b'Fellow Shareholders,Over the last several years, Kosmos Energy has built on its deep expertise in exploration and record of basin opening success by pursuing a strategy designed to grow the company over the short-, medium- and long-term, and deliver significant value to shareholders.In that time, we have expanded the ways we are creating value through exploration by adding opportunities with a shorter time cycle to first production, discovered a world-scale gas resource that is now being developed, and diversified our production base. We have executed this strategy while maintaining the strength of our balance sheet, practicing rigorous financial discipline, and operating safely and efficiently.avenue for short-term growthCREATING VALUEcomplements our historicTHROUGH EXPLORATIONportfolio of medium- andCreating value through longer-term projects. exploration remains at the Since 2016, we haveheart of our business model. tripled production fromIn 2019, we expect to drill approximately 20,000 barrelssix wells targeting a net of oil equivalent per dayprospective resource of (boepd) to approximatelyapproximately 500 million ANDREW (ANDY) G. INGLIS 66,000 boepd. At the sameboe, an amount roughly equal Chairman and Chief Executive Officer time, we have more thanto our current 2P reserves.tripled our 2P reserves from approximately 145 millionOur infrastructure-led OUR EVOLUTIONexploration will focus on barrels to more than 500 The pace of change has million barrels. the Gulf of Mexico and been significant. Equatorial Guinea where we With this production basehave existing production We recently completed twoand a $60 per barrel Brent oil strategic acquisitions inand where there is sufficient price, Kosmos is in a stronginfrastructure capacity Equatorial Guinea and theposition within the industry. U.S. Gulf of Mexico that haveto quickly develop new We anticipate generatingdiscoveries. This shorter-cycle created significant value.around $1 billion of free cash Together, these acquisitionsexploration can typically flow over the next three yearsdeliver new production in less have built a powerful newafter investing in a capital platform for future growththan 18 months. program that is expected to through infrastructure- deliver production growthIn the Gulf of Mexico, we led exploration. In bothof 8-10% per annum, 2018expect to test four prospects transactions, we acquiredthrough 2021. This strongtargeting approximately 100 high-margin, oil-weightedcash flow supports the newmillion boe net resource, production assets, asdividend, which at 18 cents per25% larger than our existing well as prime explorationshare currently yields about2P resource. In addition, we acreage around the existing3% and is expected to allowhave a deep and growing infrastructure, enabling high- the company to reduce debtprospect inventory providing return, short-cycle subseato our target leverage range ofa multi-year exploration tie-back projects. This new1.0-1.5 net debt/EBITDAX. program targeting about four 1'