I have been looking again at KOSMOS and nobody much posting so...

I have been looking again at KOSMOS and nobody much posting so FYI:

As I said previously they only report proven reserves. For year 2014 this was 73mb (+14bcft gas which I have ignored).

Under the reference USA guidelines SEC Regulation S-X 4-10 quoted in their report “Proven reserves” are equivalent to a P90 probabilistic estimate.

In their latest investor presentations on their website they claim:

> 1 billion barrels GROSS “high value” reserves (I assume they mean proven + probable P50)
> 37 billion barrels exploration portfolio (I assume they mean gross)

Converting the proven and probable (P50) to net to Kosmos to about 25% ownership, apportioning the reserves as developed/undeveloped as per 2014 annual report and whittling the exploration portfolio down from gross to net (say 20%) and then risking (say 20%) again in round figures we get:

150mb developed P50 (I call these “2PD” on my spreadsheet)
100mb undeveloped P50 (similar to “2PF” on my spreadsheet)
1.5mb risked undrilled resources (similar to “P2C” on my spreadsheet)

Applying the values used on my spreadsheet for these reserve status’s with 2yr oil futures at $US70 we get

2PD: 150mb at US$18/bl = 2700m
2PF: 100mb at US$8/bl   =  800m
P2C: 1.5b at at US$0.4/bl = 600m
Cash = 500m

Total = US$4600m less debt of US$1500m = US$3100m

This value is approximately the same as Kosmos’s current market cap.

If you wish to review this alongside a FAR spreadsheet example that I already published, please open a new window and enter 15319409 into HC search

pj