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Share Name | Share Symbol | Market | Type |
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Cobalt Energy Ltd B | TSXV:CB.B | TSX Venture | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES. Cobalt Energy Ltd. (TSX VENTURE:CB.A) (TSX VENTURE:CB.B) ("Cobalt" or the "Company") is pleased to announce that it has filed with applicable Canadian securities regulatory authorities its unaudited first quarter financial statements and related Management Discussion and Analysis for the three months ended March 31, 2008. These filings are available for review at www.sedar.com. Highlights - Successfully closed Cobalt's first property acquisition at Woking Alberta on January 8th, 2008. - Established the Company's initial production, averaging 19 boe/d (100% crude oil) for the quarter. - Capital expenditures amounted to $675,000, of which $287,000 was spent on the Woking acquisition, $142,000 on equipping and well completions, $91,000 on proprietary seismic, and $155,000 on capitalized general and administration costs. - Seismic activity included shooting nine kilometers of new proprietary seismic in the Company's core area of East Central Alberta. - At March 31, 2008, Cobalt had $2,058,823 in cash and short term deposits, a working capital surplus of $1,881,952 and no outstanding bank debt. - Subsequent to the quarter, Cobalt entered into an agreement to acquire from a senior producer approximately 47 boe/d production (approximately 70% natural gas) and an estimated 160,000 boe of reserves in exchange for $2,844,000 in cash, subject to certain industry standard adjustments and provisions. This acquisition is located at Woking Alberta, within the Company's Peace River Arch core area. The acquisition also includes approximately 12,000 gross acres (6,200 net acres) of land and production facilities. Closing is expected to occur on or about June 18, 2008. - Subsequent to the quarter, Cobalt announced that it intends to complete a private placement of up to 5,000,000 common Class A share subscription receipts ("Common Share Subscription Receipts") at an issue price of $0.40 per Common Share Subscription Receipt and up to 1,000,000 flow-through Class A share subscription receipts ("Flow-Through Subscription Receipts") at an issue price of $0.45 per Flow-Through Subscription Receipt for gross proceeds of up to $2,450,000 (the "Offering"). Closing of the Offering is expected to occur on or about June 11, 2008. Activity Update & Outlook Over the past year, factors such as relatively low natural gas pricing, a new royalty framework, and lack of interest in the equity marketplace have constrained start-up companies to move cautiously within their capital abilities. Cobalt has remained disciplined with its capital expenditures by employing a balanced approach between acquisitions and exploration drilling. Cobalt's plan over the past quarter has been to focus on low risk opportunities to establish a production base and corresponding cash flow. We believe we accomplished an important step towards that objective in the first quarter through the property acquisition at Woking, Alberta. We also believe that we can significantly enhance that position in the second quarter through the proposed acquisition, again at Woking. The proposed acquisition will build on Cobalt's production and land base by acquiring its partner's operated working interest in the same assets. The immediate focus will be recompletions on several crude oil wells which are anticipated to increase the acquired production levels. At current oil prices, successful completion of these operations will provide an attractive production base with a stream of high netback cash flow. The proposed Woking acquisition also holds future potential for a waterflood project and possible development well drilling. During the second half of the year, Cobalt's business plan will turn primarily to exploration drilling, focusing on natural gas in our two core areas of the Peace River Arch and in East Central Alberta. Natural gas pricing has recently strengthened, trending upwards and beginning to track the pricing of crude oil. This creates a positive economic framework for natural gas exploration drilling as the Company fulfills the remainder of its flow-through obligation. At Boundary Lake, located in the Peace River Arch, the primary geological zone of interest is the Triassic formation which contains liquids rich natural gas reserves at moderate depths. Cobalt currently controls 3,840 acres of undeveloped land and has evaluated over 80 km of seismic to identify potential Triassic targets. Working with industry partners, Cobalt expects to participate in the drilling of up to 3 (1.5 net) exploration wells prior to year end. At East Central Alberta, a nine kilometer proprietary seismic program was shot in the first quarter. This brings the Company's total seismic evaluation in the region to 59 kilometers, primarily targeting natural gas in the Devonian formation. Currently, Cobalt owns 3,200 acres of undeveloped land at 100% working interest. In addition, the Company has negotiated a farm-in on 640 acres of undeveloped land. Cobalt expects to operate the drilling of up to 3 exploration wells at 100% working interest prior to year end. Concurrent with our recompletion projects and exploration drilling, we anticipate adding to our undeveloped land position in multi-zone regions of Alberta. Acquisitions remain a part of Cobalt's growth strategy and the Company is continually evaluating property or corporate acquisition opportunities which are well-suited to its business plan. The Company has filed the following reports for the year ended December 31, 2007, as required under National Instrument 51-101 "Standard of Disclosure for Oil and Gas Activities": Form 51-101F1 "Statement of Reserves Data and Other Oil and Gas Information" and Form 51-101F3 "Report of Management and Directors on Oil and Gas Disclosure". These documents can be found for viewing by electronic means on the System for Electronic Document and Analysis Retrieval at www.sedar.com. Reader Advisory - This news release contains certain forward-looking statements, which include assumptions with respect to completion of an acquisition, funds from financing, increase to production and reserves and use of capital. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, tax treatment (including royalties), inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. BOE or boe/d may be misleading particularly if used in isolation. A BOE conversion of 6mcf:1bbl is based as an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the well head.
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