Cobalt Makes Two Oil Discoveries Offshore Angola

Cobalt International today announced discoveries at its Lontra #1 and Mavinga #1 deepwater Pre-salt exploratory wells offshore Angola.

On Block 20, the Lontra #1 well has reached total depth, and the drilling and evaluation results confirm an oil and gas discovery. Further evaluation, including a drill stem test, is required to assess Lontra’s potential. Cobalt expects to be able to provide more information on the Lontra #1 well prior to year end.

Upon completion of testing operations, Cobalt plans to mobilize the Petroserv SSV Catarina drilling rig to the Orca #1 Pre-salt exploratory well (formerly the Baleia Prospect), located approximately 15 miles (25 kilometers) northeast of Lontra in Block 20. Cobalt’s partners in Block 20 include Sonangol Pesquisa e Produção, S.A. and BP Exploration Angola (Kwanza Benguela) Limited.

In addition, Cobalt announced the Mavinga #1 Pre-salt oil discovery on Block 21. The Cobalt operated Mavinga #1 exploratory well, located approximately 8 miles (12.5 kilometers) northwest of Cobalt’s 2012 Cameia discovery, reached total depth and encountered approximately 100 feet (30 meters) of net oil pay. This discovery was confirmed by the successful production of oil from mini drill stem tests, direct pressure and permeability measurements, and log and core analyses. Efforts to establish a sustained flow rate from a full drill stem test were not successful. Cobalt is in the early stages of determining what operational issues may have prevented the production from the oil reservoir during the drill stem test.

Cobalt estimates a gross oil column of up to 650 feet (200 meters) at the crest of the Mavinga structure updip of the Mavinga #1 well. Additional drilling will be required to confirm the ultimate gross thickness of the mound and its reservoir quality; however the Mavinga discovery is expected to be tied-back to and become part of the planned Cameia development complex in Block 21.

Following the temporary abandonment of the Mavinga #1 well, Cobalt mobilized the Ocean Confidence drilling rig to proceed with the drilling of the Bicuar #1A Pre-salt exploratory well located south of the Cameia and Mavinga discoveries on Block 21. Cobalt’s partners in Block 21 include Sonangol Pesquisa e Produção, S.A., Nazaki Oil and Gaz, and Alper Limitada.

“While operations are still continuing at Lontra, it’s clear that each of Cobalt’s four wells to date has been successful in finding and delineating new hydrocarbon resources in the Angolan Pre-salt. This is a remarkable and highly unusual start to the exploration of such an immense new basin,” said Joseph H. Bryant, Cobalt’s Chairman and Chief Executive Officer. “Our early success in exploring the Pre-salt offshore Angola and Gabon, coupled with our success to date in the deepwater Gulf of Mexico, are a testament to the depth of Cobalt’s portfolio.”

3Q Results

Cobalt today also announced a net loss of $160 million, or $0.39 per basic and diluted share for the third quarter of 2013, compared to a net loss of $39 million, or $0.10 per basic and diluted share, for the third quarter of 2012. The current quarter included $108 million, or $0.27 per share for the impairment of expenditures, including $94 million associated with the Ardennes #1 exploratory well and related prospect leases.

Expenditures (excluding changes in working capital) for the quarter ending September 30, 2013 were approximately $290 million and for the nine months ending September 30, 2013 were approximately $671 million. Cobalt’s updated 2013 expenditure forecast is $850 to $950 million. Cash, cash equivalents, and investments at the end of the third quarter were approximately $2 billion. This includes about $395 million designated for future operations held in escrow and collateralizing letters of credit, but excludes approximately $109 million in the TOTAL drilling fund for the Gulf of Mexico.

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October 29, 2013