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Provisions of our certificate of incorporation and by-laws could discourage potential acquisition proposals and could deter or
prevent a change in control.
Some provisions in our certificate of incorporation and by-laws, as well as Delaware statutes, may have the effect of delaying,
deferring or preventing a change in control. These provisions, including those providing for the possible issuance of shares of our
preferred stock and the right of the board of directors to amend the by-laws, may make it more difficult for other persons, without the
approval of our board of directors, to make a tender offer or otherwise acquire a substantial number of shares of our common stock or
to launch other takeover attempts that a stockholder might consider to be in his or her best interest. These provisions could limit the
price that some investors might be willing to pay in the future for shares of our common stock.
Provisions of the notes could discourage an acquisition of us by a third party.
Certain provisions of the notes could make it more difficult or more expensive for a third party to acquire us, or may even
prevent a third party from acquiring us. For example, upon the occurrence of a fundamental change, holders of the notes will have the
right, at their option, to require us to repurchase all of their notes or any portion of the principal amount of such notes in integral
multiples of $1,000. In addition, the acquisition of us by a third party could require us, under certain circumstances, to increase the
conversion rate for a holder who elects to convert its notes in connection with such acquisition. By discouraging an acquisition of us
by a third party, these provisions could have the effect of depriving the holders of our common stock of an opportunity to sell their
common stock at a premium over prevailing market prices.
We do not intend to pay dividends on our common shares and, consequently, your only opportunity to achieve a return on your
investment is if the price of our shares appreciates.
We do not plan to declare dividends on shares of our common stock in the foreseeable future. Consequently, investors must rely
on sales of their shares of common stock after price appreciation, which may never occur, as the only way to realize a return on their
investment.
Item 1B.
Unresolved Staff Comments
Not applicable.
Item 2.
Properties
Please refer to the information under the caption “Business” in this Annual Report on Form 10-K.
Item 3.
Legal Proceedings
We are currently, and from time to time we may become, involved in various legal and regulatory proceedings arising in the
normal course of business.
On November 30, 2014, two purported stockholders, St. Lucie County Fire District Firefighters’ Pension Trust Fund and Fire
and Police Retiree Health Care Fund, San Antonio, filed a class action lawsuit in the U.S. District Court for the Southern District of
Texas on behalf of a putative class of all purchasers of our securities from February 21, 2012 through November 4, 2014 (the
“St. Lucie lawsuit”). The St. Lucie lawsuit, filed against us and certain officers, former and current members of the Board of
Directors, underwriters, and investment firms and funds, asserted violations of federal securities laws based on alleged
misrepresentations and omissions in SEC filings and other public disclosures, primarily regarding compliance with the U.S. Foreign
Corrupt Practices Act (“FCPA”) in our Angolan operations and the performance of certain wells offshore Angola. On December 4,
2014, Steven Neuman, a purported stockholder, filed a substantially similar lawsuit against us and certain of our officers in the U.S.
District Court for the Southern District of Texas on behalf of a putative class of all purchasers of our securities from February 21,
2012 through August 4, 2014 (the “Neuman lawsuit”). Like the St. Lucie lawsuit, the Neuman lawsuit asserted violations of federal
securities laws based on alleged misrepresentations and omissions in SEC filings and other public disclosures regarding our
compliance with the FCPA in our Angolan operations. On March 3, 2015, the Court entered an order consolidating the Neuman
lawsuit with the St. Lucie lawsuit. The consolidated matter is captioned In re Cobalt International Energy, Inc. Securities Litigation
(the “Consolidated Action”). The same day, the Court also entered an order in the Consolidated Action appointing Lead Plaintiffs and
Lead Counsel. Lead Plaintiffs filed their consolidated amended complaint on May 1, 2015. Among other remedies, the Consolidated
Action seeks damages in an unspecified amount, along with an award of attorney fees and other costs and expenses to the plaintiffs.
We filed a motion to dismiss the consolidated amended complaint on June 30, 2015, and the other defendants also filed motions to
dismiss. On January 19, 2016, the Court denied our motion to dismiss. On February 3, 2016, we filed a motion requesting that the
