Kosmos Energy Ltd. 10-Q

Financial Statements (unaudited)

Item 1. Financial Statements 7 Consolidated Balance Sheets 7 Consolidated Statements of Operations 8 Consolidated Statements of Stockholders’ Equity 9 Consolidated Statements of Cash Flows 10 Notes to Consolidated Financial Statements 11 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 Item 3. Quantitative and Qualitative Disclosures about Market Risk 51 Item 4. Controls and Procedures 53 PART II. OTHER INFORMATION Item 1. Legal Proceedings 54 Item 1A. Risk Factors 54 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 54 Item 3. Defaults Upon Senior Securities 54 Item 4. Mine Safety Disclosures 54 Item 5. Other Information 54 Signatures 55 Item 6. Exhibits 55 Index to Exhibits 56 2 Table of Contents KOSMOS ENERGY LTD. GLOSSARY AND SELECTED ABBREVIATIONS The following are abbreviations and definitions of certain terms that may be used in this report. Unless listed below, all defined terms under Rule 4-10(a) of Regulation S-X shall have their statutorily prescribed meanings. “2D seismic data” Two‑dimensional seismic data, serving as interpretive data that allows a view of a vertical cross‑section beneath a prospective area. “3D seismic data” Three‑dimensional seismic data, serving as geophysical data that depicts the subsurface strata in three dimensions. 3D seismic data typically provides a more detailed and accurate interpretation of the subsurface strata than 2D seismic data. “API” A specific gravity scale, expressed in degrees, that denotes the relative density of various petroleum liquids. The scale increases inversely with density. Thus lighter petroleum liquids will have a higher API than heavier ones. “ASC” Financial Accounting Standards Board Accounting Standards Codification. “ASU” Financial Accounting Standards Board Accounting Standards Update. “Barrel” or “Bbl” A standard measure of volume for petroleum corresponding to approximately 42 gallons at 60 degrees Fahrenheit. “BBbl” Billion barrels of oil. “BBoe” Billion barrels of oil equivalent. “Bcf” Billion cubic feet. “Boe” Barrels of oil equivalent. Volumes of natural gas converted to barrels of oil using a conversion factor of 6,000 cubic feet of natural gas to one barrel of oil. “BOEM” Bureau of Ocean Energy Management. “Boepd” Barrels of oil equivalent per day. “Bopd” Barrels of oil per day. “BP” BP p.l.c. and related subsidiaries