Cobalt International Energy, Inc. (“Cobalt”) (NYSE:CIE) today
announced a net loss of $150 million, or $5.05 per basic and
diluted share for the third quarter of 2017, compared to a net loss
of $218 million, or $7.98 per basic and diluted share, for the
third quarter of 2016. This decrease in net loss compared to the
same period in 2016 was largely driven by a $96 million reduction
in loss on amendment of contract and an $11 million decrease in
general and administrative expenses offset by a $27 million
increase in interest expense and a $33 million non-cash loss on
debt related embedded derivatives associated with an increase in
the market value of secured debt during the quarter.
As of September 30, 2017, cash, cash equivalents, short term
investments and restricted cash were approximately $547 million.
This includes $250 million of Angolan sale proceeds received
pursuant to the purchase and sale agreement with Sonangol, but
excludes approximately $179 million in receivables owed to Cobalt
by Sonangol.
Capital expenditures are expected to be approximately $250
million in 2017, which excludes general and administrative expenses
and interest expense. Of this amount, approximately $226 million
has been spent as of September 30, 2017. Cobalt does not expect any
significant cash outlays for its development activities for the
remainder of the year given that drilling activities have been
completed. Total 2017 cash outlays are currently expected to be
approximately $537 million, of which approximately $409 million has
been spent as of September 30, 2017.
Operational Update
In the deepwater Gulf of Mexico, Cobalt has completed the North
Platte appraisal program and is currently planning to file for a
suspension of production (“SOP”) during the fourth quarter of 2017.
As a contingency to the SOP process, Cobalt is also currently in
the planning stages for a North Platte #5 well.
At Anchor, the operator plans to file an application with the
Bureau of Safety and Environmental Enforcement to expand the
existing Anchor unit to include the two leases located immediately
south of the unit (Green Canyon blocks 850 and 851). Assignments
submitted for the south Anchor leases were approved by the Bureau
of Ocean Energy Management in August. The operator currently
intends to file for an SOP for the Anchor unit.
At Shenandoah, the operator is currently concluding studies to
verify the suitability of a more cost effective facility as the
production host and is also evaluating future drilling options.
Marketing efforts continue with respect to Cobalt’s Gulf of
Mexico assets. However, given the scope of these assets, this
process has taken longer than expected. Interested parties continue
to be engaged in Cobalt’s data room and the process is still moving
forward.
With regard to Angola, the two arbitration processes between
Cobalt and Sonangol continue to progress and the arbitral tribunals
for each arbitration have been constituted with a President for
each selected. In addition, scheduling conferences are being
planned to agree on long term schedules for both arbitrations
cases. Cobalt continues to seek a constructive dialogue with Angola
to attempt to resolve these disputes amicably. However, until this
matter is resolved in a satisfactory manner, Cobalt will continue
to vigorously prosecute these claims in arbitration and seek all
available remedies.
Conference Call
A conference call for investors will be held today at 9:00 a.m.
Central Time (10:00 a.m. Eastern Time) to discuss Cobalt’s third
quarter 2017 results. Hosting the call will be Timothy J. Cutt,
Chief Executive Officer, and David D. Powell, Chief Financial
Officer.
The call can be accessed live over the telephone by dialing
(877) 407-9039, or for international callers (201) 689-8470. A
replay will be available shortly after the call and can be accessed
by dialing (844) 512-2921 or for international callers (412)
317-6671. The passcode for the replay is 13672842. The replay will
be available until November 16, 2017.
Interested parties may also listen to a simultaneous webcast of
the conference call by accessing the Newsroom-Events & Speeches
section of Cobalt’s website at www.cobaltintl.com. A replay of the
webcast will also be available for approximately 30 days following
the call.
About Cobalt
Cobalt International Energy, Inc. (NYSE: CIE) is an independent
exploration and production company active in the deepwater U.S.
Gulf of Mexico and offshore West Africa. Cobalt was formed in 2005
and is headquartered in Houston, Texas.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the federal securities laws, including the safe
harbor provisions of the Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934 — that is,
statements related to future, not past, events. Forward-looking
statements are based on current expectations and include any
statement that does not directly relate to a current or historical
fact. In this context, forward-looking statements often address
Cobalt’s expected future business and financial performance, and
often contain words such as “anticipate,” “believe,” “may,” “will,”
“aim,” “estimate,” “continue,” “intend,” “could,” “expect,” “plan,”
and other similar words. These forward-looking statements involve
certain risks and uncertainties that ultimately may not prove to be
accurate. Actual results and future events could differ materially
from those anticipated in such statements. For further discussion
of risks and uncertainties, individuals should refer to Cobalt’s
SEC filings. Cobalt disclaims any obligation or undertaking, and
does not intend, to update these forward-looking statements to
reflect events or circumstances occurring after this press release,
other than as required by law. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. All forward-looking statements
are qualified in their entirety by this cautionary statement.
Consolidated Statement of Operations
Information:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016 (in
thousands, except per share amounts) Oil, natural gas and natural
gas liquids revenues
$
14,427
$
4,228
$
38,043
$
9,037
Operating costs and expenses: Seismic and
exploration 11,522 21,228 32,605 36,719 Dry hole costs and
impairments 45,983 50,346 325,574 205,735 Loss on amendment of
contract – 95,908 – 95,908 Lease operating expenses 2,638 2,373
8,371 5,031 General and administrative expenses
19,934
31,251
66,558
82,571
Accretion expense 296 102 883 306 Depreciation, depletion and
amortization
10,500
7,183
29,472
14,642
Total operating costs and expenses
90,873
208,391
463,463
440,912
Operating loss (76,446 ) (204,163 ) (425,420 )
(431,875 ) Other (expense) income, net: Other income 169 –
10,870 4,375 Loss on embedded derivatives (32,664 ) – (103,194 ) –
Interest income 1,478 990 4,683 3,781 Interest expense
(42,155 ) (15,034 ) (128,380 )
(46,650 ) Total other expense, net (73,172 )
(14,044 ) (216,021 ) (38,494 ) Net loss
$ (149,618 ) $ (218,207 ) $ (641,441 ) $ (470,369 )
Basic and diluted loss per share $ (5.05 ) $ (7.98 )
$ (21.72 ) $ (17.21 ) Weighted average common shares
outstanding (basis and diluted)
29,606
27,359
29,532
27,330
Consolidated Balance Sheet
Information:
September 30,
2017
December 31,
2016
($ in thousands) Cash and cash equivalents $ 200,445 $ 613,534
Restricted cash 11,274 2,517 Short-term investments 325,235 340,418
Total current assets 757,821 1,147,191 Oil and natural gas
properties 920,776 1,078,885 Total assets 1,692,384 2,230,478 Total
current liabilities 469,884 533,954 Total long-term liabilities
2,692,944 2,537,858
Total stockholders’ equity (29,624,874 and
29,422,864 shares issued and outstanding as of September
30, 2017 and December 31, 2016, respectively)
(1,470,444 ) (841,334 ) Total liabilities and stockholders’ equity
$ 1,692,384 $ 2,230,478
Consolidated Statement of Cash Flows
Information:
Nine Months Ended September 30, 2017
2016 ($ in thousands)
Net cash (used in) provided by:
Operating activities $ (180,285 ) $ (74,838 ) Investing activities
(212,362 ) 377,421 Financing activities (1,285 ) –
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Cobalt International Energy, Inc.Investor Relations:Aaron
Skidmore, +1 713-457-4426Director, Investor RelationsorMedia
Relations:Lynne L. Hackedorn, +1 713-579-9115Vice President,
Government and Public Affairs