Kosmos Energy Q2 2026 Earnings Report

Kosmos Energy EPS Results

• Actual EPS: $0.11
• Consensus EPS: $0.09
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

Kosmos Energy Revenue Results

• Actual Revenue: $607.25 million
• Expected Revenue: $483.23 million
• Beat/Miss: Beat by +$124.02 million
• YoY Revenue Growth: N/A

Kosmos Energy Announcement Details

• Quarter: Q2 2026
• Date: 8/3/2026
• Time: Before Market Opens
• Conference Call Date: Monday, August 3, 2026
• Conference Call Time: 11:00AM ET

Kosmos Energy (NYSE:KOS) is an independent oil and gas exploration and production company headquartered in Dallas, Texas. Since its founding in 2003, the company has focused on identifying and developing hydrocarbon reserves in frontier and emerging basins around the world. Kosmos combines geological and geophysical expertise with a disciplined approach to acreage acquisition and partner selection to pursue high‐impact offshore exploration opportunities.

The company’s portfolio is anchored by assets in West Africa and the Gulf of Mexico. Kosmos is known for its discovery and development of the Jubilee and TEN fields offshore Ghana, which marked one of the largest deepwater oil finds in West Africa. More recently, the company has extended its presence in the Mauritania‐Senegal basin, working alongside international partners to appraise and advance the Greater Tortue Ahmeyim gas project. In the Gulf of Mexico, Kosmos holds interests in several deepwater blocks where it applies advanced seismic imaging and drilling technologies.

Over its history, Kosmos has achieved a series of significant exploration successes that have propelled its growth and attracted major industry collaboration. The company’s first major discovery came in 2007 with the Jubilee field, and subsequent partnerships have expanded its technical capabilities and financial backing. Through farm‐out agreements and joint ventures, Kosmos has managed to share exploration risk while retaining meaningful stakes in development projects.

Kosmos Energy is led by a senior management team with extensive upstream industry experience, supported by a board of directors that emphasizes strong governance and sustainability practices. The company maintains regional offices in key operating areas, including Accra, London and Houston, to oversee on-the-ground activities and stakeholder relations. Kosmos continues to pursue its strategy of disciplined exploration and development, targeting long-life resources in underexplored basins.

Kosmos Energy Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Production increased strongly, with first-half output up 18% year over year, driven by new Jubilee wells and the GTA ramp-up. Jubilee’s J76 well was described as one of the company’s best in more than a decade, and gross production is expected to exceed 90,000 barrels of oil per day once J50 starts.
• Positive Sentiment: Kosmos reported substantial balance-sheet improvement, including approximately $420 million of debt reduction in the quarter and about a 50% reduction in net debt versus year-end 2025. Management remains focused on reaching at least a 20% net-debt reduction for 2026, extending the RBL, and potentially addressing the 2028 notes.
• Positive Sentiment: Cost reductions are progressing ahead of schedule, with second-quarter absolute operating costs down roughly 25% year over year and full-year operating expense per barrel expected to decline by about 35%. GTA operating costs per MMBtu are also targeted to fall 50% this year, with further reductions expected as domestic gas-to-power volumes are added.
• Positive Sentiment: Kosmos completed a farm-down of the Tiberius project to Navitas, with proceeds consisting of upfront cash, future capital carries, and milestone payments that are expected to cover Kosmos’s Tiberius capital spending through the first half of 2027. First oil remains targeted for the second half of 2028, while the Shell-backed Trailblazer prospect is planned for drilling in early 2027.
• Negative Sentiment: Winterfell well 5 was temporarily abandoned because of casing problems, and management expressed frustration with repeated drilling execution issues and additional costs. Further capital spending on the project is paused until the operator identifies and resolves the problems.

Presentation

[Operator]

Good day, everyone. Welcome to Kosmos Energy's second quarter 2026 conference call. As a reminder, today's call is being recorded. At this time, let me turn the call over to Jamie Buckland, Vice President of Investor Relations at Kosmos Energy.

[Jamie Buckland, VP of Investor Relations at Kosmos Energy]

Thank you, operator. Thanks to everyone for joining us today. This morning, we issued our second quarter 2026 earnings release. This release and the slide presentation to accompany today's call are available on the investors page of our website. Joining me on the call today to go through the materials are Andy Inglis, Chairman and CEO, and Neal Shah, CFO. During today's presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations.

[Jamie Buckland, VP of Investor Relations at Kosmos Energy]

Actual results and outcomes could differ materially due to factors that we note in this presentation and in our U.K. and SEC filings. Please refer to our annual report, stock exchange announcement, and SEC filings for more details. These documents are available on our website. At this time, I'll turn the call over to Andy.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Thanks, Jamie. Good morning and afternoon to everyone. Thank you for joining us today for our second quarter 2026 results call. I'll begin today's call by reviewing the progress we've made against the four 2026 goals that we laid out at the start of the year before giving an update on each of our business units. I'll hand it to Neal to talk about the financials before I wrap up with closing remarks. We'll open up the call for Q&A. Starting on slide three. When we released our full year 2025 results in March, we laid out four key objectives for Kosmos in 2026, which is shown on the slide.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

I'm pleased to say, in the first half of the year, we've made excellent progress across all four. We've grown production from our core assets, namely Jubilee and GTA. We've delivered significant absolute and per BOE cost reductions year-on-year with a specific focus on operating costs. We've delivered a meaningful reduction in net debt already this year and are making good progress towards hitting a 20% reduction in net debt, a target we increased with our first quarter results in May.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

We've continued to advance our high-quality growth portfolio, particularly in the Gulf of Mexico, with minimal capital input. Through these actions, we're delivering a stronger and more valuable Kosmos, a company with high production, lower costs, and lower debt that is more resilient to future price volatility with significant upside from our deep hopper of future growth opportunities. I'll now go into more detail as we move through the slides. Starting with Ghana on slide four.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

We've seen a lot of positive progress in Ghana this year with an active drilling campaign that is delivering towards the upper end of our expectations, demonstrating Jubilee's potential. We've used the chart on this slide for the last few quarters to highlight the ramp-up in Jubilee production since the start of the current drilling campaign in the second half of 2025. Since we reported first quarter results in May, two new producers have come online, J76 and J77. The final producer well of the campaign, J50, is the completion of a previously drilled well, is expected to start up in the coming days.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

With J50 online, we expect Jubilee gross production above 90,000 bpd. J76 in particular came in at the top end of our expectations, and based on performance so far, is the best well we've seen at Jubilee in over a decade. The well is an example of the upside potential of the asset and shows there is a lot of future value left to play for, particularly as we start to integrate the results of the 2025 OBN seismic into our future well planning. With seven months of production.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

We have a robust track record that underpins our full year guidance for Jubilee, which remains unchanged at 70,000-80,000 bpd. The performance of the latest wells continues to support the upper end of this range. An important takeaway from the chart at the top of the slide is the correlation between activity and performance. During periods of drilling, high FPSO uptime, and sustained water injection, the field has performed well. We are therefore working closely with the operators to secure a rig for the 2027-2028 drilling campaign for up to 10 wells, with the objective of starting in mid-2027.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

This campaign will benefit from both the fully processed 4D and fast-track OBN seismic, which will help refine and high-grade future well locations and give the partnership the best opportunity to maximize future reserve recovery. In summary, it's an exciting time in Ghana. Jubilee, our highest margin production, is performing strongly at a time of higher oil prices, helping us to deliver our debt reduction targets for the year. Looking forward with the benefit of new technologies, we're working closely with the operators to plan and progress next year's drilling campaign.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Turning to slide five. GTA has continued to perform well this year. In the second quarter, gross LNG production was around 2.65 million tons per annum equivalent, in line with our expectations. Nine gross LNG cargoes were lifted during the quarter at the upper end of guidance. For the full year, our guidance of 32-36 gross LNG cargoes remains unchanged, with 18.5 lifted in the first half of the year. During the second quarter, one condensate cargo was jointly listed by Kosmos and the NOCs, with around 300,000 bbl net to Kosmos.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

An additional condensate cargo is expected late in the third quarter, which is also expected to be assigned to Kosmos and the NOCs, with around 400,000 bbl net to Kosmos. Due to the seasonality that we've flagged in the past, daily LNG production expected to remain slightly lower during the summer months because of the warmer sea and air temperatures. Volumes should pick up again later in the year as cooler temperatures return. On costs, we remain on track to hit our 50% reduction target for OpEx per MMBtu this year and see scope for further reduction in 2027.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

On the phase I expansion with domestic gas to power, which should materially enhance project returns, there's been good progress on the ground in both Senegal and Mauritania so far this year. In Senegal, the land has now been cleared for the onshore section of the northern segment of the gas pipeline, which will connect GTA to the 250MW Gandon power station being built near Saint Louis. The photographs on the top of the slide show the gathering in China in May to celebrate the completion of the fabrication of the onshore pipeline before it was shipped to Senegal.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

The pipeline is due to arrive in country in the coming days after taking a longer route than initially planned to avoid the Middle East. In Mauritania, the country just signed a 25-year agreement with the Saudi Power Company for the development, finance, construction, and operation of a new 230 MW gas-fired power plant in Nouadhibou, which is expected to use gas from the GTA field. These developments in Senegal and Mauritania are important steps for both countries to enhance domestic electricity generation, reduce reliance on imported fuels, and support the country's long-term energy security and industrial development.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Turning to slide six. Production in the Gulf of Mexico for the second quarter was in line with expectations, with continued solid performance for our operated Odd Job and Kodiak fields. On Winterfell, the number five well was temporarily abandoned by the operator due to casing issues encountered during drilling. Turning to the gross side of the business. Following final investment decision in March, the Tiberius project is making good progress. Last week, we successfully completed a highly competitive farm down on Tiberius, bringing Navitas into the project as a 33.33% partner.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Following the farm-in, Kosmos will remain as operator with a 33.34% interest. OXY, the owner and operator of the nearby Lucius facility, will have a 33.33% interest. The farm-in proceeds are a mix of upfront cash, carry for future development CapEx, and future milestone payments. We expect the carry element to cover all of our Tiberius CapEx in 2026 and fund our share of the development through the first half of 2027. Tiberius is a low-cost, high-margin development. We now have an aligned partnership to move it forward, with first oil expected in the second half of 2028.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Elsewhere in the Gulf, as previously discussed, we entered into a strategic exploration alliance with Shell earlier in the year. As part of the alliance, we exchanged interests across multiple blocks across the Norphlet play, which houses several material exploration prospects. Shell plan to start drilling the first of these, Trailblazer, in the first quarter of 2027. Trailblazer is targeting around 200 million barrels oil gross equivalent resource, and Kosmos is designated as a development operator in the event of success. I'll now turn it over to Neal to take you through the financials.

[Neal Shah, CFO at Kosmos Energy]

Thanks, Andy. Turning now to slide seven, which looks at the financials for the second quarter in detail. As Andy mentioned, it has been a strong quarter for the company, with production around 12% higher year-on-year, driven by the new wells coming online at Jubilee and the ramp up at GTA. Realized price was higher year-on-year, reflecting the elevated pricing seen in the second quarter following the war in the Middle East. As flagged last quarter, some of the pricing of our production has a lag impact, so we should also see some benefit of the 2Q pricing in the third quarter.

[Neal Shah, CFO at Kosmos Energy]

On operating costs, we have seen a material reduction in both absolute and unit cost year-on-year. Absolute operating costs in the second quarter are around 25% lower year-on-year, consistent with our ongoing efforts to drive down costs across the business. With the EG disposal, we have now sold our highest cost barrels. We would expect absolute operating costs and cost per unit to continue to fall through the second half of the year. The rest of the cost lines for the quarter were in line with guidance, but it is worth highlighting the interest expense reduction, which we expect to continue as we deliver on our debt reduction targets for the year.

[Neal Shah, CFO at Kosmos Energy]

In terms of guidance for the third quarter and the full year 2026, we have updated the table in the appendix to reflect the Equatorial Guinea sale, which was completed in June. The two main line items that have been updated are production and operating costs. On production, the midpoint of the range has been moved down around 2,500 bbl of oil equivalent per day net, taking out the EG barrels for the second half of the year, with the remaining portfolio on track following the strong performance year-to-date.

[Neal Shah, CFO at Kosmos Energy]

With slightly lower production post the EG sale and significantly lower costs, we remain on track to reduce OpEx per barrel by around 35% in 2026. Turning to slide eight, we have had an active first half of the year, carrying out several important initiatives to drive a meaningful reduction in both debt and leverage, clear near-term maturities, and increase liquidity. The successful GTA bond largely addressed the 2027 bond maturity, and we intend to pay the remaining stub with free cash flow. We paid down approximately $420 million of debt through free cash flow, the equity raise, and proceeds from the EG sale.

[Neal Shah, CFO at Kosmos Energy]

We ended the quarter with over $500 million of available liquidity. This progress is recognized by the rating agencies, with both S&P and Fitch upgrading the company to B-minus, reflecting the work we have done to enhance the balance sheet in the first half of the year. Looking at the second half of the year and the things that remain on our to-do list, we have commenced discussions with the lending banks around amending and extending the RBL. We expect that process to close during the fourth quarter, targeting a facility size of around $1.2 billion.

[Neal Shah, CFO at Kosmos Energy]

As we make further progress on the capital structure, we will also look potentially to repay the 2028 notes later in the year. Lastly, we will continue to take advantage of higher prices to layer in more hedges for 2027. With continued execution, we expect leverage to fall further towards two times by year-end, a pretty significant turnaround in only 12 months. In summary, we've worked hard in the first half of the year to reduce absolute debt and leverage while improving liquidity.

[Neal Shah, CFO at Kosmos Energy]

There's more to do in the second half, and we are being proactive and methodical to get it all done. With that, I'll hand it back to Andy.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Thanks, Neal. Turning now to slide nine to conclude today's presentation. As stated in my opening remarks, we have four key objectives for 2026, grow production, lower costs, reduce debt, and advance our quality growth portfolio with minimal CapEx in 2026. This slide shows the progress we've achieved year-to-date against those goals. Production for the first half of 2026 is up 18% versus the same period last year. Absolute operating costs are down 24% in the first half of 2026 versus 2025. We've delivered a reduction in net debt of around 50% versus year-end 2025.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

We are advancing our growth portfolio with the Tiberius FID in farm down, continuing progress on GTA expansion, and the exploration alliance with Shell in the Gulf of Mexico. We're working hard to deliver a stronger, more valuable Kosmos and look forward to delivering on our full-year targets to support long-term value creation for our investors. Thank you. I'd now like to turn the call over to the operator to open the session for questions.

[Operator]

Thank you. We will now begin the question-and-answer session. If you'd like to ask a question at this time, please press star then the number one on your telephone keypad to raise your hand and enter a queue. If you'd like to withdraw your question at any time, you can press star one again. We'll pause just for a second to compile a complete list. Our first question comes from Charles Meade with Johnson Rice. Your line is open.

[Charles Meade, Analyst at Johnson Rice]

Yes, good day to you, Andy, and to the rest of your team there.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Charles.

[Charles Meade, Analyst at Johnson Rice]

I'd like to ask about the J76 well. If you could characterize for us the setting of that well, I'm thinking along the lines of, is it kind of up-dip of one of your previous strong producers in a known fault block, or is it maybe on the other end of the spectrum, maybe it's in some fault block that you hadn't been connected to? I'm really trying to understand what the nature of the remaining opportunity for you is. Maybe not just the nature of the opportunity in the next couple of years in Jubilee for you guys.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Yeah. Thanks, Charles. Look, clearly J76 has been a very strong well. I think actually one of the best wells we've drilled in over a 10 years. I think ultimately we're in the core part of the field. We've used the latest 4D to be able to identify some opportunities that are in that core part of the field that are up-dip and unswept. The other interesting thing about 76 is we have actually picked up some deeper horizons as well. There's a combination of sort of what I would say the core areas of the field we've looked at in the past, plus some deeper opportunity.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

I think in total, it sort of demonstrates two things. There are significant opportunities in the field where we have oil that is being bypassed by the current drilling program and injection patterns, therefore can provide wells that have both significant resource and the ability to drill a well where you can have a secondary target deeper that introduces additional resource. I think it's those two elements that are important as we go forward. I think there's significant bypassed oil opportunities, and I think there'll be continuing opportunities to find potentially deeper horizons that we haven't accessed in the past.

[Charles Meade, Analyst at Johnson Rice]

Got it. Andy, that's exactly the kind of detail I was looking for. Then a follow-up question on Tiberius. I read or I went through the Navitas press release.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Right.

[Charles Meade, Analyst at Johnson Rice]

I had a hard time following it, even though it was in the Hebrew version. I'm wondering if you could I recognize some of this may be sensitive. I wonder if you could frame up for us how we should think about the value that you achieved for your sell down of 70% there.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Charles, thanks for looking at us this morning. I'll pass it over to Neal, who can give you the full translation.

[Neal Shah, CFO at Kosmos Energy]

Yeah, Charles. Hi. Yeah. If you just take the math simply in terms of what we got for what we've sold, it implies a gross valuation for Tiberius of around $250 million as of January 1st, 2026. Again, we've got sort of a total of a bit under $45 million of consideration in between sort of upfront cash carry and milestone payments. Again, I think a very good result from the team in executing a really good competitive farm-down process. We're excited that we have the right partnership for the future.

[Charles Meade, Analyst at Johnson Rice]

That's exactly the kind of detail I was looking for, Neal. To be clear, that $250 million gross valuation, does that include the future contingent payments?

[Neal Shah, CFO at Kosmos Energy]

No, that's just the gross value of the asset. You'd add our net plus the value of the carry.

[Charles Meade, Analyst at Johnson Rice]

Okay, thanks.

[Neal Shah, CFO at Kosmos Energy]

Yeah.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, Charles.

[Operator]

Your next question comes from Bob Brackett with Bernstein Research. Your line is open.

[Bob Brackett, Analyst at Bernstein Research]

Good morning. A question, a bit of a follow-up, I suppose. Can you talk about the Logan discovery that you all picked up and is now part of this Navitas JV? Maybe what are the volumes in place, and what is the future plan to sort of bring that part of Tiberius into production?

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Yeah. Thanks, Bob. I'll pass it over to Neal. He's been handling that.

[Neal Shah, CFO at Kosmos Energy]

Yeah. Hey, good morning, Bob. We've just got updated seismic over Tiberius. There's a good discovery well that's already on Tiberius that was drilled, I think, 10+ years ago. It's in the tens of millions of barrels of resource, but we do look at it as a potential add-on into the sort of greater Tiberius area. We're looking at a handful of wells in Tiberius in terms of different fault blocks and ultimately connecting Logan into the system. It's a potential well or two into that area to add some additional recovery.

[Bob Brackett, Analyst at Bernstein Research]

Very clear. A follow-up. I imagine you're frustrated with Winterfell, either by the operator, by the reservoir, by something. Is there recourse there, or do you think you finally tackled some of the challenges there?

[Neal Shah, CFO at Kosmos Energy]

Yeah. Just on, again, I think just from a Winterfell basis, yeah, I do think ultimately there is a big prize in terms of reserves there. We've drilled a number of wells. There's good pay. We have been disappointed by the drilling performance on, again, what are relatively routine operations and the additional cost that have been incurred as a result. Hence the pause on activity to fully understand sort of what's causing the issues. Yeah, again, there hasn't been a material daily impact to sort of production, we do want to make sure sort of those drilling issues are resolved before any more capital gets spent on the project.

[Neal Shah, CFO at Kosmos Energy]

Yeah, it has been frustrating, it's something the team's working hard on with the operator to make sure gets comprehensively resolved.

[Bob Brackett, Analyst at Bernstein Research]

Very clear. Thank you.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Thanks, Bob.

[Operator]

Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

[Neil Mehta, Analyst at Goldman Sachs]

Yeah, good morning, team. Andy, Neal, I just wanted to first congratulate you guys on the progress on your net debt reduction, 15% since year-end 2025. Neil, maybe the first question's for you on slide eight. You want to walk us through the progress that you guys have made and what your plan is through the balance of the year to hit 20% or above?

[Neal Shah, CFO at Kosmos Energy]

Yeah. Neal, good morning, and thank you. It has been a lot of good work by the entire team to deliver a good first half in terms of almost $500 million of debt reduction in the first half of the year. A bit under, we're at 2.5 and change. The goal would be to get closer to 2.4 by the end of the year. Again, I think from where we are from a production and cost perspective, we feel pretty good about the ability to get there even in a sort of lower commodity price environment. That'll be the big variable that sort of exists between now and the end of the year.

[Neal Shah, CFO at Kosmos Energy]

The balance of that difference, which is about, call it $150 million, is expected to be generated from free cash flow, right? Again, I think we've delivered free cash for the last two quarters. The expectation is to do that as well, and that'll get us to sort of that net debt number of around 20% reduction year-on-year. In addition to that, again, I think we remain proactive in terms of just managing the maturity schedule. We've tackled the 2026s first earlier this year. We tackled the 2027s thereafter.

[Neal Shah, CFO at Kosmos Energy]

We're working on the RBL at the moment, we'll tackle the 2028s. Once we're sort of done with that, we have, call it 3+ years of runway, without sort of worrying about sort of the debt in front of us. We'll continue to focus on free cash flow and managing that debt level down beyond the 20% reduction in 2026. Again, I think the strong financial performance is driven by sort of good operational backbone at the beginning. Again, the focus on doing both things simultaneously to get to the right result.

[Neil Mehta, Analyst at Goldman Sachs]

Yeah. Thanks, Neal. Just the follow-up is on the unit cost at phase I. Again, year-over-year, there should be significant reductions in OpEx as we work through startup costs and you get toward Mauritania, Senegal scale. Just talk about where you stand in terms of the reduction in cost, and then how does phase I+ fit into the equation? What could the cost trend down to on a multi-year basis as we try to dial in that number?

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Yeah. Neil, I'll pick that up, Neal. Yeah, you're correct. Clearly, we're getting the effects of two dynamics this year. We're clearly pushed volume up on GTA. The performance through the first half of the year has been very strong. We were targeting 32-36 cargoes. We did 18.5 in the front end of the year. The overall production level, clearly strong. That obviously helped in terms of managing the unit cost. We've also had the benefit of some of the final commissioning costs coming out.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

I think there's still improvement to make in the cost base in 2027 with different operating models that we're discussing with BP. You have the additional impacts of increasing production. As we said in the past, you can add at least another 50% to the FPSO, the current throughput that's being supplied to the FLNG vessel for domestic gas. That additional volume is going to have a significant impact on the unit cost because it comes with no additional cost.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

I think, as we said in the remarks, the big agenda now, it's an agenda that's deeply aligned with both countries in Mauritania and Senegal, is to push on with the supply of the domestic gas. We saw the progress, I think some pictures in the deck that showed the progress in Senegal in terms of getting pipe in the ground, connection to the first offtake, which will be the Gandon Power Station. In Mauritania, the work that they've done with a Saudi developer for their power station.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

That volumetric effect just simply then impacts the per unit cost. I think we've got continuing growth in margin in GTA through that phase I expansion. I think we're aligned with the governments in both countries in terms of how we deliver that.

[Neil Mehta, Analyst at Goldman Sachs]

Thanks, Andy.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, Neil.

[Operator]

Your next question comes from the line of David Round with Stifel. Line is open.

[David Round, Analyst at Stifel]

Great. Thanks, guys. Jubilee, the production side there has been really good. I guess I wouldn't mind if you could just touch on, please, the and whether previous decline assumptions may change if that's been going well.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Yeah. No, look. Thanks, David. I think it's a really good question. Clearly, our focus through the first half of the year has been on the drilling program. I think we've seen the impact of new data, the ability to influence, then the selection of good wells. I think that selection then with good operator drilling performance has led to the current levels that we're experiencing. I think, big check in the box there. I think when it comes to water injection, I'd say this is an area where there is an opportunity to do better. We did well in the first quarter.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Volumes replacement around 130%, which is sort of what you need. That's what sort of world-class performance looks like. It hasn't been as strong in 2Q. It's been around about half that level, I'd say around 65%. Some of it was scheduled maintenance. Some of it was availability of the water injection pumps. We're working really hard with the operator now to focus on that issue. It's just an operational issue. It's not a reservoir issue. It's just simply about keeping the water injection pumps up and with high availability.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

We've had high availability on the oil side. We need to sort of match that on the water side. That's the focus in 3Q and 4Q, then into the beginning of next year as we take a timeout on the drilling program and then restart. Planned restart is around the middle of the year. We're making good progress on the rig contract. I think we're clear about what we need to do. The back end of the year will be a strong focus on the water injection.

[David Round, Analyst at Stifel]

Okay. Thanks, Andy. In terms of the forward program and the program you're looking at next year, is it too early to think about how many of those might be injectors versus producers?

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Yeah. It's a little early, David. Without being overly simplistic, I think, let's say in the core of the field, we've got pretty good injection support. I'm talking more broadly now, and the issue is not so much about needing new injection, probably more around getting the water in the ground, actually. As we move out of some of the areas where the well density isn't as high, let's say, as you move back into the eastern side of the field, JSE, for instance, it will be more about pairing injectors and producers.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

If you haze through, you can look through all of that, there'll be a bias. I think the bias is still going to be more towards injection. Sorry, more towards producers over injectors. Actually, the injection well, we're drilling at the tail end of this program. That's actually an injector. It'll provide some support for this year, actually, it's just to support a future producer. Okay? You're sort of getting the right balance there between injection and production. I think, the bias will still be that it'll be more heavily weighted to producers.

[David Round, Analyst at Stifel]

Okay. That's really helpful. Thanks, Andy.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, David.

[Operator]

Your next question comes from the line of Mark Wilson with Jefferies. Your line is open.

[Mark Wilson, Analyst at Jefferies]

All right. Thank you. I'd like to ask questions about the U.S. Gulf, if I may start there. Great to see Tiberius farming completed. One well tieback initially, you speak to 100 million barrels there. Reminds me of Winterfell. I imagine that 100 million barrels is a kind of an area, region. Just wondering what you're targeting with that one well tieback in terms of recoverable reserves at Tiberius. Same sort of question for Trailblazer. Great exploration opportunity. Just wondering what Kosmos' net share would be of that 200 million target. That's my first question.

[Neal Shah, CFO at Kosmos Energy]

Yeah.

[Mark Wilson, Analyst at Jefferies]

Thank you.

[Neal Shah, CFO at Kosmos Energy]

Yeah. Hey, Mark. Good morning. Yeah. With Tiberius, yeah, the 100 million barrels is sort of within Tiberius. Logan would be additional beyond that. There are sort of, call it three fault blocks in Tiberius, which we've penetrated one. The first well is targeting around, call it 40 million barrels recovery. Again, we've talked about sort of $10 F&D, which is sort of a $400-ish million slightly gross development cost all in. That sort of squares. Once the infrastructure's in place, that includes the tie-in infrastructure.

[Neal Shah, CFO at Kosmos Energy]

Once that's in place, we can add the additional wells and get production impact much sooner. We'll phase that on post first oil. If I take that to Trailblazer, That's a larger prospect. It's about 200 million barrels gross in terms of prospectivity. We own about a third, a little under 30% of the projects sit next to us. A little under around 60 million barrels. Again, pretty material prospect for us. Again, I think you'd expect it to be a multi-well development all in if successful. In the similar sort of Kosmos fashion.

[Neal Shah, CFO at Kosmos Energy]

The idea would be keep the first well on as a development well, bring that online to put in the infrastructure, and then bring in additional producers once it's tied back.

[Mark Wilson, Analyst at Jefferies]

That's really appreciated, Neal. Thank you for that. If I could move on to GTA, because excellent to see the pipe on its way, goodness me, for the domestic power. I'm just wondering what flexibility you have on the pricing for that or if that's part of the actual license agreements. That'd be the first point. Secondly, just wondering if there's any discussions over further phases at GTA. Thank you.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

The agreements we have in place, we get the equivalent net back of the FOB, less the LNG processing fee. You're not converting it into LNG, you're just delivering it as domestic gas. It's the FOB equivalent for domestic supply.

[Neal Shah, CFO at Kosmos Energy]

That's been agreed through phase I, in terms of the gas price, Mark.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

The point about that is the additional volume comes with the same economics as the LNG export. Yeah, look, there's a lot going on in BP as you say. Obviously I don't have any insight into that or can't comment on what their corporate objectives are, whether GTA is core or non-core. I think for us, the most important thing at the moment is to sort of focus on the development of the asset, and we continue to work hard with BP on that and aligned with states around the delivery of the domestic gas, where as you say, there's real progress being made.

[Mark Wilson, Analyst at Jefferies]

Okay. Obviously the main one is the net debt coming down, which is, yes, great to see, as has been commented by others. RBL refinance in the second quarter. Neal, you also mentioned looking to, I think you said repay the 2028 bonds. That's the $400 million. That's what I understood correct, or is that a refinance of those targeted this year?

[Neal Shah, CFO at Kosmos Energy]

Yeah, no, good question, Mark. Yeah. Again, I think, like I was trying to refer to say earlier, but this year we've tried to be really sort of methodical around how we address the financing issues and the maturity schedule. Like I said, we've gone through the 2026s. Earlier this year, we paid the 2027s with the Nordic bond. We are working on the RBL at the moment, which matures in 2029 but starts amortizing in 2027. Once that's out of the way, the next maturity for us to address is the 2028s. Again, I think it's been good to see the yields on the bonds return closer to normal.

[Neal Shah, CFO at Kosmos Energy]

We'd expect as we continue to address the financial risk, get the debt down, we'll see a continued improvement in yields. It's something we're continuing to evaluate in terms of whether it's a repayment from an opportunistic repurchase or just potentially refinancing those later in the year. Again, it's something on the agenda, and as the market and the yields evolve, we'll continue to keep an eye on that.

[Mark Wilson, Analyst at Jefferies]

Okay. Understood. I'll hand it over. Thanks for those questions.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, Mark. Appreciate it.

[Operator]

Your next question comes from the line of Christoffer Bachke with Clarksons Securities. Your line is open.

[Christoffer Bachke, Analyst at Clarksons Securities]

Christoffer from Clarksons here. Firstly, congratulations on another very strong quarter. Operational executions continue to impress, so that's great to see. My first question is related to Jubilee, and especially with the Jubilee production now tracking at or above the 90,000 bpd. How should we think about the sustainable production potential of Jubilee over the next quarters, and could this potentially influence the scope or pace of the 2027-28 drilling campaign? That's my first.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Yeah, no, Christoffer. That's a good question. Look, when you look at Jubilee, if you look at the 2025, 2026 program, it's been a very successful program. It's certainly been supported by the new 4D, and I think that's enabled us to see a lot more opportunity in the field. I think it is actually worth commenting on. If you look at that overall program, with payback of less than six months. You want to get back to drilling as soon as possible. There are some logistical issues on that in terms of ordering long lead equipment, well heads, etc.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

We're working with the operator to make sure we get back to drilling as soon as practicable. That date is around the middle of next year, and we're pushing maybe to get there a little earlier. I think that's the current target. It's a fulsome program. Our objective is to drill up to 10 wells. Not only will we have the fully processed 4D at that point, but we'll also have early product from the OBN, which I think is going to be another step change in our ability to properly describe the opportunity set.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Potentially some of the things that have been harder to image that are deeper. I think for us, we see ongoing opportunity, and as we've said, I think consistently over probably the last 10 quarters, you need to do three things to deliver that potential. You've got to get back to regular drilling, which I've talked about. You have to deliver high FPSO uptime, which the operator has done so far this year, and you have to get the water injection operating so you get water in the ground.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

As we look forward, we will see some decline clearly. There'll be a little bit of mitigation from the last water injection well. That's primarily to support a future well in 2027. We will see natural decline from the end of the program, which finishes at the end of this quarter through the fourth quarter, first quarter, second quarter, and then back to drilling.

[Christoffer Bachke, Analyst at Clarksons Securities]

Thank you very much. Also staying on Jubilee and the full year guidance, you have highlighted that production is trending toward the upper end of guidance, you also had another well coming online. Assuming current operational performance continues, should we think about ending the year toward the upper end of the production range, and would that potentially allow you to exceed your targeted 20% net debt reduction for 2026?

[Andy Inglis, Chairman and CEO at Kosmos Energy]

A really good question, that's obviously our objective. We're working it again. It's about eyes down, focus on the operational delivery. As I've said, it's about picking the right wells. It's about drilling them. It's about the delivery of the uptime. I think the area that's really important now is that water injection availability. I think when you look at the overall suite of options within Kosmos, GTA has been trending to the upper end of its guidance in terms of the number of cargoes.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Despite Winterfell 5, we've had strong performance in the Gulf of Mexico, particularly from Kodiak and Odd Job. You put all that together, Christoffer, are we confident we're going to hit our numbers? It's about a managed outlook across all of those production opportunities. Finally, it's about managing the cost base. We haven't talked about that much on the call. This is a significant reduction in costs we've achieved in the first half of the year. Delivering the portfolio optimizations with the EG sale, the TEN FPSO repurchase.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Those are structural changes that are enduring. That together with rigorous capital management, I think we've talked about the Tiberius farm down, that again allows us to manage the CapEx through the back end of 2026 and into 2027. In combination, the three things, production performance, cost reduction, and capital management underpin that debt reduction target.

[Christoffer Bachke, Analyst at Clarksons Securities]

Thank you very much. Just the last one, if I may.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, Christoffer.

[Christoffer Bachke, Analyst at Clarksons Securities]

Yeah.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Okay, go on.

[Christoffer Bachke, Analyst at Clarksons Securities]

You have briefly mentioned it already. You are in ongoing discussions with the lending banks and have now also commenced that. You expect the amended RBL to be completed during the fourth quarter. Could you elaborate a bit on how those discussions are progressing, and once the RBL is completed, should investors expect you to kind of turn your attention towards addressing the 2028, or are those two processes going in parallel?

[Neal Shah, CFO at Kosmos Energy]

Yeah, I think that's the right way to think about it, Christoffer, in terms of just the series of events. We've kicked off the RBL process. Again, just for those of you who haven't been, this will be the fifth time we get through an extension process on the RBL with a lot of the same banks who've been in there since I joined the company in 2011. Yeah, it's a well sort of established program or process. We've started exchanging term sheets in terms of what that looks like.

[Neal Shah, CFO at Kosmos Energy]

We need to sort of finalize that and clearly on the back of improved Jubilee performance, in a constructive commodity price environment, we're well-placed to sort of execute that here relatively quickly. Yeah, I think as we get that complete, then like I said, the next maturity on the list is the 2028, and that gives us a bit over three years of runway without any maturities to manage.

[Christoffer Bachke, Analyst at Clarksons Securities]

Thanks for taking my questions.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, Christoffer.

[Operator]

Again, if you would like to ask a question, please press star, then the number one on your telephone keypad to raise your hand and enter the queue. Your next question comes from Stella Cridge with Barclays. Your line is open.

[Stella Cridge, Analyst at Barclays]

Hi there, everyone. Many thanks for all the updates. Sorry to add two more questions on the refinancing side. Just wondered if you're still targeting 2032 and 2033 as potential maturity dates of the new RBL. I was just wondering, regarding the liquidity test that you would usually be tested on the 2028 bonds, how does that fit into the next few months in the RBL negotiation? Do you get a waiver or is that just kind of rolled into the whole process? That would be great. Thanks.

[Neal Shah, CFO at Kosmos Energy]

Yeah. I mean, the chart. I forget what slide it is.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Slide eight.

[Neal Shah, CFO at Kosmos Energy]

Slide eight is clearly illustrative, but in line with what we're working live. The idea is to get sort of the final maturity beyond the existing bonds. Again, we'd normally do it in a sort of six, seven year timeframe. That's kind of when the final maturity base would be, but it generally starts amortizing after three years. The shape of the RBL won't be dissimilar to the shape that it's always in. That essentially puts a sort of refinancing plan in sort of three years down the line to force another extension. That's sort of again, business as usual from that perspective.

[Neal Shah, CFO at Kosmos Energy]

Same thing with your question around the liquidity test, along with sort of redetermination. Essentially we'll sort of all boil that up into the refinancing. We probably won't have a sort of formal, full redetermination because generally, again, I'm going in a little detail, but the RBL is always limited by the loan life. As you kick the loan life, you have full access to the facility, which keeps all the liquidity available to the company. We'll do those sort of contemporaneously with the refi.

[Stella Cridge, Analyst at Barclays]

That's great. Many thanks for that. If you don't mind me asking on Tiberius, could you just remind us, like how much gross production would come from that first well? I notice you also mentioned a potential second well. Be great to hear about that as well.

[Neal Shah, CFO at Kosmos Energy]

Yeah. Again, every well will be different, but the expectation is, I think a good modeling assumption, there's around 10,000 bpd gross per well. Again, we have up to 30,000 bpd of capacity at Lucius, the facility. Again, the ability to accommodate multiple wells over time.

[Stella Cridge, Analyst at Barclays]

Super. Many thanks for that.

[Andy Inglis, Chairman and CEO at Kosmos Energy]

Great. Thanks, Stella.

[Operator]

Since there are no further questions at this time, I would like to bring the call to a close. Thanks to everyone joining today. You may now disconnect your lines at this time, and thank you for your participation.

Participants

Executives

• Jamie Buckland, VP of Investor Relations
• Andy Inglis, Chairman and CEO
• Neal Shah, CFO

Analysts

• Charles Meade, Analyst at Johnson Rice
• Bob Brackett, Analyst at Bernstein Research
• Neil Mehta, Analyst at Goldman Sachs
• David Round, Analyst at Stifel
• Mark Wilson, Analyst at Jefferies
• Christoffer Bachke, Analyst at Clarksons Securities
• Stella Cridge, Analyst at Barclays