Cobalt International Energy (CIE) Q1 2012 Earnings Call May 01, 2012 11:00 am ET Executives Joseph H. Bryant - Chairman and Chief Executive Officer John P. Wilkirson - Chief Financial Officer, Principal Accounting Officer and Executive Vice President James W. Farnsworth - President and Chief Exploration officer Analysts Evan Calio - Morgan Stanley, Research Division Ryan Todd - Deutsche Bank AG, Research Division Brian Singer - Goldman Sachs Group Inc., Research Division Brad Pattarozzi - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Michael Scialla - Stifel, Nicolaus & Co., Inc., Research Division Joseph Bachmann - Howard Weil Incorporated, Research Division Al Stanton - RBC Capital Markets, LLC, Research Division Presentation Operator
During the first quarter, we concentrated on 5 critical areas that we believe would deliver shareholder value. These include performing a Drill Stem Test on our Cameia #1 exploratory well; participating in the drilling of wells in both of our key deepwater geographic basins; continue our technical evaluation and maturation of additional pre-salt prospectivity in Blocks 9, 20 and 21 in Angola, Diaba and Gabon; and four, continuing our efforts to highly obtain regulatory approvals of our exploration plans and permits required to drill our Gulf of Mexico prospect inventory; and five, initiating and completing a successful follow-on stock offering which would provide Cobalt with an even stronger balance sheet.I'm happy to report that we've accomplished a great deal in these 5 critical areas. And we'll start off discussing our successes in West Africa. In early February, Cobalt obtained the Drill Stem Test results from our Cameia #1 exploratory well in the deepwater offshore Angola and announced that the results were extraordinary and had exceeded Cobalt's expectations. The DST confirmed the presence of a very thick, continuous high-quality reservoir saturated with light oil. Following the exceptional success of the Cameia #1 exploratory well, Cobalt immediately commenced drilling of the Cameia #2 appraisal well in order to further assess the size and extent of the Cameia oil discovery. In addition, the Cameia #2 well will test objectives deeper than those drilled in the Cameia #1 well. We expect to announce the results of this appraisal well later in the second quarter of this year. Our 3D seismic acquisition and processing efforts offshore West Africa continue to go very well. Last year, Cobalt and our Block 20 partners executed an agreement with our seismic contractor to acquire and process approximately 4,200 square kilometers of 3D seismic data on Block 20. It is now a little over 6 months since our seismic contractors started shooting this survey, and the data acquisition is anticipated to be completed this week. The processing of this data has already commenced. These efforts should allow us to remain on schedule to drill the much-anticipated Lontra prospect in Block 20 in 2013.
In Block 9, we completed our 3D seismic processing efforts in March. Most significantly, the data quality is exceeding our pre-acquisition expectations. We have begun prospect maturation efforts and preliminary well planning, and we are currently targeting the drilling of the first Block 9 pre-salt exploration well of the Loengo prospect, also in 2013.In Block 21, where Cameia is located, we are finalizing our block-wide 3D seismic reprocessing efforts and expect this work to be fully complete and in our geologists' hands by the end of May. These reprocessed data will be utilized to further mature additional prospects we see on Block 21. We have firmed up our near-term drilling plans for offshore Angola. Today, we're able to announce that we have contracted the Ocean Confidence drilling rig for one additional slot at an attractive day rate. After the Cameia #2 appraisal drilling and testing operations are complete, we will release the Ocean Confidence to another operator who will drill one lease-maintaining well outside of Angola. As soon as that well is complete, which we expect will be late in the third quarter or in the fourth quarter of 2012, the rig will be returned to us and we will use our one remaining slot, plus the one additional slot to drill 2 consecutive pre-salt wells offshore Angola, most likely chosen from Bicuar and North Cameia in Block 21 and Loengo in Block 9. While securing the Ocean Confidence addresses our near-term plans, we're also currently tendering for a long-term rig solution to support our Angolan exploration and development drilling program. In addition, we're in the process of tendering for long-lead items for this drilling program. With regard to the Diaba blocks in Gabon, the final reprocessing of the 6,000 square kilometer 3D seismic acquisition was completed at the end of last year. TOTAL, as operator, is performing detailed seismic reprocessing over the most promising prospects on the block and expects that this work completed in June. Their contract is a drilling rig with a target to spud the first Diaba exploratory pre-salt well on either Mango or Mango South in early 2013. Read the rest of this transcript for free on seekingalpha.com