Kosmos Energy has agreed to sell its interests to Shell in Namibia, Sao Tome and South Africa
These African positions are part of a portfolio of frontier exploration assets that the Dallas based minnow agreed to sell to the AngloDutch major for approximately $100Million, plus future contingent payments of up to $100Million.
Kosmos’ asset in Suriname is the only non-African property on the list.
Under the terms of the agreement, Shell will acquire Kosmos’ participating interest in blocks offshore São Tomé & Príncipe, Suriname, Namibia, and South Africa , Kosmos says in a release. The consideration consists of an upfront cash payment of approximately $100Million, plus contingent payments of $50Million payable upon each commercial discovery from the first four exploration wells drilled across the Assets, capped at $100Million 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.
Post completion of the transaction, Kosmos retains a focused exploration portfolio with over six billion barrels of gross resource potential in the Gulf of Mexico and West Africa. Kosmos also expects to realize approximately $125Million in total savings across capital expenditures and general and administrative expenses over the next two years as a result of the transaction.