Cobalt Swings to Loss in 2Q

Cobalt announced a net loss of $41.8 million, or $0.12 per basic and diluted share, for the three months ended June 30, 2010, compared with a net loss of $2.1 million, or $0.01 per pro forma basic and diluted share, for the same period in 2009.

The net loss for the second quarter includes $10.0 million ($0.03 share) expensed for force majeure costs related to the drilling rig (Ocean Monarch) and other equipment and services which were to be used to drill the North Platte #1 exploratory well that was suspended as a result of the Gulf of Mexico Drilling Moratorium imposed by the United States Government. Also included in the quarter are $13.9 million ($0.04 share) of dry hole expense and impairment charges related to the Firefox #1 exploratory well, the Heidelberg #2 appraisal well and pre-moratorium drilling costs for the North Platte #1 exploratory well.

Expenditures for the first six months totaled approximately $76 million. Cobalt now estimates that its full year expenditures will be between $150 and $170 million, compared with Cobalt’s previously announced guidance of $430 million. The lower full year expenditures are due to delays to Cobalt’s drilling plans in the Gulf of Mexico caused by the moratorium, and the anticipated delay in commencing Angolan drilling operations from the fourth quarter 2010 to the first quarter of 2011.