On this page of StockholderLetter.com we present the latest annual shareholder letter from Kosmos Energy Ltd. — ticker symbol KOS. Reading current and past KOS letters to shareholders can bring important insights into the investment thesis.

 •  4/25/2025 Letter Continued (Full PDF)
 •  4/28/2023 KOS Stockholder Letter
 •  4/25/2024 KOS Stockholder Letter
 •  More "Oil & Gas Exploration & Production" Category Stockholder Letters
 •  KOS Benford's Law Stock Score = 84

KOS Shareholder/Stockholder Letter Transcript:

2024
ANNUAL
REPORT

AT KOSMOS
ENERGY, OUR
PURPOSE IS
CLEAR.
We are a leading deepwater
exploration and production company
focused on meeting the world   s
growing demand for energy.
We have diversified oil and gas
production from key assets offshore
Ghana, Equatorial Guinea, Mauritania,
Senegal and the Gulf of America. In the proven basins where
we operate, we are advancing high-quality development
opportunities that have come from our exploration success.
As we deliver the energy the world needs today and tomorrow,
we strive to be a force for good in our host countries,
accelerating economic and social progress.

Fellow Shareholders,
The last twelve months have seen the energy sector
undergo a recalibration. While most nations continue
to support the Paris Agreement   s 1.5  C target, there is
growing acknowledgment that significant quantities
of oil and gas will be required to support modern
life for many years to come. The just, orderly, and
equitable energy transition we all want may take
longer to achieve than many people were once
inclined to admit. This pragmatic reassessment
resonates in our African host countries, where leaders
continue to seek the energy investment so crucial for
industrialization, economic growth, and job creation
for their expanding populations.
CLEAR AND CONSISTENT STRATEGY
Our clear and consistent strategy, predicated on the
world   s growing demand for secure, affordable, and
cleaner energy, has enabled Kosmos to navigate
these changes with resilience and foresight. With oil
production from our advantaged assets in Ghana,
the Gulf of America, and Equatorial Guinea, we are
supplying the world with the energy it needs today.
Equally, we remain focused on the energy needs of
the future. We have started production at the Greater
Tortue Ahmeyim liquified natural gas (LNG) project
offshore Mauritania and Senegal. This establishes a
new Atlantic Basin LNG hub ideally located to supply
European markets and, importantly, provide gas for
domestic use. As energy demand grows around the
world, gas and LNG will be critical in the shift to a
lower-carbon future. With a world-scale gas resource
now in production for many years to come, and with
room to grow, Kosmos is well-positioned to capitalize
on the world   s current and future energy needs and
create long-term, sustainable value.
PRIORITIZING FREE CASH FLOW
In 2022, we set ourselves the goal of materially
growing production from key projects across the
portfolio. 2024 marks the end of a capital-intensive
period for the company. We are now prioritizing the
generation of free cash flow through maximizing
revenue and disciplined capital investment. Our
forecast 2025 capital expenditure is expected to
be $400 million or less     a reduction of over 50%
compared to recent years.
Additionally, as a part of rigorous cost management,
Kosmos is pursuing a reduction in annual overhead
of around $25 million by year-end 2025. With higher
production, lower capital expenditure, and reduced
overhead, we are targeting the generation of
sustainable free cash which will enable us to reduce
our absolute debt and leverage, further enhancing the
company   s financial resilience.
OPERATING THE RIGHT WAY
A key part of our strategy is our ongoing commitment
to operating responsibly. Our low-cost, lower carbon
oil and gas production positions us as a reliable and
responsible producer     balancing energy security
and affordability with the need to reduce emissions.
Kosmos earned MSCI   s highest possible    AAA    rating
for the third consecutive year, which puts us in the
top 20% of companies across our sector. Similarly,
Newsweek and Statista named Kosmos one of
America   s Most Responsible Companies for the fifth
consecutive year.
Kosmos is well-positioned to generate sustainable
value for shareholders. We offer investors a clear
purpose, consistent strategy, top-quality assets with
greater than 20 years of 2P reserves/production
life, unique exposure to world-scale gas and LNG
projects, strong cash generation, and an important
role in enabling a just and orderly energy transition in
the countries where we work.
In a time of unpredictability, we endeavor to use the
foresight and resilience built across the company
to navigate a path to success. We look forward to
sharing more at our annual meeting. On behalf of
the entire board of directors, I thank you for your
participation, continued trust and support.
Sincerely yours,
ANDREW G. INGLIS
Chairman and
Chief Executive Officer

Financial Highlights
Year Ended (in thousands, except volume data)
2024
2023
$ 1,675,562
$ 1,701,535
$ 2,299,775
189,851
213,520
226,551
678,249
765,170
1,130,476
Pro Forma EBITDAX
1,070,356
1,238,151
1,436,342
Capital expenditures1
828,813
849,999
611,588
5,308,988
4,938,134
4,579,988
2,714,997
2,326,239
2,083,179
78.70
81.35
100.00
23.5
23.1
23.1
Total proved reserves (million barrels of oil equivalent)2
251
278
276
Total proved and probable reserves (millions of barrels of oil equivalent)3
528
519
552
Crude oil (million barrels)2
122
145
158
774
797
707
Revenues and other income
Net income (loss)
Net cash provided by operating activities
Total Assets
Net Debt
Average oil sales price per Bbl
Sales volumes (million barrels of oil equivalent)
2
Natural gas (billion cubic feet)
2022
1. Includes acquisitions and divestitures
2. 1P Reserves as per Ryder Scott year end SEC Reserve Reports
3. Kosmos reserves based on Ryder Scott Independent Reserves Report 2P (PRMS).
EBITDAX RECONCILIATION
Year Ended December 31,
2024

Net income (loss)
189,851
2023

2022

213,520
226,551
119,907
42,278
134,230
0
0
6,243
456,774
444,927
498,256
0
222,278
449,969
Equity-based compensation
37,951
42,693
34,546
Derivatives, net
12,099
11,128
260,892
(12,488)
(16,448)
(327,872)
17,703
23,656
(9,055)
0
0
(50,471)
Interest and other financing costs, net
88,598
95,904
118,260
Income tax expense (benefit)
159,961
158,215
110,516
$ 1,070,356
$ 1,238,151
0
0
$ 1,070,356
$ 1,238,151
Exploration expenses
Facilities insurance modifications, net
Depletion, depreciation and amortization
Impairment of long-lived assets
Cash settlements on commodity derivatives
Other expenses, net 2
Gain on sale of assets
EBITDAX
Sold Ghana & acquired Kodiak Interest EBITDAX
Pro Forma EBITDAX
1

1,452,065
(15,723)

1,436,342
1. Adjustment to present Pro Forma EBITDAX for the impact of the revenues less direct operating expenses from the sold Ghana interest associated with the Ghana pre-emption and
the acquired Kodiak interest, for the respective period. The results are presented on the accrual basis of accounting, however as the acquired properties were not accounted for or
operated as a separate segment, division, or entity, complete financial statements under U.S. generally accepted accounting principles are not available or practicable to produce.
The results are not intended to be a complete presentation of the results of operations of the acquired properties and may not be representative of future operations as they do not
include general and administrative expenses; interest expense; depreciation, depletion, and amortization; provision for income taxes; and certain other revenues and expenses not
directly associated with revenues from the sale of crude oil and natural gas.
2. Commencing in the first quarter of 2023, the Company combined the lines for    Restructuring and other    and    Other, net    in its presentation of EBITDAX into a single line titled
   Other expenses, net.   



 4/25/2025 Letter Continued (Full PDF)