KOSMOS ENERGY LTD. (NYSE: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.
Forward-Looking Statements
This Current Report on Form8-K contains forward-looking
statements within the meaning of Section27A of the Securities
Act of 1933 and Section21E of the Securities Exchange Act of
1934. All statements, other than statements of historical
facts, included in this Current Report on Form8-K that address
activities, events or developments that the Company expects,
believes or anticipates will or may occur in the futureare
forward-looking statements. The Companys 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, or of
preliminary results of past performance which are yet to be
finalized. Although the Company 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 the Company. When used in this Current Report on
Form8-K, the words anticipate, believe, intend, expect,
estimate, 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 the Company, 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 the Companys other filings with the U.S.
Securities and Exchange Commission. The Company 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 Current Report on Form8-K,
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 Current Report on Form8-K.
All forward-looking statements are qualified in their entirety
by this cautionary statement.
Item 9.01. Financial Statements and Exhibits.
|
(d) |
Exhibits. |
The following exhibits are furnished as part of this |
||
|
99.1 |
News Release dated December19, 2016 announcing the |
About KOSMOS ENERGY LTD. (NYSE:KOS)
Kosmos Energy Ltd. (Kosmos) is a holding company. The Company is an independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margin. The Company operates in the exploration and production of oil and natural gas segment. The Company’s assets include existing production and development projects offshore Ghana, large discoveries offshore Mauritania and Senegal, as well as exploration licenses with hydrocarbon potential offshore Portugal, Sao Tome and Principe, Suriname, Morocco and Western Sahara. The Company has operations in Africa, Europe and South America. Its discoveries in Ghana include Jubilee Field, TEN, Mahogany, Teak, Akasa and Wawa. The Company’s other discoveries in Mauritania include Ahmeyim and Marsouin, and Senegal include Guembeul. The Company’s West Cape Three Points (WCTP) Block and Deepwater Tano (DT) Block are located within the Tano Basin, offshore Ghana. KOSMOS ENERGY LTD. (NYSE:KOS) Recent Trading Information
KOSMOS ENERGY LTD. (NYSE:KOS) closed its last trading session up +0.20 at 6.93 with 1,481,366 shares trading hands.
