Kosmos Energy has announced the completion of its previously announced transaction with B.V. Dordtsche Petroleum Maatschappij (Shell), a wholly-owned subsidiary of Royal Dutch Shell PLC, for the farm down of its interests in Suriname, Sao Tome & Principe and Namibia for $95 million, plus future contingent payments of up to $100 million. The transfer of the interests in South Africa is to take place in 2021.
Kosmos has allocated up to one-third of the initial proceeds for two high-quality infrastructure-led exploration prospects in the Gulf of Mexico, each offering hub scale potential with a low-cost, lower-carbon development scheme. The first test on the Winterfell prospect is currently drilling with results expected early next year. The company expects to use the remainder of the proceeds to reduce borrowings outstanding under its credit facilities.
After completion of the transaction, Kosmos will still retain a focused exploration portfolio with over six billion barrels of gross resource potential in proven basins in West Africa and the Gulf of Mexico.
The Energy Chairman and Chief Executive Officer of Kosmon, Andred G. Inglis said, “We are pleased to complete this transaction with Shell on schedule. The proceeds enable Kosmos to strengthen the balance sheet while accelerating high graded exploration opportunities in proven basins. The contingent payments locked into the agreement with Shell ensure we retain upside from frontier exploration with no further investment.”