Kosmos Energy announced today that it has entered into a partnership with BP in Mauritania and Senegal that combines Kosmos’ exploration expertise with BP’s deepwater development, and LNG production and marketing experience.

Under the terms of the agreement, BP will assume named operatorship and acquire a 62 percent working interest in Kosmos’ licenses covering blocks C6, C8, C12, and C13 offshore Mauritania, as well as an effective 32.49 percent working interest in the licenses covering the Saint Louis Offshore Profond and Cayar Offshore Profond blocks offshore Senegal. Kosmos will maintain a 28 percent and 32.51 percent effective working interest in the licenses offshore Mauritania and Senegal, respectively, and will continue as exploration operator.

Andrew G. Inglis, Kosmos Energy’s chairman and chief executive officer said: “This agreement with BP demonstrates the value of our strategy, together with the quality of the basin we have opened offshore Mauritania and Senegal. Following a thorough farm-out process, BP emerged as the right partner to help us advance the Tortue gas project at pace and take forward a multi-well exploration program that will test the basin’s liquids potential beginning in mid-2017. We are pleased to have secured a super-major partner that brings financial capability, deepwater development and LNG expertise, and a vision that is fully aligned with the interests of both countries.”

Bernard Looney, BP upstream chief executive said: “The Mauritania-Senegal basin is an asset with world-class scale and potential, and we look forward to working with the team at Kosmos and the governments of Mauritania and Senegal to efficiently explore and develop its full potential. We believe the basin will become an important profit center for our upstream business.”

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.

Commenting on the commercial terms of the transaction, Mr. Inglis said: “The transaction strengthens our balance sheet by materially reducing our capital expenditure requirements, effectively funding our Mauritania-Senegal work program for the next several years. The enhanced free cash flow generation will enable us to continue to pursue other growth opportunities in our portfolio with discipline.”

Additionally, Kosmos and BP have entered into an exclusive exploration partnership covering potential new ventures opportunities in Mauritania, Senegal and The Gambia. Kosmos will remain exploration operator of all new ventures acquired within the areas of interest, while BP will become development operator.

About Kosmos Energy

Kosmos (NYSE:KOS) is a leading independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margin. Our assets include existing production and development projects offshore Ghana, large discoveries offshore Mauritania and Senegal, as well as exploration licenses with significant hydrocarbon potential offshore Portugal, Sao Tome and Principe, Suriname, Morocco and Western Sahara. As an ethical and transparent company, Kosmos is committed to doing things the right way. The Company’s Business Principles articulate our commitment to transparency, ethics, human rights, safety and the environment. Read more about this commitment in the Kosmos 2015 Corporate Responsibility Report. Kosmos is listed on the New York Stock Exchange and is traded under the ticker symbol KOS.

About BP

BP (NYSE:BP) is one of the world's largest oil and gas companies, serving millions of customers every day in more than 80 countries, and employing nearly 85,000 people. BP's business segments are oil and gas exploration & production, and refining & marketing. In alternative energies, BP has low- and no-carbon wind and biofuels businesses. Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbons basins and strong market positions in key economies.