Kosmos Provides Update on Jubilee & 2012 Capital Program

Kosmos Energy announced financial and operating results for the second quarter of 2012, including a net loss attributable to common shareholders of $25 million, or $0.07 per basic and diluted share. This compares to a pro forma net loss for the second quarter of 2011 of $0.03 per basic and diluted share.

Brian F. Maxted, Chief Executive Officer, said, “Kosmos’ second quarter was highly focused on progressing both our near- and long-term growth strategies. At Jubilee, the production outlook is improved as we’ve made good progress resolving the productivity issues impacting Phase 1 wells and we are moving quickly toward first production from Phase 1A. In addition, we anticipate submitting the TEN plan of development for approval as our second offshore development later this year. Our 2012 exploration program is off to a great start with the Wawa discovery, and we have a number of important targets remaining this year, including two significant prospects in Ghana and our first operated well onshore Cameroon. Longer-term, we are making significant progress in the exploration of our other areas, where the processing of seismic data recently acquired offshore Morocco is advancing and we are preparing to initiate a large 3D seismic acquisition program offshore Suriname in the next few weeks.”

Second quarter 2012 oil revenues were $112 million versus $124 million in the second quarter of 2011, on sales of approximately 997,000 barrels of oil for each period. The second quarter 2012 lifting priced at $112.60 per barrel, or a premium to Dated Brent of approximately $0.77 per barrel. During the second quarter of 2012, Kosmos underlifted production by approximately 240,000 net barrels due to the timing of liftings versus production.

Production expense for the second quarter of 2012 was $20 million, including $10 million related to acid stimulation costs incurred on Jubilee Phase 1 wells. Excluding these costs, the Company’s production expense was approximately $9.37 per barrel sold, down from $14.36 per barrel for the same period last year. This significant reduction is primarily a result of the purchase of the Jubilee floating production, storage and offloading vessel (FPSO) at year-end 2011, which capitalized the asset and ceased all forward lease payments.

Exploration expense in the second quarter of 2012 was $17 million, which included certain seismic, geologic and geophysical studies, as well as a portion of costs associated with the Teak-4A well. In the second quarter of 2011, exploration expense was primarily composed of unsuccessful well costs. General and administrative (G&A) costs were $35 million for the second quarter of 2012, with over 50 percent related to non-cash, equity-based compensation expense. Total G&A was up from the same period last year, primarily as a result of the Company’s growth and transition from a private to a public company in mid-2011. Depletion and depreciation expense was $33 million in the second quarter of 2012, up from $23 million in the second quarter of 2011. The increase is primarily a result of the capitalization of the Jubilee FPSO and the ongoing capital spending for development of the Jubilee field. In addition, the recording of year-end 2011 reserves impacted the 2012 depletion rate.

Income tax expense for the second quarter of 2012 was approximately $23 million, with approximately two-thirds incurred as a result of the taxable income associated with the Company’s Ghana operations. The remainder of the amount is primarily composed of a change in the Company’s deferred tax asset position related to equity compensation under the long-term incentive program.

Jubilee Update and 2012 Capital Outlook

As part of the ongoing production enhancement program at the Jubilee field offshore Ghana, Kosmos Energy and partners have performed acid stimulations on five Phase 1 production wells. Well productivity on each of the wells treated has been significantly enhanced.

Current production at the field is approximately 83,000 barrels of oil per day gross, with one well currently ramping up following acid stimulation. This represents the highest production level for the field to-date in 2012. Supported by the ongoing production enhancement program at Phase 1 and two new Phase 1A production wells to be brought online before the end of the year, Kosmos anticipates a higher production exit rate at year-end 2012.

With the success of the Company’s acid stimulation program at Jubilee, Kosmos Energy does not anticipate performing any further sidetrack operations in the current year. The removal of these sidetracks, along with updated appraisal plans on the Company’s West Cape Three Points Block, accounts for the majority of the reduction in the 2012 capital program, which is currently estimated to be $500 million.