Kosmos Energy in farm-out talks for assets in Senegal, Mauritania and Sao Tome – VP

08 Nov 16 – Kosmos Energy [NYSE:KOS], a Texan oil and gas company, is in talks to sell stakes in its upstream assets in Senegal, Mauritania and São Tomé & Principe, Vice President Exploration Tracey Henderson said.

USD 1.86bn market-cap Kosmos has holdings in five offshore blocks in the Greater Tortue offshore hydrocarbon province, which straddles the waters of Senegal and Mauritania. Kosmos owns 90% each of Block C8, Block C12 and Block C13 in Mauritania, and 60% each of the Cayar Offshore Profond and the St Louis Offshore Profond in Senegal.

A three-well drilling programme across the Greater Tortue area has revealed a total gross resource of 20tn cubic feet of gas, according to Kosmos. Kosmos will continue its exploratory drilling programme in 2017, boring an additional three wells, Henderson said.

Kosmos is looking to farm out to an industry partner with financial capabilities, and is evaluating potential strategic partners, she said. She did not indicate a likely timeline for completing the deal, or how much Kosmos is looking to raise .

Offshore São Tomé & Principe, Kosmos has three blocks in the Gulf of Guinea that it is looking to farm down, Henderson said.

Kosmos holds 65% in Block 5, with partners Oando subsidiary Equator Exploration (20%) and National Petroleum Agency of São Tomé & Principe (15%). Block 5 has an area of 2,844 sq km in water depths ranging from 2,000m to 2,500m, according to Oando.

Kosmos also has a 65% holding in Block 12, with Equator Exploration (20%), and Agencia Nacional Do Petroleo De São Tomé e Principe (ANP) (15%) owning the remaining shares.

In Block 11, Kosmos owns 85% and Agencia Nacional Do Petroleo De São Tomé e Principe has a 15% carried interest.

Kosmos aims to reduce its ownership in each of these blocks to around 33%, Henderson said. It is willing to sell stakes in them now, depending on what deals are offered, could also wait until it has shot 13,000 sq-km of 3D seismic in 1Q17, Henderson said. She did not specify how much Kosmos is looking to raise through the farm-down.

Kosmos is also drilling up to two wells in São Tomé in 2H17, and would prefer to have completed the farm-outs by then, she said. The company would rather farm out all three blocks to one company than sell stakes to different companies, she added. The company has received approaches from interested parties, she said.

by Katie McQue