REG - Kosmos Energy Ltd - Offering Of Convertible Senior Notes

Kosmos EnergyAnnouncement

05/03/2024 07:00

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RNS Number : 5457F  Kosmos Energy Limited  05 March 2024

 Kosmos Energy Ltd. Announces Offering Of $300 Million Of Convertible Senior
Notes Due 2030

 

March 4, 2024

 

Dallas, March 4, 2024 - Kosmos Energy Ltd. (NYSE/LSE: KOS) ("Kosmos" or the
"Company") announced today that it intends to offer, subject to market and
other conditions, $300 million aggregate principal amount of its convertible
senior notes due 2030 (the "notes") in a private placement. The Company also
expects to grant the initial purchasers an option to purchase up to an
additional $45 million aggregate principal amount of notes, for settlement
within a 13-day period beginning on, and including, the date on which the
notes are first issued. The notes will be senior, unsecured obligations of the
Company. The notes will rank pari passu with the Company's existing senior
notes and the Company's revolving credit facility. The notes will be
guaranteed (i) on a senior, unsecured basis by certain of the Company's
existing subsidiaries that guarantee on a senior basis the Company's revolving
credit facility and the Company's existing senior notes, and (ii) on a
subordinated, unsecured basis by certain of the Company's existing
subsidiaries that borrow under or guarantee the Company's commercial debt
facility and guarantee on a subordinated basis the Company's revolving credit
facility and the Company's existing senior notes. Upon conversions of the
notes, the Company will satisfy its conversion obligation by paying cash up to
the aggregate principal amount of the notes to be converted, and paying or
delivering, as the case may be, cash, shares of the Company's common stock or
a combination of cash and shares of the Company's common stock, at the
Company's election, in respect of the remainder, if any, of its conversion
obligation in excess of the aggregate principal amount of the notes to be
converted. The interest rate, conversion rate and other terms of the notes are
to be determined upon pricing of the offering.

 

The Company intends to use the net proceeds from the sale of the notes to (i)
repay a portion of outstanding indebtedness under the Company's commercial
debt facility; (ii) pay the cost of the capped call transactions described
below; and (iii) pay fees and expenses related to the offering.

 

In connection with the pricing of the notes, the Company expects to enter into
privately negotiated capped call transactions with one or more of the initial
purchasers of the notes or their respective affiliates and/or other financial
institutions (the "option counterparties"). The capped call transactions are
expected generally to reduce potential dilution to the Company's common stock
upon any conversion of the notes and/or offset any cash payments the Company
is required to make in excess of the principal amount of converted notes, as
the case may be, with such reduction and/or offset subject to a cap. If the
initial purchasers of the notes exercise their option to purchase additional
notes, the Company expects to enter into additional capped call transactions
with the option counterparties, and expects to use a portion of the net
proceeds from the additional notes to pay the cost of such additional capped
call transactions.

 

In connection with establishing their initial hedges of the capped call
transactions, the Company expects the option counterparties or their
respective affiliates to enter into various derivative transactions with
respect to the Company's common stock concurrently with or shortly after the
pricing of the notes, and may unwind these various derivative transactions and
purchase the Company's common stock in open market transactions shortly after
the pricing of the notes. This activity could increase (or reduce the size of
any decrease in) the market price of the Company's common stock or the notes
at that time.

 

In addition, the option counterparties or their respective affiliates may
modify their hedge positions by entering into or unwinding various derivatives
with respect to the Company's common stock and/or purchasing or selling the
Company's common stock or other securities of the Company in secondary market
transactions following the pricing of the notes and prior to the maturity of
the notes (and are likely to do so during any observation period related to a
conversion of notes). This activity could also cause or avoid an increase or a
decrease in the market price of the Company's common stock or the notes, which
could affect the ability of noteholders to convert the notes and, to the
extent the activity occurs during any observation period related to a
conversion of the notes, it could affect the number of shares and value of the
consideration that noteholders will receive upon conversion of the notes.

 

The offering is being made to persons reasonably believed to be qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"). The offer and sale of the notes, the
guarantees and any shares of the Company's common stock issuable upon
conversion of the notes have not been and will not be registered under the
Securities Act, or under any state securities laws, and the notes and such
shares may not be offered or sold in the United States except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state securities laws.

 

This announcement does not constitute an offer to sell or the solicitation of
an offer to buy the notes in the offering, nor shall there be any sale of such
notes in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical
facts, included in this press release that address activities, events or
developments that Kosmos expects, believes or anticipates will or may occur in
the future are forward-looking statements, including the potential offering of
convertible senior notes and the anticipated terms of, and effects of entering
into, the capped call transactions. Kosmos' estimates and forward-looking
statements are mainly based on its current expectations and estimates of
future events and trends, which affect or may affect its businesses and
operations. Although Kosmos believes that these estimates and forward-looking
statements are based upon reasonable assumptions, they are subject to several
risks and uncertainties and are made in light of information currently
available to Kosmos. When used in this press release, the words "anticipate,"
"believe," "intend," "expect," "plan," "will," "potential," "may" or other
similar words are intended to identify forward-looking statements. Such
statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of Kosmos, which may cause actual results
to differ materially from those implied or expressed by the forward-looking
statements. Further information on such assumptions, risks and uncertainties
is available in Kosmos' Securities and Exchange Commission filings. Kosmos
undertakes no obligation and does not intend to update or correct these
forward-looking statements to reflect events or circumstances occurring after
the date of this press release, except as required by applicable law. You are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary statement.

 

About Kosmos Energy Ltd.

 

Kosmos is a full-cycle deepwater independent oil and gas exploration and
production company focused along the Atlantic Margins. The Company's key
assets include production offshore Ghana, Equatorial Guinea and the U.S. Gulf
of Mexico, as well as a world-class gas development offshore Mauritania and
Senegal. Kosmos also maintains a sustainable proven basin exploration program
in Equatorial Guinea and the U.S. Gulf of Mexico. Kosmos is listed on the New
York Stock Exchange and London Stock Exchange and is traded under the ticker
symbol KOS.

 

Kosmos Energy Ltd. is headquartered in Dallas, TX.

 

Investor Relations

Jamie Buckland

+44 (0) 203 954 2831

jbuckland@kosmosenergy.com (mailto:jbuckland@kosmosenergy.com)

 

Media Relations

Thomas Golembeski

+1-214-445-9674

tgolembeski@kosmosenergy.com (mailto:tgolembeski@kosmosenergy.com)

 

SOURCE: Kosmos Energy Ltd.

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