Kosmos Energy Acquired DGE for $1.23 Bln

August 6, 2018

World Energy Reports LLC.

Kosmos Energy has agreed to acquire Deep Gulf Energy (DGE) from its private equity owner for $1.23 billion, according to a bourse filing on Monday, expanding the deepwater oil and gas firm's operations into the Gulf of Mexico.

Dallas-based Kosmos, which currently operates in Africa and South America, will pay $925 million in cash and $300 million in Kosmos common stock to acquire DGE, with the transaction expected to close towards the end of the third quarter.

Acquiring DGE's business will increase Kosmos' production by more than 50 percent to 70,000 barrels of oil equivalent per day (boed) from around 45,000 boed now, with the company's estimated reserves rising 40 percent to around 280 million barrels of oil equivalent, the statement said.

"The best deepwater assets can compete with the best of shale, and now is a good time to enter the Gulf of Mexico," Andrew Inglis, chairman and chief executive officer of Kosmos, said in the statement.

Speaking with Reuters, Inglis said the exit in recent years of a number of exploration and production companies from the Gulf of Mexico to invest more in onshore shale projects had created a space in the market for Kosmos to exploit.

It had been able to secure high quality assets without the level of competition that energy firms might experience in other places, he said.

In the London Stock Exchange statement, Kosmos noted the DGE acquisition would be "immediately accretive" to the company and the "significant free cash flow" that the assets would help generate would allow it to pay a dividend to shareholders starting in the first quarter of 2019.

DGE had been backed by energy-focused private equity firm First Reserve since 2005, according to the company's website.

Evercore and Goldman Sachs acted as financial advisers to Kosmos, according to the bourse statement.

(Reporting by David French; editing by Richard Pullin)

Floating Production Week delivers unrivaled overview, insight and analysis to the Offshore Floating Production Systems and Technology market

Floating Production Systems Report And Online Database

  • Monthly reports -- Our monthly reports provide a detailed snapshot of the business sector as of the middle of each month. More than 80 pages of data and industry analysis each month. Excel spreadsheets with each report enable subscribers to tailor the data presentation to their needs. In October of each year we provide a detailed five year forecast of production floater orders. In March of each year we fine tune the forecast and make revisions as needed.
  • Online database -- The online database is updated every day – with information direct from primary sources. In the database are details for 240 planned projects, 370 installations in service, 70+ floaters on order and 20+ floaters available. The database is fully searchable. Customized charts and spreadsheets can be directly produced from the database.
  • Customer support -- We are available to assist with technical questions about information in the database and reports -- and assist with any questions about using the database search tools.

Here's what you get!

Request Free Trial