Kosmos Energy (NYSE:KOS) has entered into a partnership with BP (LSE:BP) in Mauritania and Senegal. Under the terms of the agreement, BP will assume named operatorship and acquire a 62% working interest in Kosmos’ licenses covering blocks C6, C8, C12, and C13 offshore Mauritania, as well as an effective 32.49% working interest in the licenses covering the Saint Louis Offshore Profond and Cayar Offshore Profond blocks offshore Senegal. Kosmos will maintain a 28% and 32.51% effective working interest in the licenses offshore Mauritania and Senegal, respectively, and will continue as exploration operator.
Under the terms of the agreement, Kosmos will receive fixed consideration of $916 million, including:
- $162 million in cash up front;
- $221 million carry on exploration and appraisal, including a drill stem test (DST) on Tortue expected to be completed in 2017; and
- $533 million maximum carry on development costs until first gas production on the Tortue project, including a front end engineering and design (FEED) study to be completed in 2017 with the objective of reaching a final investment decision (FID) by 2018.
Kosmos will also receive a contingent bonus of up to $2 per barrel, for up to 1 billion barrels of liquids, structured as a production royalty, subject to a future liquids discovery and oil price.