Kosmos Energy shares surged 12% on Monday after BP (BP) agreed to acquire a 62% working interest in its exploration blocks in Mauritania and a 32.49% working interest in its Senegal exploration blocks.
Kosmos will receive $916 million, including $162 million in cash up front, $221 million carry on exploration and appraisal, and $533 million maximum carry on development costs until first gas production on the Tortue project.
Kosmos will also receive a contingent bonus of up to $2 per barrel for up to 1 billion barrels of liquids, structured as a production royalty, subject to a future liquids discovery and oil price. Closing of the transaction is expected in Q1.
Kosmos and BP have also entered into an exclusive exploration partnership covering potential new ventures in Mauritania, Senegal and The Gambia. Kosmos will remain exploration operator of all new ventures acquired within the areas of interest, while BP will become development operator.