Kosmos Energy Ltd. (“Kosmos” or the “Company”) (NYSE/LSE: KOS) announced today its financial and operating results for the first quarter of 2023. For the quarter, the Company generated a net income of $83 million, or $0.17 per diluted share. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net income⁽¹⁾ of $78 million, or $0.16 per diluted share for the first quarter of 2023.

FIRST QUARTER 2023 HIGHLIGHTS

• Net Production⁽²⁾: ~58,800 barrels of oil equivalent per day (boepd), with sales of ~61,100 boepd
• Revenues: $394 million, or $71.67 per boe (excluding the impact of derivative cash settlements)
• Production expense: $84 million, or $15.26 per boe
• Capital expenditures: $206 million
• On Phase 2 of the Greater Tortue Ahmeyim LNG project, partners confirmed a gravity-based structure development concept

Commenting on the Company’s first quarter 2023 performance, Chairman and Chief Executive Officer Andrew G. Inglis said: “Kosmos delivered solid performance in the first quarter and moved the company closer to the expected mid-year free cash flow inflection point. We have three development projects underway that aim to increase production by around 50% from current levels.

“New oil production from Jubilee is expected online shortly, with capital expenditure starting to fall through the rest of the year. We have also made good progress in the quarter on Phase 1 of the Tortue project and drilling at Winterfell is planned to begin next quarter.

“Kosmos has a busy year of catalysts ahead, having already delivered key milestones in the first quarter. We remain focused on execution and realizing the full potential of our distinctive assets.”

FINANCIAL UPDATE

Net capital expenditures for the first quarter of 2023 was $206 million, in line with guidance.

Realized pricing for the quarter of $70.91 per boe, including derivative cash settlements, was lower compared to the fourth quarter due to lower commodity prices during the period, and was partially offset by a reduction in operating expenses to $15.26 per boe.

Kosmos exited the first quarter of 2023 with approximately $2.3 billion of total long-term debt and approximately $2.1 billion of net debt⁽¹⁾ and available liquidity of approximately $1.0 billion. The Company generated net cash provided by operating activities of approximately $204 million and free cash flow⁽¹⁾ of approximately $(20) million in the first quarter.

At the end of the quarter, the company completed its semi-annual re-determination of the RBL facility. As expected, the borrowing base decreased by ~$100 million, effective April 1, due to the reduction in loan life.

OPERATIONAL UPDATE

Production

Total net production⁽²⁾ in the first quarter of 2023 averaged approximately 58,800 boepd, in line with company guidance. The Company exited the quarter in a net overlift position.

Ghana

Production in Ghana averaged approximately 33,600 boepd net in the first quarter of 2023. Kosmos lifted three cargos from Ghana during the quarter, in line with guidance.

At Jubilee, production averaged approximately 72,200 bopd gross during the quarter. Lower production during the quarter, compared to the previous quarter, was largely due to reduced water injection to manage reservoir pressure during Jubilee Southeast drilling. Normal water injection at Jubilee resumed late February.

Drilling on the Jubilee field continues to make good progress with five wells across the Jubilee main reservoir and Jubilee Southeast development expected online from the end of the second quarter through to the end of the third quarter (four producer wells and one injector well). Production at the Jubilee field is expected to rise through to year-end as these new wells come online. The partnership expects new wells to increase gross production at Jubilee by over 50% from the first quarter to more than 110,000 bopd by the end of 2023.

At TEN, production averaged approximately 20,300 bopd gross for the first quarter.

Two cargos are expected in Ghana in the second quarter of 2023, which would lead to an underlift position at the end of the second quarter, ahead of an anticipated increase in cargo liftings during the second half of the year as Jubilee production ramps up.

U.S. Gulf of Mexico

Production in the U.S. Gulf of Mexico averaged approximately 15,900 boepd net (~82% oil) during the first quarter, in line with guidance.

The workover plan for the Kodiak ST3 well has progressed and a vessel has been contracted. Work is expected to begin in the fourth quarter.

The Odd Job subsea pump project, intended to sustain long-term production from the field, is 45% complete and is on track to be in service by mid-year 2024.

The Winterfell development project continues to progress. Drilling is expected to start in the third quarter of 2023, with first oil targeted around the end of the first quarter of 2024. Host facility and export agreements are expected to be executed around mid-year 2023.

The Tiberius infrastructure-led exploration (ILX) well, a four-way structural trap targeting a pre-drill gross resource of ~135 million barrels of oil, is scheduled to spud in the third quarter.

Equatorial Guinea

Production in Equatorial Guinea averaged approximately 27,200 bopd gross and 9,300 bopd net in the first quarter of 2023. Kosmos lifted 1 cargo from Equatorial Guinea during the quarter, in line with guidance.

The infill drilling campaign is scheduled to commence in the fourth quarter of 2023 with the first of three infill wells expected to be online around the end of the year.

The Akeng Deep ILX opportunity, a well targeting a pre-drill gross resource of ~180 million barrels of oil in the deeper Albian trend, is expected to spud next year following the completion of the infill drilling campaign.

Mauritania & Senegal

Phase 1 of the Greater Tortue Ahmeyim liquified natural gas (LNG) project continues to make good progress. First gas is targeted at the end of 2023 with continued progress across the four major work streams:

• Hub Terminal: Construction work is complete, and activity is focused on progressing the final commissioning for handover to operations around the end of the second quarter of 2023.
• Subsea: Laying of the deepwater section of the pipeline from the field to the FPSO is currently underway. This will be followed by the installation of the infield flowlines and subsea structures. Timely execution of this subsea work scope is the critical path to first gas by the end of the year.
• FPSO: Arrival on location offshore Mauritania/Senegal is expected around the end of the second quarter of 2023 when the hookup and commissioning work will commence.
• FLNG: Construction and mechanical completion activities are finishing and commissioning work is underway. Sailaway is targeted for mid-year 2023.

Further progress has also been made across the company's other future gas developments:

• Tortue Phase 2: In late February, the company announced that the partnership had selected a gravity-based structure development concept, a key step to advancing the project into pre-FEED.
• BirAllah: Kosmos is working with the partnership and Government of Mauritania on project optimization and concept selection.
• Yakaar-Teranga: The partnership is continuing to progress the first phase domestic gas scheme with the Government of Senegal, with the potential for LNG export in future phases.

(1) A Non-GAAP measure, see attached reconciliation of non-GAAP measure.

(2) Production means net entitlement volumes. In Ghana and Equatorial Guinea, this means those volumes net to Kosmos' working interest or participating interest and net of royalty or production sharing contract effect. In the U.S. Gulf of Mexico, this means those volumes net to Kosmos' working interest and net of royalty.

Conference Call and Webcast Information

Kosmos will host a conference call and webcast to discuss first quarter 2023 financial and operating results today, May 9, 2023, at 10:00 a.m. Central time (11:00 a.m. Eastern time). The live webcast of the event can be accessed on the Investors page of Kosmos’ website at http://investors.kosmosenergy.com/investor-events. The dial-in telephone number for the call is +1-877-407-0784. Callers in the United Kingdom should call 0800 756 3429. Callers outside the United States should dial +1-201-689-8560. A replay of the webcast will be available on the Investors page of Kosmos’ website for approximately 90 days following the event.

About Kosmos Energy

Kosmos is a full-cycle deepwater independent oil and gas exploration and production company focused along the Atlantic Margins. Our key assets include production offshore Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, as well as a world-class gas development offshore Mauritania and Senegal. We also maintain a sustainable proven basin exploration program in Equatorial Guinea, Ghana and the U.S. Gulf of Mexico. Kosmos is listed on the New York Stock Exchange and London Stock Exchange and is traded under the ticker symbol KOS. As an ethical and transparent company, Kosmos is committed to doing things the right way. The Company’s Business Principles articulate our commitment to transparency, ethics, human rights, safety and the environment. Read more about this commitment in the Kosmos Sustainability Report. For additional information, visit www.kosmosenergy.com.

Non-GAAP Financial Measures

EBITDAX, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, and net debt are supplemental non-GAAP financial measures used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines EBITDAX as Net income (loss) plus (i) exploration expense, (ii) depletion, depreciation and amortization expense, (iii) equity based compensation expense, (iv) unrealized (gain) loss on commodity derivatives (realized losses are deducted and realized gains are added back), (v) (gain) loss on sale of oil and gas properties, (vi) interest (income) expense, (vii) income taxes, (viii) loss on extinguishment of debt, (ix) doubtful accounts expense and (x) similar other material items which management believes affect the comparability of operating results. The Company defines Adjusted net income (loss) as Net income (loss) adjusted for certain items that impact the comparability of results. The Company defines free cash flow as net cash provided by operating activities less Oil and gas assets, Other property, and certain other items that may affect the comparability of results and excludes non-recurring activity such as acquisitions, divestitures and National Oil Company ("NOC") financing. NOC financing refers to the amounts funded by Kosmos under the Carry Advance Agreements that the Company has in place with the national oil companies of each of Mauritania and Senegal related to the financing of the respective national oil companies’ share of certain development costs at Greater Tortue Ahmeyim. The Company defines net debt as total long-term debt less cash and cash equivalents and total restricted cash.

We believe that EBITDAX, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, Net debt and other similar measures are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the oil and gas sector and will provide investors with a useful tool for assessing the comparability between periods, among securities analysts, as well as company by company. EBITDAX, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, and net debt as presented by us may not be comparable to similarly titled measures of other companies.

This release also contains certain forward-looking non-GAAP financial measures, including free cash flow. Due to the forward-looking nature of the aforementioned non-GAAP financial measures, management cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, we are unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from these non-GAAP measures in future periods could be significant.

Forward-Looking Statements

This press release 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 press release that address activities, events or developments that Kosmos expects, believes or anticipates will or may occur in the future are forward-looking statements. Kosmos’ 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 Kosmos 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 Kosmos. When used in this press release, 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 Kosmos (including, but not limited to, the impact of the COVID-19 pandemic), 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 Kosmos’ Securities and Exchange Commission (“SEC”) filings. 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 press release, 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 press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

The following table presents our net debt as of March 31, 2023 and December 31, 2022:

Kosmos was overlifted by approximately (217.0) thousand barrels as of March 31, 2023.

2023 Guidance

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