Kosmos Energy's Q2 2025: Unpacking Contradictions in Jubilee Production and GTA Phase I Plus Strategies

Jubilee production decline and drilling requirements, GTA Phase I plus and gas sales agreements, fiscal terms and work commitments in Jubilee license extension, Jubilee production decline and well requirements, GTA Phase I Plus and gas sales agreements are the key contradictions discussed in Kosmos Energy's latest 2025Q2 earnings call.



Production Growth and Cost Management:
- Kosmos Energy reported increased production levels, approaching record highs, with further near-term growth expected as GTA ramps up toward FLNG nameplate capacity and additional wells are brought online at Jubilee and Winterfell.
- The company reduced CapEx by 65% in the first half of 2025 compared to the same period in 2024, contributing to a $170 million CapEx in H1 2025.
- The cost reductions and increased production are attributed to a focus on 3 key areas: CapEx, OpEx, and overhead improvements.

GTA Project and Financing:
- GTA's commercial operations day was achieved in June, marking a significant milestone for the project's financial stability.
- Kosmos agreed on indicative terms for a term loan of up to $250 million, secured against assets in the Gulf of America, to be used to repay the 2026 bond maturity.
- These steps are part of a strategy to enhance the company's financial resilience by addressing debt maturity concerns and continuing to work on additional financing activities.

Hedge and Financial Strategies:
- Kosmos hedged 7 million barrels of 2026 oil production with floor and ceiling prices, aiming for around 50% of 2026 production to be hedged.
- The company obtained a waiver from its banks on the debt cover ratio covenant until March 2026 to reflect the timing impact of GTA ramp-up costs on leverage.
- These actions align with a proactive approach to improving the balance sheet, raising liquidity, and reducing net debt.

Jubilee Field and Seismic Technology:
- Jubilee's gross production initially dropped to 55,000 barrels of oil per day but is expected to rise due to the addition of wells and improved data from 4D seismic.
- The first producer well in the '25-'26 drilling program brought online in July, contributing 10,000 barrels of oil per day.
- The company plans to acquire OBN seismic later in the year, enhancing imaging and supporting a regular drilling program to maintain production levels and potentially increase them.