Kosmos Energy (“Kosmos” or the “Company”) announced that it has successfully re-financed its revolving credit facility (“RCF”) and completed the semi-annual re-determination of its reserve-based lending (“RBL”) facility. Through these financing activities and strong free cash flow in the first quarter of 2022, liquidity has been further strengthened.
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Revolving Credit Facility
Kosmos has re-financed its RCF with a total capacity of $250 million while extending the maturity to the end of 2024. The reduced RCF size will offset an increase in the margin, resulting in slightly lower interest expenses going forward. In anticipation of the cessation of the London Interbank Offered Rate (“LIBOR”), this is one of the energy industry’s first credit facilities linked to the Secured Overnight Financing Rate (“SOFR”). The facility remains undrawn.
Reserve-Based Lending Facility
Kosmos also announced today that in conjunction with the spring re-determination of the RBL, the Company’s lending syndicate approved a borrowing base capacity of $1.25 billion with current outstanding borrowings of $0.9 billion. Total commitments as of April 1, 2022 were $1.25 billion.
The RBL facility is secured against the Company’s production assets in Ghana (excluding the incremental interests acquired from Occidental Petroleum in October 2021) and Equatorial Guinea with the first amortization payment scheduled for March 2024.
Liquidity
Total liquidity at the end of the first quarter of 2022 increased to approximately $0.9 billion, including the impact of the reduced RCF size.
“We are pleased to have successfully completed the RCF re-financing and our RBL redetermination, which secures the liquidity necessary to support the growth of our differentiated portfolio. We appreciate the continued support of our key relationship banks. With strong free cash flow generation, coupled with the recent receipt of pre-emption proceeds, we are making excellent progress in reducing both leverage and absolute debt while growing liquidity. At current oil prices we expect leverage to be below our 1.5x target by year-end 2022 and are well on the way to achieving that outcome” said Neal Shah, Chief Financial Officer.
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 U.S. Gulf of Mexico, as well as a world-class gas development offshore Mauritania and Senegal. 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.