Cobalt ends Q4 with $1.2 billion of cash, eyes 50% workforce reduction

By Lisa Kerner

Charlotte, N.C., Feb. 22 – Cobalt International Energy, Inc. ended 2015 with about $1.2 billion of cash and cash equivalents, said chairman and chief executive officer Joe Bryant during the company’s fourth-quarter earnings call on Monday.

The total includes a $250 million initial payment received from Sociedade Nacional de Combustiveis de Angola – Empresa Publica (Sonangol).

Sonangol has agreed to acquire Cobalt’s 40% working interest in Angola Blocks 20 and 21 for $1.75 billion. Closing is contingent on the receipt of Angolan government approvals. Bryant discussed the sale and said he expects it to close at some point.

Cobalt has reduced its overall daily spread rate for its operated drilling activities by about $200,000 to $1.1 million through its cost-reduction efforts.

The company has identified about $100 million of reduced expenditures for 2016 and is restructuring to better align with its post-Angola business. As a result, Cobalt expects to cut its total workforce by 50%, Bryant said.

Cobalt used $553 million of cash in 2015 for capital and operating expenditures. Capex is expected to total between $450 million and $500 million in 2016, and total uses of cash are expected to be in the range of $600 million to $650 million.

For the quarter, Cobalt had a net loss from continuing operations of $325.0 million, or $0.80 per basic and diluted share, compared with a net loss from continuing operations of $140.4 million, or $0.34 per basic and diluted share, for the fourth quarter of 2014.

The company had a net loss from continuing operations for the full year ended Dec. 31 of $498.5 million, or $1.22 per basic and diluted share. This compares with a net loss from continuing operations of $317.2 million, or $0.78 per basic and diluted share, for 2014, according to the earnings release.

Houston-based Cobalt is an independent oil exploration and development company.

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