Kosmos Energy Reports Positive Financial Developments Across Key Areas
Kosmos Energy (“Kosmos” or the “Company”) today provides an update on its financial position following several notable advancements across its financing activities. The update underscores Kosmos’ commitment to maintaining financial discipline, ensuring liquidity, and strategically managing risk, all while leveraging the quality of its global asset portfolio.
Reserve-Based Lending Facility Remains Strong
Kosmos has successfully completed the semi-annual re-determination of its reserve-based lending (“RBL”) facility, confirming the robustness of its asset-backed credit arrangements. The facility’s borrowing base continues to exceed the RBL’s $1.35 billion capacity, highlighting the strength and resilience of Kosmos’ reserves that serve as collateral.
The RBL facility, a cornerstone of Kosmos’ financial framework, provides the Company with flexible liquidity options to fund ongoing operations, exploration, and development initiatives. The successful redetermination reflects not only the current value of Kosmos’ reserves but also the operational performance and strategic positioning of the Company’s asset portfolio, including its high-quality offshore oil and gas holdings in multiple regions.
Importantly, Kosmos confirms that it remains fully compliant with all financial and liquidity covenants tied to the RBL facility. This includes the recent liquidity test undertaken in connection with the Company’s 2027 unsecured notes, conducted alongside the RBL re-determination in September. With no further tests scheduled until March 2026, Kosmos demonstrates financial stability and disciplined management of its debt obligations.
Strategic Liquidity Enhancements
In addition to its RBL activities, Kosmos has made significant strides in strengthening its liquidity through complementary financing initiatives. The Company recently entered into a senior secured term loan facility (“Term Facility”) with Shell Trading (US) Company (“Shell”), providing access to up to $250 million under favorable terms. This facility adds another layer of financial flexibility, supporting ongoing capital programs while optimizing the Company’s balance sheet.
Kosmos has issued a notice of partial redemption concerning $150 million of its 2026 unsecured notes, with the repayment funded by the first tranche of the Term Facility. The redemption is scheduled for October 6, 2025, and represents a proactive step toward reducing near-term debt obligations. The remaining $100 million of the 2026 unsecured notes is planned to be repaid prior to the maturity date, further reflecting the Company’s proactive approach to managing debt and mitigating refinancing risk.
By strategically layering financing instruments, Kosmos ensures that it maintains a balanced liquidity position capable of supporting both operational needs and strategic growth initiatives. This multi-faceted approach to liquidity management highlights the Company’s prudent financial planning and its commitment to delivering long-term shareholder value.
Hedging Program Enhances Risk Management
Kosmos has also capitalized on recent increases in oil prices by expanding its hedging program for 2026. As of this update, the Company has hedged 8.5 million barrels of oil for the year, with an average floor price of $66 per barrel.
Hedging remains a critical component of Kosmos’ risk management strategy, providing a level of downside protection against volatile commodity markets while enabling the Company to maintain a stable financial outlook. By locking in attractive prices, Kosmos can protect cash flows from price fluctuations, ensuring that funding for operational, exploration, and development activities remains predictable.
The expanded hedging program demonstrates Kosmos’ proactive approach to market opportunities, balancing the potential for upside gains with prudent risk mitigation. This strategy aligns with the Company’s broader financial objectives, providing a buffer that supports both operational execution and shareholder returns.
Management Commentary
Neal Shah, Chief Financial Officer of Kosmos Energy, commented on the recent developments:
Shah’s remarks underscore Kosmos’ dual focus on financial discipline and operational execution. By maintaining compliance with debt covenants, actively managing liquidity, and enhancing risk mitigation measures, the Company positions itself to navigate market volatility while delivering consistent value to shareholders.
Focus on Operational and Capital Discipline
Beyond financing, Kosmos continues to emphasize operational efficiency and disciplined capital allocation. The Company’s strategy centers on leveraging high-quality assets to generate organic free cash flow, which in turn supports both debt reduction and strategic investment opportunities.
Kosmos’ capital expenditure program is carefully calibrated to balance near-term operational needs with longer-term growth objectives. By prioritizing investments in high-return projects and maintaining strict cost control measures, the Company ensures that capital is deployed effectively to enhance production, extend asset life, and unlock new opportunities across its portfolio.
The combination of disciplined capital management, proactive debt reduction, and strategic hedging contributes to a resilient financial profile that allows Kosmos to pursue growth initiatives with confidence. This comprehensive approach demonstrates a forward-looking mindset that aligns financial planning with operational execution.
As the Company moves into the final quarter of 2025, Kosmos remains focused on sustaining financial resilience and operational excellence. Key priorities include:
- Continuing to monitor and optimize liquidity across RBL and term loan facilities.
- Executing planned redemptions of unsecured notes to reduce debt and associated interest costs.
- Expanding hedging programs as market conditions warrant, securing downside protection while preserving upside potential.
- Delivering consistent free cash flow from high-quality producing assets.
- Maintaining disciplined capital allocation to maximize value creation for shareholders.
Kosmos’ proactive approach to financial management, combined with its high-quality asset base and disciplined capital program, positions the Company to navigate market volatility while capturing strategic growth opportunities. The Company’s recent financing accomplishments and enhanced hedging program reflect a holistic approach to risk management, liquidity optimization, and long-term value creation.
