Kosmos Energy Plc (LON:KOS, NYSE:KOS) has struck a deal to expand its strategic position offshore Equatorial Guinea.
The company announced a US$650mln deal to acquire a stake in the Ceiba Field and Okume Complex, as well as three exploration licences - adding 6,000 square kilometres to its previous footprint of 25,000 square kilometres in the Gulf of Guinea.
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It delivers net production of 13,500 barrels of oil per day as well as ‘identified opportunities for resource and value upside’. And it is expected to generate around US$120mln of operating cash flow per year (based on US$50 per barrel Brent).
Additionally, the deal brings 45mln barrels of net recoverable resources.
"This transaction expands our significant position in a proven, but under-explored oil basin," said Andrew Inglis, Kosmos chief executive.
"The Ceiba and Okume fields, which our team originally discovered and managed, provide low-cost, high-margin production with several identified opportunities for resource and value upside.
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“These discoveries de-risked the key play elements in the basin, but limited exploration in subsequent years means we have the chance to fully unlock the exploration potential of the Rio Muni basin.”
The company and its partner Trident Energy are jointly acquiring the assets from Hess Corporation, though Kosmos is expected to pay net cash consideration of around US$240mln at close. The acquisition is being covered by cash on hand and from the availability from its reserves based lending facility.