Cobalt’s net loss deepens in 2Q

Cobalt International Energy, Inc. today announced a net loss of $95 million, or $0.23 per basic and diluted share for the second quarter of 2014, compared to a net loss of $79 million, or $0.19 per basic and diluted share, for the second quarter of 2013.

The net loss for the second quarter of 2014 includes $42 million of impairment charges associated primarily with wells drilled in the U.S. Gulf of Mexico, $12 million for seismic and exploration expenses, and $22 million for general and administrative expenses. Capital and operating expenditures (excluding changes in working capital) for the quarter ending June 30, 2014 were approximately $193 million. Cash, cash equivalents, and investments at the end of the second quarter were approximately $2.6 billion. This includes about $150 million designated for future operations held in escrow and collateralizing letters of credit, but excludes approximately $76 million in the TOTAL drilling fund for the Gulf of Mexico.

Operational Update

Cobalt also announced that it is finalizing operations on its successful Cameia #3 appraisal well and will move the Petroserv SSV Catarina rig to drill the Loengo #1 Pre-salt exploration well on Block 9. Cobalt, as operator, owns a 40% working interest in Block 9.

In addition, Cobalt announced that it is moving forward on the Cobalt operated Cameia project development, targeting the formal sanction of the Cameia project by the end of 2014 and first production from the development in 2017.

Cobalt also announced that it is participating as non-operator in the first Heidelberg field development well currently being drilled in the deepwater Gulf of Mexico. First production from Heidelberg remains on schedule for 2016. Cobalt owns a 9.375% non-operated working interest in Heidelberg.

Also in the Gulf of Mexico, the second appraisal well on Cobalt’s Shenandoah discovery was spud in late May. The well is located on Walker Ridge Block 52. Cobalt owns a 20% non-operated working interest in Shenandoah. Due to mechanical difficulty, the Anchor #1 well has been junked and abandoned prior to reaching its geologic objectives. Results from the replacement Anchor well are now anticipated in early 2015. Cobalt owns a 20% non-operated interest in the Anchor prospect. The first appraisal well at the Yucatan prospect is close to completion. Cobalt owns a 5.34% non-operated interest in the Yucatan prospect.