Kosmos Energy Ltd.KOS
Kosmos Energy Ltd. Debt Disclosure
Debt
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Outstanding debt principal balances: | |||||||||||
Facility(2) | $ | 1,200,000 | $ | 900,000 | |||||||
7.125% Senior Notes(2) | 100,000 | 250,000 | |||||||||
7.750% Senior Notes(2) | 350,000 | 350,000 | |||||||||
7.500% Senior Notes | 400,274 | 400,274 | |||||||||
8.750% Senior Notes | 500,000 | 500,000 | |||||||||
3.125% Convertible Senior Notes | 400,000 | 400,000 | |||||||||
GoA Term Loan Facility(2) | 150,000 | — | |||||||||
Total long-term debt | 3,100,274 | 2,800,274 | |||||||||
| Unamortized deferred financing costs and discounts(1) | (47,515) | (55,562) | |||||||||
| Total debt, net | 3,052,759 | 2,744,712 | |||||||||
| Less: Current maturities of long-term debt | (132,143) | — | |||||||||
Long-term debt, net(2) | $ | 2,920,616 | $ | 2,744,712 | |||||||
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(1)Includes $24.3 million and $30.4 million of unamortized deferred financing costs related to the Facility, $10.4 million and $14.1 million of unamortized deferred financing costs and discounts related to the Senior Notes, $9.0 million and $11.1 million of unamortized deferred financing costs and discount related to the 3.125% Convertible Senior Notes, and $3.0 million and $0 of unamortized deferred financing costs related to the GoA Term Loan Facility as of December 31, 2025 and December 31, 2024, respectively.
(2)As of December 31, 2025, total long-term debt, net was $2.9 billion. In January 2026, we received net proceeds of $98.5 million from the funding of the second tranche of the GoA Term Loan Facility after deducting fees and expenses. The net proceeds were used, together with cash on hand, to fund the redemption of the remaining $100.0 million of the 7.125% Senior Notes due 2026. In January 2026, the Company also issued $350.0 million of 11.250% Senior Secured Bonds due 2031 in the Nordic market. In February 2026, Kosmos used a portion of the net proceeds from the offering to fund the repurchase of an aggregate principal amount of $182.5 million of the 7.750% Senior Notes due 2027 and to make a voluntary early principal repayment of $100.0 million on outstanding borrowings under the Facility.
Facility
The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. The amount of funds available to be borrowed under the Facility, also known as the borrowing base amount, is determined every March and September. The borrowing base amount is based on the sum of the net present values of net cash flows and relevant capital expenditures reduced by certain percentages as well as value attributable to certain assets’ reserves and/or resources in the Jubilee and TEN Fields in Ghana and the Ceiba Field and Okume Complex in Equatorial Guinea.
In September 2025, during the Fall 2025 redetermination, the Company’s lending syndicate approved a borrowing base at the full Facility size of $1.35 billion. As of December 31, 2025, borrowings under the Facility totaled $1.2 billion and the undrawn availability under the Facility was $150.0 million. In February 2026, the Company used a portion of the net proceeds from the Nordic bond offering to make a voluntary early principal repayment of $100.0 million on outstanding borrowings under the Facility.
When our debt cover ratio exceeds 2.50x, we are required under the Facility to maintain a restricted cash balance that is sufficient to meet the payment of interest and fees for the next six-month period on the 7.750% Senior Notes, the 7.500% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes or the Facility, whichever is greater. As of December 31, 2024, our debt cover ratio was 2.54x. During the first quarter of 2025, the Facility lenders waived the requirement to maintain a restricted cash balance through 2025. As of December 31, 2025, our debt cover ratio was 5.49x. Our next financial covenant assessment date is March 31, 2026, after which date we will be required to restrict approximately $50.0 million in cash as required under the terms of the Facility unless otherwise waived by the lenders.
If an event of default exists under the Facility, the lenders can accelerate the maturity and exercise other rights and remedies, including the enforcement of security granted pursuant to the Facility over certain assets held by our subsidiaries. The Facility requires the Company to maintain certain financial covenants including:
•the field life cover ratio (as defined in the glossary), not less than 1.50x; and
•the loan life cover ratio (as defined in the glossary), not less than 1.10x through September 30, 2027 and 1.30x after September 30, 2027; and
•the interest cover ratio (as defined in the glossary), not less than 2.25x; and
•the debt cover ratio (as defined in the glossary), not more than 3.50x.
In July 2025, the Company and the Facility lenders agreed to amend the debt cover ratio required under the Facility. The amendment made this covenant less restrictive for the two scheduled financial covenant assessment dates in September 2025 and March 2026, up to a maximum of 4.0x and 4.25x respectively, and returned to the originally agreed upon ratio of 3.50x for assessment dates thereafter. In February 2026, we further amended the debt cover ratio calculation through September 2026. This most recent amendment makes the covenant less restrictive for the two scheduled financial covenant assessment dates in March 2026 and September 2026, up to a maximum of 4.5x and 4.25x respectively, and for purposes of the financial covenant assessment date in March 2026, the calculation will be made excluding the Company’s Mauritania and Senegal business unit. The debt cover ratio returns to the originally agreed upon ratio of 3.5x for assessment dates thereafter. The change is intended to align the covenant calculation with recent business operations, lower potential oil prices and the impact of operating costs during the ramp-up of the GTA Phase 1 project on our results of operations.
We were in compliance with the financial covenants above contained in the Facility, as amended, as of September 30, 2025 (the most recent assessment date). The Facility contains customary cross default provisions.
Interest on the Facility is the aggregate of the applicable margin (4.00% to 5.50%, depending on the length of time that has passed from the date the Facility was entered into), plus the term SOFR reference rate administered by CME Group Benchmark Administration Limited for the relevant period published. Interest is payable on the last day of each interest period (and, if the interest period is longer than six months, on the dates falling at six-month intervals after the first day of the interest period). We pay commitment fees on the undrawn and unavailable portion of the total commitments, if any. Commitment fees are equal to 30% per annum of the then-applicable respective margin when a commitment is available for utilization and, equal to 20% per annum of the then-applicable respective margin when a commitment is not available for utilization. We recognize interest expense in accordance with ASC 835—Interest, which requires interest expense to be recognized using the effective interest method. We determined the effective interest rate based on the estimated level of borrowings under the Facility.
The Facility provides a revolving credit and letter of credit facility. The availability period for the revolving credit facility expires one month prior to the final maturity date. The letter of credit facility expires on the final maturity date. The available facility amount is subject to borrowing base constraints and, beginning on April 1, 2027, outstanding borrowings will be constrained by an amortization schedule. The Facility has a final maturity date of December 31, 2029. As of December 31, 2025, we had no letters of credit issued under the Facility. We have the right to cancel all the undrawn commitments under the amended and restated Facility.
Corporate Revolver
On March 31, 2022, we refinanced the Corporate Revolver by replacing it with a new revolving credit facility agreement with a total size of $250 million and a maturity date of December 31, 2024. In April 2024, in connection with the amendment and restatement of the Facility, we amended the Corporate Revolver reducing the borrowing capacity from $250.0 million to $165.0 million. In October 2024, pursuant to a voluntary cancellation notice sent by the Company, the Corporate Revolver was terminated.
7.125% Senior Notes due 2026
In April 2019, the Company issued $650.0 million of 7.125% Senior Notes and received net proceeds of approximately $640.0 million after deducting commissions and other expenses. We used the net proceeds to redeem all of the previously issued 7.875% Senior Secured Notes due 2021, repay a portion of the outstanding indebtedness under the Corporate Revolver and pay fees and expenses related to the redemption, repayment and the issuance of the 7.125% Senior Notes.
The 7.125% Senior Notes mature on April 4, 2026. On September 24, 2024, the Company completed the repurchase of an aggregate principal amount of $400.0 million of the 7.125% Senior Notes due 2026 pursuant to the Company’s cash tender offers for portions of the 7.125% Senior Notes, the 7.750% Senior Notes, and the 7.500% Senior Notes announced on September 9, 2024. In October 2025, we used the proceeds from funding of the first tranche under the GoA Term Loan Facility, together with cash on hand, to fund the partial redemption of an additional aggregate principal amount of $150.0 million of the 7.125% Senior Notes. In January 2026, we used the proceeds from funding of the second tranche under the GoA Term Loan Facility, together with cash on hand, to complete the redemption of the remaining outstanding balance amount of $100.0 million of the 7.125% Senior Notes.
7.750% Senior Notes due 2027
In October 2021, the Company issued $400.0 million of 7.750% Senior Notes and received net proceeds of approximately $395.0 million after deducting fees. We used the net proceeds, together with cash on hand, to refinance the $400.0 million Bridge Notes (which were issued during the fourth quarter of 2021 in connection with the completion of the acquisition of Anadarko WCTP) and to pay expenses related to the issuance of the 7.750% Senior Notes.
The 7.750% Senior Notes mature on May 1, 2027. Interest is payable in arrears each May 1 and November 1, commencing on May 1, 2022. The 7.750% Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the 7.500% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility). The 7.750% Senior Notes are guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's Gulf of America assets, and on a subordinated, unsecured basis by certain subsidiaries that borrow under, or guarantee, the Facility and that guarantee the 7.500% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes. The 7.750% Senior Notes contain customary cross default provisions.
On or after November 1, 2023, the Company may redeem all or a part of the 7.750% Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest:
| Year | Percentage | |||||||
| On or after November 1, 2023 | 103.875 | % | ||||||
| On or after November 1, 2024 | 101.938 | % | ||||||
| On or after November 1, 2025 | 100.000 | % | ||||||
We may also redeem the 7.750% Senior Notes in whole, but not in part, at any time if changes in tax laws impose certain withholding taxes on amounts payable on the 7.750% Senior Notes at a price equal to the principal amount of the 7.750% Senior Notes plus accrued interest and additional amounts, if any, as may be necessary so that the net amount received by each holder after any withholding or deduction on payments of the 7.750% Senior Notes will not be less than the amount such holder would have received if such taxes had not been withheld or deducted.
Upon the occurrence of a change of control triggering event as defined under the 7.750% Senior Notes indenture, the Company will be required to make an offer to repurchase the 7.750% Senior Notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase.
If we sell assets, under certain circumstances outlined in the 7.750% Senior Notes indenture, we will be required to use the net proceeds to make an offer to purchase the 7.750% Senior Notes at an offer price in cash in an amount equal to 100% of the principal amount of the 7.750% Senior Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
The 7.750% Senior Notes indenture restricts the ability of the Company and its restricted subsidiaries to, among other things: incur or guarantee additional indebtedness, create liens, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, enter into agreements that restrict the ability of the Company's subsidiaries to make dividends or other payments to the Company, enter into transactions with affiliates, or effect certain consolidations, mergers or amalgamations. These covenants are subject to a number of important qualifications and exceptions. Certain of these covenants will be terminated if the 7.750% Senior Notes are assigned an investment grade rating by both Standard & Poor’s Rating Services and Fitch Ratings Inc. and no default or event of default has occurred and is continuing. The 7.750% Senior Notes contain customary cross default provisions.
On September 24, 2024, the Company completed the repurchase of an aggregate principal amount of $50.0 million of the 7.750% Senior Notes pursuant to the Company’s cash tender offers for portions of the 7.125% Senior Notes, the 7.750% Senior Notes, and the 7.500% Senior Notes announced on September 9, 2024. In February 2026, the Company used a portion of the net proceeds from the Nordic bond offering to fund the repurchase of an aggregate principal amount of $182.5 million of the 7.750% Senior Notes pursuant to the Company’s cash tender offer announced on January 12, 2026.
7.500% Senior Notes due 2028
In March 2021, the Company issued $450.0 million of 7.500% Senior Notes and received net proceeds of approximately $444.4 million after deducting fees. We used the net proceeds to repay outstanding indebtedness under the Corporate Revolver and the Facility, to pay expenses related to the issuance of the 7.500% Senior Notes and for general corporate purposes.
The 7.500% Senior Notes mature on March 1, 2028. Interest is payable in arrears each March 1 and September 1, commencing on September 1, 2021. The 7.500% Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the 7.750% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility). The 7.500% Senior Notes are guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's Gulf of America assets, and on a subordinated, unsecured basis by certain subsidiaries that borrow under, or guarantee, the Facility and that guarantee the 7.750% Senior Notes, the 8.750% Senior Notes and the 3.125% Convertible Senior Notes. On September 24, 2024, the Company completed the repurchase of an aggregate principal amount of approximately $49.7 million of the 7.500% Senior Notes pursuant to the Company’s cash tender offers for portions of the 7.125% Senior Notes, the 7.750% Senior Notes, and the 7.500% Senior Notes announced on September 9, 2024. The 7.500% Senior Notes contain customary cross default provisions.
On or after March 1, 2024, the Company may redeem all or a part of the 7.500% Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest:
| Year | Percentage | |||||||
| On or after March 1, 2024 | 103.750 | % | ||||||
| On or after March 1, 2025 | 101.875 | % | ||||||
| On or after March 1, 2026 | 100.000 | % | ||||||
We may also redeem the 7.500% Senior Notes in whole, but not in part, at any time if changes in tax laws impose certain withholding taxes on amounts payable on the 7.500% Senior Notes at a price equal to the principal amount of the 7.500% Senior Notes plus accrued interest and additional amounts, if any, as may be necessary so that the net amount received by each holder after any withholding or deduction on payments of the 7.500% Senior Notes will not be less than the amount such holder would have received if such taxes had not been withheld or deducted.
Upon the occurrence of a change of control triggering event as defined under the 7.500% Senior Notes indenture, the Company will be required to make an offer to repurchase the 7.500% Senior Notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase.
If we sell assets, under certain circumstances outlined in the 7.500% Senior Notes indenture, we will be required to use the net proceeds to make an offer to purchase the 7.500% Senior Notes at an offer price in cash in an amount equal to 100% of the principal amount of the 7.500% Senior Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
The 7.500% Senior Notes indenture restricts the ability of the Company and its restricted subsidiaries to, among other things: incur or guarantee additional indebtedness, create liens, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, enter into agreements that restrict the ability of the Company’s subsidiaries to make dividends or other payments to the Company, enter into transactions
with affiliates, or effect certain consolidations, mergers or amalgamations. These covenants are subject to a number of important qualifications and exceptions. Certain of these covenants will be terminated if the 7.500% Senior Notes are assigned an investment grade rating by both Standard & Poor’s Rating Services and Fitch Ratings Inc. and no default or event of default has occurred and is continuing. The 7.500% Senior Notes contain customary cross default provisions.
8.750% Senior Notes due 2031
In September 2024, the Company issued $500.0 million of 8.750% Senior Notes and received net proceeds of approximately $494.9 million after deducting fees. We used the net proceeds, together with cash on hand, to fund the Tender Offers and pay expenses related to the issuance of the 8.750% Senior Notes.
The 8.750% Senior Notes mature on October 1, 2031. Interest is payable in arrears each April 1 and October 1, commencing on April 1, 2025. The 8.750% Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the 7.750% Senior Notes, the 7.500% Senior Notes and the 3.125% Convertible Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility). The 8.750% Senior Notes are guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company’s Gulf of America assets and on a subordinated, unsecured basis by certain subsidiaries that borrow under, or guarantee, the Facility and that guarantee the 7.750% Senior Notes, the 7.500% Senior Notes and the 3.125% Convertible Senior Notes. The 8.750% Senior Notes contain customary cross default provisions.
At any time prior to October 1, 2027, and subject to certain conditions, the Company may, on one or more occasions, redeem up to 40% of the original principal amount of the 8.750% Senior Notes with an amount not to exceed the net cash proceeds of certain equity offerings at a redemption price of 108.750% of the outstanding principal amount of the 8.750% Senior Notes, together with accrued and unpaid interest and premium, if any, to, but excluding, the date of redemption. Additionally, at any time prior to October 1, 2027, the Company may, on any one or more occasions, redeem all or part of the 8.750% Senior Notes at a redemption price equal to 100%, plus any accrued and unpaid interest, and plus a “make-whole” premium. On and after October 1, 2027, the Company may redeem all or part of the 8.750% Senior Notes at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, on the notes redeemed during the twelve-month period indicated beginning on October 1 of the years indicated below:
Year | Percentage | |||||||
| 2027 | 104.375 | % | ||||||
| 2028 | 102.188 | % | ||||||
2029 and thereafter | 100.000 | % | ||||||
We may also redeem the 8.750% Senior Notes in whole, but not in part, at any time if changes in tax law impose certain withholding taxes on amounts payable of the 8.750% Senior Notes at a price equal to the principal amount of the 8.750% Senior Notes plus accrued interest and additional amounts, if any, as may be necessary so that the net amount received by each holder after any withholding or deduction on payments of the 8.750% Senior Notes will not be less than the amount such holder would have received if such taxes had not been withheld or deducted.
Upon the occurrence of a change of control triggering event as defined under the 8.750% Senior Notes indenture, the Company will be required to make an offer to repurchase the 8.750% Senior Notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase.
If we sell assets, under certain circumstances outlined in the 8.750% Senior Notes indenture, we will be required to use the net proceeds to make an offer to purchase the 8.750% Senior Notes at an offer price in cash in an amount equal to 100% of the principal amount of the 8.750% Senior Notes, plus accrued an unpaid interest to, but excluding, the repurchase date.
The 8.750% Senior Notes indenture restricts the ability of the Company and its restricted subsidiaries to, among other things: incur or guarantee additional indebtedness, create liens, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, enter into agreements that restrict the ability of the Company’s subsidiaries to make dividends or other payments to the Company, enter into transactions with affiliates, or effect certain consolidations, mergers or amalgamations. Certain of these covenants will be terminated if the 8.750% Senior Notes are assigned an investment grade rating by both Standard & Poor’s Rating Services and Fitch Ratings Inc. and no default or event of default has occurred and is continuing.
3.125% Convertible Senior Notes due 2030
In March 2024, the Company issued $400.0 million of 3.125% Convertible Senior Notes (the “3.125% Convertible Senior Notes”) and received net proceeds of $390.4 million after deducting fees.
The 3.125% Convertible Senior Notes mature on March 15, 2030, unless earlier converted, redeemed or repurchased. Interest is payable in arrears each March 15 and September 15, commencing September 15, 2024. The 3.125% Convertible Senior Notes are senior, unsecured obligations of Kosmos Energy Ltd. and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the 7.750% Senior Notes, the 7.500% Senior Notes and the 8.750% Senior Notes) and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the Facility, to the extent of the value of the assets securing such indebtedness). The 3.125% Convertible Senior Notes are guaranteed on a senior, unsecured basis by certain of our existing subsidiaries that guarantee on a senior basis the 7.750% Senior Notes, the 7.500% Senior Notes and the 8.750% Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries. The 3.125% Convertible Senior Notes are guaranteed on a subordinated, unsecured basis by certain or existing subsidiaries that borrow under or guarantee the Facility and guarantee on a subordinated basis the 7.750% Senior Notes, the 7.500% Senior Notes and the 8.750% Senior Notes, and, in certain circumstances, certain of our other existing or future subsidiaries.
Holders of the 3.125% Convertible Senior Notes may convert all or any portion of their 3.125% Convertible Senior Notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2029 only under the following circumstances:
•during any calendar quarter commencing after the calendar quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater that or equal to 130% of the conversion price on each applicable trading day;
•during the business day period after any consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 3.125% Convertible Senior Notes for each trading day of the measurement period was less that 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
•if we call any or all of the 3.125% Convertible Senior Notes for redemption, the 3.125% Convertible Senior Notes called (or deemed called) for redemption may be converted at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
•upon the occurrence of certain specified corporate events.
On or after December 15, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert at any time all or a portion of their 3.125% Convertible Senior Notes at the option of the holder.
The conversion rate for the 3.125% Convertible Senior Notes is initially 142.4501 share of common stock per $1,000 principal amount of 3.125% Convertible Senior Notes (which is equivalent to an initial conversion price of approximately $7.02 per share of our common stock), subject to adjustments.
Upon conversion, we will pay cash up to the aggregate principal amount of the 3.125% Convertible Senior Notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 3.125% Convertible Senior Notes being converted. The amount of cash and shares of our common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 40 consecutive trading day observation period.
In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion date for a holder who elects to convert its 3.125% Convertible Senior Notes in connection with such a corporate event or to convert its 3.125% Convertible Senior Notes called (or deemed called) for redemption in connection with such notice of redemption, as the cause may be.
Other than in connection with certain tax law changes, we may not redeem the notes prior to March 22, 2027. We may redeem for cash all or any portion of the 3.125% Convertible Senior Notes, at our option, on or after March 22, 2027 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of
redemption, during an 30 day consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide the related notice of redemption, at a redemption price equal to 100% of the principal amount of the 3.125% Convertible Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. We are not required to redeem or retire the 3.125% Convertible Senior Notes periodically. We may not elect to redeem less than all of the outstanding 3.125% Convertible Senior Notes unless at least $75.0 million aggregate principal amount of 3.125% Convertible Senior Notes are outstanding and not subject to redemption as of the time we send the related redemption notice. The 3.125% Convertible Senior Notes indenture contains customary terms and covenants.
The Company recorded the 3.125% Convertible Senior Notes, including the debt itself and all embedded derivatives, at cost less debt issuance costs of $9.6 million and has presented the 3.125% Convertible Senior Notes as a single financial instrument in Long-term debt, net in our consolidated balance sheet. No portion of the embedded derivative required bifurcation from the host debt contract. As of December 31, 2025, the effective annual interest rate on the 3.125% Convertible Senior Notes is approximately 3.70%, including amortization of debt issuance costs.
Capped Call Transactions
In connection with the issuance of the 3.125% Convertible Senior Notes, the Company used $49.8 million of the net proceeds from the issuance of the 3.125% Convertible Senior Notes to enter into capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions are generally expected to reduce potential dilution to holders of our common stock upon any conversion of the 3.125% Convertible Senior Notes and/or offset any cash payments that we are required to make in excess of the principal amount of any 3.125% Convertible Senior Notes that are converted, as the case may be, with such reduction and/or offset subject to a cap.
The Capped Call Transactions have an initial cap price of $10.80 per share, which represents a premium of 100% over the last reported sale price of our common stock on March 5, 2024, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions cover, initially, the number of shares of our common stock underlying the 3.125% Convertible Senior Notes, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 3.125% Convertible Senior Notes.
The Capped Call Transactions qualify for a derivative scope exception as they are indexed to our common stock and are not required to be accounted for as a separate derivative. Consequently, the Capped Call Transactions have been included as a net reduction to additional-paid-in-capital within stockholders’ equity in our consolidated balance sheet and do not require subsequent remeasurement.
GoA Term Loan Facility
On September 24, 2025, the Company entered into a senior secured term loan credit agreement secured by first priority liens on all of the Company’s Gulf of America assets (as defined in the Credit Agreement). The GoA Term Loan Facility is a -year term loan structured in two tranches, with the first tranche a principal amount of $150.0 million, which was funded on October 1, 2025, and a second tranche comprising commitments to lend up to an additional $100.0 million, available for drawing until April 1, 2026. On October 1, 2025, we received net proceeds of $147.2 million from funding of the first tranche after deducting fees and other expenses. On October 6, 2025, the net proceeds were used, together with cash on hand, to fund the redemption of a portion of the 7.125% Senior Notes due 2026 totaling $150.0 million in aggregate. On January 12, 2026, we received net proceeds of $98.5 million from the funding of the second tranche after deducting fees and expenses. On January 13, 2026, the net proceeds were used, together with cash on hand, to complete the redemption of the remaining outstanding balance of $100.0 million of the 7.125% Senior Notes due 2026.
Interest on outstanding loans under the GoA Term Loan Facility is payable quarterly in arrears at a rate per annum equal to 3.75% plus the term SOFR reference rate administered by CME Group Benchmark Administration Limited for the relevant period published. The GoA Term Loan Facility is now fully drawn and matures in 2029, with principal payments beginning June 30, 2026.
The GoA Term Loan Facility contains customary affirmative and negative covenants, including the affect our ability to incur additional indebtedness, create liens, merge, dispose of assets, and make distributions, dividends, investments or capital expenditures, among other things. The GoA Term Loan Facility requires the Company to maintain certain financial covenants including:
•the GoA field life coverage ratio (as defined in the glossary), not less than 1.50x; and
•the GoA net leverage ratio (as defined in the glossary), not more than 3.50x and
The GoA Term Loan Facility includes certain representations and warranties, indemnities and events of default that, subject to materiality thresholds and grace periods, arise as a result of a payment of default, failure to comply with covenants, material inaccuracy or representation or warranty, and certain bankruptcy or insolvency proceedings. If there is an event of default, all or any portion of the outstanding indebtedness may be immediately due and payable and other rights may be exercised including against the collateral.
GTA Nordic bonds
In January 2026, the Company issued $350.0 million of 11.250% senior secured bonds due 2031 in the Nordic market (the “GTA Nordic bonds”). In February 2026, Kosmos used a portion of the net proceeds from the offering to fund the repurchase of an aggregate principal amount of $182.5 million of the 7.750% Senior Notes pursuant to the Company’s cash tender offer announced on January 12, 2025 and to make a voluntary early principal repayment of $100.0 million on outstanding borrowings under the Facility, with the remaining proceeds to be used for future retirements of the 7.750% Senior Notes due 2027.
The GTA Nordic bonds mature in January 2031. Interest is payable semi-annually in arrears each July 29 and January 29, commencing on July 29, 2026. The GTA Nordic bonds were issued by Kosmos Energy GTA Holdings, a wholly-owned subsidiary of Kosmos Energy Ltd., and are fully and unconditionally guaranteed by the Company and the Company’s wholly-owned subsidiaries, Kosmos Energy Tortue Finance, Kosmos Energy Senegal, Kosmos Energy Investments Senegal Limited and Kosmos Energy Mauritania. The GTA Nordic bonds are also guaranteed on an unsecured basis by certain of the Company’s subsidiaries that also guarantee the Company’s existing senior unsecured notes.
At any time prior to July 29, 2028, the Company may, on any one or more occasions, redeem all or part of the GTA Nordic bonds at a redemption price equal to 100%, plus any accrued and unpaid interest, and plus a “make-whole” premium. On and after July 29, 2028, the Company may redeem all or part of the GTA Nordic bonds at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, on the notes redeemed:
Year | Percentage | |||||||
July 29, 2028 to, but not including, July 29, 2029 | 105.625 | % | ||||||
July 29, 2029 to, but not including, January 29, 2030 | 103.375 | % | ||||||
January 29, 2030 and thereafter | 100.000 | % | ||||||
If the Company’s shares are no longer listed on the New York Stock Exchange or upon the occurrence of a change of control event, as defined in the Bond Terms for the GTA Nordic bonds, each Nordic bondholder shall have a right to require that the Company repurchase all or some of the GTA Nordic bonds held by that Nordic bondholder (a “Put Option”) at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase. If more than 90% of the outstanding GTA Nordic bonds have been repurchased as a result of the exercise of the Put Option, the Company will be entitled to repurchase all the remaining GTA Nordic bonds at a price equal to 101% of the principal amount.
The Bond Terms governing the GTA Nordic bonds restrict the ability of Kosmos Energy GTA Holdings, Kosmos Energy Tortue Finance, Kosmos Energy Senegal, Kosmos Energy Investments Senegal Limited and Kosmos Energy Mauritania to, among other things: incur or guarantee additional indebtedness, create liens, sell assets, enter into transactions with affiliates, or effect certain consolidations, mergers or amalgamations.
The Bond Terms governing the GTA Nordic bonds also require Kosmos Energy GTA Holdings to maintain certain financial covenants including:
•Minimum Liquidity (as defined in the Bond Terms) of not less than $17.5 million or 5% of the outstanding GTA Nordic bonds, whichever is greater; and
•an Asset Coverage Ratio (as defined in the Bond Terms) of at least 1.25x.
Principal Debt Repayments
At December 31, 2025, the estimated repayments of debt during the five fiscal year periods and thereafter are as follows:
| Payments Due by Year | |||||||||||||||||||||||||||||||||||||||||
| Total | 2026(2) | 2027(2) | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||
| Principal debt repayments(1) | $ | 3,100,274 | $ | 132,143 | $ | 713,306 | $ | 828,639 | $ | 526,186 | $ | 400,000 | $ | 500,000 | |||||||||||||||||||||||||||
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(1)Includes the scheduled maturities for outstanding principal debt balances. The scheduled maturities of debt related to the Facility as of December 31, 2025 are based on our level of borrowings and our estimated future available borrowing base commitment levels in future periods. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter.
(2)In January 2026, we used net proceeds of $98.5 million from the funding of the second tranche of the GoA Term Loan Facility, together with cash on hand, to fund the redemption of the remaining $100.0 million of the 7.125% Senior Notes due 2026. In January 2026, the Company also issued $350.0 million of 11.250% Senior Secured Bonds due 2031 in the Nordic market. In February 2026, Kosmos used a portion of the net proceeds from the Nordic bond offering to fund the repurchase of an aggregate principal amount of $182.5 million of the 7.750% Senior Notes due 2027and to make a voluntary early principal repayment of $100.0 million on outstanding borrowings under the Facility.
Interest and other financing costs, net
Interest and other financing costs, net incurred during the period comprised of the following:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Interest expense | $ | 229,322 | $ | 214,440 | $ | 207,629 | |||||||||||
| Amortization—deferred financing costs | 7,886 | 8,709 | 9,921 | ||||||||||||||
| Debt modifications and extinguishments | 195 | 25,173 | 1,503 | ||||||||||||||
| Capitalized interest | (16,492) | (168,715) | (138,738) | ||||||||||||||
| Deferred interest | (214) | (281) | 3,183 | ||||||||||||||
| Interest income | (30,613) | (24,129) | (19,456) | ||||||||||||||
| Other, net | 33,346 | 33,401 | 31,862 | ||||||||||||||
| Interest and other financing costs, net | $ | 223,430 | $ | 88,598 | $ | 95,904 | |||||||||||
Cash payments for interest totaled $223.5 million, $194.8 million and $213.4 million for the years ended December 31, 2025, 2024 and 2023. Capitalized interest for the years ended December 31, 2025, 2024 and 2023 was $16.5 million, $168.7 million and $138.7 million, respectively. The decrease in capitalized interest during the year ended December 31, 2025 compared to 2024 is primarily due to the achievement of first gas production on the GTA Phase 1 project on December 31, 2024, after which we no longer capitalize interest on the project.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 22, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.