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

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.