Kosmos Energy acquires additional Ghana interests for US$550m

GHANA – Kosmos Energy and Ghana National Petroleum Corp. (GNPC) have agreed to acquire interests in Tullow-operated Jubilee and TEN fields offshore Ghana from Occidental Petroleum Corp., Houston for US$750 million.

Combined, the assets had a second-quarter 2021 net production of 22,000 boe/d.

In a US$550-million deal that closed October 13, 2021, Kosmos gained an additional 18% interest in Jubilee field and an additional 11% interest in TEN fields.

The deal increases Kosmos’ interests in Jubilee to 42.1% and in TEN to 28.1%.

Consideration due to OXY at completion was about US$460 million after closing adjustments, Kosmos said in a release on October 13, 2021.

The transaction is subject to a 30-day pre-emption period, which, if fully exercised, could reduce Kosmos’ ultimate interest in Jubilee by 3.8% to 38.3%, and in TEN by 8.3% to 19.8%, the company said.

Prior to closing the transaction, OXY resolved certain historical tax claims related to the sold interests, both companies said in separate releases, though no details were provided.

The additional Ghana interests are expected to generate around US$1 billion of incremental free cash flow by the end of 2026 at US$65 Brent with upside given current prices, said Andrew G. Inglis, chairman and Chief Executive Officer of Kosmos.

Using Kosmos’ year-end 2020 reserves report, prepared by independent reserve auditor Ryder Scott, estimated 2P reserves acquired as part of the deal were about 104 MMboe at year-end 2020.

The acquired assets are currently producing about 17,000 boe/d net and are expected to generate about US$325 million of EBITDAX in 2022 at US$65 Brent, the company continued.

The transaction creates a “simplified and aligned partnership in both the Jubilee and TEN fields,” Kosmos said.

The US$200-million sale to GNPC is expected to close in this year’s fourth quarter with GNPC currently holding 13.64% interest in Jubilee and 15% interest in TEN.  Petro SA is the remaining partner in both fields.   

In June 2021, OXY inked a deal to sell certain Permian basin acreage for US$508 million, bringing its post-Colombia divestiture total to over US$1.3 billion of the planned US$2-3 billion.

Since August 2019, the company has divested more than US$9 billion of assets. 

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