Cobalt Encouraged by North Platte Appraisal Results

Cobalt International Energy Inc. said Wednesday that the preliminary results of its North Platte No. 4 appraisal well mark a major milestone in fully appraising the North Platte field in the deepwater Gulf of Mexico.

The company encountered approximately 650 feet of net oil pay in the North Platte No. 4 appraisal well. The initial appraisal results also indicate high quality inboard Lower Tertiary Wilcox reservoirs on the eastern flank of the North Platte field, Cobalt said in a Jan. 4 press release.

The North Platte No. 4 appraisal well was drilled with Rowan Cos. rig Rowan Reliance (UDW drillship), Cobalt spokesperson Lynne L. Hackedorn told Rigzone in a phone call.

Cobalt previously encountered about 550 feet of net pay in the North Platte No. 3 appraisal well. Cobalt Chief Executive Officer Timothy J. Cutt said in the release that the confirmation of high quality reservoir on the large eastern flank of the field is encouraging.

The company currently is evaluating log data, fluid samples and pressure information and is preparing for a geologic sidetrack to further analyze the extent of the eastern flank of the field. Cobalt expects to complete the geologic sidetrack in the first quarter, then provide an update on the field’s resource potential.

A positive geologic sidetrack well could suggest that Stifel’s risked net asset value/share of $1.00, which includes 450 million barrels of oil equivalent gross, and $.47/share for North Platte, are conservative, analyst Michael S. Scialla said in a Jan. 4 research note. Until then, Stifel said it would keep its Hold rating on the company as Cobalt markets its deepwater projects, including assets in Angola. In August of last year, the company’s planned sale of a 40 percent stake in two offshore Angola oil blocks was cancelled after Cobalt failed to get approvals it needed from the Angolan government.

“While management has indicated in the past that it has been pleased with the level of interest in its data room, we do not anticipate a near-term sale announcement,” Scialla said.

Cobalt holds 60 percent working interest in North Platte. Total E&P USA Inc. is partner with 40 percent interest.

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