—3—
production ahead of schedule and within
budget. Two additional development wells
are planned to be drilled and completed at
Heidelberg in 2016 with the goal to
increase its production over time.
Of course, any overview of 2015 would not
be complete without a discussion of the
impact that the severe and prolonged
downturn in oil and gas prices has had on
our company and the oil and gas industry
as a whole. Any price displacement of the
magnitude that we have seen creates both
challenges and opportunities. The first
challenge we faced was to review our cost
structure and reduce it to a level
commensurate with current oil and gas
prices. To that end, we worked diligently
with our equipment and service providers
and through our initial efforts, we have
been able to reduce our non-rig drilling
costs in the Gulf of Mexico by 25%. Our
work is not finished here. We will continue
to do all we can to drive down costs to
protect our balance sheet and ensure that
Cobalt is a strong and durable enterprise
for years to come. Despite the negative
effects the current price environment has
had on our business and the performance
of our stock price, I am confident and
optimistic in Cobalt’s future. While I can
make no assurances regarding the Angola
transaction, the proceeds we receive upon
closing should allow us to take advantage
of attractive investment opportunities in
today’s market for deepwater oil and gas
assets. The downturn has also presented
us with the opportunity to appraise and
develop our current discovered oil and gas
resources at lower costs while hopefully
bringing these projects online at a future
point in time in which oil and gas prices are
much higher than today.
In November 2015, Cobalt celebrated its
tenth anniversary. As I reflect on Cobalt’s
ten year history, I am proud of all that we
have accomplished but excited about the
future of our company. I recognize that
today’s oil and gas price headwinds present
challenges that we must continue to
overcome. However, I am confident that we
can and will face these challenges head on
and emerge as a stronger, sustainable and
more resilient company.
On behalf of the Board of
Directors and our entire
team, thank you for your
continued confidence in and
support of Cobalt.
Joseph H. Bryant
Chairman and
Chief Executive Officer
“AS I REFLECT ON
COBALT’S TEN YEAR
HISTORY, I AM PROUD
OF ALL THAT WE
HAVE ACCOMPLISHED
BUT EXCITED ABOUT
THE FUTURE OF
OUR COMPANY.”
2015 ANNUAL REPORT: A DECADE OF DISCOVERY
