Kosmos Energy (KOS) Hits Production Milestone With Winterfell
Kosmos Energy KOS, a deepwater exploration and production firm, has announced the initiation of oil production from the Winterfell development in the U.S. Gulf of Mexico. The Winterfell development in the Green Canyon area of the U.S. Gulf of Mexico is operated by Beacon Offshore Energy, with Kosmos holding a 25.04% working interest in the field.
Winterfell is a phased development. For the first phase, two production wells are currently online and working to increase the production from the development. Alongside, a third well is also being drilled, expected to be operational by the end of the third quarter of 2024. The three wells are anticipated to produce 20,000 barrels of oil equivalent per day (boe/d).
The first phase includes five wells in total, which are projected to produce 100 million boe, with significant upside potential in subsequent phases. The Miocene-aged Winterfell field is situated in water depths of approximately 5,400 feet. It was developed using a 13-mile subsea tieback to a host platform operated by Occidental Petroleum. Discovered in 2021, the final investment decision for Winterfell was made in January 2024.
The Winterfell development encompasses blocks 899, 900, 943, 944, 987 and 988 in the Green Canyon area. It also includes additional opportunities in neighboring blocks where Kosmos Energy holds interests. Apart from Beacon Offshore and Kosmos Energy, the other partners in the field are Westlawn Americas Offshore, Red Willow, Alta Mar Energy and CSL Exploration.
Kosmos Energy noted that the initiation of oil production from Winterfell marks a significant achievement for the company. The initiative is expected to help the company in achieving its growth target by the end of the year. Furthermore, KOS has expressed its enthusiasm to further develop the Winterfell discovery, owing to the significant upside potential it offers. Kosmos Energy’s management highlighted that Winterfell's high-margin barrels and low carbon intensity make it well-suited and a beneficial addition to the company’s portfolio. This implies that the oil extracted from the field has a lower environmental impact and is expected to be profitable for the company.
Zacks Rank and Key Picks
Currently, KOS carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Sunoco LP SUN, SM Energy SM and Hess Midstream Partners LP HESM. Sunoco presently sports a Zacks Rank #1 (Strong Buy), while SM Energy and Hess Midstream carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than the composite stocks in the industry, providing unitholders with consistent returns.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Hess Midstream owns, operates, develops, and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.
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