[ 2011-04-18 ]

Kosmos to pay GNPC $15m to settle past disputes
Kosmos Energy Ltd has indicated in its Initial
Public Offering (IPO) Prospectus filed with the
Securities and Exchange Commission on Thursday
April 14, 2011 that it will use proceeds of the
IPO to fund capital expenditure and to make a
$15.0 million payment to GNPC upon the successful
completion of the IPO pursuant to the settlement
agreement entered into with GNPC to resolve past
disputes and for general corporate purposes.

Extracts from the prospectus on the use of
proceeds is presented below:

“We estimate that our net proceeds from the sale
of 30,000,000 common shares in this offering will
be approximately $477.7 million after deducting
estimated offering expenses payable by us of $5.5
million and underwriting discounts and commissions
and assuming an initial public offering price of
$17.00 per common share (the midpoint of the
estimated public offering price range set forth on
the cover of this prospectus). If the
over-allotment option is exercised in full, we
estimate that our net proceeds will be
approximately $550.2 million.

“We intend to use the net proceeds from this
offering, available cash and borrowings under our
commercial debt facility to fund our capital
expenditures, and in particular our exploration
and appraisal drilling program and development
activities through early 2013, our related
operating expenses, to make a $15.0 million
payment to GNPC upon the successful completion of
this offering pursuant to the settlement agreement
we entered into with GNPC to resolve our past
disputes and for general corporate purposes. See
"Risk Factors--We had disagreements with the
Republic of Ghana and the Ghana National Petroleum
Corporation regarding certain of our rights and
responsibilities under the WCTP and DT Petroleum
Agreements."

Management will retain broad discretion over the
allocation of the net proceeds from this offering.
Pending use of the net proceeds of this offering,
we intend to invest the net proceeds in interest
bearing, investment-grade securities.

“We estimate we will incur approximately $500.0
million of capital expenditures for the year
ending December 31, 2011. This capital expenditure
budget consists of:

* $175.0 million for development in Ghana;

* $225.0 million for exploration and appraisal in
Ghana;

* $30.0 million for exploration and appraisal in
Cameroon;

* $30.0 million for new ventures to expand our
license portfolio (including geological and
geophysical expenses); and

* $40.0 million in unallocated funds which are
available for additional drilling and licensing
costs and activities.

The ultimate amount of capital we will expend may
fluctuate materially based on market conditions
and the success of our drilling results. Our
future financial condition and liquidity will be
impacted by, among other factors, our level of
production of oil and natural gas and the prices
we receive from the sale thereof, the success of
our exploration and appraisal drilling program,
the number of commercially viable oil and natural
gas discoveries made and the quantities of oil and
natural gas discovered, the speed with which we
can bring such discoveries to production, and the
actual cost of exploration, appraisal and
development of our oil and natural gas assets. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and
Capital Resources”

Source - ghanaoilwatch.org

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