Value Creation through Successful Exploration and Selective Development

Transcription

1 NYSE: CIE Lontra #1 Value Creation through Successful Exploration and Selective Development February 2014 Investor Presentation 1

2 Forward Looking Statements Neither the United States Securities and Exchange Commission nor any other state securities regulator nor any securities regulatory authority elsewhere has reviewed or made any determination as to the truthfulness or completeness of the disclosure in this document. Any representation to the contrary is an offense. Recipients of this summary are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors in this regard. Certain statements, estimates, reserve and resource data, and financial information contained in this summary ("Estimates") constitute forward-looking statements or information. Such forward-looking statements or information involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from the Estimates or results implied or expressed in such forwardlooking statements. While presented with numerical specificity, the Estimates are based (1) on certain assumptions that are inherently subject to significant business, geologic, economic, regulatory, environmental, seasonal, competitive uncertainties, contingencies and risks including, without limitation, ability to obtain debt and equity financings, capital costs, construction costs, well production performance, operating costs, commodity pricing, differentials, royalty structures, field upgrading technology, and other known and unknown risks, all of which are difficult to predict and many of which are beyond Cobalt's control, and (2) upon assumptions with respect to future business decisions that are subject to change. There can be no assurance that the Estimates or the underlying assumptions will be realized and that actual results of operations or future events will not be materially different from the Estimates. Under no circumstances should the inclusion of the Estimates be regarded as a representation, undertaking, warranty or prediction by Cobalt, or any other person with respect to the accuracy thereof or the accuracy of the underlying assumptions, or that Cobalt will achieve or is likely to achieve any particular results. The Estimates are made as of the date hereof and Cobalt disclaims any intent or obligation to update publicly or to revise any of the Estimates, whether as a result of new information, future events or otherwise. Recipients are cautioned that forward-looking statements or information are not guarantees of future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking statements or information due to the inherent uncertainty therein. 2

3 2013: A Year of Unparalleled Exploration and Operational Results Best in Class Deepwater Exploration Success 71% Drilling Success Rate 5 for 7 on exploration and appraisal wells Made the largest discovery in the world in 2013 (1) Discovered over 1 Billion BOE (gross) Proven Operating Credentials Drilled the deepest well ever in the Gulf of Mexico deepwater in record time Reduced drilling time by 30-50% versus expectations in both Gulf of Mexico and Angola Demonstrated ability to learn and adapt quickly in challenging drilling environments Significantly impacts near term exploration efficiency and long term project economics (1) Tudor Pickering, Holt & Co and the American Association of Petroleum Geologists 3

4 GOM West Africa Robust 2014 Exploration and Development Activity Bicuar #1A Orca #1 Cameia, Lontra Mupa, Loengo, Golfinho Cameia Gabon Shenandoah North Platte & Offset Prospects Anchor, Goodfellow First Syn-rift discovery in Kwanza Basin; MMBO Large Pre-salt structure; currently drilling; results in Q Potential 2014 appraisal wells Potential 2014 exploration wells Phase I development sanction expected; 2017 first oil Actively pursuing new licenses; acquiring new 3D seismic in Diaba block Operator plans further appraisal activity first half 2014 Processing of new Full Azimuth 3D seismic and appraisal / exploration well permitting Participation in partner operated GOM exploration 4

5 Stellar Success Rate as Cobalt Opens Pre-salt Kwanza Basin N 100% exploration success rate suggests world-class petroleum province and establishes a potential giant trend Post-Salt Salt Post-Salt Salt S Cobalt Discovery Cobalt Prospect Basement Basement Basement Orca Cobalt PROSPECT Block 20 Block 21 Lontra Cobalt DISCOVERY Golfinho Cobalt PROSPECT Mavinga Cobalt DISCOVERY Cameia Cobalt DISCOVERY Bicuar Cobalt DISCOVERY Discovered MMBO (gross) between four fields (1) Lontra: MMBO Cameia: MMBO Mavinga: <100 MMBO Bicuar: MMBO Currently drilling Orca prospect potential of 250+ MMBO (1) More than 20 undrilled Pre-salt structures Greater than 2.5 bn barrels of gross potential Next wells to drill: Exploration wells (200+ MMBO prospects) (1) Loengo #1: Block 9 Mupa #1: Block 21 Golfinho #1: Block 20 Appraisal wells: Cameia Well to be spud after Orca Lontra Bicuar (1) Cobalt International Energy estimates as of February

6 Exploration Program Results to Date Have Resulted in a Step-change in Our Pre-salt Understanding and Risking Chance of Success: <20% 2007 Initial Critical Uncertainties at Play Entry: 1. Will the salt seal and trap oil? 2. Are reservoirs present and where are they? 6 Pre-Salt Post-Salt Salt Basement 3. Do deeper seals exist? 4. Are source rocks present and mature? 5. Can the Pre-Salt be effectively imaged? 6. Can early success be repeated? 100% Success to Date 2014 Current Geologic Understanding: 1. Salt proven to be a highly effective seal 2. Multiple Pre-salt reservoirs proven Post-Salt Salt 2 3. Deeper seals proven 4. Mature source rocks proven Pre-Salt Basement 4 5. High-quality Pre-Salt image is achieved; new opportunities identified 6. Multiple discoveries; deep inventory of new prospects 6

7 Cobalt has Competitive Advantages as Kwanza Basin Drilling Accelerates Cobalt has collected valuable, proprietary data Eni Operated 35 >100,000 ft of Pre-salt drilled > 3,800 sq miles of 3D seismic >300 ft of whole Pre-salt core 36 Conoco Operated Orca #1 Angola >500 side-wall Pre-salt cores 20 that will impact future exploration and development results Optimal well placement and design Conoco Operated Ability to prioritize exploration versus appraisal wells Continued operational outperformance Favored position to help Angola meet national oil production targets Cobalt will be developing barrels while others are still looking for barrels Cobalt will have six wells drilled before others drill their first well following the 2011 license round Statoil Operated 38 Cobalt License Cobalt Discovery Cobalt Prospect Cobalt Successful Well Cobalt Currently Drilling Industry Discovery Blocks 9, 20, 21 Cobalt 40% (Operator) Repsol Operated Azul 22 Maersk Operated 0 16 mi 25 km 23 Denden 9 7

8 Syn-Rift Discovery De-risks Deeper Reservoirs in the Kwanza Basin Bicuar discovery proved presence of quality Syn-rift reservoir Cobalt Prospects in Blocks 20 and 21 Significantly de-risks remaining prospects across the basin Currently re-analyzing data to high-grade prospect inventory Potential to better understand deeper intervals in existing discoveries such as Cameia Similar deeper reservoir analogs exist in Brazil s Campos Basin Illustrative Geologic Model Lontra Discovery Golfinho Orca #1 Baleia #1A (1996) Block 20 and 21 Cobalt 40% (Operator) Mavinga Discovery Cameia Discovery Bicuar Discovery Sag Carbonates Sag Mupa 0 16 mi Syn-Rift Coquinas Syn-Rift 25 km Basement Cobalt License Cobalt Discovery Cobalt Prospect Cobalt Successful Well Cobalt Currently Drilling 8

9 Orca #1: Offset Well from 1996 Baleia Test Lontra #1 Discovery 0 16 mi 25 km Baleia #1A (1996) Orca #1 Block 20 Cobalt 40% (Operator) Cobalt License Cobalt Discovery Cobalt Prospect Cobalt Successful Well Cobalt Currently Drilling Industry Discovery Catarina Rig Orca #1 targets the Pre-salt section found in the Baleia #1A well; second Pre-salt well on Block 20 New 3D suggests a larger structure with thicker reservoir potential Gross resource potential of 250+ MMBO (1) SW Lontra #1 Cobalt DISCOVERY Orca #1 Cobalt DRILLING Baleia #1A (1996) NE Potential for additional deeper intervals Reservoir quality is key risk Spud December 2013; well results expected Q Post-Salt 87m oil Ahead of schedule versus day expectation Salt Basement Basement 25km 16 mi. (1) Cobalt International Energy estimates as of February

10 Cobalt s Proven Inboard Lower Tertiary Geologic Model in the Gulf of Mexico Paleo Delta System Cobalt Geologic Model Potential for thick ponded reservoirs located up-dip closer to the Paleo Delta System Optimally positioned for improved reservoir and reservoir energy Utilized advances in sub-salt imaging technology to unlock access to deep reservoirs Geologic model proven by outstanding results at North Platte and Shenandoah North Platte >550 net pay, high quality reservoir and fluids Shenandoah >1000 net pay, high quality reservoir and fluids Tiber INBOARD SYSTEM Anchor Coronado Cobalt Leases Cobalt Successful Well Cobalt Upcoming Well Industry Discovery Gila Kaskida Goodfellow OUTBOARD SYSTEM St Malo 13,000 BOPD DST Jack 6,000 BOPD DST Cascade Chinook 10

11 Estimated Ultimate Recovery (MMBOE) Cobalt has Discovered Three of the Largest Recent Deepwater Fields in GOM 800 Largest GOM Lower Tertiary and Miocene Discoveries since North Platte Cobalt Discovery Lower Tertiary Miocene 500 Shenandoah 400 Heidelberg Discovery Year In the Lower Tertiary, Cobalt is 2 for 4 a 50% success rate, higher than industry averages Resources are Estimated Ultimate Recovery (EUR) from WoodMac in MMBOE, Lower Tertiary and Miocene discoveries in Walker Ridge, Green Canyon, Garden Banks and Keathley Canyon since

12 2014 Inboard Lower Tertiary Program Williams Fork North Platte Discovery Cobalt 60% (Operator) Latvian Anchor Processing recently acquired Full Azimuth 3D seismic over North Platte and surrounding prospects Baffin Bay Fraser Enhanced image of North Platte structure and selection of appraisal well location South Platte Shenandoah Discovery Cobalt 20% Prioritize North Platte offset prospects including applying learnings from recent wells Goodfellow Cobalt Leases Cobalt Successful Well 0 12 mi Cobalt Discovery Cobalt Upcoming Well Cobalt Prospects 20 km Next Shenandoah appraisal well results expected by year end Participation in partner operated Inboard Lower Tertiary prospects Anchor expected spud 1Q Goodfellow 12

13 Anchor: Inboard Lower Tertiary Prospect Anchor Garden Banks Green Canyon Keathley Canyon Walker Ridge Large, well-defined 3-way Inboard Lower Tertiary Prospect with Miocene potential 0 50 Miles Chevron operated with spud in 1Q 2014 Cobalt 20% (Chevron Operated) Cobalt Leases Cobalt Prospect 0 3 mi 5 km Well results expected 3Q 2014 Anchor Upcoming Well Gross un-risked potential of 200 to 500 MMBOE (1) Miocene: Secondary Objective Salt Cobalt 20% working interest Trap is key risk ILT: Primary Objective (1) Cobalt International Energy estimates as of February

14 High Margin Oil Projects Advancing to First Production Heidelberg Project MMBOE gross Miocene resource (1) with 9.375% working interest Cobalt booked proved undeveloped reserves in 2013 of 7.9 MMBL and 3.4 BCF (2) Development well drilling begins in 2014; First oil expected 2016 Shenandoah Project Large Inboard Lower Tertiary resource with 20% working interest Next appraisal well planned in 2014 to test lateral extent and seek oil/water contact North Platte Project Large Inboard Lower Tertiary, Cobalt-operated resource with 60% working interest Analyzing full azimuth seismic to determine optimal appraisal well location; spud expected early 2015 (1) 2P and 3P resource numbers per Netherland, Sewell & Associates, Inc (NSAI) (2) 1P reserve number per NSAI 14

15 Maintaining a Strong Balance Sheet to Pursue Exploration and Development 2014 Estimated Cash Balance ($B) Expenditures Shifting Toward Appraisal & Development ($MM) /31/2013 Estimated Restricted and Unrestricted Cash (1)(2) Potential 2014 financing opportunities Portfolio high grading Estimated 2014 Cash Expenditures 12/31/2014 Estimated Restricted and Unrestricted Cash (1)(3) Opportunistic capital markets issuance Exploration Appraisal & Development Financing principles have not changed Minimize shareholder dilution Maximize flexibility Limit cash requirements until generating operational cash flow Development program to be funded through the lowest cost of capital (1) Unrestricted cash includes cash, cash equivalents, short-term investments and long-term investments. Restricted cash includes Cash Collateralized Angola LOCs (2) Includes an estimate of 4Q cash expenditures prepared by management in good faith based upon internal reporting and expectations for the three months ended December 31, This estimate is preliminary, unaudited, and may be revised. We and our auditors have not completed our normal quarterly review procedures as of and for the three months ended December 31, 2013, and there can be no assurance that our financial results for this quarterly period will not materially differ from this estimate. (3) Also includes interest payments, Angola contractual obligations and other items 15

16 Proven Track Record Based on Exploration Led Value Delivery 2005 Q Solid Foundation: Unique Deepwater Exploration Portfolio, Technology and Skills Proven Success: Selective Development of World Class Discoveries Continual Growth: A Leading Exploration and Production Company Private equity capital World class: Expertise and capability Data and technology Oil-focused exploration strategy Early access to best emerging exploration plays Pre-eminent industry partnerships 8 material discoveries prove three emerging basins Booked reserves Deep follow-on prospect inventory Operating control and pace Select non-operated opportunities Demonstrated deepwater geologic and drilling capabilities Developer of selected discovered barrels Access to public capital; potential to high-grade portfolio Demonstrated development capabilities Cash flow from operations Exploration led portfolio renewal Repeatable and scalable value creation Reserve growth Cameia First Development 16

17 Dominant Positions For Future Growth Deepwater West Africa: Cobalt Pre-eminent Explorer 5 discoveries : Lontra, Cameia, Bicuar, Mavinga, Diaman Pre-salt Play major new trend; Cobalt discoveries prove regional geology ~1,360,000 net acres covering 3 Angola blocks ~467,000 net acres covering 1 Gabon block 3 operated Angola blocks with 40% working interest; 1 Gabon block with 21.25% working interest Deepwater Gulf of Mexico 3 discoveries: North Platte, Shenandoah, Heidelberg Inboard Lower Tertiary Play major new trend; Cobalt discoveries prove regional geology ~695,000 net acres covering ~250 blocks ~85% operated blocks with average 50% working interest Cobalt is realizing unique competitive benefits by being the focused early-mover 17

18 Value Creation through Successful Exploration and Selective Development Performance continues to validate our strategy 8 material discoveries moving forward Selective developer of discovered barrels Deep inventory of follow-on opportunities Identifying renewal opportunities in existing and new plays/basins Expanded shareholder base Balance sheet in place to deliver 18

19 NYSE: CIE Investor Relations Contact: Cobalt International Energy, Inc. Cobalt Center 920 Memorial City Way, Suite 100 Houston, TX Main: