14. Commitments and Contingencies

From time to time, we are involved in litigation, regulatory examinations and administrative proceedings primarily arising in the ordinary course of our business in jurisdictions in which we do business. Although the outcome of these matters cannot be predicted with certainty, management believes none of these matters, either individually or in the aggregate, would have a material effect upon the Company’s financial position; however, an unfavorable outcome could have a material adverse effect on our results from operations for a specific interim period or year.

The Jubilee Field in Ghana covers an area within both the WCTP and DT petroleum contract areas. It was agreed the Jubilee Field would be unitized for optimal resource recovery. Kosmos and its partners executed a comprehensive unitization and unit operating agreement, the Jubilee UUOA, to unitize the Jubilee Field and govern each party’s respective rights and duties in the Jubilee Unit, which was effective July 16, 2009. Pursuant to the terms of the Jubilee UUOA, the tract participations are subject to a process of redetermination. The initial redetermination process was completed on October 14, 2011. As a result of the initial redetermination process, our Unit Interest is 24.1%. These consolidated financial statements are based on these re determined tract participations. Our unit interest may change in the future should another redetermination occur.

The Company leases facilities under various operating leases that expire through 2019, including our office space. Rent expense under these agreements, was $3.3 million, $4.7 million and $4.6 million for the years ended December 31, 2016, 2015 and 2014, respectively.

We currently have a commitment to drill two exploration wells in Mauritania. In Mauritania, our partner is obligated to fund our share of the cost of the exploration wells, subject to their maximum $221 million cumulative exploration and appraisal carry covering both our Mauritania and Senegal blocks. Additionally, in Sao Tome and Principe we have 2D and 3D seismic requirements of 1,200 square kilometers and 4,000 square kilometers, respectively, and we have 3D seismic requirements in Mauritania and Western Sahara of 3,000 square kilometers and 5,000 square kilometers, respectively.

In January 2017, Kosmos Energy Ventures (“KEV”), a subsidiary of Kosmos Energy Ltd., elected to cancel the fourth year option of the Atwood Achiever drilling rig contract and revert to the original day rate of approximately $0.6 million per day and original agreement end date of November 2017. KEV is required to make a rate recovery payment of approximately $48.1 million representing the difference between the original day rate and the amended day rate multiplied by the number of days from the amendment effective date to the date the election is exercised plus certain administrative costs. This amount will be charged to exploration expense in the first quarter of 2017.

In November 2015, we entered into a line of credit agreement with one of our block partners, whereby, our partner may draw up to $30 million on the line of credit to pay their portion of costs under the petroleum agreement. Interest accrues on drawn balances at 7.875%. The agreement matures on December 31, 2017, or earlier if certain conditions are met. As of December 31, 2016, there was $10.2 outstanding under the agreement, which is included in other long-term assets.

Future minimum rental commitments under these leases at December 31, 2016, are as follows:


	Payments Due By Year(1)
	Total		2017		2018		2019		2020		2021		Thereafter
	(In thousands)
Operating leases(2)	$	11,171	$	4,190	$	3,820	$	3,161	$	—	$	—	$	—
Atwood Achiever drilling rig contract(3)		229,482		229,482		—		—		—		—		—

(1)

Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments, in our petroleum contracts.

(2)

Primarily relates to corporate office and foreign office leases.

(3)

In January 207, KEV exercised its option to cancel the fourth year and revert to the original day rate of approximately $0.6 million per day and original agreement end date of November 2017. Commitments calculated using the original day rate of $0.6 million effective February 1, 2017, excluding applicable taxes. The commitments also include a $48.1 million rate recovery payment equal to the difference between the original day rate and the amended day rate.