Citigroup Maintains Buy on Kosmos Energy After Suriname Acquisition

Citigroup has published a research report on Kosmos Energy

after the company's announcement today of acquiring acreage offshore Suriname in West Africa. In the report, Citigroup writes, "Today, Kosmos acquired a significant acreage position offshore Suriname, which is its first acquisition outside of West Africa. The two blocks combined cover an area of 3 million gross acres and are located in the Guyanas trend, which was opened up following Tullow's Zaedyus discovery. Recall that in September this year, the Zaedyus exploration well encountered ~230 feet of net oil pay. The objective of Kosmos' exploration program is to test whether the prospect is an extension of a Jubilee-type play system that was discovered in West Africa. Under the signed production sharing contracts with Suriname, Kosmos plans to acquire 3D seismic data before drilling, with first well results not expected until 2014. KOS will be an operator of the block with a 100% WI, but would most likely farm-out part of its interest if the seismic program were to prove successful." Citigroup maintains its Buy rating and $20 price target on Kosmos Energy, which is currently trading down $0.40 from yesterday's $11.50 closing price.