Kosmos announces acquisition of Deep Gulf Energy for $1.225B
Kosmos Energy announced that the company has entered into an agreement to acquire Deep Gulf Energy, or DGE, a deepwater company operating in the Gulf of Mexico, from First Reserve and other shareholders for a total consideration of $1.225B, subject to certain adjustments. By acquiring DGE, Kosmos adds to its deepwater Atlantic Margin portfolio an established business with attractive assets and a strong record of growing production and reserves through infrastructure-led exploration. This immediately accretive acquisition enhances the scale of the company and is expected to generate significant free cash flow, enabling Kosmos to return cash to shareholders through a dividend, beginning in the first quarter of 2019. Under the terms of the transaction, Kosmos will acquire DGE for total consideration of $1.225B, comprised of $925M in cash and $300M in Kosmos common shares issued to First Reserve, management, and other DGE shareholders. Kosmos intends to fund the cash portion of the purchase price with borrowings under its existing credit facilities. In connection with the transaction, Kosmos has received $200M of additional firm commitments to increase its reserves-based loan facility capacity. The acquisition is expected to close around the end of the third quarter 2018, subject to receipt of regulatory approval and the satisfaction of customary closing conditions.