Texas-based oil explorer, Kosmos Energy says it has generated $230 million from the sale of approximately two million barrels of crude oil from Ghana’s Jubilee fields in 2011 third quarter, according a statement on its website November 10, 2011 after announcing its financial results for the third quarter 2011.
The Blackstone Group and Warburg Pincus backed-company said it sold each barrel of crude at $115.50 after performing two Jubilee liftings during the quarter.
This is against the second-quarter 2011 oil revenues at $124.1 million on sales of 996 thousand barrels of oil, or $124.62 per barrel.
Production expense during the quarter, the New York Stock Exchange listed company said was $24 million, or $12.13 per barrel, and depletion and depreciation was $43 million, an average of $21.36 per barrel.
Exploration expense for the third quarter 2011 was $11 million, it noted.
Kosmos disclosed that a redetermination of the Jubilee Unit tract participation interest by an independent expert analysis was recently completed, resulting in an increase in its Unit interest.
“The original tract participations in the Jubilee Unit were 50 percent for both the West Cape Three Points and Deepwater Tano Blocks. After expert analysis, the Unit interests have been changed to 54.37% for the West Cape Three Points Block and 45.63% for the Deepwater Tano Block. Accordingly, the Company’s Jubilee Unit interest increased to 24.08% from 23.51%,” it said.
Giving an update on its Ghana operations, Kosmos said “all of the Jubilee Phase 1 wells have been drilled, and current oil production is approximately 80,000 barrels per day. Identified completion issues require one of the producing wells to be sidetracked, as well as downhole remediation on certain other wells.”
Once these completion issues have been resolved, the company says production is expected to continue ramping up toward the FPSO facility capacity. “The J-7 production well is currently being sidetracked, with completion expected at the beginning of 2012. Additionally, the Phase 1A development, including five production and three injection wells, is being planned to commence drilling in 2012.”
Kosmos indicated that it is currently drilling the Teak-3 appraisal well on the West Cape Three Points Block, testing a potential updip stratigraphic extension of the discovery wells.
“Results at Teak-3 are expected by the end of November 2011. The Teak-4 appraisal well is scheduled to begin drilling late in the first quarter of 2012,” it added.
On the Deepwater Tano Block, Kosmos says together with other partners are currently re-drilling the Enyenra-1 discovery well, with plans to perform a drill stem test at that location.
Immediately following operations at Enyenra-1, the Enyenra-4 appraisal well will be drilled over 4 miles downdip from Enyenra-2, on the south flank of the discovery. Results at Enyenra-4 are expected in the first quarter of 2012, says Kosmos.
Back to its quarter financial results, Kosmos recorded earnings before interest, taxes, depreciation, amortization and exploration expenses (EBITDAX) of $191 million with total liquidity up by over $115 million to nearly $1.1 billion.
The company generated net income attributable to common shareholders of $52 million in the third quarter of 2011, or $0.13 per basic and diluted share. This compares to a net loss attributable to common unit holders of $99 million for the same period in 2010.
Brian F. Maxted, President and Chief Executive Officer of kosmos Energy said “Our results for the third quarter were very strong, supported by our oil liftings and continued robust Brent pricing. While production at Jubilee has not ramped up as quickly as planned, the ultimate resources recoverable from this giant field are unchanged, and we continue to be encouraged by its reservoir performance. We had a number of positives in our exploration and appraisal drilling programs for the quarter, with successes on both of our Ghana blocks, which continue to highlight the value upside of our Ghana assets. At the same time, we are further enhancing the Company’s portfolio of exploration opportunities, capturing substantial acreage offshore Morocco during the quarter.”