Kosmos to focus on Ghana in 2012

 Ghanaian fans celebrate their victory in front a banner reading

Ghana focus: Kosmos to devote 90% of $600 million spend on Ghana this year

Dallas-based Kosmos Energy plans to spend about $600 million this year with 90% of that devoted to its operations in Ghana and the bulk of its development plans focussed on the Jubilee project.

The company is planning a “substantial” appraisal and exploration drilling programme and expects to participate in at least nine new wells off the African nation, chief executive Brian Maxted said in a statement.

At least two appraisal wells will be drilled this year at Kosmos’ Teak discovery and another one at the Mahogany discovery in the West Cape Three Points Block

The company also plans to perform multiple flow tests and reservoir studies on those two discoveries as well as the Akasa and Banda discoveries.

Kosmos says it will also participate in two appraisal wells on the Deepwater Tano Block, where the company just this week increased its stake.

Another three exploration wells off Ghana – targeting the Deepwater Sapele, Wawa, and Turonian (Tweneboa) Deep prospects – are planned for the Deepwater Tano Block this year.

In total, Kosmos has dedicated about 55% of its capital budget to exploration and appraisal activities, with the rest going towards development.

The first phase of the Tullow-operated Jubilee field will comprise most of Kosmos’ development spending this year as the partners gear up for Phase 1A.

Phase 1 production has been hindered by ongoing well-completion issues and the partners plan to drill up to three sidetracks of existing Jubilee wells this year.

Darrell McKenna, Kosmos chief operating officer, said the partners are exploring a number of options to enhance Phase 1 flows, including an acid stimulation on one of the producers “in the next few weeks”.

As for Phase 1A, Kosmos has budgeted for five new production wells, three water injection wells, and additional subsea infrastructure.

By the end of the year, Kosmos anticipates four production wells and one injection well to be online, with gross production at Jubilee at between 70,000 and 90,000 barrels per day of oil.

Jubilee, which straddles the Deepwater Tano and West Cape Three Points licences, was discovered in 2007 via the Mahogany-1 and Hyedua-1 exploration wells. It holds estimated recoverable reserves of 370 million barrels of oil.

The field produced more than 29 million barrels of oil over last 12 months at Jubilee and is currently averaging about 70,000 bpd, McKenna said on a conference call with analysts.

Kosmos also said it plans to spud the Sipo well on the Ndian River Block – its first onshore well in Cameroon, testing the Liwenyi prospect – late this year.

Money is also set aside for a planned exploration programme with “significant” 3D seismic shoots in Kosmos’ recently acquired positions off Morocco and Suriname, with first drilling planned as early as 2013 for Morocco and 2014 for Suriname.

Kosmos posted fourth-quarter earnings of $34 million on revenues of $221.7 million, a considerable improvement on the $94 million loss on revenues of $3 million in the same period a year earlier.

For the year, Kosmos reported a loss of $2.08 million, a vast improvement on the $323 million lost in 2010.

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