Cobalt International Says Angola Stake Sale Off Track

Reuters

Aug 2 (Reuters) - Cobalt International Energy Inc said it was unlikely to close a $1.75 billion sale of its 40 percent stake in two offshore oil blocks in Angola to the state oil company, sending its shares down as much as 43.5 percent.

The oil and gas producer, which reported a bigger quarterly loss on Tuesday, also said it was suspending operations in the Gulf of Mexico to conserve cash.

The company said in August last year it would sell its stake in the oil blocks to Angola's Sonangol, which holds the remaining stake.

Cobalt's Angolan operations are being investigated by the U.S. Department of Justice.

"Although we prefer the same transaction with Sonangol to close, I am pleased that we can remarket these...assets to third parties," Chief Executive Tim Cutt said on a post-earnings call on Tuesday.

The company also said its keenly watched Goodfellow #1 exploration well in the Gulf of Mexico was dry.

Cobalt said its quarterly loss widened mainly because of a write-off related to the well, which the company started drilling in March.

The company's net loss widened to $205.55 million, or 50 cents per share, in the quarter ended June 30, from $66.81 million, or 16 cents per share, a year earlier.

The company said it cut its workforce by more than 60 percent over the past several months.

As of June 30, its long-term debt was $2.03 billion and its cash and cash equivalents was $833.8 million, including $250 million received from Sonangol, which will presumably be returned.

Cobalt shares were down at 98 cents, after touching a record low of 76 cents earlier in the day.

(Reporting by Vishaka George and Arathy Nair in Bengaluru; Editing by Don Sebastian)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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