Kosmos Energy Ltd.

Good day, everyone. Welcome to Cosmos Energy's fourth quarter and full year 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, Operator, and thanks to everyone for joining us today. This morning, we issued our fourth quarter and full year 2023 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 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, plans, and expectations. Actual results and outcomes could differ materially due to factors that 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 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 results call. I'd like to begin today's call talking about our purpose as a company which defines our strategy and the characteristics that make Cosmos unique. We'll then provide an update on our operational financial progress in 2023 before looking forward to a catalyst-rich year ahead. Starting on slide three. At Cosmos, our purpose is clear. We are a leading deep-water independent E&P company focused on meeting the world's growing demand for cleaner energy. With oil production from our low-cost, lower-carbon oil assets in Ghana, the U.S. Gulf of Mexico, and Equatorial Guinea, we are providing the world with the energy it needs today. At the same time, we're developing cleaner sources of energy for the future through world-scale gas projects offshore Mauritania and Senegal. And finally, as we deliver the energy the world needs, we strive to be a force for good in the countries we operate in. accelerating economic and social progress across our host nations. We do this through growing production, which leads to increased revenues and royalties for the countries. We are also providing natural gas for domestic use in power generation, enhancing access to more affordable and more reliable electricity, while also investing in important social programs in our countries of operation. Turning to slide four. Cosmos has a unique investment case with a world-class portfolio, differentiated growth in the right assets, and strong free cash flow outlook. Taking those three in turn. First, we have a diversified portfolio of world-class assets. This portfolio is comprised of advantage oil assets today, characterized by production with low cost and top quartile carbon intensity. Alongside our oil assets, we're building out our advantaged gas position, which will lower the overall intensity of the products we sell. Importantly, the portfolio has longevity with a 2p reserves to production ratio of over 20 years with a deep hopper of discovered resource that can further extend the reserve line. Second, we have meaningful growth. We are targeting production rising to around 90,000 barrels of oil equivalent per day by the end of the year, in line with our 50% growth target from the second half of 2022. As part of that targeted growth, gases anticipate to increase from around 10% of our overall production to around 25% over that period. Beyond that, we have a hopper of value-accreted growth opportunities such as Tiberius, Yakuturanga, and the King Deep, that support future growth, albeit at a more measured rate, as we look to prioritize free cash flow and debt reduction. And finally, we expect to see significant improvement in free cash flow as we move out of the current development phase, with CapEx expected to fall with the startup of both Winterfell and Tortue this year. With those projects online, we forecast quarterly free cash flow of around $100 to $150 million at mid-cycle oil prices. We plan to prioritize the use of our future free cash flow towards debt pay down until we achieve our leverage target, after which we'll consider shareholder returns. Turning to slide five, which looks at the first of the three characteristics that make Cosmos unique. the quality of our portfolio. We have a diverse portfolio of exploration, development, and production assets across five countries in the Atlantic Basin, balanced between short-cycle oil and longer-dated gas opportunities. The chart on the top right of the slide breaks out our reserve space. Our 1P reserves of around 280 million barrels of oil equivalent provides a 1P reserves to production ratio of around 12 years weighted more towards oil. The quality of the portfolio is highlighted by the 1p reserve replacement ratio in 2023 of over 100%, which reflects the strong reserve additions at Jubilee as we draw Jubilee Southeast on stream. On a 2p basis, we have a reserves to production ratio of over 20 years, which is slightly more to gas than oil. demonstrating the direction of travel over the coming years, with gas set to play a growing role in the outlook for the company. The chart at the bottom right of the slide shows the importance of the diversity in the asset base, with all business units playing an important role in the delivery of the company's future. The 2C resource base, which includes some contribution from Yakuturanga, as well as upside in Jubilee and Winterfell, gives the company a 2C reserves to production ratio of over 30 years, with additional discovered resource beyond that, such as Tiberius, expected to extend the production life. Turning to slide six, which looks at our growth this year and beyond in more detail. The chart at the top shows the progress we're making towards our 50% production growth target. The Jubilee ramp-up is already contributing a meaningful step-up following the Jubilee Southeast startup last summer. This ramp-up is planned to continue with five additional wells expected online at Jubilee in the first half of this year. First oil at Winterfell is expected early next quarter, an important milestone for our Gulf of Mexico business. After that, we're looking forward to the startup of Tortue, which is expected to take company production to above 90,000 barrels of oil equivalent per day. On the bottom half of the slide is our opportunity set beyond 2024. We have a balance of high-quality short-cycle oil opportunities, such as Tiberias, and longer-dated gas and LNG opportunities, like Yakuturanga and Tortue Phase II. Turning to slide seven, as we deliver our current phase of development projects and then pursue selected investment opportunities, we expect more measured growth and our free cash flow profile to improve significantly. With a targeted 50% increase in production by year-end 2024, as measured against the first half of 2022, we expect our free cash flow to grow materially at mid-cycle oil prices. As these projects deliver, CapEx is expected to fall sharply. With Tortue and Winterfell online, we expect annual CapEx to return to a more steady state number in 2025 and beyond of around $550 million, including maintenance and some further growth. With growing production and falling CapEx, we're reaching an important inflection point with quarterly free cash flow expected to be in the $100 to $150 million range once the current phase of developments is delivered. Turning to slide eight. Supporting our strategic and operational progress is a continued focus on our ESG activities. Supplying the energy the world needs today and meeting growing future demand must be done in a responsible way that not only provides affordable and reliable energy, but also provides sustainable growth and benefits to our host countries. I'm proud of our progress in 2023. Starting with environment, we continue to maintain carbon neutrality for our operated Scope 1 and 2 emissions. In 2023, we announced a new term target to reduce by 25% our equity scope one emissions in 2026 from a 2022 baseline and are making good progress towards that goal. Turning our attention to social, we aim to be a trusted partner and good corporate citizen in our host countries and here in the US. We continue to invest in our people and the communities we work in supporting a just energy transition that provides greater access to power in Africa. We continue to have 100% local employment in all of our overseas offices, and we're again named a top workplace in both Houston and Dallas in 2023. We care deeply about the people who work for and with Cosmos, and this is an important part of our success as a company. And lastly, governance. Cosmos has a very experienced and diverse board with a wide range of backgrounds. This was further enhanced in 2023 with the addition of three new board members that bring unique perspectives and new ideas that help continue to support Cosmos' growth. In summary, ESG credentials are a core part of our strategy. This commitment was once again recognized by MSCI, one of the leading ESG rating agencies, which ranked Cosmos AAA, the highest possible rating, which puts us in the top 20% of companies in our sector for the second year. Similarly, Newsweek and Statista named Cosmos one of America's most responsible companies for the fourth consecutive year. Our ability to effectively execute our strategy relies on our commitment and focus on operating responsibly. That commitment starts at the top with our board of directors, down through leadership and to all of our employees, and supports our ability to deliver long-term value to all of our stakeholders. Turning to slide 10, a recap of our achievements in 2023. 2023 was another year of continued delivery. We continue to operate safely with lost time injury rates and total recordable injury rates significantly below industry averages, a trend we have maintained for several years. As discussed earlier in the materials, production is growing with fourth quarter production of 66,000 barrels of oil equivalent per day up 12% year on year. Our development projects are progressing with Jubilee Southeast online and ramping up, Winterfell due online shortly, and Tortue Phase 1 making good progress with startup expected later this year. We continue to build out our future growth opportunities with the discovery of the operated Tiberius ILX prospect and by increasing our working interest in Yakuturanga and assuming operatorship. And as discussed on the previous slide, our continued ESG focus was recognized by MSCI as we maintained our AAA rating. I'll now let Neil run through the financial results for the quarter and the year.