Cobalt Confirms Successful Cameia-2 Appraisal Well

Source: www.gulfoilandgas.com 7/31/2012, Location: Africa

Cobalt International Energy, Inc. announced a net loss of $141 million, or $0.35 per basic and diluted share, for the second quarter of 2012, compared to a net loss of $19 million, or $0.05 per basic and diluted share, for the second quarter of 2011. The current quarter included $99 million, or $0.24 per share, in charges for the impairment of expenditures associated with the Ligurian exploration prospect including $42 million in leasehold expenditures and $57 million in drilling related-expenditures for the Ligurian #1 and Ligurian #2 exploratory wells. Of the $99 million in charges, $69 million was incurred in prior quarters.

Total expenditures (excluding changes in working capital) for the quarter ending June 30, 2012 were approximately $124 million. These expenditures are consistent with previously announced full year 2012 estimated total expenditures of between $550 and $650 million. Cobalt’s cash, cash equivalents, and investments position at the end of the second quarter was approximately $1.7 billion. This included about $515 million designated for future operations held in escrow and collateralizing letters of credit, but excluded approximately $150 million in the TOTAL drilling fund for the U.S. Gulf of Mexico. Cobalt continues to have no outstanding debt.

Operations Update

Cobalt provided an update on the status of its Cameia #2 appraisal well, located in Block 21 offshore Angola. The objectives of Cameia #2 were to (1) better define the areal extent of the Cameia discovered resources, (2) determine an oil-water contact deeper on the Cameia structure than the lowest known oil observed in Cameia #1, and (3) test deeper oil potential in untested zones in the Cameia field. Based on our preliminary wireline logging results, Cameia #2 was successful on the first and second objectives, and evaluation is ongoing to determine the potential of the deeper reservoir target.

The well was drilled approximately 3.5 kilometers south from the Cameia #1 pre-salt discovery well to the target total depth of 5,475 meters in basement. Logging results have (1) confirmed the presence of a large hydrocarbon accumulation in what is a high quality reservoir, and (2) confirmed lowest known oil to be at least 135 meters deeper than that which was observed in Cameia #1. In pursuit of our third objective, analysis of data obtained from drilling operations and wireline logging indicates hydrocarbon charge and pressure separation from the uphole reservoir section in the deepest reservoir target.

Cobalt is currently preparing for a production drill stem test to be performed in August. Cobalt will evaluate the results of all data collected to determine the reservoir potential, if any, of this new zone.

Sociedade Nacional de Combustiveis (Sonangol E.P.) is the concessionaire for Block 21/09. Partners include Cobalt International Energy (operator) with a 40% interest, Sonangol Pesquisa e Producao S.A. (20%), Nazaki Oil and Gaz S.A. (30%), and Alper Oil Limitada (10%).

Cobalt also announced that it has executed, subject to formal Sonangol E. P. approval, a three year drilling rig contract for use of the deepwater semi-submersible SSV Catarina to support its Angolan exploration, appraisal and development operations. The rig is expected to arrive in Angola early in the first quarter of 2013. Cobalt also anticipates that the Diamond Offshore Ocean Confidence will return to Angola in late 2012 to support its operations.

On July 3, 2012, Cobalt spud the North Platte #1 exploratory well on Garden Banks Block 859 in the U.S. Gulf of Mexico with the Ensco 8503 drilling rig. The Cobalt-operated North Platte #1 exploratory well will test a four-way inboard Lower Tertiary structure that lies in the heart of the emerging inboard Lower Tertiary play. Cobalt holds a dominant position in this play, with numerous follow-on inboard Lower Tertiary exploratory prospects. Cobalt anticipates announcing the results of the North Platte #1 well in late 2012.

Cobalt is also participating in the Anadarko-operated Shenandoah #2 appraisal well on Walker Ridge Block 51. The Shenandoah #2 appraisal well was spud on June 29, 2012, and will appraise the Shenandoah inboard Lower Tertiary oil discovery announced in 2009, where more than 300 feet of net oil pay was discovered. Cobalt anticipates that results of this well will be announced in late 2012.

Cobalt participated in the June 20, 2012 Central Gulf of Mexico Lease Sale 216/222 and was high bidder on 10 blocks, which represented a total net bid amount of approximately $17 million. These blocks, if awarded, will expand Cobalt’s Gulf of Mexico asset inventory by adding two new prospects to the inventory, and by adding adjacent blocks to two of Cobalt’s existing prospects.

Joseph H. Bryant, Cobalt’s Chairman and CEO said “Cobalt’s operations continued to gain momentum in Angola, Gabon and the Gulf of Mexico in the second quarter. We are excited about the results of Cameia #2. It was very important that we begin to understand the lateral continuity of the exceptional reservoir discovered in Cameia #1. Even though Cameia #2 is a flank well on the carbonate mound feature, we do see every indication that a high quality reservoir extends over a broad area. We have a lot of work yet to do before we fully understand the magnitude of the Cameia discovery, but we believe that we are off to a great start with two successful wells in the field, and in our Angolan pre-salt exploration program”. Bryant added “with the addition of the SSV Catarina, we have secured the drilling equipment we need to maintain a steady exploration and appraisal program in Angola and the Gulf of Mexico for years to come.”


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Current Operations

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Related Categories: Artificial Lift  Cementing, Stimulation  Directional Drilling  Drilling  Drilling Engineering & Equipment Systems  Enhanced Oil Recovery  General  Logging, Perforating, Testing  Offshore Drilling  Reservoir/Completion Consultants  Workover & Well Services  Workover Rigs/Services 

Related Articles: Artificial Lift  Cementing, Stimulation  Directional Drilling  Drilling  Drilling Engineering & Equipment Systems  Enhanced Oil Recovery  General  Logging, Perforating, Testing  Offshore Drilling  Reservoir/Completion Consultants  Workover & Well Services  Workover Rigs/Services 


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