Tortue Ahmeyim (GTA) Field
Production in Mauritania and Senegal from GTA averaged approximately 59,800 Boepd gross (14,600 Boepd net) in the third quarter of 2026. Eight and a half gross LNG cargos lifted in the third quarter of 2026.
Sao Tome and Principe
In August 2026, we received approval for an extension to May 2027 for the current exploration phase for Block 5 offshore Sao Tome and Principe.
Results of Operations
All of our results, as presented in the table below, represent operations from Ghana, Equatorial Guinea, Mauritania, Senegal and the Gulf of America, including the results related to the Ceiba Field and Okume Complex production assets located in Block G offshore Equatorial Guinea through the date of sale in June 2026. See Note 3 - Acquisitions and Divestitures for additional information. Certain operating results and statistics for the three and nine months ended September 30, 2026 and 2025 are included in the following tables:
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 2026 2025
(In thousands, except per volume data)
Sales volumes:
Oil (MBbl) 3,691 3,799 12,675 12,822
Gas (MMcf) 11,749 9,712 36,770 21,004
NGL (MBbl) 95 97 587 301
Total (MBoe) 5,744 5,515 19,390 16,624
Total (Boepd) 62,437 59,942 71,027 60,893
Revenues:
Oil sales $ 326,899 $ 255,661 $ 1,120,201 $ 880,584
Gas sales 81,377 53,761 237,082 107,439
NGL sales 1,783 1,537 30,757 5,706
Total oil and gas revenue $ 410,059 $ 310,959 $ 1,388,040 $ 993,729
Average oil sales price per Bbl $ 88.57 $ 67.30 $ 88.38 $ 68.68
Average gas sales price per Mcf 6.93 5.54 6.45 5.12
Average NGL sales price per Bbl 18.77 15.85 52.40 18.96
Average total sales price per Boe $ 71.39 $ 56.39 $ 71.58 $ 59.78
Costs:
Oil and gas production, excluding workovers $ 101,191 $ 143,737 $ 407,165 $ 538,670
Oil and gas production, workovers 565 3,959 4,615 19,452
Total oil and gas production costs(1) $ 101,756 $ 147,696 $ 411,780 $ 558,122
Depletion, depreciation and amortization $ 112,228 $ 141,514 $ 352,602 $ 413,449
Average cost per Boe:
Oil and gas production, excluding workovers $ 17.62 $ 26.06 $ 21.00 $ 32.40
Oil and gas production, workovers 0.10 0.72 0.24 1.17
Total oil and gas production costs(1) $ 17.72 $ 26.78 $ 21.24 $ 33.57
Depletion, depreciation and amortization 19.54 25.66 18.18 24.87
Total $ 37.26 $ 52.44 $ 39.42 $ 58.44
______________________________________
(1)Substantially all NGLs and natural gas sales in Ghana and the Gulf of America are associated production from our oil wells and, therefore, production costs metrics are presented under a common unit of measure. In Mauritania and Senegal, all condensate sales and LNG sales are associated production from our gas wells and the first LNG cargo was successfully completed in April 2025. Oil and gas production costs related to LNG production at the GTA Phase 1 project were $56.1 million and $59.4 million for the three months ended September 30, 2026 and 2025, respectively, and $177.2 million and $186.6 million for the nine months ended September 30, 2026 and 2025, respectively. Oil and gas production costs per Mcfe in Mauritania and Senegal was $7.74 and $10.01 for the three months ended September 30, 2026 and 2025, respectively, and $7.14 and $19.91 for the nine months ended September 30, 2026 and 2025. Mauritania and Senegal LNG sales are presented as gas sales in the table.
The following table shows the number of wells in the process of being drilled or in active completion stages, and the number of wells suspended or waiting on completion as of September 30, 2026:
Actively Drilling or Wells Suspended or
Completing Waiting on Completion
Exploration Development Exploration Development
Gross Net Gross Net Gross Net Gross Net
Ghana
Jubilee Unit - - - - - - 3 1.16
TEN - - - - - - 5 1.02
Gulf of America
Winterfell - - - - - - 1 0.25
Tiberius
- - - - 1 0.50 - -
Mauritania / Senegal
Greater Tortue Ahmeyim
- - - - 1 0.27 - -
Total - - - - 2 0.77 9 2.43
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The discussion of the results of operations and the period-to-period comparisons presented below analyze our historical results including the results related to the Ceiba Field and Okume Complex production assets located in Block G offshore Equatorial Guinea through the date of sale in June 2026. See Note 3 - Acquisitions and Divestitures for additional information. The following discussion may not be indicative of future results.
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Three Months Ended
September 30, Increase
2026 2025 (Decrease)
(In thousands)
Revenues and other income:
Oil and gas revenue $ 410,059 $ 310,959 $ 99,100
Gain (loss) on sale of assets (339) - (339)
Other income, net 160 270 (110)
Total revenues and other income 409,880 311,229 98,651
Costs and expenses:
Oil and gas production 101,756 147,696 (45,940)
Exploration expenses 4,239 54,948 (50,709)
General and administrative 18,682 12,886 5,796
Depletion, depreciation and amortization 112,228 141,514 (29,286)
Interest and other financing costs, net 53,746 57,919 (4,173)
Derivatives, net 133,876 (3,646) 137,522
Other expenses, net 12,680 6,384 6,296
Total costs and expenses 437,207 417,701 19,506
Loss before income taxes (27,327) (106,472) 79,145
Income tax expense 15,683 17,827 (2,144)
Net loss $ (43,010) $ (124,299) $ 81,289
Oil and gas revenue. Oil and gas revenue increased by $99.1 million during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 primarily as a result of higher production and sales volumes at Jubilee and GTA and higher average realized oil and gas prices during the three months ended September 30, 2026, partially offset by no sales volumes in Equatorial Guinea (post sale in June 2026) and lower sales volumes in the Gulf of America
business unit. We sold 5,744 MBoe at an average realized price per barrel equivalent of $71.39 during the three months ended September 30, 2026 and 5,515 MBoe at an average realized price per barrel equivalent of $56.39 during the three months ended September 30, 2025.
Oil and gas production. Oil and gas production costs decreased by $45.9 million during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 primarily as result of the sale of the Equatorial Guinea assets in June 2026 and lower routine operating costs in Ghana, GTA and the Gulf of America.
Exploration expenses. Exploration expenses decreased by $50.7 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025 primarily as a result of approximately $51.1 million of exploration expense for the three months ended September 30, 2025 related to the Winterfell-4 step out well which was plugged and abandoned during the third quarter of 2025.
Depletion, depreciation and amortization. Depletion, depreciation and amortization decreased by $29.3 million during the three months ended September 30, 2026, as compared with the three months ended September 30, 2025 primarily as a result of lower depletion rates per Boe in the Gulf of America business unit and no depletion recorded on the Equatorial Guinea assets sold in June 2026, partially offset by higher sales volumes at Jubilee and GTA.
Derivatives, net. During the three months ended September 30, 2026 and 2025, we recorded a loss of $133.9 million and a gain of $3.6 million, respectively, on our outstanding hedge positions. The amounts recorded were a result of changes in the forward oil price curve during the respective periods.
Income tax expense. For the three months ended September 30, 2026 and 2025, changes to our effective tax rates are driven by which tax jurisdictions our income (loss) before income taxes is generated. The jurisdictions in which we operate have statutory tax rates ranging from 0% to 35%.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Nine Months Ended
September 30, Increase
2026 2025 (Decrease)
(In thousands)
Revenues and other income:
Oil and gas revenue $ 1,388,040 $ 993,729 $ 394,311
Gain on sale of assets 9,082 600 8,482
Other income, net 690 849 (159)
Total revenues and other income 1,397,812 995,178 402,634
Costs and expenses:
Oil and gas production 411,780 558,122 (146,342)
Exploration expenses 27,180 68,686 (41,506)
General and administrative 65,655 58,215 7,440
Depletion, depreciation and amortization 352,602 413,449 (60,847)
Interest and other financing costs, net 166,248 164,595 1,653
Derivatives, net 334,063 (18,480) 352,543
Other expenses, net 26,225 14,854 11,371
Total costs and expenses 1,383,753 1,259,441 124,312
Income (loss) before income taxes 14,059 (264,263) 278,322
Income tax expense 97,868 58,382 39,486
Net loss $ (83,809) $ (322,645) $ 238,836
Oil and gas revenue. Oil and gas revenue increased by $394.3 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 primarily as a result of higher production and sales volumes at Jubilee and GTA and higher average realized oil and gas prices during the nine months ended September 30, 2026, partially offset by lower sales volumes in Equatorial Guinea and in the Gulf of America business unit. We sold 19,390 MBoe at an average realized price per barrel equivalent of $71.58 during the nine months ended September 30, 2026 and 16,624 MBoe at an average realized price per barrel equivalent of $59.78 during the nine months ended September 30, 2025.
Oil and gas production. Oil and gas production costs decreased by $146.3 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. Oil and gas production costs are lower in 2026 across all of our business units primarily as a result of lower routine operating costs in Ghana and GTA, decreased workover expense in our Gulf of America business unit, the TEN FPSO transaction, and the sale of the Equatorial Guinea assets in June 2026. This decrease is partially offset by higher sales volumes at Jubilee and GTA during the nine months ended September 30, 2026.
Exploration expenses. Exploration expenses decreased by $41.5 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 primarily related to the Winterfell-4 step out well which was plugged and abandoned during the nine months ended September 30, 2025 and decreased geological and geophysical studies and related costs for the nine months ended September 30, 2026. This decrease was partially offset by the write-off of exploration leasehold costs during 2026.
Depletion, depreciation and amortization. Depletion, depreciation and amortization decreased $60.8 million during the nine months ended September 30, 2026, as compared with the nine months ended September 30, 2025 primarily as a result of lower depletion rates per Boe across our portfolio and no depletion recorded on the Equatorial Guinea assets sold during the period, partially offset by higher sales volumes at Jubilee and GTA during the nine months ended September 30, 2026.
Derivatives, net. During the nine months ended September 30, 2026 and 2025, we recorded a loss of $334.1 million and a gain of $18.5 million, respectively, on our outstanding hedge positions. The changes recorded were a result of changes in the forward curve of oil prices during the respective periods.
Income tax expense. For the nine months ended September 30, 2026 and 2025, our overall effective tax rates were impacted by the difference in our 21% U.S. income tax reporting rate and the 35% statutory tax rates applicable to our Ghanaian and Equatorial Guinean operations, jurisdictions that have a 0% statutory tax rate or where we have incurred losses and have recorded valuation allowances against the corresponding deferred tax assets, and other non-deductible expenses, primarily in the U.S.
Liquidity and Capital Resources
We are actively engaged in an ongoing process of anticipating and meeting our funding requirements related to our strategy as a deepwater exploration and production company. We have historically met our funding requirements through cash flows generated from our operating activities and obtained additional funding from issuances of equity and debt, as well as partner carries.
Oil prices are historically volatile and could negatively impact our ability to generate sufficient operating cash flows to meet our funding requirements. This oil price volatility could impact our ability to comply with our financial covenants. To partially mitigate this price volatility, we maintain an active hedging program and review our capital spending program on a regular basis. Our investment decisions are based on longer-term commodity prices based on the nature of our projects and development plans. Current commodity prices, combined with our hedging program and our current liquidity position is expected to support our remaining capital program for 2026.
As such, our capital budget for the last quarter of 2026 is based on our exploitation plans for our producing assets in Ghana, Mauritania, Senegal and the Gulf of America, and our development activities in the Gulf of America and in Mauritania and Senegal.
Our future financial condition and liquidity can be impacted by, among other factors, the success of our exploration, appraisal and exploitation drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the reliability of our oil and gas production facilities, our ability to continuously export oil, natural gas and LNG and our ability to secure and
maintain partners and their alignment with respect to capital plans, the actual cost of exploration, appraisal, exploitation and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.
Sources and Uses of Cash
The following table presents the sources and uses of our cash and cash equivalents and restricted cash for the nine months ended September 30, 2026 and 2025:
Nine Months Ended
September 30,
2026 2025
(In thousands)
Sources of cash, cash equivalents and restricted cash:
Net cash provided by operating activities $ 445,550 $ 98,712
Borrowings under long-term debt 151,167 375,000
Net proceeds from issuance of senior notes and bonds 350,000 -
Net proceeds from issuance of common stock 206,440 -
Proceeds on sale of assets 127,034 -
1,280,191 473,712
Uses of cash, cash equivalents and restricted cash:
Oil and gas assets 228,002 244,133
Notes receivable and other investing activities
11,598 86,791
Payments on long-term debt 569,848 150,000
Repurchase and redemption of senior notes 397,184 -
Payments on finance lease
24,270 -
Other financing costs
8,836 1
1,239,738 480,925
Increase (decrease) in cash, cash equivalents and restricted cash $ 40,453 $ (7,213)
Net cash provided by operating activities. Net cash provided by operating activities for the nine months ended September 30, 2026 was $445.6 million compared with net cash provided by operating activities for the nine months ended September 30, 2025 of $98.7 million. The increase in cash provided by operating activities in the nine months ended September 30, 2026 when compared to the same period in 2025 is primarily a result of higher production and sales volumes at Jubilee and GTA, higher average realized oil and gas prices, lower routine oil and gas production costs across all of our business units, decreased workover expense in our Gulf of America business unit, the TEN FPSO transaction and the sale of the Equatorial Guinea assets in June 2026.
The following table presents our liquidity and financial position as of September 30, 2026 and December 31, 2025:
September 30, 2026 December 31, 2025
(In thousands)
Outstanding debt principal balances:
Facility
$ 750,000 $ 1,200,000
7.125% Senior Notes - 100,000
7.750% Senior Notes
49,973 350,000
7.500% Senior Notes 400,274 400,274
8.750% Senior Notes 500,000 500,000
3.125% Convertible Senior Notes 400,000 400,000
11.250% Senior Secured Bonds
350,000 -
GoA Term Loan Facility 181,319 150,000
Total long-term debt 2,631,566 3,100,274
Cash and cash equivalents 103,749 91,518
Total restricted cash (1)
54,448 26,226
Net debt(2) $ 2,473,369 $ 2,982,530
Availability under the Facility $ 463,019 $ 150,000
Availability under the GoA Term Loan Facility $ - $ 100,000
Available borrowings plus cash and cash equivalents $ 566,768 $ 341,518
(1)Previously, when our debt cover ratio exceeded 2.50x, we were required under the Facility to maintain a restricted cash balance that was sufficient to meet the payment of interest and fees for the next six-month period on the 7.750% Senior Notes, the 7.500% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes or the Facility, whichever is greater. Our debt cover ratio for the most recent September 30, 2026 financial covenant test date exceeded 2.50x. As of September 30, 2026, we had funded approximately $23.6 million into the debt service reserve account as required under the terms of the Facility. However, following the amendment and restatement of the Facility in October 2026, the requirement to fund the debt service reserve account has been removed and therefore the $23.6 million of previously restricted cash has become unrestricted in the fourth quarter of 2026.
(2)Excludes $63.9 million TEN FPSO finance lease liability. For purposes of the debt cover ratio calculation under the Facility, the finance lease liability is included in net debt.
Capital Expenditures and Investments
For our capital expenditure budget for the last quarter of 2026, we expect to incur capital costs as we advance development efforts in Ghana, the Gulf of America and in Mauritania and Senegal.
We have relied on a number of assumptions in budgeting for our future activities. These include the number of wells we plan to drill, our paying interests in our operations including disproportionate payment amounts, the costs involved in developing or participating in the development of a prospect, the timing of third-party projects, the availability of suitable equipment and qualified personnel and our cash flows from operations. We also evaluate potential corporate and asset acquisition opportunities to support and expand our asset portfolio which may impact our budget assumptions. These assumptions are inherently subject to significant business, political, economic, regulatory, health, environmental and competitive uncertainties, contingencies and risks, all of which are difficult to predict and many of which are beyond our control. We may need to raise additional funds more quickly if market conditions deteriorate, or one or more of our assumptions proves to be incorrect, or if we choose to expand our acquisition, exploration, appraisal, development efforts or any other activity more rapidly than we presently anticipate. We may decide to raise additional funds before we need them if the conditions for raising capital are favorable. We may seek to sell assets, equity or debt securities or obtain additional bank credit facilities. The sale of equity securities could result in dilution to our shareholders. The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations.
2026 Capital Program
We estimate we will spend in aggregate around $350 million of capital for the year ending December 31, 2026, excluding any acquisitions or divestitures of oil and gas properties during the year. This capital expenditure budget consists of:
•Approximately $290 million related to maintenance activities and infill development drilling across our producing Ghana and Gulf of America assets, including the TEN FPSO purchase payments;
•Approximately $60 million related to progressing our development programs in the Gulf of America and in Mauritania and Senegal and includes first half 2026 integrity spend in Equatorial Guinea.
The ultimate amount of capital we will spend may fluctuate materially based on market conditions and the success of our exploitation and drilling results among other factors. Our future financial condition and liquidity will be impacted by, among other factors, our level of production of oil, natural gas and LNG and the prices we receive from the sale of oil, natural gas and LNG, and our ability to effectively hedge future production volumes, the success of our multi-faceted infrastructure-led exploration, appraisal and development drilling programs, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, our partners' alignment with respect to capital plans, and the actual cost of exploration, appraisal, exploitation and development of our oil and natural gas assets, and coverage of any claims under our insurance policies.
Significant Sources of Capital
Facility
The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September. The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets' reserves and/or resources in the Jubilee and TEN Fields in Ghana. As of September 30, 2026, borrowings under the Facility totaled approximately $750.0 million and the undrawn availability under the Facility was approximately $463 million.
We were in compliance with the financial covenants contained in the Facility as of September 30, 2026 (the most recent assessment date). Post the amendment and restatement of the Facility in October 2026, the debt cover ratio returns to the originally agree upon ratio of 3.5x for assessment dates going forward.
In October 2026, the Company amended and restated the Facility. The amendment includes the following material changes: an extension in the tenor by approximately 3.25 years (final maturity date now occurs April 1, 2033), a change in the applicable interest margin to 4.50% for the first three years, with subsequent increases during the amortization period, the addition of a new minimum liquidity covenant requiring the Company to maintain a minimum liquidity of $200 million, to be tested semi-annually beginning on March 31, 2027 and the functional removal of the debt service reserve account. The Facility size has been reduced to $1.2 billion in line with total commitments. The Company also has the option, subject to certain conditions and exceptions, to increase total available commitments up to an additional $550 million. The available facility amount is subject to borrowing base constraints and, beginning on October 1, 2029, outstanding borrowings will be constrained by an amortization schedule.
The Facility provides a revolving credit and letter of credit facility. The availability period for the revolving credit facility expires one month prior to the final maturity date. The letter of credit facility expires on the final maturity date. As of September 30, 2026, we had no letters of credit issued under the Facility. We have the right to cancel all the undrawn commitments under the amended and restated Facility.
If an event of default exists under the Facility, the lenders can accelerate the maturity and exercise other rights and remedies, including the enforcement of security granted pursuant to the Facility over certain assets. The amended and restated Facility contains customary cross default provisions.
The U.S. and many foreign economies continue to experience uncertainty driven by varying macroeconomic conditions. Uncertainty in the macroeconomic environment and associated global economic conditions have resulted in volatility in credit, equity, and foreign currency markets, including the European sovereign debt markets and volatility in various other markets. If any of the financial institutions within our Facility are unable to perform on their commitments, our liquidity could be impacted. We actively monitor all of the financial institutions participating in our Facility. None of the financial institutions have indicated to us that they may be unable to perform on their commitments. In addition, we periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of the relationships. Based on our monitoring activities, we currently believe our banks will be able to perform on their commitments.
Senior Notes
We have three series of senior notes outstanding as of September 30, 2026, which we collectively refer to as the "Senior Notes." Our 7.750% Senior Notes have an outstanding balance of approximately $50.0 million and mature on May 1, 2027. Interest is payable on the 7.750% Senior Notes each May 1 and November 1. Our 7.500% Senior Notes have an outstanding balance of approximately $400.3 million and mature on March 1, 2028. Interest is payable on the 7.500% Senior Notes each March 1 and September 1. Our 8.750% Senior Notes have an outstanding balance of $500.0 million and mature on October 1, 2031. Interest is payable on the 8.750% Senior Notes each April 1 and October 1.
The Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equally in right of payment with all of its existing and future senior indebtedness (including the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility, the GoA Term Loan Facility and, with respect to certain of our subsidiaries that own our assets in Mauritania and Senegal, the GTA Nordic bonds). The GTA Nordic bonds are fully and unconditionally guaranteed by the Company, as well as the Company's wholly-owned subsidiaries, Kosmos Energy Tortue Finance, Kosmos Energy Senegal, Kosmos Energy Investments Senegal Limited and Kosmos Energy Mauritania. The GTA Nordic bonds are also guaranteed on an unsecured basis by certain of the Company's subsidiaries that also guarantee the Senior Notes on a senior, unsecured basis. The Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's Gulf of America assets, and on a subordinated, unsecured basis by entities that borrow under, or guarantee, our Facility.
3.125% Convertible Senior Notes due 2030
We have one series of senior convertible notes outstanding. Our 3.125% Convertible Senior Notes mature on March 15, 2030, unless earlier converted, redeemed or repurchased. Interest is payable in arrears each March 15 and September 15, commencing September 15, 2024.
The 3.125% Convertible Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility, to the extent of the value of the assets securing such indebtedness). The 3.125% Convertible Senior Notes are guaranteed on a senior, unsecured basis by certain of our existing subsidiaries that guarantee on a senior basis the Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries. The 3.125% Convertible Senior Notes are guaranteed on a subordinated, unsecured basis by certain of our existing subsidiaries that borrow under or guarantee the Facility and guarantee on a subordinated basis the Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries.
The 3.125% Convertible Senior Notes indenture contains customary terms and covenants.
In connection with the issuance of the 3.125% Convertible Senior Notes, the Company entered into capped call transactions (the "Capped Call Transactions"). The Capped Call Transactions are generally expected to reduce potential dilution to holders of our common stock upon any conversion of the 3.125% Convertible Senior Notes and/or offset any cash payments that we are required to make in excess of the principal amount of any 3.125% Convertible Senior Notes that are converted, as the case may be, with such reduction and/or offset subject to a cap.
GoA Term Loan Facility
On September 24, 2025, the Company entered into a senior secured term loan credit agreement secured by first priority liens on all of the Company's Gulf of America assets (as defined in the credit agreement). The GoA Term Loan Facility is structured in two tranches, with the first tranche consisting of a four-year term loan in an aggregate principal amount of $150.0 million, which was funded on October 1, 2025, and a second tranche of an additional $100.0 million, which was funded in January 2026. The net proceeds were used, together with cash on hand, to fund the redemption of $250.0 million in aggregate of the 7.125% Senior Notes due in 2026. On March 24, 2026, we made a voluntary prepayment of $53.6 million against the
GoA Term Loan. On May 1, 2026, the GoA Term Loan Facility was amended to apply this prepayment in full satisfaction of the scheduled principal amount due on the first scheduled amortization payment date on June 30, 2026, and then ratably to all remaining scheduled principal payments of the outstanding loans. The amendment also deferred all future scheduled amortization payment dates in 2026, 2027 and 2028 such that they will now be due on October 1, January 1, April 1 and July 1 in each of 2026, 2027 and 2028. On September 30, 2026, we paid the scheduled principal payment of $15.1 million against the GoA Term Loan, satisfying the remaining 2026 obligations.
Interest on outstanding loans under the GoA Term Loan Facility is payable quarterly in arrears at a rate per annum equal to 3.75% plus the term SOFR reference rate administered by CME Group Benchmark Administration Limited for the relevant period published. The GoA Term Loan Facility matures in 2029.
GTA Nordic Bonds
In January 2026, we issued one series of senior secured GTA Nordic bonds totaling $350.0 million. Our 11.250% senior secured GTA Nordic bonds mature in January 2031, unless earlier redeemed or repurchased. Interest is payable semi-annually in arrears each July 29 and January 29, commencing July 29, 2026.
The GTA Nordic bonds were issued by Kosmos Energy GTA Holdings, a wholly-owned subsidiary of Kosmos Energy Ltd., and are fully and unconditionally guaranteed by the Company, as well as the Company's wholly-owned subsidiaries, Kosmos Energy Tortue Finance, Kosmos Energy Senegal, Kosmos Energy Investments Senegal Limited and Kosmos Energy Mauritania. The GTA Nordic bonds are also guaranteed on an unsecured basis by certain of the Company's subsidiaries that also guarantee the Company's existing senior unsecured notes.
The Bond Terms governing the GTA Nordic bonds also require Kosmos Energy GTA Holdings to maintain certain financial covenants including:
•Minimum Liquidity (as defined in the Bond Terms) of not less than $17.5 million or 5% of the outstanding GTA Nordic bonds, whichever is greater; and
•an Asset Coverage Ratio (as defined in the Bond Terms) of at least 1.25x.
Equity Issuance
In March 2026, the Company completed a registered underwritten public offering of 112.1 million shares of common stock, resulting in net proceeds to Kosmos of approximately $206.4 million.
Contractual Obligations
The following table summarizes by period the payments due for our estimated contractual obligations as of September 30, 2026, and the weighted average interest rates expected to be paid on the Facility given current contractual terms and market conditions, and the instrument's estimated fair value. Weighted-average interest rates are based on implied forward rates in the yield curve at the reporting date. This table does not include amortization of deferred financing costs.
Asset
(Liability)
Fair Value at
Years Ending December 31, September 30,
2026(2) 2027 2028 2029 2030 Thereafter Total 2026
(In thousands, except percentages)
Fixed rate debt:
7.750% Senior Notes $ - $ 49,973 $ - $ - $ - $ - $ 49,973 $ 50,102
7.500% Senior Notes - - 400,274 - - - 400,274 398,289
8.750% Senior Notes
- - - - - 500,000 500,000 458,340
3.125% Convertible Senior Notes
- - - - 400,000 - 400,000 331,000
11.250% Senior Secured Bonds
- - - - - 350,000 350,000 376,131
Variable rate debt:
Weighted average interest rate 8.50 % 9.66 % 10.32 % 10.54 % - % - %
Facility(1) $ - $ 121,436 $ 258,143 $ 370,421 $ - $ - $ 750,000 $ 750,000
GoA Term Loan Facility
- 60,439 60,440 60,440 - - 181,319 181,319
Total principal debt repayments $ - $ 231,848 $ 718,857 $ 430,861 $ 400,000 $ 850,000 $ 2,631,566
Interest & commitment fee payments on long-term debt 75,342 217,697 174,796 125,173 89,375 63,438 745,821
Operating leases(3)
1,011 3,952 3,744 3,176 - - 11,883
Finance lease
13,536 52,514 - - - - 66,050
Purchase obligations(4)
8,269 21,905 2,420 - - - 32,594
Decommissioning Trust Funds(5)
- 8,284 8,284 8,284 8,284 77,865 111,001
Firm transportation commitments 979 2,315 - - - - 3,294
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(1)The amounts included in the table represent principal maturities only. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the available borrowing base as of September 30, 2026. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. In October 2026, the Company agreed to an amendment and restatement of the Facility. The amendment includes an extension of the amortization schedule such that amortization of principal is to commence with an initial reduction on October 1, 2029 and then continue in equal amounts every six months thereafter until the maturity date which is extended by approximately 3.25 years (final maturity date now occurs April 1, 2033).
(2)Represents the period October 1, 2026 through December 31, 2026.
(3)Primarily relates to corporate and foreign office leases.
(4)Represents gross contractual obligations to execute planned future capital projects. Other joint owners in the properties operated by Kosmos will be billed for their working interest share of such costs. Does not include our share of operator's purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments and seismic obligations, in our petroleum contracts. The Company's liabilities for asset retirement obligations associated with the dismantlement, abandonment and restoration costs of oil and gas properties are not included. See Note 15 - Additional Financial Information for additional information regarding these liabilities.
(5)In April 2024, a decommissioning trust agreement with the Jubilee unit partners to cash fund future retirement costs associated with the Jubilee Field was finalized. The operator currently estimates the total commitment to be approximately $111.0 million as of September 30, 2026, net to Kosmos, which will be funded annually by Kosmos over an estimated fourteen year period. It is possible that our funding requirements could change based on future changes in the decommissioning plan or estimates.
As of September 30, 2026, the Jubilee partners have a commitment to drill a minimum of ten development wells under the amended Jubilee plan of development as part of the license extensions of WCTP and DT Petroleum Agreements in Ghana.
Once the Tortue Phase 1 SPA Commercial Operations Date was achieved in February 2026, we have a commitment to our buyer under the Tortue Phase 1 SPA, BP Gas Marketing Limited, to deliver our proportionate share of a minimum annual contract quantity of LNG of 127,951,000 MMBtu, which is equivalent to approximately 2.45 million tonnes per annum, subject to certain downward adjustments by the sellers. Under certain circumstances, in the event the annual quantities provided are lower than the minimum annual contract quantity, Kosmos may be obligated to credit or pay a portion of the Contract Price to BP Gas Marketing Limited for the shortfall volumes.
Critical Accounting Policies
We consider accounting policies related to our revenue recognition, exploration and development costs, income taxes, estimates of proved oil and gas reserves, asset retirement obligations, impairment of long-lived assets, and acquisition accounting as critical accounting policies. The policies include significant estimates made by management using information available at the time the estimates are made. However, these estimates could change materially if different information or assumptions were used. Other than items discussed in Note 2 - Accounting Policies, there have been no changes to our critical accounting policies which are summarized in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" section in our annual report on Form 10-K, for the year ended December 31, 2025.
Cautionary Note Regarding Forward-looking Statements
This quarterly report on Form 10-Q contains estimates and forward-looking statements, principally in "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. Although we believe 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 us. Many important factors, in addition to the factors described in our quarterly report on Form 10-Q and our annual report on Form 10-K, may adversely affect our results as indicated in forward-looking statements. You should read this quarterly report on Form 10-Q, the annual report on Form 10-K and the documents that we have filed with the Securities and Exchange Commission completely and with the understanding that our actual future results may be materially different from what we expect. Our estimates and forward-looking statements may be influenced by the following factors, among others:
•the impact of a potential regional or global recession, inflationary pressures and other varying macroeconomic conditions on us and the overall business environment;
•the impacts of the conflict in Iran and ongoing instability in the Middle East and Latin America, the continued war in Ukraine and the effects these events have on the oil and gas industry as a whole, including increased volatility with respect to oil, natural gas and liquified natural gas ("LNG") prices and operating and capital expenditures;
•our ability to find, acquire or gain access to other discoveries and prospects and to successfully develop and produce from our current discoveries and prospects;
•uncertainties inherent in making estimates of our oil and natural gas data;
•the successful implementation of our and our block partners' prospect discovery and development and drilling plans;
•projected and targeted capital expenditures and other costs, commitments and revenues;
•termination of or intervention in concessions, rights or authorizations granted to us by the governments of the countries in which we operate (or their respective national oil companies) or any other federal, state or local governments or authorities;
•our dependence on our key management personnel and our ability to attract and retain qualified technical personnel;
•the ability to obtain financing and to comply with the terms under which such financing may be available;
•the volatility of oil, natural gas and LNG prices, as well as our ability to implement hedges addressing such volatility on commercially reasonable terms;
•the availability, cost, function and reliability of developing appropriate infrastructure around and transportation to our discoveries and prospects;
•the availability and cost of drilling rigs, production equipment, supplies, personnel and oilfield services;
•other competitive pressures;
•potential liabilities inherent in oil and natural gas operations, including drilling and production risks and other operational and environmental risks and hazards;
•current and future government regulation of the oil and gas industry, applicable monetary/foreign exchange sectors or regulation of the investment in or ability to do business with certain countries or regimes;
•cost of compliance with laws and regulations;
•changes in, or new, environmental, health and safety or climate change or GHG laws, regulations and executive orders, or the implementation, or interpretation, of those laws, regulations and executive orders;
•adverse effects of sovereign boundary disputes in the jurisdictions in which we operate;
•environmental liabilities;
•geological, geophysical and other technical and operations problems, including drilling and oil and gas production and processing;
•military operations, civil unrest, outbreaks of disease, terrorist acts, wars or embargoes;
•the cost and availability of adequate insurance coverage and whether such coverage is enough to sufficiently mitigate potential losses and whether our insurers comply with their obligations under our coverage agreements;
•our vulnerability to severe weather events, including, but not limited to, tropical storms and hurricanes, and the physical effects of climate change;
•our ability to meet our obligations under the agreements governing our indebtedness;
•the availability and cost of financing and refinancing our indebtedness;
•the amount of collateral required to be posted from time to time in our hedging transactions, letters of credit, performance bonds and other secured debt;
•our ability to obtain surety or performance bonds on commercially reasonable terms;
•the result of any legal proceedings, arbitrations, or investigations we may be subject to or involved in;
•our success in risk management activities, including the use of derivative financial instruments to hedge commodity and interest rate risks; and
•other risk factors discussed in the "Item 1A. Risk Factors" section of our quarterly reports on Form 10-Q and our annual report on Form 10-K.
The words "believe," "may," "will," "aim," "estimate," "continue," "anticipate," "intend," "expect," "plan" and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and, except to the extent required by law, we undertake no obligation to update or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. As a result of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this quarterly report on Form 10-Q might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, including, but not limited to, the factors mentioned above. Because of these uncertainties, you should not place undue reliance on these forward-looking statements.
Kosmos Energy Ltd. published this content on November 02, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 02, 2026 at 20:00 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]