December 15, 2009 / 11:30 PM / 10 years ago

UPDATE 1-Cobalt Energy prices below expectations

* Cobalt IPO prices at $13.50 vs $15-17 range-underwriter

* Cobalt Energy sold 63 mln shares, raised $850.5 mln

* Cobalt plans to list on NYSE under symbol “CIE”

By Clare Baldwin

NEW YORK, Dec 15 (Reuters) - Independent oil exploration company Cobalt International Energy Inc CIE.N priced shares in its initial public offering below expectations, according to an underwriter.

The Houston-based company sold 63 million shares for $13.50, each, and raised roughly $850.5 million. It had expected to sell shares for between $15 to $17.

Cobalt had no revenue as of Sept 30, and no proved reserves, but plans to tap into what are some of the hottest geographies in the energy industry.

Cobalt has ownership stakes in deepwater prospects in the Gulf of Mexico and the African countries of Angola and Gabon. The Gulf of Mexico is one of the most lucrative areas for oil and gas exploration, with investments from all of the major oil companies, including Exxon Mobil Corp (XOM.N), and Angola has become one of the leading U.S. energy suppliers.

Cobalt said it expects to start commercial production from its Gulf of Mexico properties between 2012 and 2014, and from its African properties between 2014 and 2016.

Cobalt International has development agreements with French oil concern Total SA (TOTF.PA) SA and Angola’s national oil company, Sonangol, and plans to use the IPO’s net proceeds to fund its drilling and exploration program through 2011.

Cobalt was founded in 2005 by a group of oil industry executives and private equity investors. Its chief executive, Joseph Bryan, had previously been chief operating officer of oil and gas exploration company Unocal Corp.

The funds backing the company are affiliated with Goldman Sachs & Co, and private equity firms Riverstone Holdings LLC and The Carlyle Group.

Another oil and gas prospector, Crimson Exploration Inc, is expected to price later this week.

Cobalt’s underwriters are led by Credit Suisse and Goldman Sachs & Co. The underwriters have the option to purchase an additional 9.45 million shares. (Reporting by Clare Baldwin, additional reporting by Matt Daily)

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