Transcript: Kosmos Energy Q1 2026 Earnings Conference Call

On Tuesday, Kosmos Energy (NYSE:KOS) discussed first-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation. The full earnings call is available at https://edge.media-server.com/mmc/p/j4m9u9xx/ Summary Kosmos Energy reported a 25% increase in production year-on-year, with a concurrent 22% reduction in operating costs and a 7% reduction in net debt from the end of 2025. The company is benefiting from higher market prices and premium benchmarks, with record production and pricing expected to reflect more significantly in the second and third quarters due to pricing structure lags. Strategic initiatives include advancing the Tiberius project in the Gulf of America, a strategic exploration alliance with Shell, and a focus on cost reduction, particularly in operating expenses, with a target of a 20% reduction in 2026. Operational highlights include strong performance in Ghana with ongoing drilling success and the GTA project exceeding LNG nameplate capacity. Management expressed confidence in achieving a 20% debt reduction target by year-end, supported by high production levels, strong operational progress, and the sale of producing assets in Equatorial Guinea. Full Transcript OPERATOR Good day everyone. Welcome to Cosmos Energy first quarter 2026 conference call. As a reminder, today's call is being recorded at this time. Let me turn the call over to Jamie Buckland, Vice President of Investor Relations. Jamie Buckland (Vice President of Investor Relations) Thank you operator and thanks to everyone for joining us today. This morning we issued our first quarter 2026 earnings release. This release and the slide presentation to accompany today's call are available on the Investors page of our website. Joining me on the call today to go through the materials are Andy Ingalls, Chairman and CEO and Neil Schar, CFO. During today's presentation we will make forward looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors we note in this presentation and in our UK and SEC filings. Please refer to our annual report, Stock Exchange announcement and SEC filings for more details. These documents are available on our website and at this time I will turn the call over to Andy. Thanks Jamie and good morning and afternoon to everyone. Thank you for joining us today for our first quarter 2026 results call. I'll start today's call by reviewing progress against the four goals for 2026 that we lay down for with our full year results in March. I'd then like to spend some time talking about the current market dynamics and how Cosmos is uniquely positioned to benefit by being priced off premium benchmarks before focusing on each business unit the operational progress we've made year to date. I'll then hand over to Neil to talk about the financials before I wrap up with closing remarks. Will then open up the call for Q and A starting on slide 3. Two months ago we released our full year 2025 results and I focused on four key objectives for Cosmos in 2026 which is shown on the slide. This year we are targeting production growth from our core assets, continued progress in cost reduction with a particular focus this year on operating costs. Having made significant reductions in CAPE ahead last year, meaningful net debt reduction and advancement of our high quality growth portfolio with minimal capex this year, I'm pleased to say we're making excellent progress against all these goals. Compared to the same quarter last year, production is up around 25% and absolute operating costs are down around 22%. In addition, we reduced net debt by around 7% from year end 2025. I'll go into more detail on each as we move through the slides starting with production on slide 4. With the ramp up of Greater Tortue Ahmeyim (GTA) and Jubilee production, we posted record quarterly production in the first quarter. As can be seen on the top chart on the slide this record production has come at a time when we've seen record high pricing and also record high differentials. The dark blue line on the left axis of the bottom chart shows dated Brent pricing year to date. Dated Brent is the benchmark used for pricing are Ghana cargoes in times of market tightness. Dated Brent can trade at a premium to Brent futures reflecting the strong near term demand for the barrels in the physical market. Dated Brent hit an all time record high in early April and has continued to trade at a premium to Brent futures. Also worth noting are the differentials we're seeing on those barrels. The barrels we sell typically include a differential which is either a discount or premium to the benchmark such as Dated Brent. That discount or premium depends on factors such as crude quality, location and regional market conditions. The red line on the chart shows an illustrative differential for West African crude year to date through January and February. Those differentials were slightly negative but started to grow through March into April as the Middle east conflict continued. While the data on the chart is illustrative, we've seen those differentials rise to a meaningful premium through through this period of market tightness. Turning to slide 5, this slide looks at how our barrels are priced in different geographies and the time lag we see between production and revenue. Our three core production hubs, Ghana, Greater Tortue Ahmeyim (GTA) and the Gulf of America are all priced off premium benchmarks. In fact, across the U.S. Exploration and Production (E&P) sector, Kosmos is one of the most exposed companies to international prices. As a percentage of sales, around 50% of our production, primarily Ghana, is priced up dated Brent the dark blue line on the chart. Since the Middle east conflict broke out, the dated Brent premium over WTI has more than tripled. Ghana cargoes are typically priced off an average 5 or 10 day period before or after the cargo loading. Our March Jubilee cargo had already been hedged, but we didn't benefit from the rise in prices seen in the month. But we do have a growing amount of unhedged production as we move through the year that should capture additional upside. In the Gulf of America we sell most of our barrels against heavy Louisiana Sweet or hls, which generally trades at a small premium to wti. The red line on the chart production in the Gulf is typically sold on a one month trailing average, so we'll start to see the benefits of higher prices as we move into the second quarter. On gta, the gas production is priced off. I spread the green line on the chart which also generally trades at a premium to US prices. Production is priced on a three month historical average price, so we'll start to see the full benefit of higher prices in 2Q. However, the lag effect also means we'll continue to see firmer Greater Tortue Ahmeyim (GTA) pricing beyond any future price declines. So in summary, we've seen record production, record prices and record differentials. But given the pricing structure we have in our various sales contracts, we won't see the benefit of higher prices that started in late first Q until the second and third quarters. I'd now like to talk about each of our business units in more detail. Turning slide 6 which looks at the progress we're making in Ghana. This is the slide we've used for the last two quarters and has been updated for recent activity. As the operator discussed in our full year results last week, the 202526 drilling campaign continues to perform strongly. The J74 well came online in early 2026 followed by the J75 well at the end of the quarter. Both wells are performing in line with expectations and gross Jubilee production for the first quarter was around 70,000 barrels of oil per day. The plots on the chart have been updated slightly since last quarter and reflect the Partnership's decision to enhance efficiency by by drilling a series of wells before completing them simultaneously. This means there will be a gap in new production additions during the second quarter with two tube production expected in the mid-70s. Three new producer wells are due online in relatively quick succession in June and July. As previously communicated by the operator, each of these wells is being drilled and completion operations start shortly. Based on the logging results, these three wells should drive a material uplift in production around 20,000 barrels of oil per day. Growth in aggregate before some natural decline is expected in the fourth quarter. As the drilling campaign concludes year to date performance and the upcoming activities, Fed continues to support the upper end of our 70,000 to 80,000 Valaday gross oil production guidance for Jubilee this year. Looking at the bottom right of the slide, we're pleased to see the operator announce their refinancing earlier in the year, which was accompanied by a commitment to drill in 27 and 28. The partnership is aligned on securing a rig for a program of the 10 wells with drilling targets of restart around mid-2027. As we previously discussed, this regular drilling program is key to sustain the improved performance we've seen from Jubilee this year. Also worth noting is a value creation from the current drilling program with well paybacks in the mid cycle price environment around six months and a lot shorter in the current environment turning slide 7 Greater Tortue Ahmeyim (GTA) has continued to perform strongly this year with around 2.85 million tonnes per annum equivalent gross produced in the first quarter in excess of the floating LNG nameplate capacity at 2.7 million tonnes per annum. 9.5 gross LNG cargoes were listed during the quarter in line with guidance for the year ahead. Our gross cargo guidance of 32 to 36 LNG cargoes is unchanged.1 Gross condensate cargo was listed in the quarter which went to bp. The second and third condensate cargoes later in the year, including one this quarter, are expected to be assigned to Kosmos and the nocs due to some seasonality that we've flagged in the past. Daily LNG production is expected to fall from higher winter levels as the sea and air temperatures warm up through the summer months. Volumes should then pick up again later in the year as cooler temperatures return. On costs we remain on track to deliver our 50% reduction target for OPEX per MMBTU this year and see scope for further cost reductions in 2027 on the phase one expansion which should materially enhance project returns. There's been good progress on the ground in Senegal year to date. Approximately 50% of the land is being cleared for the onshore section of the northern segment of the pipeline, with the remaining 50% expected to be done this quarter. This northern segment will connect to the 250 megawatt Gandong Power Station being built near San Luis. The onshore pipelines are expected to be exported from China in May with arrival in Senegal scheduled around the middle of the year. The West African Development bank has been appointed the mandated lead arranger to raise approximately $270 million to finance the infrastructure. The Board of Directors of the bank approved at the end of March the first tranche of around $90 million. Turning to slide 8 production in our Gulf of America business unit for the first quarter was in line with expectations with continued solid performance from our odd job and Kodiak Fields. In April the Winterfell 2 well was shut in pending a future intervention and full year. Gulf America production is now expected towards the lower end of our guidance on the growth side of the business. We were pleased to take the final investment decision on the Cosmos operated Tiberius project alongside our 5050 partner OFSI. With expected development costs of around $10 a barrel and operating and transport costs around $20 a barrel for the first phase. This is a low cost high margin development. The first phase will be a single well tieback that will produce into Oxley's nearby Lucius platform Capex is planned largely to be spent in 27 and 28 with first oil expecting the second half of 2028. We commenced the farm out process to reduce our working interest to around a third. As mentioned with our full year results in March, we recently entered into a strategic exploration alliance with Shell in the Gulf of America, an exchange interest across multiple blocks across the Norfolk Play, which houses several material exploration prospects. We expect to drill the first of these trailways in the first half of 2027. Trailbladder targeting around 200 million barrels of oil equivalent gross resource. I'll now turn to Neil to take you through the financials. Neil Schar (Chief Financial Officer) Thanks Andy. Turning now to Slide 9 which looks at the financials for the first quarter in detail, production year on year was around 25% higher driven by both GTA ramp up and new wells coming online at Jubilee resulting in record production of 75,000 boe per day for the quarter. Realized price is slightly lower year on year reflecting the changing production mix with more gas volumes from gta. As Andy talked about earlier in the materials, due to the lag in pricing, we don't expect to see the full benefit of higher prices until the second and third quarters this year. OPEX of just under $20 per boe was in line with our guidance and marks a decrease year on year of 47% reflecting the continued progress we're making this year in reducing costs, having focus on capex and overhead last year most of the other line items came in within our previous guidance ranges except tax which was impacted by the large mark to market change in derivatives. Looking ahead to Q2, we've included the usual guidance in the appendix to the slides. Q2 production is expected to be slightly lower than 1Q largely due to the seasonality on GTA we've talked about and lower Gulf of America (GOA) production on the back of Winterfell 2 In Ghana we're guiding to 3 to 4 cargoes in 2Q which includes a 10 cargo in the quarter. This also drives higher Q2 opex as the result of the accrued 10 FPSO lease payments prior to the agreement to purchase the vessel. OPEX is expected to normalize in the third and fourth quarters. One Jubilee cargo is expected at the very end of the quarter which is the reason for the 3 to 4 cargo range for Q2 for the full year. Guidance remains unchanged. One area that we continue to monitor is tax as we incorporate higher oil prices into our actuals and will provide further updates through the year. Just a reminder that we only pay cash tax in Ghana at at the moment given net operating losses in the US and cost recovery at GTA turning to slide 10 we've had a busy start of the year on the financing side, completing several important objectives that set us up well for the year ahead. In January we completed the $350 million Nordic bond and have repurchased $250 million of 2027 notes with the proceeds. We also paid down $100 million of the bank facility with the remainder of the proceeds in March. We took advantage of the strong share price rally this year to raise around $200 million of equity which was also used to accelerate our debt paydown. The company exited the quarter with around $500 million of liquidity post these transactions with additional liquidity to be created from the EG sale and from free cash flow going forward on the reserve based lending bank facility. The banks approved a covenant waiver through the midyear and we're already seeing leverage drop sharply on the back of the equity raise and strong operational progress. We expect this to continue as we start to see the full benefits of higher production and higher pricing coming in over the coming months. Lending banks have also approved the sale of our producing assets in Equatorial guinea, which we expect to close around the middle of the year with the proceeds used to further pay down the facility. On hedging. We continue to be active, targeting more hedges in 2027 at higher floors and higher ceilings than our existing 2027 hedges. Last week we are pleased to see Fitch upgrade our corporate rating to B minus, a positive move to reflect the progress we've been making this year, with discussions ongoing with S and P as well. Despite the higher pricing we've seen so far in 2026, our capital allocation for the year remains unchanged. We remain focused on increasing our financial resilience and utilizing our free cash flow to accelerate debt paydown and deleveraging. With that, I'll hand it back to Andy. Andy Ingalls (Chairman and CEO) Thanks Neil. Turning now to Slide 11 to conclude today's presentation. As I said in my opening remarks, we have four key objectives for 2026 grow production, lower costs, reduce debt and advance our quality growth portfolio with minimal CapEx in 2026. This slide highlights the targets we've set against those objectives on production. We now expect to complete the sale of EG around the middle of the year, making that adjustment for the second half. We still feel we can achieve production growth close to that 15% target on costs based on year to date performance so far. We feel confident that we can meet and potentially exceed our 20% operating cost reduction target. So in aggregate we're on track to deliver a reduction of around 35% in operating costs for BOE year on year. On that with EG sale equity raised and higher pricing. We we're doubling our debt reduction target from 10% to around 20% by year end and have made significant progress already and we are advancing our growth portfolio with Tiberius fid, progress on GTA expansion and the exploration alliance with Shell in the Gulf of America. We look forward to delivering on these objectives to support long term value creation for our investors. Thank you and I'd now like to turn the call over to the operator to open the session for questions. Operator OPERATOR we will now begin the question and answer session. If you would like to ask a question at this time, simply press star followed by the number one on your telephone keypad. We will pause for a brief moment to compile the Q and A roster. Our first question comes from the line of Charles Mead with Johnson Rice. Charles, please go ahead. Charles Mead (Equity Analyst) Yes, good morning Andy to you and the whole team there, or good afternoon as may be. I want to ask the first question on Jubilee, the OBN seismic shoot that you guys did at the end of the year last year, is that are the results or insights from that, are those already informing the this 26 drilling program or is that something where we're really going to see more of the benefit in the 2728 program? Andy Ingalls (Chairman and CEO) Yeah, hey Charles. No, the Ocean Bottom Node (OBN) is really going to have an impact on the 2728 program. The 26 program though is leveraging the 4D North Azimuth Seismic (NAS) that we shot ahead of the obnoxious and so we've got the product from that and that did influence the selection of the 26 drilling program which is going well. So I think the objective then is to build the results from the early products of the Ocean Bottom Node (OBN) and then the later products of the obn into the 27 program. Andy Ingalls (Chairman and CEO) Match that with the North Azimuth Seismic (NAS) and so you're getting a continuous upgrade in the quality of the seismic and therefore the opportunity to de risk the future drilling programs. And as I said in my remarks, we're seeing the impact of a continuous drilling program on Jubilee in 26. Carrying that through into 2728 is clearly important and these are economically good wells. In my remarks I talked about a six month payback in a mid cycle price environment. Clearly we're doing better than that. So a lot of as you know, there's a lot of opportunity in Jubilee and the seismic upgrade through the 4D North Azimuth Seismic (NAS) and then the follow on of the Ocean Bottom Node (OBN) is continuing to make a difference. Charles Mead (Equity Analyst) Right, that's what I was aiming to get at. And then the follow up on Tiberias in the Gulf of Mexico. I think you have a point in your slide that you expect a farm out proceeds to cover any 26 CapEx that, you know, maybe in broad strokes that seems to me that, you know, the farm out proceeds to you will be on the same order of magnitude as what the dry hole costs, proportionate dry hole cost would have been. And so it doesn't, you know, it doesn't look like there's a, you know, a big premium that you're looking for on this, on this farm up. But maybe you can tell me if that's the right read. Andy Ingalls (Chairman and CEO) Yeah, obviously I don't want to disadvantage ourselves in the process that's ongoing at the moment. Look, I think it's a great time to be doing the farm app. You know, we clearly have a project that's underway. FADA has been taken strong alignment between ourselves and Oxygen and therefore there's been significant interest in the opportunity. So, you know, we're obviously looking to maximize the farm out proceeds and we may do a little better than we'd anticipated. Got it. Thank you, Andy. Great, thanks, Charles. OPERATOR And your next question comes from the line of Lydia Gold with Goldman SaaS. Lydia, please go ahead. Lydia Gold (Equity Analyst) Good afternoon and thanks for taking my question. You target a 20% reduction in operating costs this year. Could you expand on some of the key strategic initiatives that are in place across the portfolio to meet this target, particularly at gta? Thanks. Andy Ingalls (Chairman and CEO) Yeah, hi Lydia. Yeah, look, it's a combination and I think I want to emphasize the fact that we've used the opportunity to high grade the portfolio and address some of our highest cost assets. And those highest cost assets were in Equatorial Guinea where clearly we are selling the asset. And also it was on 10 because of the lease cost on the FPSO. So those, both of those are making a significant difference. Then on top of that there is an ongoing reduction in gta. There's an absolute reduction in operating costs as you take out some of the additional costs that were in last year because of the startup process. But clearly you're seeing a big impact on the BOE number or MMB, MMBtu number because of the ramp up in production. But the combination of those sort of ongoing processes and the asset high grading delivers that 20% reduction in absolute operating costs that we're seeing in 26 versus 25. And I think there's ongoing opportunity. We haven't stopped there. I Think there's ongoing opportunity in Ghana in 27. As you look at the ability then to sort of, you'll have the operator then having the operations of both FPSOs. I think there's opportunity to create synergies there. And then there are different operating models in Mauritania and Senegal for GCA which are being explored by bp. So I think this is just the start of a journey of continuing to drive costs down. And the big step in 26 comes from that underlying activity, but also the high grading of the portfolio. Thank you. Great, thanks Lydia. OPERATOR And your next question comes from the line of David round with Stiffel. David, please go ahead. David Round (Equity Analyst) Great, thanks guys. A key theme in recent years has been around this cost reduction and capping capex. Actually specifically I'm just interested in whether this commodity backdrop makes that harder to achieve and how you're thinking more generally about CAPEX in 27 and beyond. Please. Andy Ingalls (Chairman and CEO) Yeah. Hi David, good questions. We go through price cycles and I think you do see some tightening. I think it's very hard to predict today what the long term effect is on the inflationary environment. I think it's too early to say that, but I think the things that we're doing now are just not about smarter procurement, if you like. It's about underlying changes in how you do activity. And I think that means that the cost reductions that we're targeting, the ongoing cost reductions we would target in Ghana and gta, are about changing the way you do do business. Therefore the activity changes, therefore the cost comes out. So I think those are enduring. I don't think they sort of are simply about the procurement cycle you're in. And clearly the high grading of the portfolio is independent of that. So I think that opportunity remains and I don't think the magnitude may vary a little, but the opportunity remains. Then I think on CapEx we've clearly targeted CapEx hard in both, both 25, 26. I think that we're focused again on ensuring that we're being very, very rigorous about the allocation of capital. I think we've been clear around the growth opportunities that we're pursuing. It is Tiberius, it is the GTX mansion trailblazer exploration in a timing sense of the spend flowing through. I think Tiberius is relatively low spend in 27. The biggest spend is really in 28 probably if it's 100 million on Tiberius net, it's probably 1/3, 2/3 in that sense. The GTA it's probably overall for phase one. Plus there really isn't any expenditure on the facilities. You can move from 430 to 63030 production through the FPSO with no spend. Therefore it's about the additional wells that will sustain the portfolio beyond the end of the decade. And therefore the spend for that will really be in 28, 29. So you take all of that, I don't think you'll see a significant. It's early days yet, but the capital for 27 is going to be pretty tight. Maybe a little higher than than today for 26, maybe around 400. But underneath that you've got the sustaining capex that we're spending today in drilling in Ghana and the Gulf. That will be pretty similar in 27. And then you've got a little more growth capex. But that allows you then though to continue to move forward these high quality prospects. Neil Schar (Chief Financial Officer) Okay, thanks Andy. That's very clear. Very quick follow up then. Actually if I might, can you just remind us if there is a specific leverage target please when I pass it over to Neil? Yeah. And so you know David, we've always talked about getting to sort of one and a half times in a normalized oil price environment. And you know, again I think what you'll see this year is, you know, we've said we'll take off, you know, around 20% of the debt which we started this year at 3 billion, which will get into sort of the, the mid 2s and then with higher oil prices you can continue to flex that down and then the EBITDAX of the business jumps quite largely. So last year we did something in the 5 to $600 million range. We should be north of a billion dollars this year in terms of where we get to. And so that leverage ratio compresses quite quickly. But I think again from a. As Andy said, the capital has continued to stay a bit tight in 27, but that allows us advance the projects and at the same time generate free cash flow to pay down the debt. So the goal is to do both at the same time and get leverage. What we'd like to see is sort of net debt fall below 2 billion first in terms of a milestone. So we'll make a good dent in that progress this year. And again we're seeking to sort of maximize every dollar in terms of debt pay down. David Round (Equity Analyst) Great, that's very clear. Thanks guys. OPERATOR Again, if you would like to ask a question, just press star followed by the number one on your telephone keypad. And our next question comes from the lineup, Bob Brackett with Bersen Research. Bob, please go ahead. Bob Brackett (Equity Analyst) Good morning. I'd like to talk a bit about Senegal and GTA, you mentioned the phase one plus, which I expect is 300 million cubic feet a day gas pipeline that brings ultimately molecules up to that Gandon power station. Can you talk about how to think about the unit economics you mentioned it's reducing opex. How do we think about the volume? Is it your 27%? And how do we think about price? Andy Ingalls (Chairman and CEO) Yeah, Bob, good questions. I think that the first thing is it's somewhere that the expansion of gta, I sort of, sort of think about it being sort of 200 million rather than 300. Yeah, you can go from today we're pushing about 430 million standard cubic feet through the MPSO. You can get to 630 without actually spending any capital on it. If you want to go up higher than that, there is increased demand, there are incremental spend on capital to get there relatively modest. But if you think about the first wave being sort of 200, the first piece of that domestically, piece of it will be used in Mauritania, a piece of it will be used in Senegal. The first piece in Senegal will flow to the Gandong power station, as you said. Then the rgs, which is the pipeline company in Senegal, will continue to build that pipeline south from San Luis to Dakar. There's actually four phases. You can look online and see what they're doing and ultimately allows you to build out that sort of power station infrastructure down towards Dakar. So it's going to be a phased process that will start to build through 27, 28, 29 and to the end of the decade. So actually, in terms of unit economics, the capital spend for us is very low. Sort of de minimis is the way to think about it. For that 200 million standard cubic feet, there is capital spend to sustain the profile at the back end of the decade, which is associated with more wells to keep you at that sort of 636, 50 million standard cubic feet. But ultimately it is a very low cost expansion and therefore the margin that you're getting from it is, is high. You're almost from an operating cost perspective, there is no FLNG lease and therefore your margin on those versus the export is higher. Neil Schar (Chief Financial Officer) Again, I think the easy way to think about it, Bob, is just again, We've said phase one opex is around $5 to $6 per mmbtu. That's fixed cost. Essentially the costs don't change with the expansion on the operating cost and therefore you get a sort of multiplying effect in terms of reducing that to sort of the sub4 type area. So again, I think every incremental molecule helps bring down that break even faster. And then for the domestic gas, you're not paying the FLNG cost, which is part of that sort of $4. Bob Brackett (Equity Analyst) A follow up, please. I'm seeing mixed messages in the press around Jakart Turanga. Can you give us an update on what's happening there? Andy Ingalls (Chairman and CEO) Yeah, I don't think it's sort of mixed messages, Bob. I think that the key message out of it is around the importance of domestic gas for Senegal's growth. You know, relatively large population, growing population, reducing the cost of power, electricity is a key priority for the government and therefore their goal is to ensure that they can advance those projects and do that in a timely way. But for Kosmos, it was about saying, we want to invest in gta. We want to enable that source of domestic gas to be our focus. And therefore we did relinquish Yakutra. The government has picked it up. Petrosan, I believe, will lead that development and it will be another source of gas for the country. But given the scale of the economic growth, I think that can be seen basically from population growth. Then it needs all the gas the country needs all the gas that it can take. Mauritania is a slightly smaller population, so their pull for domestic gas will be lower and can be fed by gta. So this is good for both countries. And clearly world events today are all about how do you create security and affordability. And the extension now of both GTA and Yaka Taranga will enable Senegal to achieve those goals. And we're fully supportive of of it. Very clear. Thanks. Great. Thanks, Bob. OPERATOR Our next question comes from the line of Mark Wilson with Jefferies. Mark, please go ahead. Mark Wilson (Equity Analyst) Yeah, thank you. I'm going to ask a question from an investor to start off with. It's probably more for Neil. Just wondering about the derivative cash losses in Q1 and what we should expect in 2026. And obviously this speaks to this maximizing of deleverage. So, yeah, the cash derivatives, Neil. Neil Schar (Chief Financial Officer) Yeah, yeah. It's clearly a large mark to market change. And again, we came into the year with an asset about $50 million, and then there's a $250 million mark to market loss just given, you know, we got payout in January and February on those hedges, and then clearly the market moved. From a cash perspective, it cost us about $30 million and not a ton of cash, actually. But clearly the implied shift in the forward curve has an impact on the derivative Side, our hedges are largely sort of focused on sort of the first half of this year. So we talked about we have 6 million barrels left for the rest of the year. About half of that matures in Q2 and the other half over the second half of the year. And so there's a larger exposure in Q2 and then sort of less, and then that sort of steps down again in Q3 and Q4. And so again, it'll ultimately depend on sort of what the actual realized dated Brent Price is. But we feel okay with our exposure on 26 and have really been working on adding some additional downside protection in 27. And so again, I think we're good in terms of where we are. We'll have more physical exposure from a pricing perspective, as we talked about in the call, Mark into Q. And so there's a bigger call it unhedged volume that we'll be able to realize in the second quarter with more physical volume being sold versus the hedges. So again, I think Q2 is sort of shaping up quite nicely. And then the hedging exposure comes down, at least more access to the upside from the physical sale. Mark Wilson (Equity Analyst) Okay, thank you. And Andy, a slightly bigger picture question. I'm just wondering what contact you've had with, if at all, with the new management set up at bp, given Tortu performing so well. I'm just wondering if there's any commentary you could give there. Thank you. Andy Ingalls (Chairman and CEO) No, look, you know, things change and they don't change for us, clearly, and for bp, ensuring that GTA runs both efficiently from a cost perspective, but equally well from a production perspective. We deliver on the cargo forecast, et cetera. So that's all going well, Mark and I don't think there's any, you know, we sort of see no change. Clearly, the Meg, the new CEO, has significant experience of Senegal from her experience at Woodside with Sangamar. So as it were, we bring, you know, it's great. Somebody who has deep industry knowledge and very specific knowledge actually, of the. Of that specific geography. So, you know, the real sort of answer is we know, as you'd expect, is that we're focused on the. On the operational side at the moment and ensuring that we deliver on the targets we've set. And actually, that's exactly what we're doing. Okay, thank you. And then just one last point. Just check in on the Jubilee guidance. Is there any scheduled downtime on the vessel in the rest of the year? Maintenance or anything? I think you've asked that question before, actually, fairly recently. Yeah, I like that question. You do like that question mark? Yeah. The honest answer is no. Okay, so none in 26 and none in 27. I think that's what the operator told you last time. So no, the answer's no. Scheduled maintenance. And look, if I go to the essence of your question, right. Are we comfortable with our guidance? The answer is sort of yes. And why, as we started the year we were clear it's all about forecasting. But of course now sort of getting close to the middle of May, you have a lot of extra information. You know, the field started the year at, you know, we ended the year of 25 at 57,000 barrels of oil per day. We stabilized it, we've added two wells. It's delivered at 70,000 barrels of oil per day, year to date. So very strong performance. With two wells added, we now drilled three wells. We have all of the, the logging information, pressure data, et cetera. So you know, we'll be confident we're adding wells that will add an additional 20,000. So you build the base of 70, you add another 20 and you can see on our plot that we showed in the presentation, you know, the resulting production profile. So I think, you know, to the point really to add is, look, we, we're further down the process. We've clearly delivered strongly in the first four or five months of the year. We've got additional data from the wells that we've drilled and we're now starting that completion process. So I think as every month goes by, we're more confident that we can deliver on the guidance that we've given with no shutdowns in 26. Mark Wilson (Equity Analyst) I've made a very clear note of that. I won't have to ask again. Thank you very much. OPERATOR And your next question comes from the line of Stella Cridge with Barclays. Stella, please go ahead. Stella Cridge (Equity Analyst) Hi there. Good morning, good afternoon and many thanks for all the updates today. I just wondered if I could ask you for a bit more color or comments on how you're thinking about the debt profile going forward. You'll see taken many actions year to date, many different parts of the capital structure. The RBL discussions, you say they're going to commence around a bit mid year. Could you give us any sense of what you think the lenders will be looking for there? Would it be sort of the visibility around Jubilee, for instance, in this supportable oil price environment? Neil Schar (Chief Financial Officer) Yes, go for it. I'm happy to give that. And then if you have another question we can follow up. But yeah, like you said, we've Been quite busy on the financing front. Again, what we wanted to accomplish was pretty clear in terms of clearing out the near term maturities and bolstering liquidity. So to stabilize the ratings and continue to reduce the absolute amount of debt. So again, as I say, we're well on track to deliver all of that. We've cleared the 26s and most of the 27s at this point, liquidity is 500 million and growing and we're on our way down on the debt pay down to get to, you know, into the low twos from a leverage standpoint by the end of the year. So again, I think all that's on track. And that leaves sort of, as you reference, sort of the next financing objective for us to work on is the extension of the rbl. Just to recall, this would be the sixth RBL extension that we go through or that I've been through here at Cosmos. And so yeah, again, normally just, you know, it's a seven year facility, it doesn't amortize for three years and then you end up extending the tenor every three years. And so, you know, met with the banks recently. Again, they continue to be really supportive. They are looking for Jubilee performance to continue to improve. But again, I think that process is well underway, as Andy noted and otherwise, again, I think they want to see the same thing that our creditors and equity holders want to see, which is us to bring the leverage down. So as we execute the plan, again, I feel pretty good about going into that process in the middle of this year and then that will basically kick the maturity from the ultimate maturity from sort of 29 to sort of the 30 to 33 timeframe. Stella Cridge (Equity Analyst) Super, thank you for that. And just the final bit I had wanted to ask about, I thought it was very interesting in the fetch report that they were talking about. Potentially you're trying to get down into the 800 to refinance a smaller amount in the RBL. Is that something you could comment on as well? Neil Schar (Chief Financial Officer) Yeah, we exited 1Q with about a billion dollars drawn on the facility with the eg proceeds coming in around 150ish million free cash flow. Again, I think naturally the RBL will reduce into that range. From a drawn perspective, from a total facility size perspective though, which is what will generally extend. I wouldn't expect much change. We were at sort of $1.3 billion facility size. We probably don't need that much just because we're bringing down the amount of the absolute amount of both bonds and bank within the capital structure. So maybe it's one and a quarter ish in terms of facility size. I wouldn't expect the size to change dramatically. Although again, I think the bigger focus on our side is just reducing the drawn, the actual drawn amount. Stella Cridge (Equity Analyst) That's so clear. Thanks. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.