Kosmos farms out three offshore blocks to Galp

U.S.-based oil and gas company Kosmos Energy has reached an agreement with Portuguese corporation Galp Energia to farm out a twenty percent non-operated stake of the company’s interest in Blocks 5, 11, and 12, offshore Sao Tome and Principe.

To remind, Kosmos Energy teamed up with Oando Energy’s subsidiary, Equator Exploration, to acquire ownership over Blocks 5 and 12 in the Gulf of Guinea back in April 2016. Block 11 rights were transferred to Kosmos by ERHC Energy, a Houston-based oil and gas company, back in October 2015.

Kosmos said on Monday that, based on the terms of the agreement with Galp, the Portugese company will pay a proportionate share of Kosmos’ past costs in the form of a partial carry on the 3D seismic survey over blocks 6, 11 and 12, expected to begin in the first quarter of 2017.

The transaction is expected to close before the year-end, subject to ANP and government approval as well as other customary closing conditions.

Galp said on Monday that, after the completion of the acquisition, Kosmos would remain the operator of every block. In block 5, Kosmos will hold a 45 percent stake while Galp and Equator will hold 20 percent each with ANP holding the remaining 15 percent.

Block 11 has only three partners with Kosmos holding the biggest share, 65 percent. Galp and ANP will hold 20 and 15 percent stakes, respectively. Finally, in block 12, Kosmos will hold a 45 percent stake while Galp, Equator, and ANP will hold a 20, 22.5, and 12.5 percent share, respectively.

Galp added that, through the agreement with Kosmos, it would further reinforce its presence in the country, where it holds an operatorship and a 45 percent interest in block 6, in which Kosmos also holds a 45 percent interest. The third partner in block 6 is the National Petroleum Agency (ANP), on behalf of the government, with a 10 percent stake.

Also on Monday, Kosmos Energy posted a net loss and lower oil revenues for the third quarter of 2016 compared to its performance in the prior-year quarter.

Offshore Energy Today Staff