13. 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.

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. In Sao Tome and Principe, Morocco and Western Sahara, we have 3D seismic requirements of 4,750 square kilometers, 3,000 square kilometers and 5,000 square kilometers, respectively. Additionally, in Morocco certain geological studies are also required.

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 in November 2017. During the first quarter of 2017, KEV made a rate recovery payment of $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 was exercised plus certain administrative costs.

In November 2015, we entered into a line of credit agreement with Timis Corporation, whereby Timis Corporation may draw up to $30.0 million on the line of credit to offset its joint interest billings arising from costs under the Senegal petroleum agreements. Interest accrues on drawn balances at 7.875%. As of March 31, 2017, there was $14.5 million outstanding under the agreement, which is included in other long-term assets. In addition to the amount outstanding under the agreement, as of March 31, 2017 Timis Corporation has a $1.6 million joint interest billing receivable that will be applied against the line of credit if not paid by the due date. We have conditionally agreed with Timis Corporation to terminate this line of credit agreement in the event Timis Corporation’s transaction with BP for the transfer of Timis Corporation’s 30% participating interest in the Cayar Offshore Profond and the Saint Louis Offshore Profond blocks offshore Senegal is completed. In such event Timis Corporation will pay $16.0 million to Kosmos on the earlier of the following: (i) an additional hydrocarbon discovery is made in either of these two blocks and the coventurers then elect to submit an appraisal plan; (ii) December 31, 2018; or (iii) the date that a final investment decision is made for developing the Greater Tortue field. In the event that Timis Corporation’s transaction with BP does not close, then the line of credit agreement shall continue as before.

Future minimum rental commitments under our leases at March 31, 2017, are as follows:


	Payments Due By Year(1)
	Total		2017(2)		2018		2019		2020		2021		Thereafter
	(In thousands)
Operating leases(3)	$	12,568	$	3,963	$	4,600	$	3,940	$	65	$	—	$	—
Atwood Achiever drilling rig contract		133,875		133,875		—		—		—		—		—

(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)

Represents payments for the period from April 1, 2017 through December 31, 2017.

(3)

Primarily relates to corporate office and foreign office leases.