Andy: It's probably overall for phase one plus, there really isn't any expenditure on the facilities. You can move from 430 to 630 production through the FPSO with no spend. Therefore, it's about the additional wells that will sustain the portfolio beyond the end of the decade. And therefore, the spend for that will really be in 28, 29. So you take all of that, I don't think you'll see a significant, you know, it's early days yet, but the capital for 27 is going to be pretty tight, maybe a little higher than today for 26, maybe around 400. But, you know, underneath that, you've got the sustaining capex that we're spending today in drilling in Ghana and the Gulf. you know, that will sort of be pretty similar in 27. And then you've got a little more growth capex, yeah? But that allows you then, though, to continue to move forward these high-quality prospects.
David: Okay, thanks, Andy. That's very clear. Very quick follow-up then, actually, if I might. Can you just remind us if there is a specific leverage target, please?
Gus: Well, I'll pass it over to Neil. Yeah. And so, you know, David, we've always talked about getting to sort of one and a half times in a normalized oil price environment. And, you know, again, I think what you'll see this year is we'll, you know, we've said we'll take off around 20 percent of the debt, which we started this year at three billion to get into sort of the mid twos. And then, you know, with higher oil prices, you can continue to flex that down. And then the EBITDA, the EBITDA of the business jumps quite, quite largely. So, you know, last year we did something in the five to six hundred million dollar range. We should be north of a billion dollars. this year in terms of where we get to. And so that leverage ratio compresses quite quickly. But I think, you know, again, from a, you know, as Andy said, the capital has continued to stay a bit tight in 27, but that allows us to advance the projects and at the same time generate free cash flow to pay down the debt. So the goal is to do both at the same time and get leverage, you know, what we'd like to see is sort of the net debt fall below, you know, $2 billion first in terms of a milestone. So we'll make a good dent in that progress this year. And again, we're seeking to sort of maximize every dollar in terms of debt pay down.
David: Great. That's very clear. Thanks, Gus.
Operator: Again, if you would like to ask a question, just press star followed by the number one on your telephone keypad. And our next question comes from the line of Bob Brackett with Burstein Research. Bob, please go ahead.
Bob Brackett: Good morning. I'd like to talk a bit about Senegal and GTA. You mentioned the phase one plus, which I expect is a 300 million cubic feet a day gas pipeline that brings ultimately molecules up to that Gandon power station. Can you talk about how to think about the unit economics? You mentioned it's reducing OPEX. How do we think about the volume? Is it your 27%? And how do we think about price?
Andy: Yeah, Bob, good questions. You know, I think that the first thing is, you know, it's somewhere that, you know, the expansion of GTA, I sort of think about it being sort of 200 million rather than 300, yeah? You can go from today, we're pushing about 430 million standard cubic feet through the NPSO. You can get a 630 without actually spending any capital on it. You know, if you want to go up higher than that, there is an increased demand you know, there are incremental spend on capital to get there, relatively modest. But if you think about the first wave being sort of 200, you know, the first piece of that domestically, piece that will be used in Mauritania, piece that will be used in Senegal, the first piece in Senegal will flow to the Gandon Power Station, as you said. Then the RGS, which is the pipeline company in Senegal, will continue to build that pipeline south from San Luis to Dakar. There's actually four phases. You can look online and see what they're doing. And ultimately allows you to build out that sort of power station infrastructure, you know, down towards Dakar. So it's going to be a phased process that'll start to build through 27, 28, 29 and to the end of the decade. Actually, in terms of unit economics, the capital spend for us is very low, sort of de minimis is the way to think about it for that 200 million standard cubic feet. There is capital spent to sustain the profile at the back end of the decade, which is associated with more wells to keep you at that sort of 6, 36, 50 million standard cubic feet. But ultimately, it is a very low-cost expansion. and therefore the margin that you're getting from it is high. You're almost, from an operating cost perspective, there is no FLNG lease, and therefore your margin on those versus the export is higher.
Gus: And again, I think the easy way to think about it, Bob, is just, again, we've said sort of Phase one OPEX is around sort of $5 to $6 per MMBTU. That's fixed cost, essentially. The costs don't change with the expansion on the operating cost. And therefore, you get a sort of multiplying effect in terms of reducing that to sort of the sub four type area. So again, I think every incremental molecule helps bring down that break even faster.
Andy: And then for the domestic gas, you're not paying the FLNG cost, which is part of that sort of $4.
Bob Brackett: A follow-up, please. I'm seeing mixed messages in the press around Yakart-Turanga. Can you give us an update on what's happening there?
Andy: Yeah, I don't think it's sort of mixed messages, Bob. I think that the key message out of it is around... the importance of domestic gas for Senegal's growth. You know, relatively large population, growing population, reducing the cost of power, electricity is a key priority for the government. And therefore, you know, their goal is to ensure that they can advance those projects and do that in a timely way. But for Cosmos, it was about saying, we want to invest in GTA. We want to enable that source of domestic gas to be our focus. And therefore, we did relinquish Yucca-Turanga. The government has picked it up. I believe we'll leave that development, and it will be another source of gas for the country. But, you know, given the scale of the economic growth, I think, that can be seen basically from population growth, then it needs all the gas, the country needs all the gas that it can take. Mauritania is a slightly smaller population, so their pull for domestic gas will be lower and can be fed by GTA. So this is good for both countries. And, you know... Clearly, world events today are all about how do you create security and affordability, and the extension now of both GTA and Yaka Turanga will enable Senegal to achieve those goals, and we're fully supportive of it.
Operator: Very clear. Thanks. Great. Thanks, Bob. Our next question comes from the line of Mark Wilson with Jefferies.
Operator: Mark, please go ahead.
Mark Wilson: Yeah, thank you. I'm going to ask a question for an investor to start off with. It's probably more for Neil. Just wondering about the derivative cash losses in Q1 and what we should expect in 2026. And obviously, this speaks to this maximizing of deleverage. So yeah, cash derivatives, Neil?
Gus: Yeah, it's clearly a large mark-to-market change. And again, we came into the year with an asset about $50 million, and then there's a $250 million mark-to-market loss just given we got payout in January and February on those hedges, and then clearly the market moved. From a cash perspective, it costs about $30 million, so not a ton of cash, actually. But clearly, the implied shift in the forward curve has an impact on the derivative side. Our hedges are largely sort of focused on sort of the first half of this year. So we talked about we have 6 million barrels left for the rest of the year. About half of that matures in Q2 and the other half over the second half of the year. And so, you know, there's a larger exposure in Q2 and then sort of less and then that sort of steps down again in Q3 and Q4. And so, again, it'll ultimately depend on sort of what the actual realized dated Brent is. But we feel okay with our exposure on 26 and have really been working on adding some additional downside protection in 27. And so, again, I think we're good in terms of where we are. We'll have more physical exposure from a pricing perspective, as we talked about in the call. mark into Q. And so there's a bigger, you know, call it unhedged volume that we'll be able to realize in the second quarter, um, with more physical volume being sold versus the hedges. Um, so again, I think Q2 is sort of shaping up quite nicely and then the hedging exposure comes down, uh, at least more access to the upside, um, from the physical sale.
Mark Wilson: Okay. Thank you. And, and Andy, can I, uh, a slightly bigger picture question. Um, I'm just wondering what contact you've had with, uh, if at all, with the new management set up at BP, given Tour 2 is performing so well. I'm just wondering if there's any commentary you could give there. Thank you.
Andy: No, look, you know, things change and they don't change. For us, clearly, and for BP, ensuring that GTA... runs both efficiently from a cost perspective, but equally well from a production perspective. We deliver on the cargo forecast, etc. So that's all going well, Mark, and I don't think there's any, you know, we sort of see no change. Clearly Meg, the new CEO, has significant experience of Senegal from her experience at Woodside with Sangamar. So as it were, we bring... You know, it's great, somebody who has deep industry knowledge and very specific knowledge, actually, of that specific geography. So, you know, the real sort of answer is, you know, as you'd expect, is that we're focused on the operational side at the moment and ensuring that we deliver on the targets we've set, and actually that's exactly what we're doing.
Mark Wilson: Okay, thank you. And then just one last point, just checking on the Jubilee guidance. Is there any scheduled downtime on the vessel in the rest of the year, maintenance or anything?
Andy: I think you've asked that question before. Yeah, I like that question. You do like that question, Mark. The honest answer is no. Okay, so none in 2016. And then in 27, I think that's what the operator told you last time. So, no, the answer is no scheduled maintenance. And look, if I go to the essence of your question, right, are we comfortable with our guidance? The answer is sort of yes. You know, as we started the year, we were clear it's all about forecasting, yeah, but of course, you know, sort of getting close to the middle of May, you have a lot of extra information. You know, the field started the year at, you know, we ended the year of 25 at 57,000 barrels of oil per day. We stabilized it. We've added two wells. It's delivered at 70,000 barrels of oil per day. year today. So very strong performance with two wells added. We now have drilled three wells. We have all of the logging information, pressure data, etc. So we're confident we're adding wells that will add an additional 20,000. So you've built the base of 70,000 You add another 20 and you can see on our plot that we showed in the presentation the resulting production profile. So I think to the point really to add is, look, we're further down the process. We've clearly delivered strongly. In the first four or five months of the year, we've got additional data from the wells that we've drilled, and we're now starting that completion process. So I think as every month goes by, we're more confident that we can deliver on the guidance that we've given, with no shutdowns in 26.
Mark Wilson: I've made a very clear note of that. Thank you very much.
Andy: Thanks, Mark.
Operator: And your next question comes from the line of Stella Gridge with Barclays. Stella, please go ahead.
Stella Gridge: Hi there. Good morning, good afternoon, and many thanks for all the updates today. I just wondered if I could ask you for a bit more color or comments on how you're thinking about the debt profile going forward. You've taken many actions year-to-date to address many different parts of the capital structure. There are real discussions about you say they're going to commence around about mid-year. Could you give us any sense of what you think the lenders will be looking for there? Would it be sort of the visibility around Jubilee, for instance, you know, in this supportable price environment? Yes, Stella. Go for it.
Gus: No, good. Yeah, well, I'm happy to give you that. And then if you have another question, we can follow up. But yeah, like you said, we've been quite busy on the financing front. Again, what we wanted to accomplish is pretty clear in terms of clearing out the near-term maturities and bolstering liquidity, sort of stabilize the ratings and continue to reduce the absolute amount of debt. So again, I'd say we're well on track to deliver all of that. You know, we've cleared the 26s and most of the 27s at this point. um, liquidity is, you know, 500 million and growing, uh, and, um, uh, and we're on our way down, uh, on the debt pay down to get to, you know, uh, into the low twos, um, from a leverage standpoint by the end of the year. So again, I think all that's on track and that leaves sort of the, as you referenced, sort of the next financing, um, objective for us to work on is the extension of the RBL. Um, just, uh, to recall that this would be the, the sixth, uh, rbl extension that that that we go through or that i've been through uh here at cosmos and so um you know again normally just you know it's a seven-year facility it doesn't amortize for three years and then you end up extending the tenor every three years and so um you know met with the banks recently again they continue to be um really supportive um yeah they are looking for jubilee performance to continue to improve but again i think that process is well underway, as Andy noted. And otherwise, again, I think they want to see the same thing that our creditors and equity holders want to see, which is us to bring the leverage down. So as we execute the plan, again, I feel pretty good about going into that process in the middle this year. And then that'll basically kick the maturity from, the ultimate maturity from sort of 29 to sort of the 30 to 33 timeframe.
Stella Gridge: Super, thank you for that. And just the final bit I had wanted to ask about, I thought it was very interesting in the Fitch report that they were talking about potentially trying to get down into the 800s to refinance a smaller amount in the RBL. Is that something you could comment on as well?
Gus: Yeah, and so we exited 1Q with about a billion dollars drawn on the facility with the EG proceeds coming in around 150-ish million free cash flow. Again, I think naturally the RBL will reduce into that range from a drawn perspective. From a total facility size perspective, though, which is what will generally extend, I wouldn't expect much change. We were at sort of $1.3 billion facility size We probably don't need that much just because we're bringing down the absolute amount of both bonds and bank within the capital structure. So maybe it's one and a quarter-ish in terms of facility size. I wouldn't expect the size to change dramatically, though, again, I think the bigger focus on our side is just reducing the actual drawn amount.
Operator: That's so clear. Very excellent. Since there are no further questions at this time, I would like to bring the call to a close.
Operator: Thanks to everyone joining today. You may disconnect your lines at this time. Thank you for your participation.
