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On Thursday, Benchmark analysts reiterated a Hold rating on Kosmos Energy stock (NYSE: NYSE:KOS), which currently trades at $1.78 with a market capitalization of $863 million. According to InvestingPro data, analysts have set price targets ranging from $2.50 to $7.00 for the stock. The decision follows Kosmos Energy’s announcement of a memorandum of understanding (MOU) with operator Tullow to extend their Ghana licenses. The licenses for the West Cape Three Points and Deepwater Tano fields are set to be extended to 2040, from their previous expirations in 2034 and 2036, respectively.
The MOU outlines a comprehensive plan that includes a $2 billion well program in the Jubilee Field. Additionally, the agreement stipulates a commitment to increase gas supply by 100 million cubic feet per day. The current gas price for Jubilee gas, set at $3, will be reduced under this new agreement.
Kosmos Energy’s operations in Ghana are significant, as the region is the company’s largest. The agreement also includes a guaranteed reimbursement mechanism for gas sales and a technology transfer to state entities. These measures aim to address challenges related to associated gas, which have impacted the development of oil resources in the area.
The MOU is subject to parliamentary approval and a development plan, with finalization expected by the third quarter. Benchmark analysts maintain a Hold rating based on the company’s valuation, as expressed in their recent report.
In other recent news, Kosmos Energy reported its Q1 2025 earnings, which fell short of expectations. The company announced an earnings per share of -$0.22, missing the forecasted -$0.08, and revenue of $290.43 million, which was below the anticipated $336.36 million. These results reflect operational challenges, including scheduled maintenance that impacted production levels. Despite the earnings miss, Kosmos Energy achieved a significant milestone with the first LNG cargo export from the GTA project. The company aims to maintain financial resilience through rigorous cost control and plans to be free cash flow positive at current oil prices. Kosmos Energy is targeting a full-year capital expenditure of $400 million or lower. Analysts from Stifel and Goldman Sachs engaged with the company during the earnings call, focusing on capacity testing and financial leverage. The company’s ongoing discussions with the Ghanaian government also indicate a focus on future energy sector investments.
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