Kosmos Energy Ltd.

Good day, everyone. Welcome to Cosmos Energy's second quarter 2021 conference call. Just a reminder, today's call is being recorded. At this time, let me turn the call over to Jamie Buckland, Vice President of Investor Relations at Cosmos Energy.

Thank you, Operator, and thanks to everyone for joining us today. This morning, we issued our second quarter earnings release. The release and the slide presentation to accompany today's call are available on the Investors page of our website. Joining me on the call today to go through the material are Andy Ingalls, Chairman and CEO, and Neil Shah, CFO. During today's presentation, we will make forward-looking statements that refer to our estimates, funds, and expectations. Actual results and outcomes could differ materially due to factors that we note in this presentation in our UK and SEC filings. Please refer to our annual report, stock exchange announcement and SEC filings for more details. These documents are available on our website. At this time, I will turn the call over to Andy.

Thanks, Jamie, and good morning and afternoon to everyone. Thank you for joining us today for our second quarter results call. I'll run through the highlights for the quarter before handing over to Neil to take you through the financials and guidance for the remainder of the year. Starting on slide two, Cosmos continued to successfully execute our plans in the second quarter, delivering on the three key priorities outlined on the slide. First, we posed a strong cash performance in 2Q with free cash flow of $115 million in the quarter. We expect this strong performance to continue in the second half of the year as production increases with new wells coming online. As previously communicated, we target a year and exit rate of around 60,000 barrels of oil equivalent per day and are making good progress towards that target. Importantly, as our 2021 hedges continue to roll off, cash generation should be materially enhanced through 2022 at all prices around current levels. As a result, we expect leverage to fall significantly by year end and continue to reduce through 2022 at current prices. Second, we continue to strengthen our financial position in the quarter. We announced today the completion of the FPSO sale and leaseback transaction for the Greater Tortue Acme Project, an important step in funding our remaining capital to First Gas. The transaction will fund our outstanding capital requirements on the project through 2021 and partially into 2022, with additional savings from the transfer of future FPSO milestone payments to BP. In addition, in May this year, we successfully completed an amendment and extension of our reserve-based lending facility, which pushed out any material near-term debt maturities to 2024 and beyond. And third, we remain on track with our operational delivery for the year. 2021 has been an active year so far for Cosmos, with momentum building across all areas of the portfolio. We plan to drill nine in-fill wells this year and are starting to see new wells come online, which is having a positive impact on production levels. One example is the first Jubilee producer well that came online in July and has added around 10,000 barrels per day of incremental gross oil production. We look forward to more wells coming online in the third quarter which should further drive production levels towards our targeted year-end exit rate. In Mauritania and Senegal, all key work streams on the GTA project have made good progress with first gas expected in the third quarter of 2023. In the Gulf of Mexico, we expect to drill a windfall appraisal well later this quarter. Turning to slide three. As mentioned on the previous slide, Cosmos delivered strong cash performance the second quarter with around $115 million of free cash flow for the company. Free cash flow generated from the base business for the first half of the year was around $125 million. That excludes capex related to Mauritania and Senegal and includes slight working capital benefit. This second quarter cash generation allowed us to reduce net debt by around $100 million by quarter end. As shown on the top chart on this slide, our leverage ratio has fallen sharply since year-end 2020 and should continue to do so going forward. Higher oil prices are driving higher EBITDAX, with 2Q21 EBITDAX over three times higher than the same quarter last year. This, along with our growing production and absolute debt reduction, are positively impacting our leverage ratio, and we look forward to further progress through year-end and into 2022. As I previously mentioned, we're pleased to have completed the Greater Torchy-Ackman FBSO Save and Lease Back transaction, which is expected to fund our remaining GTA capital through 2021, with additional savings coming in 2022. At the beginning of the year, we talked about 2021 capital expenditures for Mauritania and Senegal next to Cosmos of around $350 million. The FPSO financing is now expected to cover around $160 million. This is slightly less than previously expected given the short delay in closing the FPSO transaction, but we expect to see additional savings in 2022 as a result. An additional $100 million benefit in 2021 is expected from the NOC loan refinancing that we aim to complete in the fourth quarter of the year. This leaves around $90 million of 2021 Mauritania and Senegal capex for Cosmos to fund in 2021, which occurred in the first half of the year. In May, we completed an amendment and extension of the reserve-based lending facility, and I'd like to thank our banking group for their continued support. The facility, which is a total size of $1.25 billion, was $1 billion drawn at the end of the second quarter. Importantly, the extension pushed out maturities by another two years, meaning that we have no material maturities until 2024 and beyond. Turning now to slide four. At the first quarter results in May, I talked about momentum returning to the business with activities starting to ramp up across the portfolio. I'm pleased to say this momentum has continued to build through the second quarter and we remain on track to achieve our objectives. We've seen drilling across our three production hubs and continued progress with our GTA project in Mauritania and Senegal. Taking each hub in turn, In Ghana, as I mentioned, we're starting to see positive results from this year's drilling campaign with the Jubilee J56 producer now online. Production at Jubilee is now around 80,000 barrels of oil per day, up from around 70,000 barrels in the first half of the year. The second well at Jubilee Water Inductor should come online shortly and further enhance production. The rig will then move to drill a gas injector on 10, which is expected online in the fourth quarter. The partnership then plans to drill a second Jubilee producer that is expected online around the end of the year, with further production increases expected as we move into 2022. In Equator, Guinea, at the Sabre Field, a major infrastructure integrity project has been completed, which is expected to improve reliability and allow greater flexibility for gas lifts to additional wells. The Kume upgrade project is expected to be completed in the fourth quarter. adding additional power, water injection, and gas lift capacity necessary for further facilities, debottlenecking, and additional electrical submersible pumps, or ESPs. In April 21, one ESP conversion was completed, with further ESPs expected post-completion of the upgrade project. The first of three infill wells flooded in June with positive initial results. The rig will now move to the second well location and hookup has commenced for the first well. All three wells to be drilled in the Akumate complex are expected to be online in the fourth quarter of 2021. In the Gulf of Mexico, the Tornado 5 producer well was drilled in the second quarter and came online in July and is currently producing, at the top end of the operators, 8,000 to 10,000 barrels of oil equivalent per day guidance. Later this quarter, we're planning to drill the Winterfell appraisal well. In Mauritania and Senegal, the partnership continued to make progress across all the major work streams during the quarter. As we noted in the release, the near-shore terminal has started to take shape with three concrete caissons now installed and several more in transit. The critical path to delivery of First Gas now sits with the FPSO, which is being built by Techniv Energies at the Costco Yard in China. We're working diligently with BP to ensure that the revised timeline to First Gas is delivered. I'll now hand over to Neil to take you through the financials.