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UPDATE 2-Cobalt declares force majeure on GoM rig
June 1, 2010 / 1:41 PM / in 7 years

UPDATE 2-Cobalt declares force majeure on GoM rig

* Says force majeure on rig owned by Diamond Offshore

* Sees spending $15 mln due to force majeure

* Says suspension of drilling to delay its GoM ops

* Shares down as much as 8 pct (Adds background, Stone Energy statement)

BANGALORE, June 1 (Reuters) - Oil and gas explorer Cobalt International Energy Inc (CIE.N) declared force majeure on a drill rig citing the U.S. government’s decision to suspend all drilling operations in deepwater Gulf of Mexico following the BP oil spill.

The company said it will incur expenditures of about $15 million due to force majeure. The Ocean Monarch rig, located at Cobalt’s North Platte exploratory well, belongs to Diamond Offshore Inc (DO.N).

Smaller peer Stone Energy Corp (SGY.N) also said the government’s decision to extend ban on new drilling will delay drilling of a second well in its Amberjack program.

Stone, however, said current production from the Amberjack platform remained unchanged and backed its full-year total production view of 205 million cubic feet equivalent per day (mmcfed) to 225 mmcfed.

“Drilling plans for several conventional shelf wells and two deep shelf wells do not appear to be impacted by the moratorium,” the company said.

On Thursday, the U.S. government ordered a temporary halt to drilling at 33 deepwater exploration rigs and extended the ban on new drilling by six months as part of a broader response to the oil spill. [ID:nLDE64R00P]

Oil from BP’s out-of-control spill could threaten the Mississippi and Alabama coasts this week, as public anger surged over the country’s worst environmental disaster.

U.S. government and BP (BP.L) officials are warning that the blown-out deepwater well feeding the catastrophic spill may not be shut off until August. [ID:nN31222759]

Cobalt International Energy said the decision by the government will delay its Gulf of Mexico (GoM) operations by about six months.

“Other than this initial six month delay, Cobalt reaffirms its intentions to execute all aspects of its entire GoM exploration and appraisal program as previously announced,” the company said in a statement.

The company also re-affirmed its plans to start drilling operations in offshore Angola by the fourth quarter 2010 or first quarter 2011.

Cobalt, which went public in December last year, expects to start commercial production from its Gulf of Mexico properties between 2012 and 2014 and from its African properties between 2014 and 2016. [ID:nN1630304]

Shares of the company were down 7 percent at $6.50, while those of Stone Energy were down 2 percent at $13.16 Tuesday morning on the New York Stock Exchange.

For the alerts, please double click [ID:nASA00EVS] [ID:nASA00EWR] (Reporting by Arup Roychoudhury in Bangalore; Editing by Don Sebastian)

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