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Shell acquires certain Kosmos African assets

Shell is to acquire Kosmos Energy’s participating interests in blocks offshore São Tomé & Príncipe, Suriname, Namibia, and South Africa. The deal consists of an upfront cash payment of approximately $100mn, plus contingent payments of $50mn payable upon each commercial discovery from the first four exploration wells drilled across the assets, capped at $100mn in aggregate. Three of the four wells are currently planned for 2021.

Kosmos plans to use up to one-third of the initial proceeds to test two high-quality infrastructure-led exploration prospects in the Gulf of Mexico, each offering hub scale potential with a low cost, lower carbon development scheme. The company expects to use the remainder of the proceeds to reduce borrowings outstanding under its credit facilities.

Andrew Inglis, Kosmos Energy’s Chairman and CEO, says: ‘With this transaction, we are continuing to focus our exploration portfolio on proven basins that offer superior returns with shorter payback and significant resource potential… The contingent payments locked into the agreement with Shell ensure we retain upside from frontier exploration with no further investment.’

Post completion of the transaction, Kosmos retains a focused exploration portfolio with over 6bn barrels of gross resource potential in the Gulf of Mexico and West Africa.

News Item details

Journal title: Petroleum Review

Countries: Africa -

Subjects: Oil and gas - Exploration and production - Business management -

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