Operator: Good day, everyone. Welcome to Kosmos Energy's Fourth Quarter and Full Year-End 2012 Earnings Conference Call. Just a reminder, today's call is being recorded.
At this time, let me turn the call over to Brad Whitmarsh, Vice President of Investor Relations at Kosmos Energy.
Brad Whitmarsh - IR: Thanks operator and thanks to all of you for joining us today. This morning, we issued our year-end earnings release, which is accessible on the Investor's page of the kosmosenergy.com website. Later this morning, we anticipate filing our 2012 10-K with the SEC.
Joining me on the call for our comments this morning are Brian Maxted, CEO; Greg Dunlevy, Executive Vice President and CFO; and Darrell McKenna, our Chief Operating Officer. Following brief comments, we will have a question-and-answer session. Consistent with prior calls, I'd ask the participants to keep your questions to one primary and one follow-up. This will help ensure that we get to all who are on the call today. If they are questions that we are unable to get to within one hour time frame, please feel free to call me later.
Before we get started, I'd like to mention that this conference call includes certain forward-looking statements based our current expectations. The risks associated with forward-looking statements have been outlined in the earnings release and in our SEC filings. We may also refer to certain non-GAAP financial measures in our discussion. We believe such measures are important in looking at the Company's historical and future performance and these are commonly referred to metrics in the industry. These measures are provided in addition to and should be read in conjunction with the information contained in our financial statements prepared in accordance with GAAP and included in our SEC filings.
At this time, I'd like to turn the call over to Brian.
Brian F. Maxted - CEO: Thanks Brad. In today's call I want to touch briefly on 2012 and then focus on the present in 2013 and our strong future. Greg will follow with a financial discussion before handing over to Darrell for an operations update.
Looking back, 2012 was a strong year for our Company and we entered in our best position ever, operationally, financially, as well as organizationally. As a result, we have an attractive long-term platform for growth. We are building and maturing a world-class exploration portfolio, that provides transformation outside opportunities.
Our position offshore Ghana is only the initial success for Kosmos, representing the foundation from which we will grow our business. In 2012, we've significantly matured and de-risked these assets, growing production and cash flows to record levels, progressing our next (store department) further into the face of our earlier discoveries as well.
At Jubilee, the early part of the year was focused on overcoming productivity problems, which we resolved successfully, and did so at much lower cost than earlier planned. We're also began implementing in the Phase 1A development program, and as we looked at the year with the Jubilee production at approximately 110,000 barrels of oil per day, a record levels for the field and up 70% from the beginning of the year.
In 2013 we will be focused on maximizing production, by identifying ways to be bottleneck the FPSO and increase production even further. Jubilee is proving what we've known all along, to one of the world's best (indiscernible) discoveries over the past decade and now it is one of the world's best producing fields as well.
We've also progressed the TEN discoveries in 2012, extending the (indiscernible) oil channel, when identifying a new well in sourcing coal, before submitting the final development to the government late in the year.
Along with our discoveries at Mahogany, Teak, and Akasa, we have a superior track record of success offshore Ghana, and these discoveries are strategically important to our future.
Over the next several years, our expected operating cash flows from Ghana, based on a conservative $85 per barrel Brent price, combined with existing liquidity, provides substantial and well defined production and cash flow growth to our business. In addition, our programs internally fund the material exploration program with 12 to 15 exploration shots on goal over the course of the next four to five years given its exposure to a multi-billion barrel potential. This is a real asymmetric rich reward opportunity, particularly when we are trading to slightly above our 3P PV-10 value with only the Phase 1 and Phase 1A resources at Jubilee. Let me emphasize that this excludes the value of additional phases of development at Jubilee, the TEN development, MTA, and the upside in our exploration portfolio.
Before moving on to our exploration assets, I want to make quick comments on the recent secondary offering of Kosmos stock. The $30 million share offering was recently completed and significantly enhances our public flow without dilution to our shareholders. Despite the near-term impact, we believe the benefit of nearly doubling our public flow will provide long-term gains to our new and existing shareholders.
We made a number of key strategic decisions in 2012 regarding our exploration program, including adding a substantial new acreage position offshore Mauritania and expanding further acquisition offshore Morocco, which combined make Kosmos Energy to be one of the large stakeholders offshore North and West Africa today. We also executed sizable seismic programs in Morocco as well as in Suriname. We brought in Chevron to join our exploration efforts there.
In 2013, our exploration efforts are accelerating with focus on maturing the existing assets to the drilling stage as well as capturing additional near and longer term opportunities for drilling. In Cameroon, drilling operations are now underway at the Sipo Prospect on the Ndian River Block, albeit it's a little later than we had planned due to logistical challenges with the (river) process. Results are likely to be in April of this year.
As a reminder, Sipo is our 150 million barrel oil equivalent prospect of tertiary age with multiple similar structures in the block. Kosmos operates the well with 100% working interest. Offshore Morocco we have established leading acreage positions in two basins, Agadir Basin in the north and the Aaiun Basin in the South. We're continue to mature identify prospects through seismic interpretation and that finding on our first phase of exploration drilling to include between two and three new wells testing both pre and post-salt opportunities, beginning as early as late this year. We've received the final volumes of seismic data and we're very excited by the early interpretation to provide the diverse set of opportunities with multiple barrel potential.
Offshore Morocco has garnered a high level industry interest in both its shallow and deeper water petroleum systems with a number of U.S. and international independents and majors, all negotiating new acreage positions, while farming into positions near where Kosmos is located. This bodes well as we are now beginning the process to secure strategic partners to join our exploration efforts.
In addition, we are in discussions to access the necessary rig capacity to support not only our Morocco drilling programs, but also other exploration areas as well. We expanded our leading acreage position in Northwest Africa, by capturing nearly 27,000 square kilometer position Offshore the Mauritania. The concept of offshore Mauritania represents our first reentry into the upper cretaceous stratigraphic play concept along the West Africa Transform Margin where the industry following our success in Ghana spent over $1 billion executing this play without much success during the last six of seven years.
We have targets in large base of (indiscernible) potential in this proven petroleum system. We've proven all the fields up-to-date. We believe (indiscernible) leaks from the deeper source kitchen. We've now secured a seismic vessel to cover our entire Three Block position with 2D seismic commencing in March this year and we're close to contracting the larger 3D shoot to follow in the middle part of the year.
In South America offshore Suriname where we are supporting the same Upper Cretaceous stratigraphic play across the (R&D) margin, we just now received in the fast track data from our 3D (indiscernible) acquisition. We'll spend the large majority of 2013 working to identify opportunities for potential 2014 drilling.
Somewhere in Mauritania, there was a proven oil discovery of (dip) and we are in the Deepwater basin for composition close to where we believe (source) issue has generated substantial volumes of hydrocarbons.
On maturing these existing assets to the drilling stage, we're also intently focused on further expanding our exploration portfolio to provide significant exposure for additional success to several opportunities in the pipeline. I'm excited about where the company is today and more importantly, where we're headed in the future.
Let me now hand it over to Greg.
W. Greg Dunlevy - EVP and CFO: Thanks Brian, and good morning, everyone. In my prepared comments this morning, I will first review our financial results for the final quarter of 2012, while providing some of our expectations for 2013. To follow on Brian's comments earlier, I'd like to highlight the financial position we ended the year with, largely a result of improved performance and production increases at Jubilee, combined with a step-up in our financial capacity late last year.
Cash and cash equivalents at the end of the year was $515 million, while we had approximately $600 million availability in our debt facilities. Combined this provides over $1 billion in liquidity, marks the Kosmos' strongest financial positions since becoming a public company. Maintaining adequate financial liquidity is core to our business strategy, as it provides the capacity to entirely fund our development and growth programs in Ghana and also give us the ability to fund a high-impact exploration programs to the point of success and beyond. At the same time, an improved balance sheet provides flexibility to capture attractive new exploration opportunities as they arise.
With production ramping significantly in second half of 2012, we finished the year with six crude oil liftings, two of which incurred in the fourth quarter as expected. Total oil revenues for the fourth quarter were $218 million. On the cost side, oil and gas operations expense was expected and included cost related to two asset treatments performed at Jubilee, which averaged approximately $8 million (per piece).
Exploration expense for the quarter was impacted by the completion of a large 3D seismic program offshore Suriname. In addition, we finalized our farm-out to Chevron during the period. Previously we had been recording 100% of this cost through an exploration expense until the farm-out transaction was finalized.
Depreciation and depletion per barrel was positively impacted by the transfer of proved reserves from undeveloped to developed at the end of the year, largely a result of the successful acid stimulation program conducted throughout the year.
In conjunction with executing our new corporate revolver in the fourth quarter, we also made some changes to our existing reserve-based funding facility. This reduced the committed amount from $2 billion to $1.5 billion and associated with this change we expensed $5 million of deferred finance cost to the fourth quarter.
EPS for the quarter was $0.08 per share and net cash provided by operating activities totaled over $221 million for the quarter.
At this time, I'd like to transition to our expectations for 2013. Overall, our expected investment program totals $525 million, excluding the benefits of any future farm-outs with a little more than half of this amount targeted for development activity in Ghana. The remaining 45% goes towards our global exploration programs.
At the midpoint of our production guidance range, we estimate selling nine cargoes at Jubilee crude oil this year which marks a 50% increase from our 2012 sales volumes. At current Brent prices, this represents approximately $1 billion (annual) revenues for Kosmos and substantial operating cash flows that should more than meet our 2013 capital requirements. In the first quarter of the year, we anticipate two liftings of which the first has already occurred.
On the cost side, we anticipate total production expense per barrel to range from $10 to $12, consistent with the operator's guidance. In total, the midpoint of this range represents a greater than 30% reduction from the full year 2012 rate. Exploration expense is expected to be approximately $115 million for 2013 excluding the impact of (pending) unsuccessful well costs or farm-outs completed during the year. The majority of these costs are planned for seismic acquisition and interpretation. In addition to this amount, we will be recording approximately $10 million exploration expense related to the Sapele well which has been drilled to total depth that has been plugged and abandoned. G&A costs for the year should be relatively in line with full year 2012 and new G&A should average about $30 per barrel.
Our 10-K filed today will detail our current hedge positions which totaled 7 million barrels with approximately 50% of 2013 production coverage and 2.5 million barrels to be covered in 2014. With continued strong Brent pricing we would expect to add further to our 2014 positions and begin to lock in initial hedges for 2015. With the strengthened Brent outlook in the early part of 2013 versus year-end 2012 and should pricing remain at these levels, we anticipate a negative mark-to-market change for our hedging position at the end of the first quarter of this year.
Bearing in mind the challenges of giving guidance on taxes, we project total tax expense to be approximately $16 million to $20 million per lifting, consistent with 2012 actuals. We do anticipate a larger portion of our tax expense in 2013 to be current as we anticipate using up our remaining Ghana NOL carryforwards during the year.
Now, I will turn the call over to Darrell for an operations review.
Darrell McKenna - COO: Thanks Greg. Let me start off my comments discussing our planned development program for 2013, which is focused on maximizing production levels at Jubilee as well as commencing our next major project development at TEN. As Brian and Greg mentioned, results at Jubilee continue to be very strong and the field has been averaging about 110,000 barrel oil per day through the first two months of the year.
This is a result of a successful acid stimulation program in 2012, as well as the impact of production we have seen from the first Phase 1A wells. The new Phase 1A wells are exceeding our expectations and we now have well deliverability substantially exceeding the FPSO capacity.
Today, six of the eight Phase 1A wells have been drilled to various stages, with the remainder anticipated to be completed through 2013. As mentioned earlier, the acid stimulations have proven to be highly successful in resolving near wellbore scale build-up. Going forward, we intend to utilize an intervention vessel for these treatments which we anticipate to further reduce the cost.
Our outlook for full year average production for the field is in the range of 105,000 to 115,000 barrels oil per day. This includes high predicted uptime for the FPSO as well as a two-week scheduled downtime during the year for plant maintenance timing to be determined.
Recently, we have been performing at the high end of the range as we are testing the capacity limits of the FPSO, including gas handling capacity, water injection and oil throughput systems. In the third quarter of this year, we anticipate (re-willing) the gas compression system on the FPSO, which will provide immediate uplift to gas handling capacity and results in an increase in oil production.
Accordingly, we anticipate exiting 2013 with a production above 120,000 barrels of oil per day. At the same time, we're continuing to monitor the progress of the domestic gas export plan. The system is anticipated to pipe Jubilee gas to an onshore process facility and will hook up to multi-gas-driven power generation sites. We anticipate first volume of gas to shore in the second half of the year.
The deepwater channel partners are continuing to discuss with the government the pass-forward for the TEN plan of development. Our submitted PoD supports an oil-based FPSO development with scalable production capacity initially targeting 80,000 barrel oil per day and flexibility to expand based on performance and additional resources.
Similar to Jubilee, our plan focuses on gathering early dynamic reservoir information and cash flows from which we expand our full-field development. The operator has guided to a mid-teens development CapEx of approximately $4.5 billion assuming a lease to FPSO. Our portion of that amount would be approximately $900 million which is anticipated to be spent over a multi-year timeframe. Initial production is anticipated to be in the first half of 2016 which would be the range of 30 months to 36 months following project sanction.
With the base production capacity at both Jubilee and TEN, gross oil production combined is planned at over 200,000 barrel oil per day. Our net portion represents approximately 40,000 barrel oil per day or 2.5 times our 2012 average. Progress is also being made in regards to aligning the appraisal periods of Mahogany, Teak, and Akasa. In 2013, we are planning to add at least one appraisal tail in a Jubilee Phase 1 well to test the previously undrilled portion of the Mahogany reservoir. This is in addition to a potential well in Akasa and additional seismic interpretation at Teak.
From a development standpoint, we are looking at the concept of tying in selective MTA producing wells into the Jubilee FPSO to garner early long-term dynamic reservoir information. We also released our 2012 reserve data a few weeks ago, reflecting net production of 6 million barrels in 2012 as well as a reduction in 14 billion cubic feet of gas of our field gas reserves from the prior year to align with actual fuel usage on the FPSO. In addition, we transferred 15 million barrels of oil reserves from proved undeveloped to proved developed category, as a result of our success asset stimulations and Phase 1A drilling.
Our PV-10, which is available in our 10-K, showed an increased versus last year, largely as a result of improved production outlook at Jubilee and lower assumed operating development costs at the field.
The path forward for growth at Kosmos is clear and our vision to achieve it is simple and focused. First, executing Ghana by maximizing oil production and field recovery from existing and developable rediscoveries while maintaining strong capital discipline in our investments. Next, progress our existing exploration assets to the drilling stage which expose Kosmos to potential petroleum systems that are on major scale. And lastly, continue to build a premier exploration portfolio that will deliver multiple new basins shots on goal each and every year
Operator, we'd like to open the call for questions at this time.
Operator: Ed Westlake, Credit Suisse.
Ed Westlake - Credit Suisse: Congratulations on the strong cash flow in the quarter and the progress you're making on Jubilee. Just I want to focus and touch in on debottleneck. I mean, any kind of rough numbers in terms of how – what the maximum could be for the FPSO as you look at the kit that you have on board at the moment?
Brian F. Maxted - CEO: Thanks for that question. Let me hand over to Darrell.
Darrell McKenna - COO: Ed, as we mentioned, we're looking through all systems on board FPSO right now; gas, water and oil handling. We've started the re-wheeling project back in 2011 when we approved the equipment. We're assembling and putting that in place in 2013, and as we mentioned, we know we can hit the 120 nameplate once that project is completed. I guess the only other thing I could add is that we were looking at all the systems and looking for opportunities across the board and we can perhaps give some more guidance in later calls on that.
Ed Westlake - Credit Suisse: And then a broader question about Morocco. I've got the Plains' release in front of me. Obviously, they farmed in with a carry of $215 million next to your acreage and according to DeGolyer and MacNaughton, they were talking about an estimated gross un-risked mean recoverable resources in that block of around 7 million barrels which seems like obviously a very large number. Could you comment on potentially where you are in a farm-out of your own acreage and maybe a comment on is the D&M assessment as you look at the seismic in line with your thoughts for the potential of that block?
Brian F. Maxted - CEO: Brian again. Let me just add to that first question that you asked on debottlenecking. We're obviously in a great position with the resolution of the well productivity issues, with the remediation and the acidization jobs and we've now got productive capacity way above the nameplate FPSO capacity. And as Darrell pointed out, a number of options are open to us, shorter term and longer term to get this production up. And so, we continue to look at all of those. And the obvious long-term one that we need to add is the Jubilee export of gas which we understand from the state will be – quite yet will be in place sometime in the second half of this year. So, we obviously look forward to that because it provides us with the long-term solution. To answer your question about Morocco, yeah, I mean as you know, we were one of the – as we thought to push the horizons of our existing playing fields further away from the (transfer) margin in an effort to secure – identify and secure new portfolio opportunities for sales we're one of the first players to join the hunt for oil gas offshore Northwest Africa. And so, we had the – basically we had the pick of the acreage, and actually we had in Ghana and when we went into that in 2004. So, we are very happy with the position we've got. It was deliberately selected because it's in the part of the salt basin offering both coastal and pre-salt plays, and there are several fairways on that salt basin, one of which extends into the plains of Pura Vida Block. We have an addition to those several others that are included in our acreage and we are in the early stages of interpretation on that dataset, the 3D dataset. We're not in the game of promoting large numbers of track capacity and track potential. We're very focused on de-risking the whole petroleum system, including solid rocks and reservoirs. But what I will tell you is that everything is starting to come together quite nicely for us and we look forward to maturing that prospectivity ahead of farm-outs later in the year and then drilling as early as the end of the this year.
Operator: Ryan Todd, Deutsche Bank.
Ryan Todd - Deutsche Bank: If I could, one more follow-up on Morocco. If we look over the course of the rest of the year, at what point do you think you'll be in a position from a seismic analysis and data analysis point of view to communicate some of the additional clarity on targets and timings of the wells and so on?
Brian F. Maxted - CEO: Ryan, it's Brian again. In terms of the analysis and the valuation of prospectivity around the middle of the year, as you're I'm sure aware, the pre-salt interpretation in particular, takes a lot of tender loving care and as we define the pre-salt potential. So, it's going to take us some time. Then we will be looking to farm-in our during the early part of the second half of the year. So, we should be able to give some guidance on both prospectivity and hopefully new partners sometime around the third quarter. Then alongside all of that we are working to a secure a rig and all the various permits that we're going to need to get this drilling program underway.
Ryan Todd - Deutsche Bank: Then if I could – just one more follow-up on Jubilee. You've mentioned a few times now that you believe that the well deliverability is significantly above the capacity of FPSO right now, would you be willing say what you think the well deliverability is right now?
Brian F. Maxted - CEO: No, it's obviously enhanced significantly by – I would say that the original nine wells we haven't fully acidized all of them yet and we've done seven of the nine. But once we've done all of them, I think the original plan was to fill the boat with the Phase 1 wells and I think we'll be in a position to be able to do that. The big game changes has obviously been the Phase 1A wells, of which we've drilled three, I think two are tied in. They've benefitted from the learnings of the Phase 1 drilling and completion. The wells are designed quite differently. They are high angle or in one case horizontal. So the exposure to the reservoir interface is significantly greater and therefore the KH and the productivity is significantly higher. We've got much simpler completion strings as well. They have all got the – the (indiscernible) has got the capability of 20,000 barrels a day or more. So, with that you can – it's substantially above the current nameplate capacity of the FPSO.
Operator: John Malone, Global Hunter Securities.
John Malone - Global Hunter Securities: So, with TEN, I'm assuming you get the approval in the near-term. What do you think that could add in terms of reserves net to use for next year?
Brian F. Maxted - CEO: John, yeah, it's Brian. Let me pass that over to Darrell.
Darrell McKenna - COO: We won't hand out any numbers right now in terms of net or gross adds to the reserve base. We will just reiterate the mid case that the operator has put out is the 23 wells in development; our share 900 million and we're in the range of 300 to 360 in terms of total gross adds with the project itself. And we currently…
Brian F. Maxted - CEO: We have 17% of that.
Darrell McKenna - COO: Correct. And currently in the phase of negotiating several items with the government, so we're moving along with answering technical questions on behalf of the TEN PoD right now.
Brad Whitmarsh - IR: And John, Brad Whitmarsh. I would add to that that certainly it would be a process of booking over a number of years with initial bookings originally but then also – associated with the sanction but then also as the production comes on and you get some history information, you would expect to then continue with additional reserve bookings. So, we would anticipate that to be over a multi-year period.
Brian F. Maxted - CEO: Which is typical with these phased developments of course, as we try to find the right balance between developing the first phase of the field while it's not over-extended itself from a financial commitments investment standpoint. So, as you've seen on Jubilee, the ramp-up to reserves is delayed deferred because of the phasing nature of the development plan.
John Malone - Global Hunter Securities: And then the 80,000 initial productivity on the FPSO that you're talking about for TEN, will it be building away in Jubilee, whether that will be the late and then any further debottlenecking would be again to gas compression are sort of ancillary moves or would you build at 80,000 initially and really have a lot of room to expand on that? Can you give some sense as to what you're thinking in expanding beyond that maybe?
Darrell McKenna - COO: So, John, the (indiscernible) analogist to the Jubilee 120 that is the nameplate design and then of course, we look for opportunities once we get well capacity in the TEN field to the same point where Jubilee is where we exceed the nameplate. We look for those debottlenecking opportunities as we go along and there is all these room for minor adjustments, capital investments to add in, capacity as well as major with deck space potential on top of the FPSO. Those could be added later on as we see productivity and dynamic data performing as we anticipate.
Operator: Al Stanton, RBC.
Al Stanton - RBC Capital Markets: I have a quick question on exploration. You talked about the desire to bring in partners. So, I was wondering what you were looking to do. Whether it's just manage your financial risk or perhaps it was to in larger portfolio these number of players, including yourselves and Mauritania with big stakes as (indiscernible) less of more or are you quite happy with the geography you already have?
Brian F. Maxted - CEO: Really two fundamental drivers I think of securing partners. Obviously, the balance sheet in Kosmos is in great shape right now which gives us a lot of flexibility and a lot of opportunity in farm-outs. So, given that financial driver is actually not the primary issue for us. There are two other issues that are key to driving the strategy. One is, we've got very significant acreage positions and we believe that we got these sweet spots on each of these petroleum fairways but we don't know that for certain and we don't know exactly where the individual sweet spots are. And so, the exploration program is not a one well unless you get out, it's probably several wells in each of these opportunities. And so, primarily we need somebody who is going to join us for that exploration program who's not going to get cold feet after we drill one well and not have a Jubilee size success with the first (haul) if that's what happens. Then we look beyond that with respect to our partners in terms of what they bring to the table and not just to the exploration stage, but also at the development production stage as well, particularly in some of these deeper reservoirs and deeper waters. And so that's very much the thinking behind Chevron and Suriname. And then the second driver is, as you pointed out, everybody is looking for great opportunities right now to build that portfolio out and deliver exploration catalysts. Our strategy has historically been very organic greenfield working stuff out. But to move things forward and reduce the exploration cycle time these assets – the existing assets provide opportunities for us to potentially do swaps and farm-ins with other companies. So, to some extent that's a driver for us as well. As you mentioned, there's one or two companies along (indiscernible) in each of the basins and if we feel that that acreage brings play diversity to our opportunities which is something that what we look for, then that could be helpful, otherwise getting exposed to other petroleum systems that we're not kind of represented in is pretty important to us.
Al Stanton - RBC Capital Markets: Can I ask a quick follow-up? In terms of – do you have a strong view on gas if you drill early wells (from that) gas, is that a key for an exit or are you willing to try your luck?
Brian F. Maxted - CEO: Well, I mean as we've seen on other margins in the last couple of years if you can find a lot of gas it can be extremely valuable. So, the commercial risk related to getting the phased production wrong is not as high as it used to be at least if you find a lot of gas, and we will just have to see. I mean, I think if we're in a petroleum system where we think there is potentially giant volumes of gas, it makes sense to define what opportunity we have in those basins.
Operator: Anish Kapadia, TPH.
Anish Kapadia - Tudor Pickering: I just have a question on the Mahogany/Teak/Akasa fields. I was just wondering if you could give, I mean, more detailed update in terms of what you see the combined size over there. It sounds like you're moving away from a standalone development, much more likely to be a (attained) to Jubilee. So, yeah, just what you see the combined size and what the appraisal program will be going forward on that.
Brian F. Maxted - CEO: Let me get Darrell to take that one for you.
Darrell McKenna - COO: Yeah, I guess, Anish our primary focus right now is to align the appraisal time periods with the Government of Ghana. That's our big focus. And then we've got, as I mentioned in the call, we had some minor appraisal work ongoing. We have deep enough Phase 1 (AUL) to look at an undrilled portion of Mahogany, potential for across the second well from an appraisal standpoint and an additional seismic work we want to do on (TICK). So, it's still very much a high-value good resources there and we're looking at continuing to evaluate it. The range and numbers we are talking right now is in the 50 million to 150 million barrels oil equivalent range and potentially, we'll work through 2013 to finalize our appraisal program and have a better view of it by year end.
Anish Kapadia - Tudor Pickering: So, the 50 million to 150 million is for the combination of Mahogany (indiscernible)?
Brian F. Maxted - CEO: Correct.
Anish Kapadia - Tudor Pickering: Then just one follow-up on the tax situation. I am just wondering if you could say what percentage of the $16 million to $20 million per lifting you expect to be cash taxed and what walks into as deferred and also, when would you expect to start paying the additional profit tax in Ghana?
W. Greg Dunlevy - EVP and CFO: Anish, this is Greg. Obviously, it depends on oil prices since that's what drives profitability. But at our planned price I would say we're starting cash taxes late this year. To tell you the prices, more like second quarter mid-year. So, it really depends on the price taken for the overall profitability. As far as what I think you're asking which is the additional oil entitlement, at planned prices that's probably five years out and at current prices, it's probably a couple of years out before we get to the point where the (AOE) is payable.
Operator: Pavel Molchanov, Raymond James.
Pavel Molchanov - Raymond James: I wanted to go back to one of your earlier comments about reserves bookings; on Jubilee and obviously you guys didn't book any additional reserves in 2012, is there more left for you to book on Jubilee or is it that what we currently have?
Darrell McKenna - COO: Darrell McKenna here. So, we're very earlier days on Jubilee right now. We've got very conservative recovery factors worked into our numbers right now. We're working with our reserves certifier through the next – this year, of course, and then following years to bring those recovery factors up. There's lots of opportunity relative to Jubilee and we'll continue to look for technical opportunities that will bring that forward. So, it's very positive view on it right now. And of course, that will be predicated on the Phase 1A development and it will continue. And then there is follow-up development phase as Phase 2A, 2B that will actually bring in additional reserves as we go along.
Pavel Molchanov - Raymond James: Also to touch on one of the earliest comments you guys made in relation to the recent equity sale; given what you know about the investment desires of your two principal shareholders, what can you say about their near-term plans? Are they pretty well set after this recent monetization or do they have plans to get more in, let's say, over the next 12 months to 18 months?
Brian F. Maxted - CEO: Yeah, this is Brian. I'll pick that one and try and answer that. The recent offering was very much an asset by private equity sponsors and management to respond to existing a potential new investment need to looking to see a higher flow and better tradability of the stock that we felt was hanging over us. And we've obviously achieved that with effective doubling of the flow. I mean, we essentially sell the same amount of stock as we sold of the original IPO. And as you pointed out, the investors – private equity guys still own, what, over 60% or so of the Company. And typically, (Wahlberg) in particular have got more of a history in this – in (ceding) companies and taking them public. I've typically stayed in their investments over the course of a number of years they've not necessarily been market-timers, they've got out periodically; for example, in Newfield and Spinnaker where it was in the region of a decade of both of those. So, I don't expect anything different with Kosmos really. I think they will be opportunistic as far as they maybe and can be. Obviously, nobody was happy with the price that we sold a week or two ago. But there is no further plans for them to sell anymore stock at this point.
Darrell McKenna - COO: I think we all agree that the price is unreasonably low and as Brian alluded to earlier, the current price values the Company either approximately value and PV-10 of Phase 1 plus 1A reserves in Jubilee only, which is frankly from my personal perspective a bit silly.
Brian F. Maxted - CEO: And the timing of this would – it's been 18 months since we IPO'd the Company and we – just about every meeting we have with investors this issue closed was brought up. We felt it was a good time because structurally we were between derisking of the downside in Kosmos with the resolution of the Ghana productivity issues and the conformation that we have a world-class asset underpinning the value of this Company on the one hand and on the other hand, we were ahead and in between a pretty exciting exploration program as we go forward. So, it made sense from a structural standpoint.
Operator: (Indiscernible), Citigroup.
Bob Morris - Citigroup: Actually, it's Bob Morris. I apologize if you answered this earlier. I got disconnected during the Q&A. But you mentioned that wells in Phase 1 at Jubilee were exceeding expectations, what is your current total productive capacity? I think you said before it's like 35,000, 40,000 barrels a day above the 110,000 barrels a day you've producing?
Darrell McKenna - COO: Bob, let me jump on this again. This is Darrell. As Brian mentioned, all of the Phase 1A wells were benefited from lessons learned on Phase 1. They are all very high angle wells. There's like, you said, a horizontal well in there as well. We've learned a lot in terms of our progression through the year, stimulation program. We clearly exceed our FPSO capacity right now and Brian talked about 20,000 barrel per day average on the remaining wells. We have three remaining wells to tie in and put on production. So, you can kind of do the math in terms of where it's ultimately can get to. Again when we talked about FPSO debottlenecking, we have to look at all three shifts; in the gas, water and oil. So, it's a real balance to keep all those rolling kind of simultaneously.
Bob Morris - Citigroup: Let me ask you then. If you look at that, I know you've got (indiscernible), you've got few more to drill. A part of ignoring for now the possibility of (trying in) some of the (indiscernible), we do the Jubilee FPSO. Once you get the 120,000 barrels a day second half of this year assuming that remains your capacity with what you've got on the Jubilee and the Phase 1A wells, for how long a period can you maintain that level of 120,000 barrels a day?
Darrell McKenna - COO: Yeah, that's so we've talked about it in various conversations past, is the plateau is multi years and with MTAB, obviously that gives us even longer lights on it. One of our primary objectives as an operator team with the partners is to look at how we might potentially shorten that with both minor and major capital investments over time. So we'll always look for trying to bring that capacity up and bring it up above 120,000 (this time).
Operator: We've reached the end of our question-and-answer session for today. I'll now turn the floor back over to Brad Whitmarsh for closing comments.
Brad Whitmarsh - IR: Yeah, I want to thank everybody for joining us for the conference call today. Hopefully we answered everybody's questions. If you like to follow-up, please give me a call this afternoon. Thanks.
Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time and we thank you for your participation.