USA: Cobalt Announces Extraordinary Results from Its Gulf of Mexico Wells

Cobalt International Energy, Inc. (“Cobalt”) announced extraordinary results from its Shenandoah #2R appraisal well, located in Walker Ridge Block 51, and provided an update on its North Platte #1 exploratory well, located in Garden Banks 959, both located in the Inboard Lower Tertiary Trend, deepwater Gulf of Mexico.

At Shenandoah, the well’s operator announced that the Shenandoah #2R appraisal well encountered more than 1,000 net feet of oil pay in multiple high quality Lower Tertiary-aged reservoirs. Log and pressure data from both the Shenandoah appraisal well and the 2009 Shenandoah discovery well indicate the presence of exceptionally high quality reservoirs and hydrocarbons.

The appraisal well was drilled as a straight hole to a total depth of 31,405 feet in approximately 5,800 feet of water, about 1.3 miles southwest and approximately 1,700 feet structurally down-dip from the Shenandoah #1 discovery well, in order to test the down-dip extent of the Shenandoah field. Well results indicate that the targeted sands were full to base with no evidence of oil-water contacts. The Shenandoah #1 discovery well was drilled in early 2009 on Walker Ridge Block 52 and encountered more than 300 net feet of Inboard Lower Tertiary oil pay.

Cobalt, as operator, provided an update confirming that the North Platte #1 exploratory well encountered over 550 net feet of oil pay in multiple high quality Inboard Lower Tertiary reservoirs. This compares to DeGolyer and MacNaughton’s pre-drill estimate for net pay of 350 feet. North Platte is located in approximately 4,400 feet of water and was drilled to a total depth of approximately 34,500 feet. Cobalt completed a bypass coring operation on North Platte #1 and has since temporarily abandoned the discovery well. In addition, Cobalt has begun the acquisition of a new state-of-the-art 3D seismic survey over the greater North Platte field and the majority of its prospects in the immediate area. Evaluation of this data will be ongoing throughout 2013. Appraisal plans for North Platte will be determined later in the year, as well.

Cobalt is currently drilling its Ardennes #1 exploratory well in Green Canyon 896. Ardennes is targeting both Miocene and Inboard Lower Tertiary reservoirs. Results are expected sometime mid-year 2013. DeGolyer and MacNaughton estimates Ardennes to have potential resources greater than 500 million barrels gross oil equivalent.

“The exceptional results of both the Shenandoah #2R appraisal well and the North Platte #1 exploratory well further substantiate our regional model of the prolific potential of the Inboard Lower Tertiary Trend,” said Joseph H. Bryant, Cobalt’s Chairman and Chief Executive Officer. “We believe that our material working interests in these two significant Inboard Lower Tertiary fields will be the source of tremendous value for our shareholders. Our deep portfolio of prospects on trend with these two fields bodes well for our future growth in the Gulf of Mexico. These recent results and our bright future are a testament to our commitment to the people and technology required to succeed in the deepwater Gulf of Mexico subsalt trends.”

Cobalt is the operator and holds a 60 percent working interest in North Platte. TOTAL E&P USA, INC. is Cobalt’s partner in North Platte with a 40 percent working interest. Cobalt is the operator and holds a 42 percent working interest in Ardennes. Partners in Ardennes include ConocoPhillips (30 percent working interest) and TOTAL E&P USA, INC. (28 percent working interest). In Shenandoah, Cobalt holds a 20 percent working interest. Partners in Shenandoah include Anadarko Petroleum Corporation, as operator (30 percent working interest), ConocoPhillips (30 percent working interest), Venari Resources LLC (10 percent working interest) and Marathon Oil Company (10 percent working interest).

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Press Release, March 20, 2013