Kosmos searching for more investors
Kosmos coming to London
On 2 August, Kosmos announced that it will be seeking a main-market listing in London during the third quarter in order to access European investors. According to Reuters, the company indicates “There are a number of European investment funds and specialist international oil and gas investors that are currently unable to hold Kosmos’ shares due to their listing outside of a European regulated market”
We also believe it is a function of the differing attitudes the investor bases have towards exploration. Given the multitude of onshore producers, US investors typically place more emphasis on near-term cashflows and production. Especially since the advent of shale fracking, exploration risk is smaller and a greater attention is given to cashflows and financial leverage.
European exchanges tend to see more international explorers focussing on frontier areas, leading to a greater understanding of international exploration and willingness to value it. European exchanges are more used to taking a risked approach to longer term value ideas such as 2P/3P reserves and exploration.
This may explain why European analysts have higher target prices given Kosmos’ mix of production/ development/exploration assets.
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