Using its estimated net proceeds of approximately $550.2 million from its public offering sale of 30,000,000 common shares, Kosmos said the allocated expenditure will go into developments of discoveries which are commercially viable and to complete explorations and appraisals at offshore Ghana.
In a filing to Securities and Exchange Commission of the US, the company said “We estimate we will incur approximately $500 million of capital expenditures for the year ending December 31, 2011. This capital expenditure budget consists of $175 million for development and $225 million for exploration and appraisal in Ghana.”
In budgeting for future activities, Kosmos says it relies on a number of assumptions such as the discovery success rate of oil, the number of wells planned to be drilled and the costs involved in developing or participating in the development of a prospect.
According to the company, these assumptions are subject to political, economic, regulatory and environmental uncertainties and if one or more of the assumptions prove to be incorrect then it may decide to raise additional funds if the conditions for raising such capital are favorable.
In a related development development, Kosmos also plans to spend $30 million on exploration and appraisal in Cameroon, $30 million for new ventures to expand license portfolio and $40 million in unallocated funds which are available for additional drilling and licensing costs and activities.
By Ekow Quandzie