Kosmos Energy Secures $250 Million Senior Secured Term Loan Facility with Shell to Strengthen Balance Sheet
Kosmos Energy (“Kosmos” or the “Company”) today announced that its wholly-owned subsidiary, Kosmos Energy Gulf of Mexico Operations, LLC (“the Borrower”), has successfully entered into a senior secured term loan facility (the “Term Facility”) with Shell Trading (US) Company (“STUSCO” or the “Lender”), with funding expected to be available on October 1, 2025. This strategic financing arrangement underscores Kosmos Energy’s commitment to proactive balance sheet management and positions the Company to navigate ongoing market volatility while pursuing growth opportunities in the Gulf of Mexico.
The Term Facility provides Kosmos with access to up to $250 million, which will be primarily used to repay the Company’s outstanding unsecured notes, enhancing the overall financial flexibility of the organization. The facility is structured in two tranches to provide both immediate liquidity and future optionality. The first tranche of $150 million is set to be drawn at closing and will be used to partially redeem the Company’s outstanding 2026 unsecured notes, which currently total $250 million. The second tranche, amounting to $100 million, remains available for drawing until April 1, 2026, offering additional liquidity if required to support the Company’s strategic objectives and capital management initiatives.
The Term Facility carries an interest rate of SOFR (Secured Overnight Financing Rate) plus 3.75% and is secured against the Borrower’s assets in the Gulf of Mexico. This structure provides a balance of cost efficiency and financial security, reflecting favorable terms in today’s competitive lending environment. The facility is set to mature four years from closing, providing Kosmos with a long-term horizon to execute its strategic and operational plans while maintaining flexibility in capital allocation.
Neal Shah, Chief Financial Officer of Kosmos Energy, commented on the announcement:
“We continue to be proactive in improving the resilience of the company’s balance sheet in a volatile commodity price environment by raising new liquidity on attractive terms and addressing near-term maturities. With production near record-high levels and capital expenditures at multi-year lows, closing the Term Loan facility complements our near-term goal of organically reducing net debt through free cash flow generation from our high-quality assets while also continuing to grow our strategic relationship with Shell in the Gulf of Mexico.”
Shah further emphasized that the facility represents a strategic step in Kosmos Energy’s broader financial strategy, which is centered on disciplined capital management, sustainable debt reduction, and strengthening partnerships with leading industry players. By securing liquidity through this structured facility, Kosmos positions itself to continue investing in core operations while maintaining the flexibility needed to respond to market conditions and explore future growth opportunities.
The senior secured term loan aligns with Kosmos Energy’s commitment to prudent financial planning. It allows the Company to address near-term debt obligations in an orderly manner while benefiting from favorable financing terms, thereby preserving cash flow for operational investments and potential exploration projects. The facility’s security against the Borrower’s Gulf of Mexico assets ensures mutual confidence between the Company and Shell, reinforcing the strategic partnership that has developed over several years.
Kosmos Energy has consistently focused on strengthening its balance sheet while maintaining operational excellence. With production levels approaching record highs and capital expenditures carefully managed, the Company is well-positioned to leverage its existing assets to generate free cash flow. The Term Facility supports these objectives by providing a reliable source of liquidity and reducing reliance on unsecured debt, ultimately enhancing the Company’s financial stability and flexibility.
The relationship between Kosmos Energy and Shell in the Gulf of Mexico has been an important aspect of the Company’s strategic growth. This financing agreement not only provides Kosmos with immediate financial benefits but also reinforces a long-term partnership with Shell, enabling collaborative opportunities in operational execution, asset management, and potential future exploration projects. The facility exemplifies how strategic financing can be used to strengthen partnerships and drive operational efficiency while maintaining financial discipline.
Kosmos Energy plans to continue leveraging its high-quality Gulf of Mexico portfolio to generate sustainable free cash flow, reduce debt, and invest in growth initiatives. The Term Facility is a key component of this strategy, providing the Company with flexibility, security, and access to capital on favorable terms. By addressing upcoming maturities proactively and securing additional liquidity, Kosmos is positioning itself to remain resilient amid market fluctuations and capitalize on opportunities for strategic growth.
