Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in ‘‘Cautionary Statement Regarding Forward-Looking Statements’’ and ‘‘Item 1A. Risk Factors.’’ The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this annual report on Form 10-K. Overview Kosmos is a leading independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margins. Our assets include existing production and development projects offshore Ghana and Equatorial Guinea, large discoveries and significant further exploration potential offshore Mauritania and Senegal, as well as exploration licenses offshore Cote d’Ivoire, Equatorial Guinea, Morocco, Sao Tome and Principe, and Suriname. Recent Developments Corporate In February 2018, the Company amended and restated the Facility with a total commitment of $1.5 billion from a number of financial institutions with additional commitments up to $0.5 billion being available if the existing financial institutions increase their commitments or if commitments from new financial institutions are added. As a result of the financing, we will record a $5.7 million loss on the extinguishment of debt in the first quarter of 2018. See ‘‘—Liquidity and Capital Resources’’ for additional information regarding the Facility. Our revolving letter of credit facility agreement (‘‘LC Facility’’) has flexibility that allows us to increase or decrease the available amount as needed if the existing lender increases its commitment or if commitments from new financial institutions are added. During the first quarter of 2017, the LC Facility size was increased to $115.0 million and in April 2017, we reduced the size of our LC Facility to $70 million. In February 2018, the LC Facility was increased to $73 million to facilitate the issuance of additional letters of credit. In August 2017, we announced that our entire issued and outstanding share capital has been admitted to the standard listing segment of the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange’s (‘‘LSE’’) main market for listed securities under the ticker ‘‘KOS’’. The listing is expected to broaden Kosmos’ international investor base and provide access to an additional pool of capital. On December 22, 2017, the President of the United States signed P.L. 115-97, the Tax Cut and Jobs Act (the Tax Reform Act), into law. Many of the provisions of the Act are effective beginning January 1, 2018, most notable of which is the reduction in the U.S. corporate income tax rate from 35% to 21%. We are required to adjust our U.S. net deferred tax assets for the effect of changes in tax laws or tax rates during the period that includes the date of enactment. Accordingly, we have recorded a $16.7 million charge to deferred tax expense in December 2017 as a result of reducing our net deferred tax assets. The changes required by the Tax Reform Act will have a positive, though immaterial impact, on our effective tax rate. Rig Agreement In January 2017, Kosmos Energy Ventures (‘‘KEV’’), a subsidiary of Kosmos Energy Ltd., exercised its right under the amended Atwood Achiever rig agreement with Atwood Oceanics, Inc. to 78