b'\x7f the covenants contained in the agreements governing our outstanding indebtedness will limit ourability to borrow additional funds, dispose of assets, pay dividends and make certain investments;\x7f a high level of indebtedness may place us at a competitive disadvantage compared to ourcompetitors that are less leveraged and therefore, may be able to take advantage ofopportunities that our indebtedness could prevent us from pursuing;\x7f our debt covenants may also affect our flexibility in planning for, and reacting to, changes in theeconomy and in our industry;\x7f additional hedging instruments may be required as a result of our indebtedness;\x7f a high level of indebtedness may make it more likely that a reduction in our borrowing basefollowing a periodic redetermination could require us to repay a portion of our then-outstandingbank borrowings; and\x7f a high level of indebtedness may impair our ability to obtain additional financing in the futurefor working capital, capital expenditures, acquisitions, general corporate or other purposes.A high level of indebtedness increases the risk that we may default on our debt obligations. Ourability to meet our debt obligations and to reduce our level of indebtedness depends on our futureperformance. General economic conditions, risks associated with exploring for and producing oil andnatural gas, oil and natural gas prices and financial, business and other factors affect our operationsand our future performance. Many of these factors are beyond our control. We may not be able togenerate sufficient cash flows to pay the interest on our indebtedness and future working capital,borrowings or equity financing may not be available to pay or refinance such indebtedness. Factors thatwill affect our ability to raise cash through an offering of our equity securities or a refinancing of ourindebtedness include financial market conditions, the value of our assets and our performance at thetime we need capital.We are a holding company and our ability to make payments on our outstanding indebtedness, including ourSenior Notes and our commercial debt facility, is dependent upon the receipt of funds from our subsidiaries byway of dividends, fees, interest, loans or otherwise.We are a holding company, and our subsidiaries own all of our assets and conduct all of ouroperations. Accordingly, our ability to make payments of interest and principal on the Senior Notes andcommercial debt facility will be dependent on the generation of cash flow by our subsidiaries and theirability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they areguarantors, our subsidiaries will not have any obligation to pay amounts due on the notes or to makefunds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to,make distributions to enable us to make payments in respect of the Senior Notes or the commercialdebt facility. Each subsidiary is a distinct legal entity and, under certain circumstances, legal andcontractual restrictions may limit our ability to obtain cash from our subsidiaries. The indenturegoverning the Senior Notes limits the ability of our subsidiaries to incur consensual encumbrances orrestrictions on their ability to pay dividends or make other intercompany payments to us, withsignificant qualifications and exceptions. In addition, the terms of the commercial debt facility limit theability of the obligors thereunder, including our material operating subsidiaries that hold interests inour assets located offshore Ghana and Equatorial Guinea and their intermediate parent companies(other than Kosmos Energy Holdings) to provide cash to us through dividend, debt repayment orintercompany lending. In the event that we do not receive distributions from our subsidiaries, we maybe unable to make required principal and interest payments on our indebtedness, including the SeniorNotes and commercial debt facility.64'