DALLAS, TEXAS: Kosmos Energy has acquired an additional 18% interest in the Jubilee field and an additional 11% interest in the TEN fields in Ghana from Occidental Petroleum (OXY) for a purchase price of $550 million with an effective date of April 1, 2021.
Consideration due to Occidental Petroleum (OXY) at completion was approximately $460 million after taking into account closing adjustments.
This transaction increases Kosmos’ interests in Jubilee to 42.1% and in TEN to 28.1%. The transaction is subject to a 30-day pre-emption period, which, if fully exercised, could reduce Kosmos’ ultimate interest in Jubilee by 3.8% to 38.3%, and in TEN by 8.3% to 19.8%. Prior to closing the transaction, Occidental Petroleum (OXY) resolved certain historical tax claims related to the sold interests.
Andrew G. Inglis, Chairman and Chief Executive Officer of Kosmos said: “This is a compelling transaction for Kosmos that accelerates our strategic delivery and is expected to provide long-term sustainable cash flow from fields where we have a deep understanding of the value and future upside.
We expect the additional Ghana interests to generate around $1 billion of incremental free cash flow by the end of 2026 at $65 Brent with upside given current prices. We plan to use the additional cash flow from these assets to reduce absolute debt levels and fund our growth in LNG.
Financially, the transaction is highly accretive across all key metrics, including free cash flow, and accelerates our committed path to deleveraging the balance sheet. With significant net asset value accretion for the company, we believe that this transaction will deliver substantial returns to our shareholders.
The transaction creates a simplified and aligned partnership in both the Jubilee and TEN fields, with both Kosmos and GNPC increasing their ownership. The partnership is committed to investing in both fields to maximize the value of the assets and reduce the carbon intensity of operations for the benefit of all stakeholders.”
Kosmos Energy Ltd. has launched a registered underwritten public offering of 37.5 million shares of common stock.
In addition, Kosmos intends to grant the underwriters a 30-day option to purchase up to an additional 5.625 million shares of common stock at the public offering price less underwriting discounts.
Kosmos intends to use the net proceeds from this offering to repay outstanding borrowings under its commercial debt facility, including borrowings incurred to finance a portion of the previously announced acquisition of Anadarko WCTP Company.
Barclays, BofA Securities and Jefferies are acting as joint book-running managers in the Offering.
Kosmos is a full-cycle deepwater independent oil and gas exploration and production company focused along the Atlantic Margins. www.kosmosenergy.com