NEW YORK ( TheStreet) -- In a seemingly incongruous move, Cobalt International Energy ( CIE) shares are plummeting after the company said it had discovered more natural gas than expected at its well off the Angolan coast in Southern Africa. At its Lontra well, the offshore oiler has tapped a flow of 2,500 barrels of gas condensate and 39 million cubic feet of gas per day at a total depth of 13,763 feet.
"Although the field contains more gas than our pre-drill estimates, it is beneficial that Lontra is offshore near Luanda, where we believe there is a potentially large emerging market for gas," said CEO Joseph H. Bryant in a statement. "It is clear that Lontra is a discovery on a global scale."
"This excellent track record gives us increased confidence in the depth of our Angolan portfolio, the size and value of its potential and the likelihood of further large discoveries," added Cobalt Chief Exploration Officer James W. Farnsworth.
However, foreign investors are restricted under the country's production-sharing contracts, thus capping potential profitability. The Houston-based business owns the majority stake in the well, with BP (BP) and Angola-run Sonangol each holding a 30% interest.
By early afternoon, shares had shed 16.3% to $18.61 and 13.6 million shares changed hands, more than four times its three-month average daily trading volume. BP was trading 0.53% lower at $46.76.
Monday is proving a bad day for oilers as shares of Brazil-based business Petrobras (PBR) also went south. Shares were down 10.8% to $14.22 after the company hiked its diesel prices 8% and gasoline prices 4%.