Kosmos Energy faced an unexpected setback in the fourth quarter, announcing a loss that came as a surprise to investors, largely due to lower-than-projected oil production. The deepwater oil and gas production firm reported an adjusted loss of $0.03 per share for the December quarter, a stark contrast to the earnings of $0.31 recorded in the same period last year.
Analysts were anticipating a breakeven result, according to FactSet data. The company's revenue also took a hit, decreasing to $397.7 million from $507.8 million, narrowly exceeding the street's expected figure of $396.6 million. The decline in oil-equivalent production was significant, with figures reported at approximately 66,800 barrels per day, falling short of the guidance given in November which had indicated production levels between 70,000 and 74,000 barrels per day.
Kosmos attributed this lower output to diminished production at its Jubilee plant in Ghana as well as delays in project startups. Notably, the company concluded the fourth quarter with a net underlift position of roughly 200,000 barrels. This term refers to scenarios in which a partner in an oil and gas venture takes less than their entitled share according to ownership stakes. Looking ahead to the current three-month period, Kosmos estimates that production will range from 62,000 to 66,000 barrels of oil equivalent per day.
The company anticipates that planned shutdowns at both the Jubilee plant and the Devils Tower facility in the Gulf of Mexico will further impact production levels. It is worth mentioning that the Dallas-based firm has recently referred to the Gulf of Mexico as the 'Gulf of America' in its statements, following an executive order from President Donald Trump to rebrand the region. In statements made by Chief Executive Andrew Inglis, he expressed optimism stating, 'In the Gulf of America, we expect production to further increase from the Winterfell 3&4 wells in the coming months and have been pleased by the production optimization projects undertaken during 2024.' Furthermore, regarding the situation in Ghana, Inglis highlighted the Jubilee 4D seismic and the upcoming infill drilling program, anticipating a rise in production from those efforts. Fourth-quarter costs and expenses also showed improvements, narrowing down to $431.5 million compared to $466.4 million from the previous year.
Meanwhile, net capital expenditure reached $117 million, surpassing the initial expectations of $100 million primarily due to increased startup costs linked to the Greater Tortue Ahmeyim liquefied natural gas project situated in West Africa. For the year 2025, Kosmos is projecting production levels to hover around 70,000 to 80,000 barrels of oil equivalent per day, with capital expenditures estimated to remain below $400 million.
Inglis also indicated a shift in strategy, stating, 'We will now prioritize the generation of free cash flow from our increased production base together with disciplined capital investment,' further noting that the forecasted $400 million capital expenditure budget for 2025 represents a reduction of over 50% compared to previous budgets..