Bloomberg News

Goldman-Backed Cobalt Jumps 37% After Angolan Oil Discovery

December 20, 2011

(Updates with closing share price in second paragraph.)

Dec. 20 (Bloomberg) -- Cobalt International Energy Inc., the deep-water crude explorer whose biggest investors include Goldman Sachs Group Inc., had its largest gain after an exploration well off the coast of Angola struck oil.

Cobalt rose 37 percent to $13.85 at the close in New York, the biggest intraday increase since it began trading in 2009. The climb was the largest among members of the Russell 1000 Index.

Cobalt is evaluating results from the Cameia-1 well in an offshore zone in Angola known as Block 21, the Houston-based company said today in a statement. Last month, the company estimated the prospect held at least 1 billion barrels of crude.

The discovery heralds a turnaround in Cobalt’s fortunes after exploration setbacks in the Gulf of Mexico and drilling delays stemming from BP Plc’s oil spill last year, said Scott Hanold, an analyst at RBC Capital Markets.

“After a pretty tough few years, things are starting to come together for Cobalt,” Hanold said today in a telephone interview from Austin, Texas. “Everything they’ve seen so far from this well has been pretty positive.”

At current Brent crude prices, a billion-barrel find would be valued at more than $100 billion, based on Bloomberg calculations.

‘Very Encouraging’

Goldman and private-equity firm Riverstone Holdings LLC each hold 19 percent stakes in Cobalt, according to data compiled by Bloomberg. Cobalt was founded in 2005 and first sold shares to the public in December 2009.

“The results thus far confirm the existence of hydrocarbons and are very encouraging,” the company said in the statement. After the well is sealed, Cobalt said it plans to move the Ocean Confidence rig, leased from Diamond Offshore Drilling Inc., to the nearby Bicuar-1 prospect to begin another well.

Angola signed a production-sharing agreement today with Cobalt for the exploration of an additional offshore area known as Block 20, the company said in the statement.

--Editors: Tina Davis, Steven Frank

To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net


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