Kosmos Energy 2013 Annual Report 2013 (with 10K) | Page 26

In October 2013, Kosmos executed a petroleum agreement with the Office National des Hydrocarbures et des Mines (‘‘ONHYM’’), the national oil company of the Kingdom of Morocco, covering the Tarhazoute Offshore block, to which the Company previously held certain exploration rights under a 2011 reconnaissance contract. Under the terms of the petroleum contract, the Company is the operator of the Tarhazoute Offshore block. ONHYM holds a 25% carried interest in the block through the exploration period. The Tarhazoute Offshore block is currently in the first exploration period, which is for two and one-half years from its effective date (December 9, 2013) ending in June 2016. The exploration phase may be extended for a total duration of eight years at our election and subject to our fulfilling specific work obligations, which include acquisition of 3D seismic data during the first period and drilling an exploration well in each of the subsequent periods. In the event of commercial success, the Company has the right to develop and produce oil and/or gas for a period of 25 years from the grant of an exploitation concession from the Government of Morocco, which may be extended for an additional period of 10 years under certain circumstances. We are currently assessing prospectivity on the Tarhazoute Offshore block in Morocco, and accordingly information concerning prospects, if any, on such recently acquired license areas is not yet available. We currently are, and plan to continue, processing seismic information to assess the prospectivity for these license areas. Suriname Our blocks in Suriname are located within the Guyana-Suriname Basin, along the Atlantic transform margin of northern South America. The basin resulted from rock deformation caused by tensional forces associated with the opening of the Atlantic Ocean, as South America separated from Africa in the mid-Cretaceous period. This basin has experienced the same geologic forces which occurred along the transform margin of Africa. Therefore, we believe the basin’s petroleum system to be analogous to petroleum systems seen in West Africa. A petroleum system in Suriname has been proven by the presence of onshore producing fields. We believe the play types offshore Suriname are relatively similar to those offshore West Africa and may contain subtle stratigraphic traps similar to those discovered offshore Ghana in the Jubilee field. Target reservoirs are Upper and Middle Cretaceous age basin floor fans and mid-slope channel sands which may have good lateral continuity. The Tambaredjo and Calcutta Fields onshore Suriname demonstrate that a working petroleum system exists in the area. Geological and geochemical studies suggest the hydrocarbons in these fields were generated in source rocks located in the offshore basin. The source rocks are believed to be similar in age to those which charged some of the fields offshore West Africa. Suriname lies on the Atlantic transform margin of South America located between Guyana and French Guyana. The deep water basin is subdivided by the Demerara high, a platform area which separates the Suriname deep water basin from the French Guyana Basin where the recent Zaedyus oil discovery was made in Late Cretaceous sandstones in a stratigraphic trap. Block 42 and Block 45 sit in the deep water area west of the Demerara Platform in the center of a thick Cretaceous and Tertiary succession associated with the post rift subsidence of the Atlantic continental margin. A number of onshore and shelf wells have encountered oil and, as previously noted, the Tamberedjo and Ca lcutta fields are currently producing. These fields are believed to be sourced from deep water Cretaceous source rocks. Seismic evidence suggests thick Late Cretaceous and Tertiary reservoir systems have been deposited in the deep water area and this stratigraphy may contain stratigraphic and structural trapping geometries analogous to both the Zaedyus and Jubilee discoveries. During 2012, we completed a 3D seismic data acquisition program which covered approximately 3,900 square kilometers of portions of Block 42 and Block 45 offshore Suriname. In August 2013, we completed a 2D seismic program of approximately 1,400 line kilometers over a portion of Block 42, outside of the existing 3D seismic survey. The processing of these seismic data programs is expected to be completed by mid-2014. 19