Offshore staff
HOUSTON– In a statement accompanying its 2Q 2016 earnings result, Cobalt International Energy Inc. said that its proposed sale of two blocks offshore Angola to state-owned Sonangol was “unlikely” to close.
The companies signed a $1.75-billion purchase and sale agreement last August forSonangol to acquire all of Cobalt’s 40% participating interest in blocks 21/09 and 20/11 offshore Angola.
Today, Cobalt said that its CEO Tim Cutt, met with Sonangol’s Chairwoman of the Board of Directors, Isabel dos Santos, and members of her executive team in Luanda, Angola, to discuss the status of the sale of Angolan blocks.
At this meeting, both parties jointly agreed that Cobalt would market its 40% working interest in blocks 20 and 21 to sell the assets to a third party.
Then, on Aug. 1, Cobalt said it received a letter from dos Santos confirming Sonangol’s support of such marketing and sale process. Given this agreement to market Cobalt’s interest in blocks 20 and 21, it is unlikely that the sale transaction between Cobalt and Sonangol will close pursuant to the terms of the August 2015 purchase and sale agreement, and therefore it is likely the purchase and sale agreement will automatically terminate on Aug. 22.
The company is currently preparing a data room for its Angola assets and will immediately begin the marketing and sale process.
Cutt said: “Although we would prefer the transaction with Sonangol to close, I am pleased that we can remarket these attractive liquid rich assets to third parties. The development cost environment has improved substantially, the fundamentals for medium- to long-term liquids pricing remains strong and we have delivered two new discoveries on block 20.”
Cobalt also provided an operational update on its Gulf of Mexico activities.
Its Anchor #3 appraisal well in the deepwater sector was drilled to a total depth of 34,022 ft (10,369 m). Data collected from the well is currently being evaluated. The Anchor #3 well was the second appraisal well in the Anchor unit, which was discovered in late 2014. Complete appraisal of Anchor will require further delineation wells and technical studies. Cobalt owns a 20% non-operated working interest in the Anchor discovery unit.
The company also announced appraisal success at Shenandoah, where the Shenandoah #5 appraisal well encountered approximately 1,000 ft (304 m) of net pay in multiple high quality Inboard Lower Tertiary sands. This well was the fourth appraisal well at Shenandoah and was drilled to a total depth of 31,100 ft (9,479 m).
Following drilling operations, about 80 ft (23 m) of conventional core was acquired in the upper Wilcox pay interval. Plans are to commence drilling the Shenandoah #6 appraisal well prior to year-end. This next appraisal well is expected to establish the oil water contact on the eastern flank of the field and quantify the full resource potential. Cobalt owns a 20% non-operated working interest in the Shenandoah project.
Cobalt commenced the Goodfellow #1 exploration well in March 2016, and reached total depth during 2Q and did not encounter hydrocarbons. A subsequent side track operation was also unsuccessful in finding hydrocarbons. Cobalt, as operator, owns a 72.5% working interest in Goodfellow and Total E&P USA, Inc. owns the remaining 27.5% working interest.
Once operations are completed at Goodfellow, Cobalt plans to move theRowan Reliance drillship to North Platte to drill the North Platte #4 appraisal well, which is designed to further delineate the North Platte Inboard Lower Tertiary reservoir. Cobalt, as operator, owns a 60% working interest and Total E&P USA, Inc. owns the remaining 40% working interest.
Operations also continue at the Heidelberg field, where three wells were brought on production earlier this year. The first of two additional development wells was successfully drilled in 2Q and the second additional development well is currently drilling. Both of these development wells are expected to begin producing in 4Q 2016, which will result in a total of five producing wells in the field. Cobalt owns a 9.375% non-operated working interest in Heidelberg.
08/03/2016
