Kosmos Energy 2013 Annual Report 2013 (with 10K) | Page 18

The primary reservoir types consist of well imaged Turonian and Campanian aged submarine fans situated along the steeply dipping shelf margin and trapped in an up dip direction by thinning of the reservoir and/or faults. Many of our discoveries have similar trap geometries. Our Ghanaian Discoveries Information about our Ghanaian discoveries is summarized in the following table. Discoveries Ghana Jubilee Field Jubilee Field Mahogany . Teak . . . . . Akasa . . . . TEN . . . . . Wawa . . . . License Phase 1 and Phase 1A(1)(2) subsequent phases(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WCTP/DT(3) WCTP/DT(3) WCTP WCTP WCTP DT DT Kosmos Participating Interest Block Operator(s) 24.0771%(5) 24.0771%(5) 30.8750%(4) 30.8750%(4) 30.8750%(4) 17.0000%(6) 18.0000%(4) Tullow/Kosmos(7) Tullow/Kosmos(7) Kosmos Kosmos Kosmos Tullow Tullow Stage Type Production Development Appraisal Appraisal Appraisal Development Appraisal Expected Year of PoD Submission(11) Deepwater Deepwater Deepwater Deepwater Deepwater Deepwater Deepwater 2008/2011(2) 2014(8) 2015(9) 2015(9) 2015(9) 2012(10) 2015 (1) For information concerning our estimated proved reserves in the Jubilee Field as of December 31, 2013, see ‘‘—Our Reserves.’’ (2) The Jubilee Phase 1 and Phase 1A PoDs were approved by Ghana’s Ministry of Energy in 2009 and 2012, respectively. The Jubilee Phase 1 and Phase 1A PoDs detail the necessary wells and infrastructure to develop three of the reservoirs within the Jubilee Field. Oil production from the Jubilee Field offshore Ghana commenced in November 2010, and we received our first oil revenues in early 2011. (3) The Jubilee Field straddles the boundary between the WCTP Block and the DT Block offshore Ghana. Consistent with the Ghanaian Petroleum Law, the WCTP Petroleum Agreement (‘‘WCTP PA’’) and DT Petroleum Agreement (‘‘DT PA’’) and as required by Ghana’s Ministry of Energy, in order to optimize resource recovery in this field, we entered into the Unitization and Unit Operating Agreement (the ‘‘UUOA’’) in July 2009 with Ghana National Petroleum Corporation (‘‘GNPC’’) and the other block partners of each of these two blocks. The UUOA governs the interests in and development of the Jubilee Field and created the Jubilee Unit from portions of the WCTP Block and the DT Block. (4) GNPC has the option to acquire additional paying interests in a commercial discovery on the WCTP Block and the DT Block of 2.5% and 5.0%, respectively. In order to acquire the additional paying interest, GNPC must notify the contractor of its intention to acquire such interest within sixty to ninety days of the contractor’s notice to Ghana’s Ministry of Energy of a commercial discovery. These interest percentages do not give effect to the exercise of such options. (5) These interest percentages are subject to redetermination of the participating interests in the Jubilee Field pursuant to the terms of the UUOA. See ‘‘Item 1A. Risk Factors—The unit partners’ respective interests in the Jubilee Unit are subject to redetermination and our interests in such unit may decrease as a result’’ and ‘‘—Significant License Agreements—Jubilee Field Unitization.’’ GNPC exercised its WCTP PA and DT PA options, with respect to the Jubilee Unit, to acquire an additional unitized paying interest of 3.64084% in the Jubilee Field. The Jubilee Field interest percentages give effect to the exercise of such option. Our paying interest on development activities in the Jubilee Field is 2 6.85484%. (6) In February 2013, GNPC exercised its DT PA option, with respect to TEN, to acquire an additional paying interest of 5.0%. The TEN interest percentage gives effect to the exercise of such option. Our paying interest on development activities in TEN is 19%. (7) Kosmos is the Technical Operator and Tullow Ghana Limited, a subsidiary of Tullow Oil plc (‘‘Tullow’’), is the Unit Operator of the Jubilee Unit. See ‘‘—Significant License Agreements—Jubilee Field Unitization.’’ (8) We submitted the Jubilee Full Field Development Plan (‘‘JFFDP’’) to Ghana’s Minister of Energy in December 2012 and subsequently withdrew based on discussions with the government of Ghana. A PoD providing for development of the next phase within the Jubilee Field is expected to be submitted during 2014, although we can give no assurance that such approvals will be forthcoming in a timely manner or at all. (9) Effective January 14, 2014, the Ministry of Energy and GNPC entered into a Memorandum of Understanding with Kosmos Energy, on behalf of the WCTP PA Block partners, wherein all parties have settled all matters pertaining to the Notices of Dispute for the Mahogany East PoD and the Cedrela Notice of Force Majeure, and the Ministry of Energy has approved the Appraisal Programs for the Mahogany, Teak, and Akasa discoveries. As a result of the settlement, a portion of the WCTP PA area which contained the Cedrela prospect has been relinquished. (10) The DT Block partners submitted a declaration of commerciality and a PoD to Ghana’s Ministry of Energy in November 2012. In May 2013, the government of Ghana approved the PoD over the TEN discoveries. Development of TEN will include the drilling and completion of up to 24 development wells; half of the wells are designed as producers and the remainder as water or gas injectors to support ultimate field recoveries. The TEN project is expected to deliver first oil in 2016. (11) In interpreting this information, specific reference should be made to the subsections of this annual report on Form 10-K titled ‘‘Item 1A. Risk Factors—Our identified drilling locations are scheduled out over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling’’ and ‘‘Item 1A. Risk Factors—We are not, and may not be in the future, the operator on all of our license areas and do not, and may not in the future, hold all of the participating interests in certain of our license areas. Therefore, we will not be able to control the timing of exploration or development efforts, associated costs, or the rate of production of any non-operated and to an extent, any non-wholly owned, assets.’’ 11