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UPDATE 2-Angola well data lifts Cobalt International shares
July 31, 2012 / 1:20 PM / 5 years ago

UPDATE 2-Angola well data lifts Cobalt International shares

* Q2 adj loss $0.11/shr vs est. loss $0.09/shr

* Reservoir deeper than indicated by a previous well

* Shares up 19 pct

By Swetha Gopinath

July 31 (Reuters) - Oil explorer Cobalt International Energy Inc said data from a well has confirmed the presence of a large oil reservoir off the coast of Angola, sending its shares up 19 percent.

The well in Block 21 also confirmed a deeper reservoir than what was shown by a previous appraisal well, said the company.

“The data that we have obtained from this appraisal well is nothing short of a windfall,” CEO Joseph Bryant said on a conference call with analysts.

Stifel Nicolaus & Co analyst Michael Scialla said there could be more than a billion barrels of oil in the reservoir.

Out of the 11 analysts covering the company, three rate the stock “strong buy” while the rest recommend “buy”.

Cobalt, which counts Goldman Sachs Group Inc and private equity firms Riverstone and First Reserve as investors, has a 40 percent stake in the block. State-owned Sonangol and local companies Nazaki Oil & Gas and Alper Oil are its partners.

Houston-based Cobalt said in February that test results from another well in the block exceeded expectations.

Production from the Angola block could start in early 2016, a Cobalt executive said on the call.

The company’s shares, which have nearly doubled in the last year, were up 9 percent at $26.39 in afternoon trade on Tuesday on the New York Stock Exchange. The stock earlier rose to $28.67, its highest in three and half months.

Cobalt, which operates in Angola, Gabon and the Gulf of Mexico, s aid it will hire employees and contractors to support activity in West Africa. It has also secured a three-year contract for a deepwater rig in Angola.

News of the results from the well more than made up for a slightly larger-than-expected quarterly loss at the company, which currently has no oil and gas revenue.

Second-quarter net loss widened to $141 million, or 35 cents per share, from $19 million, or 5 cents per share, a year earlier.

Adjusted loss was 11 cents per share, while analysts had expected a loss of 9 cents per share, according to Thomson Reuters I/B/E/S.

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