Kosmos Expands Role in Gulf of Mexico with Drilling Additions

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Researched by Industrial Info Resources (Sugar Land, Texas)--Kosmos Energy (NYSE:KOS) (Dallas, Texas) scored a big win in the Gulf of Mexico this week, when the company announced it had discovered oil at one of its ultra-deepwater projects. If developed, the discovery would join several others underway across the Gulf, where the company produced about 15,900 barrels of oil equivalent per day (with about 81% oil) during the second quarter. Industrial Info is tracking nearly $5 billion worth of projects featuring Kosmos globally, more than $3.3 billion of which is attributed to projects with a medium-to-high (70% or higher) likelihood of beginning construction as currently scheduled.

Click on the image at right for a graph detailing active and planned projects featuring Kosmos, by industry classification.

Kosmos' projects already in advanced development in the Gulf of Mexico include the Winterfell project in Green Canyon Block 944, where the company expects oil to begin flowing around the end of first-quarter 2024. Kosmos began drilling three production wells and started construction on a five- to six-mile crude oil export pipeline in September, along with supporting subsea infrastructure. Following initial production from the three wells, the company expects to drill two additional wells.

Kosmos said Winterfell has a pre-drill gross resource estimate of 135 million barrels of oil; in a recent quarterly earnings-related conference call, Andrew Inglis, the chief executive officer of Kosmos, said "there is an upside case for around 200 million barrels of oil equivalent across the greater Winterfell area." Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can read detailed reports on the initial drilling at Winterfell, its export pipeline and subsea infrastructure, and its anticipated drilling expansion, and can read a related plant profile.

Elsewhere in the Gulf, Kosmos began adding compression and umbilical systems at the Odd Job production field in Mississippi Canyon blocks 214 and 215, which Inglis said "continues to make good progress and is expected online in mid-2024." Subscribers can read detailed reports on the compression and umbilical projects.

Production from Odd Job will be sent to Kosmos' Delta House floating production system in Mississippi Canyon Block 254, where the company began performing modifications and upgrades to the topside module to accommodate the stronger inflows of oil. Engineering, procurement, construction and installation for the project will be performed by OneSubsea (Houston, Texas), a joint venture among SLB (NYSE:SLB) (Houston), Aker Solutions (Oslo) and Subsea7 (Sutton, England). Subscribers can learn more from a detailed project report.

"As we continue to deliver these growth projects, we expect development [capital expenditures] to fall, resulting in a lower capital program over the coming year," Inglis said in the conference call. "We're nearing the free cash flow inflection point where we expect to generate significant free cash flow, particularly at current commodity prices."

After noting net capital expenditures for the second quarter were below guidance at $170 million, primarily due to delays related to a project off the West African coast, Neal Shah, the chief financial officer of Kosmos, noted in the conference call that third-quarter capital expenditures are "expected to be similar with the second quarter, as a result of the ramp-up in activity in the Gulf of Mexico."

Kosmos also is considering the proposed Gettysburg Grassroot Oil & Gas Field Development in De Soto Canyon Block 398, which would include two production wells, a pipeline connecting the field to a yet-to-be-determined facility, and supporting subsea infrastructure. The company believes production would total more than 42,000 barrels per day of crude oil and condensate, and 19 million standard cubic feet per day of natural gas. Subscribers can read detailed reports on the production wells, pipeline and subsea infrastructure, and can read a related plant profile.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of detailed reports for active and proposed projects from Kosmos worldwide.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).