Kosmos Energy Ltd.

Good day, everyone. Welcome to the Cosmos Energy's second quarter 2024 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 and Investor Relations at Cosmos Energy.

Thank you, Operator, and thanks to everyone for joining us today. This morning, we issued our second quarter 2024 earnings release. This release and the slide presentation to accompany today's calls are available on the Investors page of our website. Joining me on the call today to go through the materials are Andy Ingle, 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 our website. And at this time, I'll 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 start today's call by looking at the operational momentum we're seeing across all our business units and the solid progress we're making towards achieving our year-end goals. Neil will then walk you through the quarter's financial results before I look ahead to the multiple catalysts we expect to deliver over the second half of the year. We'll then open the call for Q&A. Starting on slide three, two years ago, we announced a target to grow production by around 50%, driven largely by the delivery of three important projects, Jubilee Southeast in Ghana, Winterfell in the Gulf of Mexico, and GTA in Mauritania and Senegal. We're around halfway to achieving that target with the successful startup of Jubilee Southeast and Winterfell, alongside production enhancement projects in the Gulf of Mexico, which I'll talk about in more detail shortly. Through the end of the year, we expect the start-up of the first phase of the GTA project and the infill drilling campaign next year in Guinea to contribute towards our year-end production goal of around 90,000 barrels of oil equivalent per day. But we're not growing production for growth's sake. The growth is coming from high-quality material projects with long reserve lives across both oil and gas. This rising production follows a multi-year investment cycle, with capex now expected to fall sharply as these projects are completed. The increased production and lower capital should drive a meaningful free cash flow inflection in the business, with free cash flow of around $100 to $150 million per quarter once everything is fully up and running. That cash flow will be used initially to pay down debt to further strengthen the financial resilience of the company. We will also selectively invest in future growth, but this will be focused on high-graded projects developed at a cadence to fit within our targeted capital budget. Once the debt level approaches our near-term leverage target of sub-1.5 times, we'll then look at shareholder returns alongside further debt paydown to achieve our longer-term target are closer to one times. It's an exciting time for Cosmos as we continue to deliver the strategy our shareholders have invested in over the last few years. Turning to slide four, which looks at the quarter in more detail. In Ghana, the three-year drilling campaign came to an end during the second quarter with a final producer well and water injection well online at Jubilee. Gross Jubilee production in the quarter was around 87,000 barrels of oil per day. We have sustained high facility uptime with the Jubilee FPSO operating at around 99% during the quarter. However, production was lower quarter on quarter as one of the previously drilled producer wells, J69, underperformed expectations. When drilled, it encountered what we expected, but since coming online, we have not seen the pressure support required to maintain production levels from this individual well. In addition, in the second quarter, we also had some water injection issues with voidage replacement around 80% compared to the 100% target. As I said in May, to achieve the planned levels of output from the field, we need high infrastructure reliability, which we've achieved. We also need high levels of water injection, and we need the new wells to perform. Gross oil production is currently around 90,000 barrels of oil per day, with scope to increase as we address the water injection reliability. Given the underperformance of J69, full-year gross Jubilee production is now expected to be around 90,000 barrels of oil per day. With the current program now complete, the partnership will take a timeout to conduct a new 4D seismic survey starting in early 2025. after a gap of almost eight years since our previous 4D survey. This will help high-grade the well locations for the 2526 drilling campaign. I'll talk more about the impacts of new seismic technology and processing on the following slide, but its capabilities extend well beyond exploration, with significant benefits of midlife assets like Jubilee, where we can enhance our understanding of the subsurface over time. We've only produced a little over half of the 2B reserves in Jubilee over the last 14 years. So our focus, along with the operator, is on maximizing recovery and ensuring we drill the best wells first. As we've said in the past, we believe the ultimate recovery from Jubilee will be around 1 billion barrels of oil equivalent, and the new 4D survey will be important to deliver that goal and maximize our capital efficiency. On 10, the field is performing slightly ahead of expectations, with gross oil production of around 19,300 barrels of oil per day in the quarter, with the FPSO uptime of around 99%. In Extraordinary Guinea, gross production averaged around 24,000 barrels of oil per day, in line with expectations. Last month, the rig arrived in country to commence the drilling campaign. The partnership plans to drill and complete two infill wells with production expected early in the fourth quarter before the rig moves to the King Deep ILX well with the result expected by year end. The first infill well has just been drilled with positive initial results, providing confidence in our ability to add around 3,000 barrels a day net of additional oil in the EG by year end. In the U.S. Gulf of Mexico, it's been a busy period. with a startup of multiple projects in the last two months. Winterfell was brought online in July, which I'll talk about shortly. We also successfully completed the Kodiak 3 well workover, which is performing ahead of expectations. The Oddjob sub-seapump came online in late July with a meaningful increase in production from the field. Together, these projects have grown our current Gulf of Mexico production to a level of around 20,000 barrels of oil equivalent. On Tiberias, our next ILX development, where Cosmos is operator, we have ordered the long lead items and secured a rig, with the project sanction expected later this year. We continue to make good progress and anticipate first oil around 18 to 24 months after FID. Turning now to slide five, where I'll spend some time talking about Winterfell and the impact modern seismic is having on growing the resource upside. As I mentioned on the previous slide, the first two wells came online in early July with the third expected online by the end of this quarter. We're ramping up those two wells and expect gross production from the first three wells to be around 20,000 barrels of oil equivalent per day. Two additional wells are planned in the first phase with drilling expected next year. We're targeting around 100 million barrels of resource from these five wells with further upside potential from adjacent prospectivity. The partnership has licensed a new ocean bottom node seismic data over the Winterfell area, which generates significantly enhanced imaging compared with conventional streamer technology. Placing nodes on the ocean floor results in much higher resolution images. On Winterfell, where it's now calibrated with the development wells, the OBN is already helping the partnership plan the future well locations and gives us greater confidence on the resource potential of the area. We use the same state-of-the-art seismic to deliver exploration success at Tiberias and believe wide application of this seismic technology with updated processing techniques can enhance the capital efficiency of our future drilling activities across the portfolio. We see similar opportunities to use OBN in a 4D application for midlife fields like Jubilee. Winterfell is a prime example of why we acquired the Gulf of Mexico business back in 2018. A material exploration prospect near existing infrastructure with low F&D costs, which leads to a quick payback and attractive economics. Turning now to slide six, as the operator noted on its earnings call last week, the GTA project continues to make good progress with all the key pieces of infrastructure in place with gas expected to flow soon. As the slide shows, the FLNG vessel arrived earlier in the year as being moored to the hub terminal. The FESO arrived on location in the second quarter and has now been moored to the ocean floor and the risers installed. On the subsea work stream, mechanical completion of the first gas is expected later this month. On the FLNG vessel, the operator plans to bring an LNG cargo to cool the vessel this month, which helps to accelerate the commissioning activities and ramp up to full rate. The FESO is expected to be handed over to operations in September, with first gas expected shortly thereafter. First LNG production and cargo sales are expected in the fourth quarter. We look forward to updating the market with our progress over the coming weeks and months as we deliver this major milestone for the company. Turning now to slide seven, which looks at the portfolio choices beyond this year. Cosmos is differentiated as we have a deep portfolio comprised of high-quality, advanced oil opportunities in Ghana, Egypt, and the Gulf of Mexico, coupled with world-scale gas opportunities across Senegal and Mauritania. This deep portfolio enables us to enhance quality through choice, high-grading the activity set to pursue the highest value opportunities for our stakeholders. As we look at the hopper, there are a number of attractive investment opportunities for growth. We have a balance of oil and gas projects and a growing number of operated projects. Operatorship allows us to manage the pace of development and therefore spend, meaning we have greater ability to control our growth within the future capital framework we've laid out for the company. We have large interest in two key projects, Tiberius and Yakutanga. As we've previously said, Bringing in the right partners is critical to progress the projects and also manage our capital exposure as we look to de-lever the balance sheet. On both projects, we've had strong industry interest as we look to farm down our interest by project sanction. As we come to the end of this capital intensive phase of the company's evolution, with our key projects nearing completion, I want to reinforce an important message I made earlier in the year. we will selectively pursue the best growth opportunities within a disciplined capital framework, which will result in a more modest growth rate than we've seen over the past two years. I'll now turn it over to Neil to take you through the financials.