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Kosmos Energy (KOS) Completes Buyout of Deep Gulf Energy
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Kosmos Energy Ltd. (KOS - Free Report) completed the earlier announced acquisition of Deep Gulf Energy (“DGE”). The acquisition enabled the company expand the deepwater Atlantic Margin portfolio. DGE collectively comprises Deep Gulf Energy LP, Deep Gulf Energy II, LLC, Deep Gulf Energy III, LLC and related entities.
Currently, the company’s assets are concentrated in Africa and South America. The assets in Atlantic Margin are attractive and project an impressive record of increasing production and reserves through infrastructure-led explorations.
The company was expected to pay $1.2 billion for the transaction — $925 million in cash and $300 million in common stock. Cash will be funded with borrowings under the company’s existing credit facilities.
The deal is expected to boost the company’s production to 70 thousand barrels of oil equivalent per day (MBoe/d) from 45 MBoe/d. Majority of the output (85%) is expected to be oil. The stock and cash deal will enhance the company’s estimated reserves by 40% to 280 million barrels of oil equivalent (MMBoe) from 200 million MMBoe as of Jun 30, 2018.
With bottlenecks in shale plays and improved cost structure in deepwater assets, Gulf of Mexico (GoM) has recently returned to the limelight. Therefore, the acquisition is a prudent move by Kosmos Energy, which will provide it with short- and long-cycle exploration opportunities. Furthermore, the company expects to generate significant cash flow from the assets, which will enable it to pay dividends to shareholders starting from the first quarter of 2019.
Price Performance
In the past year, Kosmos Energy’s shares have increased 18.9% compared with the industry’s 7% rise.
Zacks Rank & Stocks to Consider
Kosmos Energy currently carries a Zacks Rank #3 (Hold).
Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.
Helix Energy offers specialty services to the offshore energy industry. The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.
TC Pipelines purchases, owns and actively participates in the management of U.S.-based natural gas pipelines and related assets. The company delivered an average positive earnings surprise of 3.7% in the last four quarters.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
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Kosmos Energy (KOS) Completes Buyout of Deep Gulf Energy
Kosmos Energy Ltd. (KOS - Free Report) completed the earlier announced acquisition of Deep Gulf Energy (“DGE”). The acquisition enabled the company expand the deepwater Atlantic Margin portfolio. DGE collectively comprises Deep Gulf Energy LP, Deep Gulf Energy II, LLC, Deep Gulf Energy III, LLC and related entities.
Currently, the company’s assets are concentrated in Africa and South America. The assets in Atlantic Margin are attractive and project an impressive record of increasing production and reserves through infrastructure-led explorations.
The company was expected to pay $1.2 billion for the transaction — $925 million in cash and $300 million in common stock. Cash will be funded with borrowings under the company’s existing credit facilities.
The deal is expected to boost the company’s production to 70 thousand barrels of oil equivalent per day (MBoe/d) from 45 MBoe/d. Majority of the output (85%) is expected to be oil. The stock and cash deal will enhance the company’s estimated reserves by 40% to 280 million barrels of oil equivalent (MMBoe) from 200 million MMBoe as of Jun 30, 2018.
With bottlenecks in shale plays and improved cost structure in deepwater assets, Gulf of Mexico (GoM) has recently returned to the limelight. Therefore, the acquisition is a prudent move by Kosmos Energy, which will provide it with short- and long-cycle exploration opportunities. Furthermore, the company expects to generate significant cash flow from the assets, which will enable it to pay dividends to shareholders starting from the first quarter of 2019.
Price Performance
In the past year, Kosmos Energy’s shares have increased 18.9% compared with the industry’s 7% rise.
Zacks Rank & Stocks to Consider
Kosmos Energy currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Petroleo Brasileiro S.A. (PBR - Free Report) or Petrobras SA, Helix Energy Solutions Group, Inc (HLX - Free Report) and TC Pipelines, LP . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.
Helix Energy offers specialty services to the offshore energy industry. The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.
TC Pipelines purchases, owns and actively participates in the management of U.S.-based natural gas pipelines and related assets. The company delivered an average positive earnings surprise of 3.7% in the last four quarters.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Click to see them right now >>