Schedule I Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2011

Schedule I Condensed Parent Company Financial Statements

Schedule I Condensed Parent Company Financial Statements

Schedule I—Condensed Parent Company Financial Statements

        Under the terms of agreements governing the indebtedness of subsidiaries of Kosmos Energy Ltd. for 2011, 2010 and 2009 (collectively "KEL," the "Parent Company"), such subsidiaries are restricted from making dividend payments, loans or advances to KEL. Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the Parent Company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year.

        The following condensed parent-only financial statements of KEL have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X and included herein. The Parent Company's 100% investment in its subsidiaries has been recorded using the equity basis of accounting in the accompanying condensed parent-only financial statements. The condensed financial statements should be read in conjunction with the consolidated financial statements of Kosmos Energy Ltd. and subsidiaries and notes thereto.

        The terms "Kosmos," the "Company," and similar terms when used in the present tense or prospectively or for historical periods since May 16, 2011 refer to Kosmos Energy Ltd. and its wholly owned subsidiaries and for historical periods prior to May 16, 2011 refer to Kosmos Energy Holdings and its wholly owned subsidiaries, unless the context indicates otherwise.

KOSMOS ENERGY LTD.

CONDENSED PARENT COMPANY BALANCE SHEETS

(In thousands, except share data)

	December 31,
	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	352,872		$	—
Prepaid expenses and other		394			—
Total current assets		353,266			—
Investment in subsidiaries at equity		665,096			363,507
Total assets	$	1,018,362		$	363,507
Liabilities and shareholders' equity/unit holdings equity
Current liabilities:
Accounts payable to subsidiaries	$	1,158		$	—
Total current liabilities		1,158			—
Convertible preferred units, 100,000,000 units authorized:
Series A—zero and 30,000,000 units issued at December 31, 2011 and 2010, respectively		—			383,246
Series B—zero and 20,000,000 units issued at December 31, 2011 and 2010, respectively		—			568,163
Series C—zero and 884,956 units issued at December 31, 2011 and 2010, respectively		—			27,097
Shareholders' equity/unit holdings equity:
Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at December 31, 2011 and 2010		—			—
Common shares, $0.01 par value; 2,000,000,000 authorized shares; 390,530,946 and zero issued at December 31, 2011 and 2010, respectively		3,905			—
Common units, 100,000,000 units authorized; zero and 19,069,662 issued at December 31, 2011 and 2010, respectively		—			516
Additional paid-in capital		1,629,453			—
Accumulated deficit		(616,148	)		(615,515	)
Treasury stock, at cost, 649,818 and zero shares at December 31, 2011 and 2010, respectively		(6	)		—
Total shareholders' equity/unit holdings equity		1,017,204			(614,999	)
Total liabilities, convertible preferred units and shareholders' equity/unit holdings equity	$	1,018,362		$	363,507

KOSMOS ENERGY LTD.

CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS

(In thousands)

	December 31,
	2011			2010			2009
Revenues and other income:
Oil and gas revenue	$	—		$	—		$	—
Interest income		248			44			15
Total revenues and other income		248			44			15
Costs and expenses:
General and administrative		5,064			21,187			11,580
General and administrative—related party		—			16,830			10,663
Depreciation and amortization		—			—			39
Other expenses, net		10			2			(14	)
Equity in (earnings) losses of subsidiaries		(27,183	)		207,697			57,494
Total costs and expenses		(22,109	)		245,716			79,762
Income (loss) before income taxes		22,357			(245,672	)		(79,747	)
Income tax expense		—			—			—
Net income (loss)	$	22,357		$	(245,672	)	$	(79,747	)

KOSMOS ENERGY LTD.

CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOWS

(In thousands)

	Years Ended December 31,
	2011			2010			2009
Operating activities
Net income (loss)	$	22,357		$	(245,672	)	$	(79,747	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in (earnings) losses of subsidiaries		(27,183	)		207,697			57,494
Depreciation and amortization		—			—			39
Equity-based compensation		50,966			13,791			3,468
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses and other		(394	)		15			32
(Increase) decrease due to/from related party		1,158			3,878			(10,171	)
Increase in accrued liabilities		—			213			213
Net cash provided by (used in) operating activities		46,904			(20,504	)		(28,672	)
Investing activities
Investment in subsidiaries		(274,406	)		(30,722	)		(245,496	)
Other property		—			2			(2	)
Net cash used in investing activities		(274,406	)		(30,720	)		(245,498	)
Financing activities
Net proceeds from the initial public offering		580,374			—			—
Net proceeds from issuance of units		—			—			325,344
Net cash provided by financing activities		580,374			—			325,344
Net increase (decrease) in cash and cash equivalents		352,872			(51,224	)		51,174
Cash and cash equivalents at beginning of period		—			51,224			50
Cash and cash equivalents at end of period	$	352,872		$	—		$	51,224