Kosmos Energy has left the capital-build years behind and is converting a concentrated offshore portfolio into cash that actually shrinks the balance sheet. The second-quarter swing back to profit is the first clean look at that harvest. The investment debate is whether that cash is durable enough to cut net debt at the pace management has set, or whether hedges, a still-heavy maturity stack, and a thinner asset base after the Equatorial Guinea exit keep the equity as a residual claim on a leveraged producer. Shares last traded near $3. Market value sits near $2 billion. Enterprise value sits near $4 billion. The fifty-two-week range still stretches from well below a dollar to a little above three, so the market has already priced a recovery from last year's distress without treating the harvest as complete.
The Equatorial Guinea exit is the quarter's defining portfolio event. Kosmos closed the sale of its working interest in the Ceiba Field and Okume Complex to Panoro Energy in mid-June. Cash received after closing adjustments was about $127 million. Contingent payments of up to $40 million remain outstanding if oil prices and field volumes clear contractual hurdles. Those proceeds went straight against the reserve-based lending facility, the borrowing line secured by proved reserves. The same close also lifted an asset-retirement obligation of about $140 million off the balance sheet. Late-life African fields often consume more cash in abandonment than they return in harvest years, so removing that liability is the larger gift. Selling a high-cost, non-operated barrel concentrates the company on Jubilee, Greater Tortue Ahmeyim, and the Gulf of America. It also removes a diversification sleeve and shrinks the borrowing base that lenders use to size the credit line.
The tension is that the cash harvest is real and still leaky. Reported oil and gas revenue of $607 million sat on an average sales price well above last year's print before hedges. Cash settlements on commodity derivatives took $105 million out of that print. GAAP net income of $185 million therefore overstates the cash the quarter actually left for creditors. Adjusted net income of $68 million is the cleaner earnings read. Free cash flow of about $89 million is the number that paid down debt. Net debt fell by about $400 million in the first half. The residual claim is still junior to a large secured and unsecured stack.
What resolves the debate is not another oil spike. It is whether Greater Tortue Ahmeyim holds its cargo cadence, whether the new Jubilee wells keep Ghana at the top of guidance, and whether the reserve-based facility refinance closes on terms that do not recapture the liquidity just created. Full-year production guidance after the Equatorial Guinea sale sits in a band around seventy thousand barrels of oil equivalent per day. Capital spending guidance remains about $350 million. Those two figures, plus cargo counts out of Mauritania and Senegal, are the observables that decide if the harvest compounds or stalls.