Kosmos Energy Ltd.

Good day, everyone. Welcome to Cosmos Energy's third quarter 2023 conference call. As 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. You may begin.

Thank you, Operator, and thanks to everyone for joining us today. This morning, we issued our third quarter 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 filings for more details. These documents are available on the website, and 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 third quarter of results calls. Since our last call, we've continued to make good progress on our strategic objectives with several important recent developments. I'll talk about these in more detail in today's material, as well as giving an update on the quarter. I'll then hand over the call to Neil to take you through the financials before wrapping up the presentation and opening the call for Q&A. Turning to slide three. At Cosmos, we're pursuing a clear and consistent strategy to provide the world with the energy it needs today while working hard to bring down the carbon intensity of our portfolio and providing the world with the cleaner energy it needs for the future. To achieve this, we're executing a differentiated set of projects that are focused on advantage, low cost, lower carbon oil, and advantage, low cost, lower carbon gas. This slide shows the progress we are making. First, on production growth, we set a target to grow our production in the second half of 2022 by around 50% to the second half of 2024 from three core development projects, Jubilee Southeast, Torchy Phase 1, and Winterfell. In the third quarter, we brought the first of these development projects, Jubilee Southeast Online, which increased Jubilee's gross production to around 100,000 barrels of oil a day, up almost 50% from the production levels seen in the first half of the year. I'll talk more about Jubilee in the following slides, but we're pleased with the progress being made, with more expected in the coming months. Second, our two remaining developments continue to progress. On Winterfell, the partnership recently completed the first production well, an important milestone for the project. At Tour 2, the hub terminal was completed and handed over to operations, and we have recontracted the subsea work scope, which was previously on the critical path. Third, in recent weeks, we have deepened our portfolio of high-quality advantage oil and gas investment opportunities, In October, we announced a discovery with a Tiberius well in the Gulf of Mexico, and today we announced that we had assumed operatorship and increased our working interest in the world-scale Yakuturanga fields in Senegal, subject to customary government approvals. We're excited by both these projects, as we expect them to create the next leg of value growth for Cosmos beyond 2024. More on both of these later in the presentations. The chart on the right of the slide is one we've shown before, which has been updated for these recent developments. It shows the progress we're making against our longer-term strategic objectives. The first meaningful step up in production was in 3Q, with production rising 17% from the second quarter, with further upside potential from Jubilee. And then the planned startup of Torchy Phase 1 and Winterfell in 2024. We expect this growth to drive a material step up in pre-cash flow as these projects are delivered, enabling the company to further de-lever and ultimately to fund shareholder returns when leverage falls below our target level. Looking beyond that, we have a deep hopper of high-quality operated and non-operated growth options across both short-cycle oil and long-dated gas that will continue to differentiate Cosmos from our peers over the coming years. We plan to balance the pace and working interests of these future projects to ensure we can manage our growth and generate material free cash flow. Turning to slide four, which looks at the quarter's operational highlights in more detail. Net production of around 68,000 barrels of oil equivalent per day was in line with guidance and an increase of approximately 17% versus the previous quarter due to the Jubilee Southeast startup. Jubilee produced an average of around 96,000 barrels of oil per day gross during the quarter, an increase of over 30% versus the previous quarter, with three producer wells coming online across Jubilee Southeast and the main field. While we've been successful in delivering the production wells, there were some delays in providing the necessary water injection, which has had a knock-on impact in near-term production. which I'll talk about in more detail on the following slide. On 10, production in the quarter, around 15,000 barrels of oil per day, was in line with expectations and lower than the previous quarter due to a planned two-week shutdown. While working on the maintenance of the FPSO, we modified the gas train, and the rerouted gas is now being re-injected in Tome Field to support reservoir pressure and maintain production levels. This has resulted in around a 75% reduction in flaring, a major step towards our goal to eliminate routine flaring by 2026. The amended 10 plan of development and combined 10 and Jubilee gas sales agreement has been submitted to the Ministry of Energy for approval. In the interim, we have extended the Jubilee gas sales agreement through the end of November at a price of $2.90 per mm BTU. Next to all Guinea, gross production averaged around 25,400 barrels per day during the quarter, in line with expectations. The infill drilling campaign is expected to start this quarter with the rig now in country. Ahead of the three planned infill wells, the rig is planning to carry out two workovers on the Sabre field, which should boost the year-end production rate before the new wells start coming online around the end of the first quarter. The operator expects the work over an infill campaign to add around 10,000 barrels of oil a day to gross production. Post our infill campaign, the King Deep infrastructure-led exploration well is on track to spurt early in the second quarter of 2024. In the Gulf of Mexico, net production was approximately 15,700 barrels of oil equivalent per day, ahead of guidance due to lower-than-anticipated storm activity. At odd jobs, the subsea pump project continues to make good progress and is expected online in mid-2024 as planned. Kodiak production continues to perform in line with expectations and will be supported by the workover scheduled for mid-2024. On Winterfell, the partnership continues to make good progress. The rig arrived in the third quarter, and we have successfully completed the first of the three wells, an important milestone for the project. First of all, it's on track for the end of the first quarter, 2024. Post-quarter end, we announced the discovery of the Tiberias well in Keithley Canyon, which I'll talk about in more detail later in the presentation. Turning to slide five. The startup of the Jubilee Southeast development has driven a material uplift in production at Jubilee. Three producers were brought online during the quarter, taking gross field production up to around 100,000 barrels of oil per day, a level not seen for several years. As I mentioned earlier, water injection rates in 3Q were lower than planned. This is partly due to lower uptime on the water injection pumps and partly due to the delay in bringing two water injection wells online, which we originally planned to start in 3Q. Post-quarter end, we did bring these two water injection wells online and are now ramping up water injections to support the elevated levels of production. The partnership had previously assumed we would farm out the drilling rig in Ghana in the fourth quarter. This was to allow time to assess our initial three wells in Jubilee and high-grade the next set of wells. However, given the success in our well selection and drilling execution, we are now planning to accelerate an additional producer and water injector into the fourth quarter from 2024. This should allow for continued Jubilee production growth into 2024 with both wells expected online early in the new year. The acceleration of this activity results in an increase in 2023 capex of around 30 million net to Cosmos. However, the expected returns are very high with quick payback. As a result of the lower water injection rates, the operator is now forecasting that Jubilee will produce around 85,000 barrels of oil per day gross for 2023, down from its previous estimate of 90,000. This decrease is driving our lower production guidance for the year, and is expected to result in one less 2023 cargo from Jubilee than previously forecast. It is just a timing issue, and our view of 2024 production is unchanged, with a shortfall in 2023 expected to be made up in 2024. Whilst there are always challenges in bringing a new project online and optimizing overall field performance, we're excited about the future potential of Jubilee and are continuing to work well with the operator to maximize cash flow from the field. Turning to slide six, this is a slide we've used over the years to provide a status update on the key work streams on the Tortue LNG projects. On the hub terminal, construction is finished and handover to operations has been completed. Within the quarter, we also made important progress on the subsea work scope, which was previously on the critical path to first gas. Following the performance issues with the previous pipe lay vessel, the subsea work has been re-contracted. All seas and SIPEM have now been brought in to finish the deepwater pipe lay and the infill flow lines, with work expected to start in early December and finish in the first quarter of 2024. On the FLNG, sail away of the vessel is expected later this quarter, with arrival expected early next year. The partnership is currently working with GOLA to identify ways to advance commissioning of the vessel. The critical path to first gas on phase one of the Tortue project is now through the arrival, hookup, and commissioning of the FPSO. The delivery of first gas in the first quarter of 2024, as signaled by BP, the operator, in its third quarter results last week, depends on the execution of this work stream, which has the potential to slip into the second quarter of 2024. Turning to slide seven. Beyond these key projects, we have been focused on defining the next set of growth projects for the company, targeting high-quality advantage oil and gas investment opportunities with operating control. Today, Cosmos announced that it has increased its interest and assumed operatorship of the Yakut-Turanga fields in Senegal, subject to customary government approvals. Yakutanga is a world-scale gas resource with approximately 25 trillion cubic feet of gas in place and was the largest discovery in the world in 2017. It is an advantage gas with negative CO2 located approximately 75 kilometers from the Dakar Peninsula, enabling a low-cost development. COSMOS' working interest in Yakutanga will increase to 90%, with PetroCent holding the remaining 10%. Our aim is for PetroCent to participate as an equal partner in the full value chain with a greater working interest. Cosmos is working with PetroCent and the government of Senegal on an innovative development solution prioritizing cost-competitive gas to Senegal's rapidly growing domestic market, combined with a floating LNG facility targeting exports into international markets. Petrosen's Director General stated in today's press release that Yaka Taranga is a strategic project and supports the Plan Senegal-Emergent, which aims to provide affordable, abundant and cleaner energy for the country. Cosmos and Petrosem plan to evaluate partnership strategies with the objective of creating an aligned partnership, possessing the necessary upstream and midstream expertise, coupled with access to cost-effective financing and access to international LNG markets. Turning to slide eight. Last month, Cosmos announced a successful discovery of the Tiberias infrastructure-led exploration well in the Gulf of Mexico, where Cosmos is operator and has a 33.34% interest alongside Oxy and Equinor. Tiberias is a four-way structural trap in the outboard Wilcox trend, which was drilled using the partnership's ocean bottom node seismic. This modern seismic technology generates an enhanced image of the prospects which helped refine the location of the exploration well and de-risk the future development program. The image on the slide shows the Tiberias exploration well, which was drilled on the crest of the structure in the central fog block with additional upside potential in the neighboring fog blocks. Technology improvements like OBN seismic are a game changer for the industry and allow us to have a much better understanding of the subsurface pre-drill. The well discovered a net oil column of around 250 feet, and we were able to conduct an extensive logging program recovering multiple fluid samples and sidewalk cores. Initial analysis suggests a fluid quality similar to other nearby discoveries in the Wilcox strand. The fluid samples and cores have been sent to the lab for analysis that will enable us to better understand permeability and viscosity, which are key to confirming well flow rates in a future development. We are now working with our partners on the planning of a phase development scheme which targets first production in around two years. The preferred host platform would be the Oxy-operated Lucius facility located six miles to the northwest of the discovery, with key commercial terms of the production handling agreement agreed pre-drill. Success at Tiberius validates our proven base and infrastructure-led exploration strategy, targeting low-cost, lower-carbon, short-cycle oil opportunities to complement our deep hopper of long-dated, lower-carbon gas opportunities in West Africa. I'll now hand over to Neil to take you through the financials.