A release from Dallas, USA, indicates the oil company sold only half the quantity of oil compared to what it sold during second quarter last year.
“Second quarter 2016 oil revenues were $46 million versus $119 million in the same quarter of 2015, on sales of one cargo of 0.9 million barrels of oil for 2016 as compared to two cargos totaling 1.9 million barrels in 2015,” the release said about revenues.
Production expense for the current quarter was $33 million, or $34.47 per barrel, versus $20 million, or $10.40 per barrel, in the second quarter of 2015.
Kosmos says its overall increase in production expense during the second quarter of 2016 was primarily attributable to the cost of additional operating procedures related to the turret bearing issue, as well as the impacts associated with lower production.
“Exploration expenses totaled $36 million for the second quarter, compared to $15 million in the same period of 2015. Included in the quarter were approximately $16 million of costs associated with the warm stacking of the Atwood Achiever beginning in late May,” Kosmos said.
Depletion and depreciation expense for the quarter was $17 million, or $17.86 per barrel said in the release, a decrease from $19.29 per barrel in the second quarter of 2015, which was primarily attributable to reserve additions at Jubilee in 2015.
General and administrative expenses were $20 million during the second quarter, a 52 percent decrease compared to the same period in 2015.
The second quarter results included a mark-to-market loss of $55 million related to the Company’s oil derivative contracts. At June 30, 2016, the Company’s hedging position included 11.9 million barrels through 2018 and had a total mark-to-market value of $85 million.
"We recognized an income tax benefit for the second quarter of 2016 of $16 million, primarily related to lower realized oil revenues and higher costs," said the release.
Total capital expenditures in the second quarter were $184 million, which primarily reflects spend on the company's exploration and appraisal drilling program and the TEN project.
Kosmos exited the second quarter of 2016 with $1.2 billion of liquidity and $1,058 million of net debt.
On its Ghana asset, Kosmos said it continues to be a solid foundation, delivering near-term production and cash flow growth.
“With the revised operating procedures at Jubilee working as anticipated, the start-up of the Tweneboa, Enyenra and Ntomme (TEN) project shortly, and our comprehensive hedging and insurance programmes, our financial position remains strong.
In addition, the quality of our exploration prospectivity continues to improve with the addition of new data following our drilling success over the past year and recently acquired seismic data. As a result, Kosmos is well positioned to deliver value from both our discovered gas resource offshore Mauritania and Senegal, as well as from new high-graded opportunities our team has identified,” it said.
The oil producer notes that the second quarter results included a mark-to-market loss of $55 million related to the Company’s oil derivative contracts. At June 30, 2016, the Company’s hedging position included 11.9 million barrels through 2018 and had a total mark-to-market value of $85 million.