Kosmos Energy Ltd.

Good day, everyone. Welcome to Cosmos Energy's fourth quarter and full year 2022 conference call. As a reminder, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you require operator assistance during the program, please press star zero on your telephone keypad. 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 fourth quarter and full year 2022 earnings release. This 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 materials 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, plans, and expectations. Actual results and outcomes could differ materially due to factors we note in this presentation and in our UK and SEC filings. Please refer to our annual report, stock exchange announcement, and SEC filing 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 fourth quarter and full year 2022 results call. As I normally do with our full year results, I'll start today's presentation by taking a step back to talk about our strategy and how the solid progress we made in 2022 has supported the delivery of that strategy. We'll then focus on 2023, an important year of inflection for the company. Turning to slide three, which looks at Cosmos' role in helping address the world's energy challenges. The world is grappling with a need for affordable, secure, and cleaner energy, with a balanced approach required to address the three dimensions of this energy trilemma. Cosmos has the right strategy and portfolio at the right time to be part of the solution. We have an oil-weighted portfolio that could supply more of the energy the world needs today. We're investing in growing oil supply in each of our core production hubs with an emphasis on high-graded projects that yield low-cost, lower-carbon barrels that are highly cash-generative. At the same time, we're working with our partners to bring new sources of natural gas into production. These projects address affordability and increase energy security by supplying more gas to global energy markets as well as into domestic markets in Africa. This assists our host countries in two ways. First, the revenues from the export of LNG can be invested in critical infrastructure to promote economic development. And second, providing baseload domestic gas supply will help expand access to electricity, a key goal in each of the countries where we work in Africa. Over the next year, we're targeting an increase in production of around 50% as we optimize current production and bring new projects online. But Cosmos, the expected cash flow from our current and planned activities, enables selective reinvestment into the most compelling opportunities in our deep natural gas portfolio, which can help meet demand and support the energy transition for decades to come. Longer term, we plan to continue shifting the balance of our portfolio from oil to natural gas and LNG to help meet the world's energy needs as clean and natural gas displaces coal, heavy fuel oil, and biomass as a primary source of energy in both developed and emerging economies. The world's demand for energy continues to grow, particularly in Africa, and few E&P companies are investing to meet this demand. Given the quality of our asset base and the wealth of opportunities within our differentiated portfolio, we believe Cosmos has an important role to play in helping address these global energy challenges. Turning to slide four, which looks at the execution of our strategy over the past five years. Throughout its history, Cosmos has been contrarian in its thinking and has pursued a differentiated and often counter-cyclical strategy. Cosmos' strategy has delivered value for our investors over the last five years, with more to come as we continue to execute on our plans. As part of our contrarian approach, while much of the industry moved onshore, we maintained our focus offshore, where Cosmos has deep expertise. This decision provided an opportunity to take advantage of a market with few credible buyers for high-quality deepwater assets, enabling three strategic and value-accreted acquisitions. Where many Pierce have publicly stated they are pursuing no or low growth. Cosmos has pursued a series of organic growth projects, which are planned to come online at a time when the world needs more energy. We believe that the industry is under-investing for the needs of the future, and that companies with quality opportunities can outperform. We're an early mover among our peers in transitioning our portfolio to gas, and we now have a unique hopper of world-class gas and LNG opportunities that are well aligned with the needs of the energy transition. And we've invested counter-cyclically when commodity prices were low to drive value across the portfolio, which should continue to play out over the next several years. A fundamental measure of any E&P company valuation is its 2P reserve base, which for Cosmos has almost tripled over this timeframe from around 200 million barrels of oil equivalent at the end of 2017 to around 550 million barrels of oil equivalent at the end of 2022, with a lengthy runway of additional discovered resource potential beyond that, which I'll talk more about on the next slide. Turning to slide five, For an oil and gas company to have a sustainable future, it needs a robust reserve base of advantaged hydrocarbons. As mentioned on the previous slide, over the last five years, our reserve base has enhanced materially in terms of size, quality, and diversity. Breaking down these elements, Our 1P proven reserves awaited more towards oil today, reflecting the near-term exposure to low-cost, lower-carbon barrels with high returns ensured payback. On a 2P basis, our proved and probable reserves have reserves to production ratio of over 20 years and a split almost 50-50 oil to gas, demonstrating the future direction of the company. Our strategy is to invest our oil revenues into world-class gas and LNG opportunities, which are aligned with the energy transition. The chart on the right shows the diversity in the reserve base, with a 2P reserve plus 2C contingent resource for life of over 30 years across five countries. We have materially grown our reserve space over the last five years and expect further growth over the next five. from our discovered resource base, highlighting the runway for future value creation for years to come. Turning to slide six, the consistent pursuit of our strategy has created a unique investment proposition for investors, which is characterized by the elements on this slide. A portfolio of high-quality assets that have longevity. These assets are differentiated in that they offer material and visible near-term growth. The assets are highly cash-generative, with low break-evens and benefit from access to premium markets, giving us exposure to both Brent and international gas prices. We have a unique set of gas and LNG opportunities that have the potential to capture that premium price upside that will allow us to transition more to gas over time. We have a management team focused on the execution of our clear strategy and meeting the expectations of our investors. We also continue to focus on capital discipline with a rigorous capital allocation framework. And finally, we have sector-leading ESG credentials, which I'll talk more about on the next slide. Turning to slide seven. Building our ESG credentials has been a core part of our strategy over the last five years. A key goal is to help our host nations develop their hydrocarbons in a responsible way and expand access to affordable, reliable energy. Through creating economic benefits, we help drive sustainable development in our host countries. I'm pleased to say we continue to deliver progress across the ESG spectrum in 2022. First on environment, 2019, we set a carbon neutrality target of 2030 or sooner for our operating scope one and scope two emissions, which we achieved in both 2021 and 2022. We are building on this progress with a plan to disclose equity emissions and targets in this year's sustainability report. We are increasing the gas weighting of our portfolio, with first gas a torture expected in the fourth quarter and a long pipeline of future gas projects. We should enhance our scope through emissions going forward. Second, on social. We care deeply about the people who work for Cosmos and those who work with Cosmos. In our host countries, we employ 100% local nationals, and our offices in Dallas and Houston are consistently named among the top places to work in both cities. We aim to be a trusted partner and a good corporate citizen in our host countries, working with a range of stakeholders in our communities to facilitate sustainable development. We have worked in this manner for nearly 20 years, going back to when the company was founded. Each year, we fund important social investment programs in Ghana, Exxon Guinea, Senegal, and Mauritania that are aimed at creating economic opportunity, advancing social progress, and improving standards of living. The success of the Cosmos Innovation Center is a prime example. This initiative in Ghana, Mauritania, and Senegal invests in young entrepreneurs and small businesses outside the oil and gas industry, We train and empower young people to turn their ideas into viable businesses, and we work alongside promising startups to help them reach their full potential. In Ghana, the Cosmos Innovation Center recently entered into a partnership with the MasterCard Foundation, in which MasterCard will fund a significant expansion of the program across Ghana. And finally, governance. Governance has always been a pillar of our business, and starts at the top with our experienced and diverse board of directors, down through to the executive leadership team, and onto our employees. We have always taken an industry-leading position on transparency, publishing all of our material petroleum contracts online, along with all government payments. In summary, our consistent commitment to ESG and sustainability is a core value for Cosmos. one that has been recognized by stakeholders. MSCI, one of the leading ESG rating agencies, recently ran Cosmos AAA, the highest possible rating, which puts us in the top 20% of companies in our sector. Similarly, Newsweek and Statista recently named Cosmos one of America's most responsible companies for the third consecutive year. Our consistent focus on operating responsibly in all that we do supports our ability to deliver long-term value to our diverse range of stakeholders. Switching gears, I would now like to look back at our solid delivery in 2022 and how it laid the foundation for future success. Turning now to slide nine. 2022 was a year of strong operational delivery, supporting our longer-term strategic objectives. I'm proud to report that we delivered an injury and incident-free workplace with zero recordable or lost-time safety incidents and no spills. Our production of around 64,000 barrels of oil equivalent per day was in line with guidance, representing 70% growth over 2021. Our LNG development, Torchy Phase 1, is around 90% complete. Our other development projects are moving forward with Jubilee Southeast and Winterfell making good progress. Last quarter, we reached full payback from our most recent acquisition in Ghana, achieved in just 14 months, demonstrating our track record of value creation from M&A. And as flagged on the previous slide, RESG progress was recognized by MSCI with its highest AAA rating. Turning to slide 10, 2022 was a record year for Cosmos. There's a lot of important data on this slide, but I'd like to highlight the standout points. Over the last five years, we've seen revenue and EBITDA double. Liquidity has almost doubled over the same period, while net leverage is almost halved, both a reflection of the growing financial resilience of the company. As I mentioned earlier, our two pre-reserved banks has almost tripled from year-end 2017 to year-end 2022, alongside the diversification of our asset base. The scale of this reserve base underpins the future of the company and has enabled us to grow shareholder value. I'll now hand over to Neil to talk about the financial highlights of the year.