Kosmos shares fall on lower output, higher cost guidance

(Sharecast News) - UK-listed shares of American upstream oil company Kosmos dipped on Monday after the firm swung to a loss in the second quarter, as it forecasted lower production and higher costs than initially estimated. The Dallas-headquartered company announced that it was cutting its full-year production gudiance to 65,000-70,000 barrels of oil equivalent per day (boepd), down from the 70,000-80,000 boepd range announced in May.

Kosmos reported a net loss of $87.7m over the three months to 30 June, compared with a $59.8m profit the year before, total revenues fell to $393.5m from $450.9m.

Net production was 63,500 boe per day, lower than the 66,000-72,000 guidance range given in May.

Operating costs per boe, at $36.49, were well above company guidance of $25-27, reflecting lower production than expected, and were higher than the first quarter. As a result,. Kosmos has hiked its full-year opex guidance to $22-24 per boe, up from $18-20 previously.

Nevertheless, net capital expenditure for the quarter was $86m, below guidance due to lower spend in Mauritania and Senegal and in the Gulf of Mexico. Looking forward, the company cut its full-year capex target to $350m from $400m.

"We set out this year with three clear priorities: Increase production, reduce costs and enhance the resilience of the balance sheet. During the period we have continued to make good progress across all three areas," said chair and chief executive Andrew Inglis.

"With production rising, costs falling and balance sheet resilience improving, we look forward to delivering long-term value for our shareholders through the second half of the year and beyond."

The stock was down 4% at 145p by 0856 BST.