Cobalt International Energy, Inc. (CIE) Q2 2012 Earnings Call July 31, 2012 11:00 AM ET Executives Joe Bryant – Chairman and CEO John Wilkirson – EVP and CFO Jim Farnsworth – Chief Exploration Officer Analysts Scott Willis – Credit Suisse Evan Calio – Morgan Stanley Matthew Portillo – Tudor, Pickering, Holt Ryan Todd – Deutsche Bank Brian Singer – Goldman Sachs Al Stanton – RBC Capital Markets Joe Allman – JP Morgan Brendan Warn – Jefferies Ed Westlake – Credit Suisse Presentation Operator
During the second quarter, we focused on five key objectives that we believe would deliver shareholder value. These include one, safely and successfully drilling our Cameia #2 Appraisal Well Offshore Angola to expand total debt and collecting critical well data. Two, continuing our technical evaluation and maturation of additional pre-salt prospects located within Blocks 9, 20 and 21 in Angola, as well as our Diaba block in Gabon. Three, initiating and progressing the development concept and approach for the Cameia field in anticipation of positive Cameia #2 well results.Four, building our organizational capabilities particularly in our West Africa division, so that we can effectively and efficiently carryout the exciting drilling and development activities associated with our abundant West Africa portfolio, and by participating in the drilling wells with operated and non-operated from the deepwater Gulf of Mexico. I’m happy to report that we’ve accomplished a great deal in these five key areas in the second quarter. I will now discuss these in more detail starting with our Cameia #2 results. Cameia 2 reached total debt of 5,475 meters on July 4th, without any safety and environmental incidents. Of course, this is always the most important measure of success in all of our operations. Since reaching total debt, we have been conducting numerous wireline testing and evaluation operations in order to establish that we have achieved our key role objectives of one, establishing lateral continuity of the prolific reservoir that we discovered in Cameia #1. Two, determining if an oil-water contact existed on the Cameia structure, and three, drilling the entire pre-salt stratigraphic section of our basement to determine any evidence of deeper hydrocarbon charge in the system. I’m going to let Jim, walk you through the results in a few minutes. But as we have announced this morning, we believe that we have successfully achieved the first two objectives and made significant progress on the third. Our 3D seismic data acquisition processing and evaluation efforts offshore West Africa continued to go very well.
Our seismic contractor completed the acquisition of approximately 4,200 square kilometers of 3D seismic data on Block 20 in May, and is now processing this data. We will remain confident that the progress made on the seismic data will allow us to drill the much anticipated long-term prospect in Block 20 in 2013.In Block 21, where Cameia is located, we finalized our Block wide 3D seismic reprocessing efforts utilizing the 1990s existing seismic survey and our exploration staff has been diligently evaluating this data. In addition, the Board has approved an extensive 3,000 square kilometer of 3D seismic acquisition program to assist that in our Cameia development planning, as well as prospect maturation in the Block. We will begin acquiring this survey this fall. Our prospect inventory remains robust and we are very excited about our next few prospects, Bicuar and Loengo in Block 21. To avoid any confusion, we previously have referred to Loengo as Cameia north, but the concessionaire has renamed this prospect Loengo. In Block 9, we are continuing our prospect maturation efforts and preliminary well planning, which should allow us to be in a position to drill our first Block 9, pre-salt exploration well on the Loengo prospect in 2013. With regard to the Diaba Block in Gabon, TOTAL, as operator, is nearing completion of its detailed seismic reprocessing of the recently acquired and process 3D seismic data over the most promising prospects in the block. They remain on targets for the first Diaba exploratory well on either Mango or Mango South with their contracted rig in early 2013. Given the exceptional results of both Cameia 1 and Cameia 2 Cobalt in conjunction with our partners and the concessionaire has commenced development planning for Cameia. We anticipate employing a fairly development approach and are currently evaluating subsea design specifications and exploring FPSO opportunities for this development.
I believe that this early planning will help us to achieve production from Cameia in a timely manner. My best guess is that, we should – could be online as Cameia in early 2016, if we remain aligned with our partners and the concessionaire. I will have a lot more to say about this later in the call.Read the rest of this transcript for free on seekingalpha.com