Cobalt International Energy, Inc.
Notes to Consolidated Financial Statements (Continued)
F-36
21. Supplemental Information on Oil and Gas Exploration and Production Activities (Unaudited)
weighted by production over the remaining lives of the properties to determine the benchmark prices used. Such benchmark prices are
$50.78 and $95.24 per barrel of oil, $15.23 per barrel of NGL, and -$0.182 and $4.770 per Mcf of gas for the years ended December
31, 2015 and 2014, respectively. The negative average gas price is due to the application of all transportation costs for the produced
wet gas to the gas price for the sales gas volume.
Information with respect to the Company’s estimated discounted future net cash flows related to its proved oil and natural gas
reserves as of December 31, 2015 and 2014 are as follows:
2015
2014
($ in thousands)
Future cash inflows .................................................................... $ 288,705 $
814,394
Future production costs..............................................................
(70,267)
(12,710)
Future development costs ..........................................................
(115,786) (244,306)
Future income tax expense(1) ....................................................
—
—
Future net cash flows .................................................................
102,652
557,378
10% annual discount for estimated timing of cash flows...........
(45,077) (192,094)
Standardized measure of discounted future net cash flows........ $ 57,575 $
365,284
(1) There is no future income tax expense as of December 31, 2015, as the tax basis of the oil and gas properties
in the United States and net operating losses attributable to oil and gas operations exceed the future net
revenues.
Information with respect to the Company’s standardized measure of discounted future net cash flows as of December 31, 2015
and 2014 are as follows:
2015
2014
($ in thousands)
Standardized measure, beginning .............................................. $ 365,284 $
276,633
Discoveries.................................................................................
—
—
Revisions of previous estimates:
Changes in prices and costs ..................................................
(314,367)
(36,869)
Changes in future development costs ...................................
99,964
49,700
Changes in quantities............................................................
(122,584)
17,351
Accretion of discount.................................................................
36,528
27,663
Changes in timing and other ......................................................
(7,250)
30,806
Standardized measure, ending.................................................... $ 57,575 $
365,284
22. Subsequent Events
On February 19, 2016, the Company initiated a workforce reduction program in response to the Angola Transaction and
prolonged commodity price weakness, which has resulted in a reduction of the Company’s capital programs and other operations. The
Company expects to recognize the majority of these restructuring costs in the first and second quarters of 2016 and will recognize the
remaining costs throughout 2016 until the remaining employee terminations have occurred.
