[Management View]
Kosmos Energy achieved a significant milestone with the GTA FLNG commencing commercial operations in June 2025. Key metrics include a reduction in capital expenditures for 2025 from $400 million to $350 million, and an active hedging strategy with 7 million barrels of 2026 oil production hedged. Strategic priorities focus on growing production, reducing costs, and enhancing balance sheet resilience.

[Outlook]
The company expects continued quarter-over-quarter production growth through 2026, driven by new wells and asset optimizations. Future plans include further expansion at GTA via brownfield investment and operating cost efficiencies.

[Financial Performance]
Year-over-year, Kosmos Energy reported lower-than-expected production due to delays in GTA ramp-up and weak performance at Jubilee. Quarterly production was below guidance, primarily due to these factors.

[Q&A Highlights]
Question 1: Did Apple Intelligence drive sales of the iPhone 16 series? Which features are most popular with users?
Answer: In markets where Apple Intelligence was introduced, the iPhone 16 series outperformed markets where the feature was not introduced. Users used features such as ‘Writing Tools,’ ‘Image Playground,’ and ‘Genmoji’ extensively, especially the ‘Clean Up’ feature. The ‘Clean Up’ feature received a lot of attention in Apple Store demos. Apple Intelligence is also continuing to expand language support, which is expected to further enhance user experience and demand.

Question 2: Can you provide more details on the Jubilee field's production decline and future drilling plans?
Answer: The 40% decline in Jubilee's production over the past year was higher than expected, partly due to planned FPSO shutdowns and riser instability. Improved data from new seismic technology and a consistent drilling program are expected to stabilize and increase production. The company plans to drill four new wells in 2026, with each well potentially adding 5,000 to 10,000 barrels per day.

Question 3: What are the expected cost reductions for GTA, and how will they be achieved?
Answer: GTA's start-up and commissioning costs are expected to decline in the second half of 2025. The company is exploring refinancing the FPSO and alternative operating models to further reduce costs. These measures are expected to lower operating costs significantly.

Question 4: Is the $350 million CapEx guidance sustainable for 2026, considering future projects like Tiberius and GTA Phase one plus?
Answer: The $350 million CapEx guidance is considered sustainable for 2026, focusing on high-priority projects like the four wells at Jubilee. Future projects like Tiberius and GTA Phase one plus are expected to have minimal impact on 2026 CapEx, with more significant spending anticipated in 2027 and beyond.

Question 5: Can you provide more details on the GTA Phase one plus project and the alignment within the partnership?
Answer: The partnership is aligned on a brownfield expansion to double GTA's production capacity. The project will leverage existing infrastructure, with incremental investment focused on LNG and domestic gas. The performance of the subsurface wells has been positive, supporting the expansion plans.

Question 6: What are the key elements of the Jubilee license extension MOU with the Ghana government?
Answer: The MOU includes a commitment to drill up to 20 wells and increase gas production by 130 million standard cubic feet per day at a discounted gas price. There are no changes to the broader fiscal terms, and the extension allows for long-term investment in the field.

Question 7: What financing options are being considered to address upcoming debt maturities?
Answer: Kosmos Energy is exploring various financing options, including a $250 million term loan secured by Gulf of America assets. The company aims to use cash flow to reduce absolute debt and is evaluating additional attractive sources of capital to address 2027 and 2028 maturities.

[Sentiment Analysis]
The tone of the analysts was inquisitive and focused on understanding the company's production challenges and future plans. Management's tone was confident, emphasizing progress in cost reduction, production growth, and financial resilience.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | YoY Change |
|-------------------------------|---------------|---------------|--------------|
| Net Production (BOE/day) | 63,700 | 61,000 | +4.4% |
| Capital Expenditures ($M) | 350 | 400 | -12.5% |
| Hedged Oil Production (barrels)| 7 million | 5 million | +40% |

[Risks and Concerns]
- Production challenges at Jubilee and Equatorial Guinea due to mechanical failures and well underperformance.
- Delays in GTA ramp-up impacting overall production.
- Commodity price volatility affecting cash flow stability.

[Final Takeaway]
Kosmos Energy's Q2 2025 earnings call highlighted significant progress with the GTA FLNG project, marking a shift towards increased production and cost reduction. Despite production challenges at Jubilee and Equatorial Guinea, the company remains focused on strategic priorities, including consistent drilling programs and financial resilience. The reduction in capital expenditures and active hedging strategy are expected to support long-term value creation for investors.