Shell acquires Kosmos’ offshore interests in Suriname

Must Read

Guyana oil revenue will more than double T&T’s and quadruple Suriname’s – Rystad Energy

The South American country of Guyana is on course to receive the highest estimated total income from...

Less than 15 percent of Guyana’s discovered resources have been sanctioned

With over 8 billion barrels of oil equivalent discovered to date and just two approved developments, Guyana...

Majors exiting 203 country positions but remain in play at key locations like Guyana

The largest oil and gas companies in the world,...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

Kosmos Energy on Wednesday said that it has entered into an agreement with B.V. Dordtsche Petroleum Maatschappij (Shell), a wholly-owned subsidiary of Royal Dutch Shell PLC, to farm down interests in a portfolio of frontier exploration assets for approximately $100 million, plus future contingent payments of up to $100 million.

In a press release, Kosmos said that under the terms of the agreement, Shell will acquire Kosmos’ participating interest in blocks offshore São Tomé & Príncipe, Suriname, Namibia, and South Africa. According to the release, the consideration consists of an upfront cash payment of approximately $100 million, plus contingent payments of $50 million payable upon each commercial discovery from the first four exploration wells drilled across the Assets, capped at $100 million in aggregate. Three of the four wells are currently planned for 2021, Kosmos said.

Kosmos said it plans to use up to one-third of the initial proceeds to test 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 company expects to use the remainder of the proceeds to reduce borrowings outstanding under its credit facilities, the release said.

Andrew G. Inglis, Kosmos Energy’s chairman and chief executive officer said: “With this transaction, we are continuing to focus our exploration portfolio on proven basins that offer superior returns with shorter payback and significant resource potential. The proceeds enable Kosmos to accelerate high graded exploration opportunities while strengthening the balance sheet, positioning Kosmos to create additional shareholder value. The contingent payments locked into the agreement with Shell ensure we retain upside from frontier exploration with no further investment.”

Upon completion of the transaction, Kosmos will retain a focused exploration portfolio with over six billion barrels of gross resource potential in the Gulf of Mexico and West Africa. “Kosmos also expects to realize approximately $125 million in total savings across capital expenditures and general and administrative expenses over the next two years as a result of the transaction,” the release said.

Closing of the transaction is expected in the fourth quarter of 2020 with an effective date of September 1, 2020 and is subject to customary conditions including government approvals, Kosmos said.

In October of 2018, Kosmos Energy announced that it was abandoning the Pontoenoe-1 well offshore Suriname after failing to find oil. This is the second dry well in a row that the company drilled in the South American country. The company had also come up dry in June 2018 at the Anapai-1A well in Block 45.

In November 2019 Kosmos Energy announced an oil discovery offshore Equatorial Guinea. The S-5 well was drilled at a total depth of 4,400 meters and encountered 39 meters of net oil play in the Santonian reservoir, in the offshore Rio Muni Basin.

The discovery was the first well drilled in Kosmos’ infrastructure-led exploration (ILX) in offshore Equatorial Guinea.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Venezuela buying fuel from Iran with plane loads of gold

Venezuela has reportedly obtained fuel from Iran in return for plane loads of gold, according to comments...

Keppel reviewing offshore business, plans to sell between S$3-5 billion of assets

Keppel Corporation Limited (Keppel) said Tuesday it plans to unlock value from S$3-5 billion of assets over the next 3 years as...

Oil falls as virus count mounts, U.S. debate looms

(Reuters) - Oil prices fell on Tuesday as Europe and the United States grappled with a surge in new coronavirus infections and...

Guyana oil revenue will more than double T&T’s and quadruple Suriname’s – Rystad Energy

The South American country of Guyana is on course to receive the highest estimated total income from its multi-billion-barrel oil and gas...

Less than 15 percent of Guyana’s discovered resources have been sanctioned

With over 8 billion barrels of oil equivalent discovered to date and just two approved developments, Guyana still has significant hydrocarbon resources...

More Articles Like This