Kosmos Energy Ltd. (NYSE:KOS) Q4 2022 Earnings Call Transcript

Andy Inglis: Yes. All right, Mark. Yes, we’ll do that one first. Just I think just sort of when we talked about costs in the past, and we talked about the $1 billion. It was clearly around at the time the upstream component on the basis of the sort of the lease midstream. Yes, so I think those were early costs, and I think that we’ll do a lot better than that on the upstream now as we’ve done further work to delineate what’s actually going to be required to debottleneck the infrastructure that we have in place today to take in another gas flow of around 400 million, 450 million standard cubic feet a day that you need to provide for 2.5 million to 3 million tons of LNG liquefaction. So I think that’s the first point, yes. So I think in terms of that $1 billion number, the actual upstream cost, I think, is going to be below that now that we’ve done the work.

Then you come to the midstream. And clearly, we’ve got options to release finance, which we obviously, that would — the capital will not be on our books or do we capitalize and that’s a decision that we have yet to make. But clearly, when we look at the GBS as an option, we believe whether it’s a capital or whether it’s leased, it is more cost effective than going down the FLNG route. Does that make sense?

Mark Wilson: It does, yes, definitely. And then on that local content point, given, as I say, the Phase 1 work that’s gone on in Senegal?

Andy Inglis: No, yes, absolutely, Mark. And again, what we’re looking to do is build that local content as we look at Phase 2. What I don’t want to do is sort of preempt the work that we’ll do with the market as there are various ways of doing it. We can clearly do it with a concrete base. You can do it with a steel base and what we need to do is go out, work it with the market to come up with the most cost-effective way of doing it, and one that is aligned with the local content. So that — I think what you’re unpicking is we have some real optionality now of how we create the most capital-efficient — most capitally efficient way of doing it and leveraging some of the knowledge that we’ve built from the past. So we see this as we say, it is absolutely the most cost-effective way to move forward. And it gives us the most flexibility on storage size and financing.

Mark Wilson: Got it. Okay, thank you. Just one quick follow-up on a couple of really quite punching exploration wells in the coming year at Tiberius Akeng Deep. On that — on the Akeng Deep, could you remind us who your partners are in Block S, please?

Andy Inglis: So our partners in…

Neal Shah: partners in blockchain (ph) and Trident.

Andy Inglis: And yes.

Mark Wilson: Okay, very good. Thank you.

Andy Inglis: Yes, yes great question, Mark. Important about that is that, again, we see it as being highly prospective. This is an untested deeper objective. Clearly, between the source rock and the currently producing horizons in Ceiba and Okume with a very solid away structure. And the great thing about it is then the alignment around the partnership that enables us then to bring it back to the existing capacity that we have in Ceiba and Okume. So no, we’re excited by it. I think it’s a great exploration prospect. But actually, the CapEx again it’s a very low-cost F&D because of the existing capacity in Ceiba and Akume and the fact that we have alignment amongst the partnership.

Mark Wilson: Got it. Appreciate the color. Thank you.

Andy Inglis: Great. Thanks, Mark.

Operator: Thank you. Our next questions come from the line of Matt Smith with Bank of America. Please proceed with your questions.