Kosmos Energy Ltd. (APA:US), the oil explorer backed by Warburg Pincus LLC and Blackstone Group LP, declined the most in nine months after announcing an offering of 30 million shares and its abandonment of a discovery off the coast of Ghana.
Kosmos, based in Hamilton, Bermuda, fell 7.5 percent to $11.80 at the close in New York, the biggest drop since May 4.
Some shareholders and officers are offering about 30 million common shares, Kosmos said in a statement after the close of regular U.S. trading yesterday. Underwriters have the option to buy as much as another 4.5 million common shares from some of the selling shareholders, the company said. Kosmos won’t receive proceeds from the share sale.
“When selling shareholders reduce their stake, generally there is some weakness in the share price,” Pavel Molchanov, an analyst with Raymond James & Associates Inc. in Houston, said in a telephone interview. He has an outperform, or buy, rating on Kosmos shares and doesn’t own any.
Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Barclays Capital Inc. are helping to manage the offering. Warburg has about 39.7 percent of Kosmos shares, while Blackstone has about 32.5 percent, according to data (KOS:US) compiled by Bloomberg.
Also yesterday, Kosmos said it relinquished in January a discovery area associated with the Banda find on the West Cape Three Points Block because it wasn’t commercially viable, according to a regulatory filing. The move isn’t expected to affect the company’s earnings for the quarter ending Mar. 31.
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