Cobalt Provides Update on its Operations in West Africa and U.S. Gulf of Mexico

Cobalt International Energy, Inc.  today provided the following update on its West Africa and U.S. Gulf of Mexico drilling programs.

West Africa Drilling Program

Cobalt has received notification that the Ocean Confidence drilling rig, which is currently under assignment to an Angolan affiliate of Total S.A., will be returned to Cobalt on Block 21 on or about July 12. Upon its return, Cobalt will immediately commence its initial two well pre-salt deepwater exploration drilling program on Block 21 offshore Angola.

 

Given the proximity of the two exploratory well locations, Cobalt plans to drill the surface hole of the Bicuar #1 exploratory well, move the drilling rig to the Cameia #1 exploratory well to drill and evaluate that prospect, then return to the Bicuar #1 exploratory well to drill and evaluate it. Cobalt expects each well to take 80 to 100 days to drill and an additional 10 to 20 days to evaluate if successful. Cobalt is the operator of Cameia and Bicuar and has a 40% working interest in each prospect.

In addition, Cobalt anticipates the execution of the production sharing agreement for its 40% working interest and operatorship of Block 20 offshore Angola will occur early in the third quarter of 2011.

U.S. Gulf of Mexico Drilling Program

Ensco Settlement Agreement. On June 8, 2011, Ensco Offshore Company entered into a settlement agreement with the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) among other federal defendants. As part of the settlement agreement, the BOEMRE agreed to “take action” with respect to a number of drilling permits, including Cobalt’s Application for Permit to Drill (“APD”) for its North Platte #1 exploratory well and its APD for its Ligurian #2 exploratory well, which means that the BOEMRE must initially either approve the APDs, deny the APDs or return the APDs to Cobalt with a statement specifically identifying all then-existing deficiencies within 30 days of the settlement agreement. If an APD is returned with deficiencies and is thereafter resubmitted by Cobalt, the BOEMRE must again take action within 30 days. As part of the agreement, the BOEMRE is not permitted to identify additional deficiencies during its review of the resubmission that existed during, but had not been identified in, the initial review.

North Platte #1. Cobalt formally submitted the North Platte #1 APD on June 3, 2011. Subsequent to the execution of the settlement agreement, Cobalt has been advised by the BOEMRE that Cobalt’s APD for its North Platte #1 exploratory well, Garden Banks 959 #1, is complete. The BOEMRE has identified two remaining deficiencies or further requirements that must be satisfied prior to it approving the APD. The first requirement is that the Ensco 8503 drilling rig obtain an American Bureau of Shipping (ABS) certification. This certification has been obtained. The second requirement is that Cobalt obtain a Coast Guard Certificate of Compliance for the Ensco 8503 drilling rig. The inspection required to obtain this certificate will take place upon the Ensco 8503’s return to the U.S. Gulf of Mexico. Cobalt does not anticipate any issues related to obtaining this routine Coast Guard certification.

 

As previously announced, the Ensco 8503 drilling rig is currently drilling a well in French Guiana pursuant to a sublet agreement between an affiliate of Ensco Offshore Company and a subsidiary of Tullow Oil plc. Cobalt expects that the Ensco 8503 drilling rig will be released and returned to the U.S. Gulf of Mexico late in the third quarter of 2011. As noted previously, Cobalt believes that it will have satisfied all requirements stipulated by the BOEMRE for issuance of the APD. Based on information available today, Cobalt believes that it should be able to spud its North Platte well by the end of the third quarter depending on when the Ensco 8503 returns to the U.S. Gulf of Mexico.

Cobalt expects the North Platte #1 exploratory well to take approximately six months to drill. Cobalt is the operator of North Platte and has a 60% working interest in the prospect. TOTAL E&P USA, INC. owns the remaining 40% working interest.

Ligurian #2. Cobalt formally resubmitted the Ligurian #2 APD on June 9, 2011. Under the terms of the above-mentioned settlement agreement, Cobalt expects the BOEMRE to provide Cobalt with any remaining requirements with respect to the APD for its Ligurian #2 exploratory well, Green Canyon 814, on or before July 10, 2011. Cobalt expects that any such remaining requirements will be promptly addressed and resubmitted to the BOEMRE for it to take action on the Ligurian #2 APD within 30 days thereafter. If the BOEMRE approves the Ligurian #2 APD prior to the return of the Ensco 8503 drilling rig and spud of the North Platte #1 exploratory well, then Cobalt plans to drill the Ligurian #2 exploratory well prior to drilling the North Platte #1 exploratory well.

Cobalt expects the Ligurian #2 exploratory well to take approximately six months to drill. Cobalt is the operator of Ligurian and has a 45% working interest in this prospect. TOTAL E&P USA, INC. owns a 30% working interest and Sonangol Exploration and Production International, LTD. owns the remaining 25% working interest.

About Cobalt

Cobalt is an independent oil exploration and production company focusing on the deepwater U.S. Gulf of Mexico and offshore Angola and Gabon. Cobalt was formed in 2005 and is headquartered in Houston, Texas.

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Source:Cobalt , June 29, 2011;

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