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Cobalt International Energy, Inc. (CIE)’s Shares Continue To Rally Following Sale Of Offshore African Assets

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The shares of Cobalt International Energy, Inc. (NYSE:CIE) gained slightly over 10% yesterday are up by more than 3% in pre-market trading this morning, following the company’s announcement yesterday of a deal with the Angolan government. The deal will see the Houston-based exploration company sell a 40% stake in two sizable blocks located in the offshore of Angola to Sonangol, a state-owned oil group in Angola, for $1.75 billion. The transaction is likely to close by the end of 2015, depending upon the necessary government approvals. Sonangoal is aiming for first oil from the Cameia development in 2018. Cobalt International will remain the operator of the asset for the short interim period.

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While discussing the deal, Joseph H. Bryant, CEO and Chairman of Cobalt International Energy, Inc. (NYSE:CIE), said, “We are proud of the tremendous success that our partnership with Sonangol has achieved in opening the pre-salt play in the Kwanza Basin with five significant discoveries and a deep portfolio of exploration prospects.”

A similar sentiment was echoed from the management of Sonangol. Mr. Francisco Lemos José Maria, Chairman and Chief Executive Officer of Sonangol, said, “Over the past seven years, Cobalt International Energy has had outstanding exploration success in Angola’s pre-salt, which will accrue considerable prosperity to the Angolan people over coming generations.”

The shares of Cobalt International Energy, Inc. (NYSE:CIE) have declined by 10.48% year-to-date and are currently trading at $7.96 per share. This transaction could strengthen the financial position of the company, especially after it reported net losses of $66.8 million or $0.16 per diluted share in its second quarter 2015 financial results announced on August 4. The oil and gas exploration company was actually able to surpass the market’s loss estimate of $0.22 per share for the quarter. The smart money had slightly mixed sentiment on the stock of Cobalt International Energy, Inc. (NYSE:CIE) during the second quarter, with 17 hedge funds holding positions worth $966.39 million as of June 30. The aggregate holdings have grown by 9.86% in comparison with the previous quarter, though the number of investors has declined by four. The shares of Cobalt International were up by 3.19% during the second quarter.

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