Cobalt announces major discovery in offshore Angola

HOUSTON — Cobalt International Energy has found more oil and gas trapped under salt formations in an exploratory well off the coast of Angola, a “major discovery” that could hold reserves of 700 million to 1.1 billion barrels of oil equivalent, the company said Monday.

The Houston oil producer’s Lontra well, sitting more than 13,700 feet below the ocean surface, produced 2,500 barrels of condensate and 39 million cubic feet of natural gas per day in a recent test, though Cobalt said the flow rate was hampered by testing equipment. With the proper production equipment, the well likely could flow about 30,000 barrels of oil equivalent per day, but Cobalt is still running tests to determine the well’s full size and potential, said Chief Exploration Officer James Farnsworth during  a conference call with investors Monday.

The company believes the reservoir is 45 percent oil and condensate, meaning the discovery houses more gas than the company had expected.

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Cobalt shares dropped 16 percent to $18.70 in early trading Monday.

“I can confirm that Lontra is another crown jewel in Cobalt’s set of world-class exploration successes,” Cobalt Chief Executive Officer Joseph Bryant said during the conference call. “It’s truly a discovery on a global scale.”

It’s the company’s third recent pre-salt discovery in the Kwanza pre-salt basin, which is in the offshore Angola region, an unusually strong result for an “untested” area, Bryant said. Cobalt said it has already dispatched the rig that had drilled the Lontra well to another pre-salt well site about 15 miles northeast.