Kosmos Energy Ltd. Liquidation Value

Kosmos Energy (KOS) presents a deeply negative liquidation posture as of March 31, 2026. MFFAIS-computed liquidation values range from approximately negative $3.3B (OLV) to negative $3.6B (CLV), consistent with what the balance sheet supports under the lens. Total reported assets of $4.78B are dominated by oil and gas properties at gross carrying value of $7.88B less $4.51B accumulated DD&A, yielding a net book value of $3.36B. Under a 50-70% PP&E haircut, the recoverable value of this asset block is approximately $1.7-2.4B. Inventory of $183M (petroleum $38.7M, supplies $144M) recovers at roughly $110M under 60% haircut. Cash of $130M recovers at par; receivables of $111M current plus $466M noncurrent JIB receivables (at 90-95% on current, significant uncertainty on noncurrent) contribute modest recovery. The $427M assets held for sale (EG business, per Note 3) are carried at disposal group value but remain unclosed as of the period end; recovery depends on transaction close and buyer credit.

Against this, the liability stack is formidable at face value. Total long-term debt principal stands at $2.95B across seven instruments: $1.0B RBL Facility (matures 2029), $100M 7.750% Senior Notes (matures May 2027), $400M 7.500% Senior Notes (matures March 2028), $500M 8.750% Senior Notes (matures October 2031), $400M 3.125% Convertible Senior Notes (matures March 2030), $350M 11.250% GTA Nordic Bonds (issued January 2026, matures January 2031), and $196M GoA Term Loan (matures 2029). Current liabilities total $757M including $97M accrued interest, $156M derivative liabilities current, and $332M accrued liabilities. Derivative liabilities (current plus noncurrent) total $171M at fair value, a swing from a $50M asset at December 31, 2025, driven by $303M mark-to-market loss on commodity hedges in Q1 2026 as forward oil curves fell sharply.

ARO stands at $207M total ($10M current, $196M noncurrent), not extinguishable on windup. The Jubilee decommissioning trust commitment of $111M net to KOS (unfunded beyond current trust balance) and the TEN FPSO finance lease ($80M liability, $84.8M total undiscounted payments through 2027) add to structural liabilities. The GTA LNG minimum delivery commitment to BP Gas Marketing carries penalty exposure for shortfall volumes — filing discusses in MD&A but this contingent liability is not separately XBRL-tagged.

Key quarter-over-quarter changes: total debt principal decreased modestly from $3.10B to $2.95B, reflecting the $100M 7.125% Senior Note redemption and partial 7.750% buyback, offset by $350M GTA Nordic Bond issuance and $46M net GoA Term Loan increase. The $206M equity issuance (112M shares at approximately $1.84/share net) added cash but did not structurally change the recovery picture given the quantum of senior obligations. The debt cover ratio exceeded 2.50x at the March 31, 2026 test date, triggering an approximately $47M restricted cash funding requirement under the RBL Facility; the company is seeking lender approval to extend the prior waiver, which represents a near-term covenant execution risk. Filing discusses covenant amendments multiple times in MD&A but does not separately XBRL-tag covenant headroom or restricted cash threshold calculations.