By a News Reporter-Staff News Editor at Investment Weekly News -- Kosmos Energy Ltd. ("Kosmos") (NYSE: KOS) announced financial and operating results for the second quarter of 2014, which included net income of $57 million, or $0.15 per basic and diluted share as compared with a net loss of $71 million, or $0.19 per basic and diluted share in the same quarter last year. As previously disclosed, the current quarter's results include a non-cash mark-to-market charge related to the company's commodity derivatives and an internal restructuring charge.
Andrew G. Inglis, chairman and chief executive officer, said: "Second quarter results were underpinned by strong revenue and production from the Jubilee field. As a self-funded exploration company, our Ghana asset delivers multi-year growth in production, reserves and cash flow. This provides the financial foundation for our multi-well exploration campaign which continues to build momentum as we prepare to drill the Gargaa prospect beginning late in the fourth quarter." Operational Update Gross production from the Jubilee field averaged approximately 104,000 barrels of oil per day (bopd) in the second quarter of 2014, an increase from 102,000 bopd in the first quarter of the year. The Jubilee field partners and the Government of Ghana are working together with various stakeholders to advance the export infrastructure needed to alleviate gas-related constraints currently limiting the field's oil production.
Kosmos continues to mature a number of promising opportunities in its portfolio through additional seismic acquisition and interpretation. A 4,300 square kilometer 3D seismic program in the Tarhazoute Offshore and Essaouira Offshore blocks in Morocco was completed in early July, and a 5,100 square kilometer 3D seismic survey currently underway in the Cap Boujdour Offshore block is expected to be completed in the third quarter.
Based on encouraging results from ongoing seismic interpretation, the company's exploration program in Mauritania is being accelerated with a farm-out initiative scheduled for later this year ahead of an initial exploration well targeted in 2015.
The Atwood Achiever drillship is scheduled for delivery in late August to begin mobilizing to northwest Africa in advance of the company's next exploration well which is expected to spud in late 2014. Financial Review Second quarter results benefited from increased oil revenues partially offset by a previously announced non-cash mark-to-market charge of $22 million related to crude oil price risk management and a $12 million charge for restructuring costs. Oil revenues were $328 million versus $193 million in the same quarter of last year. The increase in revenue resulted from having an additional crude oil lifting from the Jubilee field during the quarter. This compared to two liftings in the second quarter of 2013. Realized oil price was $112.58 per barrel in the quarter compared with $99.51 per barrel in the second quarter of 2013.
Production expense for the current quarter was $23 million or an average cost of $7.87 per barrel versus $11.67 per barrel in the second quarter of last year, which included certain well workover and rig maintenance costs.
Exploration expenses in the second quarter of 2014 totaled $24 million compared with $95 million in the prior year quarter. Included in the quarter were costs associated with two large 3D seismic surveys and the FA-1 exploration well in Morocco. Depletion and depreciation expense was $70 million or $23.85 per barrel versus $30.13 per barrel in the second quarter of 2013, the improvement related to the Jubilee reserves addition at the end of last year.
General and administrative expenses decreased in the current quarter to $32 million versus $42 million in the second quarter of 2013 and income tax expense for the second quarter of 2014 was $81 million; the increase over the previous year quarter largely related to higher revenues.
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