Kosmos’ 3Q profitable

Kosmos Energy has reported its third quarter 2014 net income of $19 million, or $0.05 per basic and diluted share, compared with a net loss of $44 million, or $0.12 per basic and diluted share in the same quarter last year.

Oil revenues in the third quarter of 2014 were $137 million versus $215 million in the third quarter of 2013. The decrease in revenue resulted largely from having one and one-half crude oil liftings from the Jubilee field, offshore Ghana, during the quarter compared to two liftings in the third quarter of 2013. Realized oil price was $95.26 per barrel of oil sold in the quarter versus $112.52 per barrel in the same quarter of last year.

Kosmos explained that the third quarter results benefited from the previously announced non-cash mark-to-market gain of $40 million related to the company’s oil derivative contracts. The company hedged additional forward production during the quarter resulting in 9.7 million barrels hedged at the end of the third quarter.

Production expense for the current quarter was $15 million or an average cost of $10.46 per barrel versus $17.04 per barrel in the third quarter of last year, which included certain well workover costs.

Exploration expenses in the third quarter of 2014 totaled $21 million compared with $76 million in the prior year quarter. Included in the current quarter were costs associated with large 3D seismic surveys offshore Western Sahara and Senegal.

General and administrative expenses in the current quarter were $35 million versus $38 million in the third quarter of 2013. Depletion and depreciation expense was $37 million or $25.61 per barrel of oil sold versus $30.52 per barrel in the third quarter of 2013, the improvement related to reserves addition at the end of last year.

As of September 30, 2014, the company had approximately $1.9 billion of liquidity, which included $601 million in cash and cash equivalents. Net debt at the end of the quarter was $149 million, a reduction from $416 million as of September 30, 2013.

Andrew G. Inglis, chairman and chief executive officer, said: “In the third quarter, we continued to deliver strong operational performance. The combination of high margin cash flow from Ghana and our strong balance sheet form the financial foundation of the company that allows us to self-fund our exploration and development capex program. With the Atwood Achiever (drillship) currently in transit to northwest Africa, we are now on the cusp of drilling out our transformation exploration program.”