Morocco: Kosmos Energy confirms FA-1 well offshore Morocco is non-commercial
06 May 2014
Kosmos Energy has announced financial and operating results for the first quarter of 2014, which included net income of $75 million, or $0.20 per basic share and $0.19 per diluted share as compared with $20 million, or $0.05 per basic and diluted share in the same quarter last year. The current quarter’s results include a benefit to income of $24 million related to the farm-down of a portion of the company’s interest in three exploration licences in Morocco’s Agadir Basin. In addition, first quarter results benefited from lower costs that more than offset a decrease in oil sales revenue primarily associated with lower oil prices.
Andrew G. Inglis, chairman and chief executive officer, commented: 'We had a strong first quarter largely due to consistent production from the Jubilee field and lower costs overall. Looking to the future, we are encouraged by the quality of our exploration portfolio as we mature the prospects to the drilling stage from recently acquired 3D seismic. We plan to drill a series of potentially play-opening exploration wells, with the next spud targeted for late 2014. With our cash flow from Ghana and existing liquidity, we remain extremely well-positioned to deliver this program as a self-funded explorer.'
Reporting its first quarter 2014 results, Kosmos provided an uodate on the FA-1 well in the Foum Assaka Offshore block. The well has reached a total depth of 3,830 meters and will be plugged and abandoned after failing to encounter commercial hydrocarbons. The well, which is the first in a series of play-opening wells designed to unlock the Agadir Basin, was drilled to test the salt diapir play concept targeting the Cretaceous interval in a combined structural-stratigraphic trap. This is one of several independent play types and fairways present in the Agadir Basin.
Importantly, FA-1 encountered oil and gas shows while drilling and in sidewall cores suggesting the presence of a working petroleum system. The well has also provided key seismic calibration information and the well results will now be integrated into Kosmos’ ongoing petroleum system analysis; in particular, the assessment of charge and reservoir play risks, as well as the evaluation and ranking of trap types ahead of the next tests of this petroleum system in 2015 and beyond.
Additionally, a 4,300 sq km 3D seismic program in the Essaouira Offshore and Tarhazoute Offshore blocks in Morocco commenced during March and is expected to be completed late in the second quarter. Furthermore, seismic acquisition, seismic interpretation work and prospect maturation studies are progressing well in the Company's exploration blocks offshore Ireland, Mauritania, Suriname and Western Sahara in advance of the continued exploration drilling program commencing end of 2014.
Gross production from the Jubilee field averaged approx. 102,000 barrels of oil per day (bopd) in the first quarter of 2014, an increase from 93,000 bopd in the fourth quarter of last year. Collectively with the Jubilee field partners and the Government of Ghana, Kosmos is continuing work to address gas-related constraints which currently limit oil production from the field.
Appraisal of the Mahogany, Teak and Akasa (MTA) discoveries within the Greater Jubilee area continued in the first quarter as a Jubilee development well was successfully deepened to evaluate the Mahogany interval.
Government approval was received for the farm-out of a non-operating interest to BP for the Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore blocks in the Agadir Basin, and for the farm-out of a non-operated interest to Capricorn Exploration and Development Company, a wholly-owned subsidiary of Cairn Energy in the Cap Boujdour Offshore block in the Aaiun Basin.
See also, Fastnet Oil & Gas announcement
Source: Kosmos Energy