Cobalt International Energy, Inc. (NYSE:CIE) finds no oil in Gulf of Mexico; stock falls

Posted by Kristi Scott August 20, 2013 0 Comment 737 views

Cobalt International Energy, Inc. (NYSE:CIE), an oil-focused exploration company business operations in two geographic segments, including the U.S. Gulf of Mexico and West Africa, has announced an update on its West Africa and Gulf of Mexico drilling operations.

While announcing the updates, the company said it did not find oil at one of its major deep-water wells in the Gulf of Mexico. The news started showing negative impact on Cobalt International’s stock, which fell almost 15% on Monday trading.

According to the company, its Ardennes #1 exploratory well in Green Canyon Block 896 reached its objective total depth of 36,552 feet, where Cobalt encountered only sand, claims Cobalt CEO, Van Whitfield.

However, Cobalt also said it had signed a drilling contract with Rowan Reliance Ltd for a new ultra-deepwater drilling rig, which is expected to operate in the Gulf of Mexico.

Following the announcement, analysts at Howard Weil cut their price target on shares of Cobalt International Energy to $44.00 from $45.00. Currently, the company has been given a “sector outperform” rating. In addition, JPMorgan Chase & Co. analysts reiterated an “overweight” rating on Cobalt shares, with a $32.00 price target. ISI Group upgraded shares of the company from a “buy” rating to a “strong-buy” rating. They now have a $35.00 price target on the stock.

Total, seven research analysts have rated the stock with a “buy” rating and two have given a “strong buy” rating to Cobalt. Currently, the company has a consensus rating of “Buy” and an average target price of $37.13.

For the second quarter of 2013, Cobalt International Energy reported a net loss of $79 million, or $0.19 earnings per share, compared to a net loss of $141 million, or $0.35 EPS for the same quarter a year ago. Cobalt’s cash, cash equivalents, and investments at the end of the quarter were approximately $2.3 billion.

About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

View all post by Kristi Scott Visit author's website

Write Your Comment