KOSMOS ENERGY LTD. (NASDAQ:KOS) Files An 8-K Entry into a Material Definitive Agreement

Item1.01. Entry into a Material Definitive Agreement.

On December15, 2016, Kosmos Energy Mauritania (Kosmos Mauritania)
and Kosmos Energy Senegal (Kosmos Senegal), each a wholly-owned
subsidiary of Kosmos Energy Ltd. (the Company), entered into
agreements with certain subsidiaries of BP p.l.c. for the
farm-out of the Companys interests in blocks C6, C8, C12 and C13
offshore the Islamic Republic of Mauritania (the Mauritania
Blocks) and the Saint Louis offshore Profond and Cayar Offshore
Profond blocks offshore Senegal (the Senegal Blocks). Closing of
the several transactions described below is expected in the first
quarter of 2017, with an effective date of July1, 2016, subject
to customary conditions, including governmental approvals.

Kosmos Mauritania entered into a farm-out agreement, dated
December15, 2016 (the Mauritania Agreement), with BP Exploration
(West Africa) Limited (BP Mauritania), relating to Kosmos
Mauritanias licenses covering the Mauritania Blocks. Under the
terms of the Mauritania Agreement, BP Mauritania will acquire a
62% participating interest in the Mauritania Blocks while paying
68.89% of the payment obligations due under the joint operating
agreements among Kosmos Mauritania, BP Mauritania and La Societe
Mauritanienne Des Hydrocarbures et de Patrimoine Minier (SMHPM).
SMHPM will continue to hold its 10% participating interest in the
Mauritania Blocks, and Kosmos Mauritania will retain a 28%
participating interest in the Mauritania Blocks. BP Mauritania
will be required to fund various payments and costs under the
Mauritania Agreement, including, but not limited to: (i)a $120
million initial payment to Kosmos Mauritania, (ii)costs and
expenditures made from the July1, 2016 effective date to the
completion of the farm-out transaction, (iii)exploration and
appraisal costs, up to a maximum of $221 million (together with
such costs under the Senegal Agreement), and development costs,
up to $533.4 million (together with such costs under the Senegal
Agreement) and (iv)a contingent production royalty of $0.0167 per
gross barrel produced from eligible discoveries within the
Mauritania Blocks multiplied by the average price of Brent crude
oil during the relevant production quarter, with a ceiling of
$2.00 per barrel for up to 1.0 billion barrels of gross oil
produced in aggregate from the Mauritania Blocks and Senegal
Blocks. Completion of the farm-out transaction in Mauritania is
subject to customary government approvals and other conditions
precedent.

Kosmos Senegal entered into a sale and purchase agreement, also
dated December15, 2016 (the Senegal Agreement), with BP Indonesia
Oil Terminal Investment Limited (BP Senegal), relating to Kosmos
Senegals subscribed equity interest in shares of Normandy
Ventures Limited (the JVCo), an affiliate of Kosmos Senegal,
which will hold Kosmos Senegals participating interests in the
Senegal Blocks upon transfer by Kosmos Senegal. Under the terms
of the Senegal Agreement, BP Senegal will acquire a 32.49%
effective participating interest in the licenses covering the
Senegal Blocks through its purchase of 49.99% of the JVCo shares.
In consideration therefor, BP Senegal will pay to Kosmos Senegal
approximately $42 million upon satisfaction of the conditions
precedent to and completion of the sale transaction under the
Senegal Agreement. In addition, BP Senegal will be required to
fund various fees, payments and costs under the Senegal
Agreement, including, but not limited to: (i)costs and
expenditures made from the July1, 2016 effective date to the
completion of the sale transaction, (ii)exploration and appraisal
costs, up to a maximum of $221 million (together with such costs
under the Mauritania Agreement), (iii)development costs, up to
$533.4 million (together with such costs under the Mauritania
Agreement, and (iv)a contingent production royalty of $0.00875
per gross barrel produced from eligible discoveries within the
Senegal Blocks multiplied by the average price of Brent crude oil
during the relevant production quarter, with a ceiling of $1.05
per barrel, for the first 1.0 billion barrels of gross oil
produced in aggregate from the Senegal Blocks and the Mauritania
Blocks. Such costs and expenditures payable to Kosmos Senegal
shall be adjusted according to the Senegal Agreement in the event
that JVCo owns less than a 65% participating interest in the
Senegal Blocks. Completion of the sale transaction in Senegal is
subject to customary government approvals and other conditions
precedent.

Item 7.01 Regulation FD Disclosure.

On December19, 2016 the Company issued a press release announcing
the entry into the agreements referred to above with the BP
Entities. A copy of the news release issued by the Company is
attached hereto as Exhibit99.1. The information in this Item 7.01
and Exhibit99.1 shall not be deemed filed for purposes of
Section18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to liabilities of that Section.

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