HOUSTON--(BUSINESS WIRE)--May 5, 2015--
Cobalt International Energy, Inc. (“Cobalt”) (NYSE:CIE) today announced
a net loss of $82 million, or $0.20 per basic and diluted share for the
first quarter of 2015, compared to a net loss of $57 million, or $0.14
per basic and diluted share, for the first quarter of 2014. The current
quarter included $17 million of impairment charges for the previously
announced abandonment of the North Platte #2 appraisal well.
Capital and operating expenditures (excluding changes in working
capital) for the quarter ending March 31, 2015 were approximately $191
million, in line with our planned capital and operating expenditures of
approximately $800-900 million in 2015. Cash, cash equivalents, and
investments at the end of the first quarter were approximately $2.1
billion. This includes about $105 million held for future operations in
collateralizing letters of credit.
Balance Sheet and Financing Priorities
With the aforementioned $2.1 billion in balance sheet cash, cash
equivalents and investments, Cobalt continues to be well positioned to
execute on its stated financing priorities for 2015 and beyond. These
priorities remain the access of pre-production Reserve Based Lending
(RBL) facilities and the pursuit of regional asset-based partnerships,
with a focus on maximizing the shareholder value of Cobalt’s extensive
portfolio of attractive deepwater assets.
For the $150 million Heidelberg RBL facility, the first of its kind in
the Gulf of Mexico, Cobalt has now received commitments from multiple
banks and expects to close and draw from the facility during the second
quarter. The commitments are subject to the negotiation and execution of
definitive loan documentation and other customary conditions.
On the regional partnership front, Cobalt has been encouraged by the
broad industry and financial investor response regarding an investment
opportunity in Cobalt’s Angola portfolio. Cobalt plans to evaluate any
proposals obtained through this process against other financing
alternatives. We expect to finalize this process later this year.
Operational Update
Cobalt continues to appraise and develop several of its discoveries in
Angola and the Gulf of Mexico, with a focus on progressing each to
potential sanction while simultaneously evaluating financing,
partnership or other potential means of enhancing shareholder value.
In Angola Block 20, the Orca #2 appraisal well and drill stem test
results confirmed the presence of a large oil accumulation in the Sag
section of the Pre-salt. In addition, log and sampling evaluation
results have confirmed the discovery of oil in the deeper Synrift
reservoir of the Pre-salt. Orca #2 was drilled seven kilometers (four
and one-third miles) from the Orca #1 discovery well and is Cobalt’s
first appraisal well drilled on its significant 2014 Orca deepwater
Pre-salt discovery in the Kwanza Basin. Orca is the largest oil
discovery found to date in the Kwanza Basin. Cobalt and its partners
anticipate more appraisal activities in the future to determine Orca’s
development and production potential. Cobalt, as operator, holds a 40%
working interest in Orca.
At Cameia in Angola Block 21, Cobalt is currently drilling the Cameia #4
development well. Cobalt plans a continuous development drilling program
at Cameia for the remainder of 2015 and early 2016. In conjunction with
these ongoing development drilling activities, Cobalt continues to focus
efforts on the optimization of Cameia facility and subsea infrastructure
design and costs to take advantage of favorable market forces attributed
to the current downturn in industry activity. Cobalt’s current FPSO
design is a nominal 75,000 barrel per day facility, with a likely
production capacity in excess of 80,000 barrels per day early in the
field’s life. As previously stated, Cobalt believes that Cameia’s
project economics remain robust in the current commodity price
environment. Cobalt expects to achieve formal project sanction of Cameia
by year-end 2015, aligned with its efforts to deliver first production
in 2018. Cobalt, as operator, holds a 40% working interest in Cameia.
In the U.S. Gulf of Mexico, Cobalt anticipates appraisal operations will
commence on the Anchor Inboard Lower Tertiary discovery in the coming
months. As announced earlier this year, Anchor represents Cobalt’s
fourth significant deepwater Gulf of Mexico discovery. Cobalt, as
non-operator, holds a 20% working interest in Anchor.
On April 23, 2015, Cobalt commenced drilling the North Platte #3
appraisal well as a replacement well for the North Platte #2 well, which
as previously announced was plugged and abandoned due to a seal failure
in the riser connection system. The North Platte #3 appraisal well is
being drilled to further evaluate the Inboard Lower Tertiary reservoirs
encountered in Cobalt’s 2012 North Platte #1 discovery well. North
Platte #1 found over 550 net feet of oil pay in multiple high-quality
Inboard Lower Tertiary reservoirs. Cobalt, as operator, holds a 60%
working interest in North Platte.
Appraisal operations are also expected to resume at Shenandoah, where
planning is well underway for the drilling of the Shenandoah #4 well,
the third appraisal well which is anticipated to spud before the end of
the second quarter. The well is expected to confirm the lateral sand
quality, continuity and stratigraphy of reservoirs found in the
Shenandoah #2 appraisal well, which encountered over 1,000 net feet of
oil pay in excellent quality Inboard Lower Tertiary-aged reservoirs.
Shenandoah #4 is located approximately 800 feet updip and 0.7 miles
northwest of Shenandoah #2. Cobalt, as non-operator, holds a 20% working
interest in Shenandoah.
At Heidelberg, development drilling and production facility construction
continue and remain on schedule to support initial production in the
first half of 2016. The Heidelberg production facility is designed to
produce up to 80,000 barrels of oil and 80 million cubic feet of gas per
day. Cobalt, as non-operator, holds a 9.375% working interest in
Heidelberg.
Cobalt also participated in the Central OCS Lease Sale 235, and was high
bidder on all five bids submitted. To date, Cobalt has been awarded four
of the five bid blocks and is awaiting notification of decision by the
Bureau of Ocean Energy Management on the fifth high bid.
Conference Call
A conference call for investors will be held today at 10:00 a.m. Central
Time (11:00 a.m. Eastern Time) to discuss Cobalt’s first quarter 2015
results. Hosting the call will be Joseph H. Bryant, Chairman and Chief
Executive Officer, and John P. Wilkirson, Chief Financial Officer.
The call can be accessed live over the telephone by dialing (877)
705-6003, or for international callers (201) 493-6725. A replay will be
available shortly after the call and can be accessed by dialing (877)
870-5176, or for international callers (858) 384-5517. The passcode for
the replay is 13606714. The replay will be available until May 19, 2015.
Interested parties may also listen to a simultaneous webcast of the
conference call by accessing the Newsroom-Events & Speeches section of
Cobalt’s website at www.cobaltintl.com.
A replay of the webcast will also be available for approximately 30 days
following the call.
About Cobalt
Cobalt International Energy, Inc. (NYSE: CIE) is a publicly traded
independent exploration and production company active in deepwater
basins in offshore North America and West Africa. Cobalt was formed in
2005 and is headquartered in Houston, Texas. Cobalt is committed to
communicating its performance and actions to promote sustainable
corporate social responsibility in a comprehensive, transparent and
tangible manner. To learn more about Cobalt’s commitment to responsible
business practices, see Cobalt’s 2014 Corporate Social Responsibility
Report, which can be found on Cobalt’s website at https://www.cobaltintl.com/responsibility.
Forward-Looking Statements
This press release includes “forward-looking statements” within the
meaning of the safe harbor provisions of the Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 — that is, statements related to future, not past, events.
Forward-looking statements are based on current expectations and include
any statement that does not directly relate to a current or historical
fact. In this context, forward-looking statements often address Cobalt’s
expected future business and financial performance, and often contain
words such as “anticipate,” “believe,” “intend,” “expect,” “plan,”
“will” or other similar words. These forward-looking statements involve
certain risks and uncertainties that ultimately may not prove to be
accurate. Actual results and future events could differ materially from
those anticipated in such statements. For further discussion of risks
and uncertainties, individuals should refer to Cobalt’s SEC filings.
Cobalt undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances occurring
after this press release, other than as required by law. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. All
forward-looking statements are qualified in their entirety by this
cautionary statement.
Consolidated Statement of Operations Information:
|
|
|
|
|
Quarter Ending March 31,
|
|
2015
|
|
2014
|
|
($ in thousands)
|
Oil and gas revenue
|
$
|
—
|
|
|
$
|
—
|
|
Operating costs and expenses
|
|
|
|
Seismic and exploration
|
|
17,769
|
|
|
|
8,976
|
|
Dry hole expense and impairment
|
|
19,897
|
|
|
|
13,041
|
|
General and administrative
|
|
24,249
|
|
|
|
24,169
|
|
Depreciation and amortization
|
|
1,342
|
|
|
|
1,107
|
|
Total operating costs and expenses
|
|
63,257
|
|
|
|
47,293
|
|
Operating income (loss)
|
|
(63,257
|
)
|
|
|
(47,293
|
)
|
Other income (expense)
|
|
|
|
Interest income
|
|
1,660
|
|
|
|
945
|
|
Interest expense
|
|
(20,020
|
)
|
|
|
(10,567
|
)
|
Total other income (expense)
|
|
(18,360
|
)
|
|
|
(9,622
|
)
|
Net income (loss) before income tax
|
|
(81,617
|
)
|
|
|
(56,915
|
)
|
Income tax expense
|
|
—
|
|
|
|
—
|
|
Net income (loss)
|
$
|
(81,617
|
)
|
|
$
|
(56,915
|
)
|
|
|
|
|
Basic and diluted income (loss) per share
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
Weighted average common shares outstanding
|
|
408,508,154
|
|
|
|
407,001,208
|
|
Consolidated Balance Sheet Information:
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
|
($ in thousands)
|
Cash and cash equivalents
|
|
$
|
354,803
|
|
$
|
258,721
|
Short-term restricted funds
|
|
|
22,538
|
|
|
45,062
|
Short-term investments
|
|
|
1,525,072
|
|
|
1,530,206
|
Total current assets
|
|
|
2,045,829
|
|
|
2,003,134
|
Total property, plant and equipment
|
|
|
2,095,177
|
|
|
1,932,361
|
Long-term restricted funds
|
|
|
82,419
|
|
|
105,051
|
Long-term investments
|
|
|
65,624
|
|
|
326,047
|
Total assets
|
|
|
4,383,734
|
|
|
4,450,863
|
Total current liabilities
|
|
|
392,085
|
|
|
303,601
|
Total long-term liabilities
|
|
|
1,953,157
|
|
|
2,032,996
|
Total stockholders’ equity (408,508,529 and 408,505,079 shares
issued and outstanding as of March 31, 2015 and December 31, 2014,
respectively)
|
|
|
2,038,492
|
|
|
2,114,266
|
Total liabilities and stockholders’ equity
|
|
$
|
4,383,734
|
|
$
|
4,450,863
|
Consolidated Statement of Cash Flows Information:
|
|
|
|
|
Quarter Ending March 31,
|
|
2015
|
|
2014
|
|
($ in thousands)
|
Net cash provided by (used in):
|
|
|
|
Operating activities
|
$
|
(17,180
|
)
|
|
$
|
(85,673
|
)
|
Investing activities
|
|
113,262
|
|
|
|
45,614
|
|
Financing activities
|
|
—
|
|
|
|
(597
|
)
|
Source: Cobalt International Energy, Inc.
Cobalt International Energy, Inc.
Investor Relations: Rob Cordray,
Director, Investor Relations, +1 (713) 579-9126
Media Relations:
Lynne L. Hackedorn, Vice President, Government and Public Affairs, +1
(713) 579-9115