COBALT INTERNATIONAL ENERGY, INC.
—2—
LETTER TO SHAREHOLDERS
Joseph H. Bryant
Chairman and Chief Executive Officer
Reflecting back on the past year, it is clear that 2015 was a
transformative year for Cobalt. In August 2015, we entered into an
agreement to sell our Angola business to Sonangol for $1.75 billion.
This pending transaction represents a strategic change in our
business to focus almost entirely on the deepwater Gulf of Mexico.
We believe the deepwater Gulf of Mexico has, and will continue
to have the potential for, some of the best oil and gas resources
in the world.
The Gulf of Mexico has some of the world’s
largest oil accumulations, and combined
with long-lived production profiles, leading
edge technology, existing infrastructure
and relatively stable fiscal terms, the Gulf
of Mexico should continue to attract a
significant amount of investment and
represent a sizeable source of oil and gas
supplies worldwide for years to come.
Shifting to a discussion of our 2015
operational results, appraisal operations at
North Platte, Anchor and Shenandoah were
all successful. At North Platte, we drilled our
first appraisal well which encountered over
550 feet of net oil pay, but with evidence of
even better developed reservoirs than seen
in the discovery well. We subsequently
drilled a sidetrack appraisal well at North
Platte, which encountered approximately
500 feet of net oil pay and exhibited some
of the best rock and reservoir properties
that we have seen in the Inboard Lower
Tertiary trend of the Gulf of Mexico. At
Shenandoah, the second appraisal well
found an expanded geologic reservoir
section and confirmed excellent reservoir
qualities. A sidetrack of the third appraisal
well at Shenandoah encountered over 600
feet of net oil pay. The next appraisal well at
Shenandoah is on tap for 2016, and is
designed to confirm and extend the
reservoir boundaries. At Anchor, the initial
exploration well encountered nearly 700
feet of net oil pay. In the second half of
2015, an appraisal sidetrack well was drilled
down dip to delineate the Anchor discovery
well. The appraisal well encountered 694
feet of net oil pay in a hydrocarbon column
of at least 1,800 feet in Inboard Lower
Tertiary reservoirs. We are currently
participating in the Anchor #3 appraisal well
and expect to have results sometime in the
second half of this year. As these appraisal
operations have shown, we believe our
current Gulf of Mexico assets in appraisal
and development are extremely attractive
and will position Cobalt well for future
success.
Another significant milestone occurred in
January 2016, when we achieved our first
production and revenue, as the Heidelberg
field commenced initial oil and gas
