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Komos plans US$575m capital spending

  • SOURCE: | qwesa2big
  • kosmos energyKomos Energy has announced plans to spend about US$575million on capital projects this year, underpinning the company’s commitment to advance its development projects in the country.

    Last year, the company’s capital spending came in under budget at US$425million, primarily due to the postponement of certain development and appraisal activities into 2014. As a result, the company’s overall liquidity position at year-end 2013 was stronger than expected with cash and cash equivalents of US$598million and total available liquidity of US$1.2billion.

    In a statement issued yesterday, Kosmos said its oil and gas reserve replacement ratio of 140% — that is, the growth in reserves as a share of volume produced in a year is supported by increased oil reserves in the Jubilee Field.

    “Our foundation as a self-funded explorer underlies our capital programme for the year as we continue the momentum we have created to deliver new, meaningful value for our shareholders,” stated Brian F. Maxted, chief executive officer and chief exploration officer at Kosmos.

    “In addition to advancing our development projects in Ghana, we are highly focused on our upcoming exploration drilling campaign. Further, we are continuing to build and mature our potentially transformational exploration portfolio.”

    Ghana-related development and appraisal capital spending comprises approximately two-thirds of the 2014 forecast programme, with around US$70million of the Ghana expenditure ascribed to spending deferred from 2013. The remaining one-third is allocated for exploration activities and reflects the benefits of last year’s farm-out initiatives in Morocco.

    The company’s 2014 Ghana development and appraisal activity is targetted at around US$400million, about equally divided between the Greater Jubilee and TEN (Tweneboa, Enyenra and Ntomme) projects.

    This includes funds for further development at Jubilee, including the remaining activities associated with the Phase 1A development, facility upgrades, and long-lead equipment and engineering for the next phase of development — as well as additional appraisal activities for the Mahogany, Teak and Akasa discoveries. The capital programme also provides funds for continued development at TEN.

    As part of the company’s planned exploration activities, which total approximately US$175million for the year, Kosmos expects to participate in the drilling of two offshore exploration wells.

    The company’s proved net reserves at the end of 2013 were 46.8 million barrels of oil equivalent, an increase of 3.3 million barrels of oil equivalent from year-end 2012. The year-end 2013 volumes include natural gas reserves of 1.8 million barrels of oil equivalent, essentially unchanged from the previous year — which represents only the gas anticipated to be used for power generation on the Jubilee floating production, storage and offloading (FPSO) vessel.

    A reserve replacement ratio of 140%, on a net proved basis, was realised in the Jubilee Field at the end of last year. The increase in reserves was largely related to observed field performance and Phase 1A well results.

    Source: B&FT

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