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comparable to, the financial profile that we expect to have for future periods. Except to the extent required by law, we undertake no
obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other
events occur in the future.
OVERVIEW
We are an independent exploration and production company with operations currently focused in the deepwater U.S. Gulf
of Mexico. In January 2016, we achieved initial production of oil and gas from the Heidelberg field. Our exploration efforts in
the U.S. Gulf of Mexico have resulted in four oil and gas discoveries including the North Platte, Shenandoah, Anchor, and
Heidelberg fields, each of which are in various stages of appraisal and development. We also have a non-operated interest in the
Diaba Block offshore Gabon.
In August 2015, we executed a purchase and sale agreement with Sociedade Nacional de Combustíveis de Angola—
Empresa Pública (“Sonangol”) for the sale of our working interests in Blocks 20 and 21 offshore Angola for aggregate gross
consideration of $1.75 billion before certain transaction expenses and other U.S. and Angolan taxes. The completion of this
transaction is pending the receipt of Angola government approvals. We are continuing to work with Sonangol regarding the
closing of the transaction, but we cannot make any assurances regarding the timing or occurrence of closing. Please see
“Business—West Africa—Angola Transaction” for further information.
Our operational focus is to progress our North Platte, Shenandoah and Anchor discoveries toward project sanction;
continue development drilling activities on the Heidelberg field with the aim to increase its oil and gas production over time;
and selectively conduct exploration drilling on our current U.S. Gulf of Mexico acreage. We are also seeking to renew our
world-wide exploration portfolio by pursuing new acreage opportunities in the U.S. Gulf of Mexico and evaluating certain other
new venture opportunities. In light of the current market environment and significant downturn in oil and gas prices, we are
continuing our efforts to reduce our cost structure company-wide which includes reducing or deferring certain activities.
Factors Affecting Comparability of Future Results
You should read this management’s discussion and analysis of our financial condition and results of operations in
conjunction with our historical financial statements included elsewhere in this Annual Report on Form 10-K. Below are the
period-to-period comparisons of our historical results and the analysis of our financial condition. In addition to the impact of the
matters discussed in “Risk Factors,” our future results could differ materially from our historical results due to a variety of
factors, including the following:
Discontinued Operations
.
Our historical financial statements included in this Annual Report on Form 10-K reflect our
assets in Angola being held for sale pending the completion of the Angola Transaction. Certain prior year amounts have been
reclassified for consistency with the current period presentation due to the Angola Transaction meeting the criteria to be
reported in discontinued operations as of December 31, 2015. In addition, if such transaction is consummated, our future
performance without the effect of owning such Angolan assets may materially differ from that reflected in our historical
financial statements.
See “Risk Factors— Risks Relating to Our Business—The sale of our interests in Blocks 20 and 21 offshore Angola is
subject to Angolan government approval, and such sale may be delayed or may not be consummated. In addition, pursuant to
the terms of the purchase and sale agreement governing such sale, we are obligated to transfer our interests in Block 20 and 21
prior to receipt of all consideration for such transfer.”
Oil and gas revenue.
We did not produce any revenue during the year ended December 31, 2015, although we achieved
initial production from the Heidelberg field in the U.S. Gulf of Mexico in January 2016. Initial production at Heidelberg was
achieved with two of the first three planned development wells tied back to a moored production handling SPAR. The other
completed development well is expected to begin production in the near future resulting in an initial total of three producing
wells. Two additional development wells are expected to be drilled, completed and brought onto production at Heidelberg
within the next year. Because we have not historically produced any oil or gas, our future results of operations will differ
materially from our historical results of operations due to the generation of revenue from the sale of oil and gas. As a result of
our initial production of oil and gas in January 2016, our business and the revenue we may generate from such production will
become more susceptible to fluctuations in oil and gas prices. Continuation of the substantial and extended decline in oil and
natural gas prices may materially and adversely affect our future business, financial condition, and the market price of our
common stock, results of operations, liquidity or ability to finance planned capital expenditures.
