Shares of Kosmos Energy jumped sharply, gaining 16% on the trading session following formal ratification by Ghana's parliament of extensions to key petroleum licenses and a series of production and asset updates from the company.
The Ghanaian legislature approved amendments to the West Cape Three Points and Deepwater Tano Petroleum Agreements, which govern the Jubilee and TEN offshore assets. Those licenses are now extended through 2040, a change that the company says creates scope for as much as $2 billion of additional investment in the blocks.
Under the amended plan for Jubilee, Kosmos will pursue an expansion that could include up to 20 additional wells. Management anticipates that the revised plan of development will support an increase in Jubilee's proved and probable - 2P - reserves. The license changes are also expected to provide greater volumes of gas from Jubilee and TEN to be supplied for domestic power generation within Ghana.
Operationally, Kosmos reported that the J74 development well, which began producing in early January, has now reached full ramp-up and is delivering roughly 13,000 barrels of oil per day. For February month-to-date, average gross oil output from Jubilee exceeded 70,000 barrels of oil per day.
The company also disclosed progress on the next well in the program. J75 - the first of a planned five-well drilling campaign for 2026 - has been drilled and encountered about 40 meters of net pay. Kosmos expects J75 to be placed on production around the end of the first quarter.
On the TEN asset, the partners have executed a sale and purchase agreement to acquire the floating production, storage and offloading unit - the FPSO - for a gross consideration of $205 million. Kosmos's share of that gross consideration is approximately $40 million. The group expects the FPSO purchase to drive material reductions in operating expenses beginning in 2026, with the transaction targeted to complete at the end of the first quarter of 2027.
Beyond Ghana, Kosmos provided an update on activities in Mauritania and Senegal. Phase 1 of the Greater Tortue Ahmeyim LNG project shipped 3.5 gross LNG cargoes in January. The field has averaged production of approximately 2.9 million tonnes per annum equivalent year-to-date, a level above the 2.7 mtpa nameplate capacity.
On the corporate finance side, Kosmos completed a Norwegian bond issuance totaling $350 million in January. The company used $100 million of proceeds from that bond to repay borrowings under its Reserve Based Lending facility.
Summary
Ghana's parliamentary ratification of license extensions for Jubilee and TEN through 2040 and Kosmos Energy's operational updates - including a fully ramped J74 well, progress on J75, the planned FPSO acquisition for TEN, and continued LNG shipments from Greater Tortue Ahmeyim - underpinned a 16% jump in the company's stock. The license extensions are framed as enabling up to $2 billion in incremental investment and supporting increased gas supplies for Ghanaian power generation.
Key points
- Ghana extended West Cape Three Points and Deepwater Tano licenses to 2040, enabling up to $2 billion in incremental investment - impacts the oil and gas investment and domestic energy supply sectors.
- J74 is fully ramped at about 13,000 bopd, and Jubilee's average gross production topped 70,000 bopd in February month-to-date - relevant to upstream oil production and market supply metrics.
- The TEN partners agreed to acquire the FPSO for $205 million gross (approximately $40 million net to Kosmos), a move expected to lower operating expenses from 2026 - relevant to oilfield operating cost dynamics.
Risks and uncertainties
- The timing for J75 to come online is an expectation - the well is expected to be producing around the end of the first quarter, so near-term timing risk remains for the planned production increase.
- The anticipated material operating expense reductions from the TEN FPSO acquisition are contingent on transaction completion, which is targeted for the end of the first quarter of 2027.
- The realization of up to $2 billion in incremental investment enabled by the license extensions depends on subsequent execution of development plans and investment decisions.