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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements In accordance with ASC 820 — Fair Value Measurement, fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. We prioritize the inputs used in measuring fair value into the following fair value hierarchy: •Level 1 — quoted prices for identical assets or liabilities in active markets. •Level 2 — quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data by correlation or other means. •Level 3 — unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, for each fair value hierarchy level:
| Fair Value Measurements Using:
| Quoted Prices in |  |  |  |  |  |
| Active Markets for |  | Significant Other |  | Significant |  |
| Identical Assets |  | Observable Inputs |  | Unobservable Inputs |  |
| (Level 1) |  | (Level 2) |  | (Level 3) |  | Total
| (In thousands)
September 30, 2025 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Commodity derivatives | $ | — |  |  | $ | 21,884 |  |  | $ | — |  |  | $ | 21,884 |
Provisional oil sales | — |  |  | 999 |  |  | — |  |  | 999 |
Interest rate derivatives | — |  |  | 178 |  |  | — |  |  | 178 |
Decommissioning trust fund: |  |  |  |  |  |  |
Debt securities | — |  |  | 23,478 |  |  | — |  |  | 23,478 |
Liabilities: |  |  |  |  |  |  |
Commodity derivatives | — |  |  | (3,517) |  |  | — |  |  | (3,517) |
Total | $ | — |  |  | $ | 43,022 |  |  | $ | — |  |  | $ | 43,022 |
December 31, 2024 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Commodity derivatives | $ | — |  |  | $ | 7,226 |  |  | $ | — |  |  | $ | 7,226 |
Provisional oil sales | — |  |  | 2,242 |  |  | — |  |  | 2,242 |
Interest rate derivatives | — |  |  | 2,202 |  |  | — |  |  | 2,202 |
Decommissioning trust fund: |  |  |  |  |  |  |
Debt securities | — |  |  | 10,653 |  |  | — |  |  | 10,653 |
Total | $ | — |  |  | $ | 22,323 |  |  | $ | — |  |  | $ | 22,323 |
The book values of cash and cash equivalents and restricted cash approximate fair value based on Level 1 inputs. Joint interest billings, oil and gas sales and other receivables, and accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. Our long-term receivables, after any allowances for credit losses, and other long-term assets approximate fair value. The estimates of fair value of these items are based on Level 2 inputs. Commodity Derivatives Our commodity derivatives represent swaps, crude oil collars, put options and call options for notional barrels of oil at fixed Dated Brent and NYMEX WTI oil prices. The values attributable to our oil derivatives are based on (i) the contracted notional volumes, (ii) independent active futures price quotes for the respective index, (iii) a credit-adjusted yield curve applicable to each counterparty by reference to the credit default swap (“CDS”) market and (iv) an independently sourced estimate of volatility for the respective index. The volatility estimate was provided by certain independent brokers who are active in buying and selling oil options and was corroborated by market-quoted volatility factors. The deferred premium is included in the fair market value of the commodity derivatives. See Note 7 — Derivative Financial Instruments for additional information regarding the Company’s derivative instruments. Provisional Oil Sales The value attributable to provisional oil sales derivatives is based on (i) the sales volumes and (ii) the difference in the independent active futures price quotes for the respective index over the term of the pricing period designated in the sales contract and the spot price on the lifting date. Interest Rate Derivatives Our interest rate derivatives consist of interest rate swaps, whereby the Company pays a fixed rate of interest and the counterparty pays a variable SOFR-based rate. The values attributable to the Company’s interest rate derivative contracts are based on (i) the contracted notional amounts, (ii) SOFR yield curves provided by independent third parties and corroborated with forward active market-quoted SOFR yield curves and (iii) a credit-adjusted yield curve as applicable to each counterparty by reference to the CDS market. Decommissioning Trust Fund In April 2024, a decommissioning trust agreement with the Jubilee unit partners to cash fund future retirement costs associated with the Jubilee Field was finalized. Each partner will contribute annually to the trust in proportion to its respective paying interest of the estimated future dismantlement, abandonment and restoration costs associated with the decommissioning of the Jubilee Field. Contributions to the trust are used by the trustee of the fund, the Bank of Ghana, to purchase and sell authorized securities at the direction of the Jubilee unit partners. As of September 30, 2025, the investments held in the decommissioning trust fund are US Treasury debt securities. We have classified the investments as trading securities and recorded such investments at fair market value as a long-term investment in our consolidated balance sheet using observable inputs including Kosmos’ share of the fund and broker/dealer bid/ask prices of the investments held by the fund at September 30, 2025. Contributions made to the decommissioning trust are reported as investing activities in our consolidated cash flows. All realized and unrealized gains and losses resulting from the sales and maturities or changes in fair value of the securities are recognized in Other income, net. During the nine months ended September 30, 2025, we contributed $11.5 million to the decommissioning trust fund. The following table summarizes Kosmos’ portion of the investment activity in debt securities held by the decommissioning trust during the three and nine months ended September 30, 2025 and 2024:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Type of Security |  | Purchases |  | Net Proceeds (1) |  | Unrealized Gain (Loss) |  | Purchases |  | Net Proceeds (1) |  | Unrealized Gain (Loss)
2025 |  |  |  |  |
Debt securities |  | $ | 245 |  |  | $ | — |  |  | $ | 43 |  |  | $ | 12,651 |  |  | $ | — |  |  | $ | 174 |
Cash and cash equivalents |  | — |  |  | (3) |  |  | — |  |  | — |  |  | (748) |  |  | — |
Other(1) |  | — |  |  | (17) |  |  | — |  |  | — |  |  | 149 |  |  | — |
Total |  | $ | 245 |  |  | $ | (20) |  |  | $ | 43 |  |  | $ | 12,651 |  |  | $ | (599) |  |  | $ | 174 |
2024 |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cash and cash equivalents |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other(1) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1) Represents net receivables relating to interest. The following table presents the costs and fair values of investments in debt securities held in the decommissioning trust fund according to the contractual maturities at September 30, 2025 and December 31, 2024:
|  | September 30, 2025 |  | December 31, 2024
|  | Cost |  | Estimated Fair Value |  | Cost |  | Estimated Fair Value
|  | (In thousands)
Less than 5 years |  | $ | 23,359 |  |  | $ | 23,478 |  |  | $ | 10,708 |  |  | $ | 10,653 |
5 years to 10 years |  | — |  |  | — |  |  | — |  |  | — |
Due after 10 years |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | 23,359 |  |  | $ | 23,478 |  |  | $ | 10,708 |  |  | $ | 10,653 |
Debt The following table presents the carrying values and fair values at September 30, 2025 and December 31, 2024:
| September 30, 2025 |  | December 31, 2024
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
| (In thousands)
7.125% Senior Notes | $ | 249,716 |  |  | $ | 249,448 |  |  | $ | 249,315 |  |  | $ | 246,565 |
7.750% Senior Notes | 348,540 |  |  | 341,022 |  |  | 347,910 |  |  | 339,927 |
7.500% Senior Notes | 398,232 |  |  | 352,978 |  |  | 397,672 |  |  | 379,404 |
8.750% Senior Notes | 495,418 |  |  | 386,875 |  |  | 494,997 |  |  | 470,965 |
3.125% Convertible Senior Notes | 392,718 |  |  | 254,000 |  |  | 391,603 |  |  | 332,792 |
Facility | 1,125,000 |  |  | 1,125,000 |  |  | 900,000 |  |  | 900,000 |
Total | $ | 3,009,624 |  |  | $ | 2,709,323 |  |  | $ | 2,781,497 |  |  | $ | 2,669,653 |
The carrying values of our 7.125% Senior Notes, 7.750% Senior Notes, 7.500% Senior Notes, 8.750% Senior Notes and 3.125% Convertible Senior Notes represent the principal amounts outstanding less unamortized discounts. The fair values of our 7.125% Senior Notes, 7.750% Senior Notes, 7.500% Senior Notes, 8.750% Senior Notes and 3.125% Convertible Senior Notes are based on quoted market prices, which results in a Level 1 fair value measurement. The carrying value of the Facility approximates fair value since they are subject to short-term floating interest rates that approximate the rates available to us for those periods. Nonrecurring Fair Value Measurements - Long-lived assets Certain long-lived assets are reported at fair value on a non-recurring basis on the Company's consolidated balance sheet. These long-lived assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. Our long-lived assets are reviewed for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company calculates the estimated fair values of its long-lived assets using the income approach described in the ASC 820 — Fair Value Measurements. Significant inputs associated with the calculation of estimated discounted future net cash flows include anticipated future production, pricing estimates, capital and operating costs, market-based weighted average cost of capital, and risk adjustment factors applied to reserves. These are classified as Level 3 fair value assumptions. The Company utilizes an average of third-party industry forecasts of Dated Brent, adjusted for location and quality differentials, to determine our pricing assumptions. In order to evaluate the sensitivity of the assumptions, we analyze sensitivities to prices, production, and risk adjustment factors. During the three and nine months ended September 30, 2025 and 2024, the Company did not recognize impairment of proved oil and gas properties. If we experience material declines in oil pricing expectations in the future, significant increases in our estimated future expenditures or a significant decrease in our estimated production profile, our long-lived assets could be at risk of impairment.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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