5th Aug 2024 12:07
(Alliance News) - Kosmos Energy Ltd reported a mixed bag of second quarter results, with an earnings beat offset by a cut in production guidance, analysts on Monday said.
The Dallas, Texas-based oil & gas exploration and production company said in the second quarter that ended June 30, pretax profit more than doubled to USD135.1 million from USD53.2 million the previous year.
Revenue jumped 65% to USD450.9 million from USD273.3 million.
Net production increased 7.1% to 62,100 barrels of oil equivalent per day from 58,000 boepd, while net sales grew 45% to 65,400 from 45,200 boepd.
Total costs and expenses rose 43% to USD315.8 million from USD220.1 million.
Chief Executive Officer Andrew Inglis said: "Production is rising in the US Gulf of Mexico with the startup of Winterfell [in July] and the successful completion of our production optimization activities. The drilling campaign in Equatorial Guinea has now commenced and we continue to see good progress across all major workstreams on the GTA project in Mauritania and Senegal."
Kosmos finished the quarter with net debt of USD2.5 billion, up 8.7% from USD2.3 billion last year.
"As production ramps up and capital expenditures are expected to fall, we remain committed to delivering free cash flow within a disciplined capital framework, to further enhance the financial resilience of the company, after which we will consider shareholder returns," Inglis added.
Analysts at Stifel said the results showed a cash flow and earnings beat as pricing and costs exceeded its expectations.
Production of 62.1 kboepd, was within guidance but below the broker's 63.7 kboepd forecast. Revenue beat Stifel's USD424 million forecast with operating cash flow ahead of the USD170 million estimate.
"But 2024 production guidance has, however, been revised down to reflect the previously announced
disappointing production well at Jubilee, as well as the later start-up at Winterfel," the broker explained.
Stifel noted 2024 production is now expected to be 67 to 71 kboepd, down from 71 to 77 kboepd before.
But the broker said there are positives to take away from this statement such as the Gulf of Mexico where production has risen to the highest level seen in a number of years.
The broker reiterated a 'buy' rating and does not expect to make many significant changes to its net asset value forecast. Prior to any changes its NAV stands at USD8.81 per share.
Kosmos Energy shares fell 9.3% to 380.00 pence each in London on Monday.
By Jeremy Cutler, Alliance News reporter
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