High Value Oil-Focused Deepwater Exploration and Development

Transcription

1 NYSE: CIE High Value Oil-Focused Deepwater Exploration and Development November 2014 Investor Presentation 1

2 Legal Disclosures 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 presentation. Any representation to the contrary is an offense. Recipients of this presentation 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, production estimates, exploration, development and production schedules and financial information contained in this presentation (together, "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 forward-looking 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, exploration and development results, well production performance, operating costs, commodity pricing, differentials, royalty structures, field upgrading technology, regulatory and partner approvals, equipment availability 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, including, without limitation, decisions concerning allocation of capital, drilling plans and schedules, strategic focus and viability of projects, all of which are subject to change. Unless otherwise stated herein, the Estimates contained herein are Cobalt s internal Estimates based on management assumptions and judgments, and have not been independently verified. This presentation includes Estimates of projected financial information that is not presented in accordance with generally accepted accounting principles in the United States ( GAAP ), including EBITDA and PV-10. We believe these measures commonly used by analysts and investors to evaluate the performance of companies in our industry. Our use of these measures may differ from that of others in our industry. EBITDA should not be considered as an alternative to net income (loss) or any other performance measure derived in accordance with GAAP as measures of operating performance or operating cash flows or as measures of liquidity. EBITDA has important limitations as an analytical tool and should be considered in conjunction with, and not as a substitute for, our results as reported under GAAP. As these measures are Estimates of future financial performance, they are unable to be reconciled to their most directly comparable financial measures calculated in accordance with GAAP. We believe our PV-10 for the projects presented herein will be equal to the Standardized Measure, the most directly comparable GAAP financial measure, for the foreseeable future as the tax basis in our interests in these projects and related net operating losses exceed the future net cash flows (after deducting future development and production costs) and accordingly there will be no tax effect on future cash flows. This presentation also includes Estimates in the form of resource information which include estimated quantities of oil and gas that are not yet classified as proved reserves under SEC definitions and are not intended to correspond to the SEC definitions of probable or possible reserves. There can be no assurance that such estimated resources will result in proved reserves. 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 Cobalt s Distinctive Performance Relative to Industry Discovered Barrels 3.5 BBOE Gross & 1.0 BBOE Net (1) Disciplined Use of Capital $2.1 BN Exploration Expenditures (2) GOM 43% 57% West Africa Undrilled Exploration Inventory GOM Material Discoveries 3.3 BBOE Net (1) Unrisked 31% 69% West Africa $2 Exploration Costs / Barrel Industry Leading Finding Costs Leading Explorer Five for six in Angola One for one in Gabon Three for seven in GOM Average discovery size of 400 MMBOE Gross Of the 2014 TPH 50 Wells to Watch, 33 reported through September; 27 are dry and just 1, Orca, looks to be a definite commercial success (3) 100% Deepwater Promise Delivered (1) Net Cobalt Resource Estimates are Pmean MMBOE in Gulf of Mexico and Gabon and Pmean MMBO in Angola (2) Through 12/31/13 (3) Source: Tudor Pickering Holt 3

4 Delivering on Major 2014 Expectations Portfolio management Ongoing dialogue regarding joint ventures New Ventures basin entry New blocks bought in Eastern Gulf during Spring 2014 Lease Sale Gulf of Mexico campaign Anchor currently drilling Shenandoah appraisal currently drilling Heidelberg development drilling began 2Q 2014 North Platte appraisal expected spud 1Q 2015 West Africa campaign Bicuar discovery MMBO Orca discovery MMBO Successful Cameia #3 appraisal well increases confidence for development Mupa drilling resource estimate 450 1,100 MMBO Cameia development sanction expected 4Q 2014 or 1Q

5 Cobalt Angola is a World Class Business that Continues to Grow Three operated Pre-salt blocks with 40% working interest 35 Lontra Mavinga Cameia 100 km Kamoxi 1 39 Ombovo 1 20 Bicuar Diolo 1 Orca Mupa 1 5 Cobalt Pre-salt discoveries since 2011 prove original Kwanza Basin Pre-salt play concept Locosso 1 23 Mupa 1 Drilling 8 Azul 1 9 N Cobalt Blocks Cobalt Discovery Cobalt Prospects Industry Blocks 83% overall exploration success rate Five oil discoveries of BBO (gross) Excellent reservoir quality with estimated >20,000 BOPD production rate per well Greater than 2.5 BBO of remaining gross potential on our blocks; 20+ remaining prospects Alignment with Sonangol on near term operational priorities Sanction Cameia development Acceleration of GOLD (Greater Orca Lontra Development) project Gas commercialization Ongoing exploration 5

6 Cameia Field Development is On Track for 2017 First Production Cameia #1 Cameia #2 A A Salt Block 21 Cameia Cameia #3 Cameia #1 Cameia #3 A 2.5 mi 4 km Cameia #2 Block 21 Cobalt 40% (Operator) Cobalt License Cobalt Discovery Potential Resource Cobalt Successful Well Oil recovered Post-salt 144 m below base of Cameia #1 Salt A Cameia #3 appraisal well confirmed geological model, large connected volume and very high well productivity Reconfirms resource range of MMBO Project update: Development Plan submitted to Sonangol FPSO award expected in 1Q 2015 Subsea design and tendering proceeding Development drilling starts mid-2015 Improved drilling performance eliminates need for second Cobalt-operated drilling rig Basement 6

7 Advancing the GOLD (Greater Orca Lontra Development) Project Cobalt Block 20 Discoveries and Prospects Lontra Orca 40 miles Offshore Angola 0 16 mi Plan to develop up to 1 billion barrels of oil and condensate between two fields with initial FPSO Orca: MMBO Lontra: MMBO Plans not dependent on gas monetization Anticipated accelerated first production targeted in Shared infrastructure enhances development economics of Lontra and potential tie-back fields Block 20 Cobalt 40% (Operator) Cobalt License Cobalt Discovery Cobalt Prospect Cobalt Successful Well 25 km Replicate Cameia development strategy Phased development built on subsurface learnings Leased FPSO Standardized subsea components Reliable project management approach 7

8 Developing Our Discoveries a Founding Strategy We have been planning and engineering for major developments since Cobalt s inception Keys to successful field developments Experience Leading deepwater development team has participated in 70+ major projects globally Approach Following a phased development approach to avoid overbuilding and long development timelines Partnering with industry leading service providers and contractors Utilizing proven system designs Floating production system, preference to lease Subsea systems Subsurface and wells performance 8

9 Cumulative Discovered Volumes Kwanza Pre-salt Exploration is in the Early Stage: Large Potential Remains Angola and Brazil Creaming Curves (1) Maturing Kwanza Pre-salt is currently one of a few world class petroleum basins emerging globally Followers Lower Congo Deepwater Cobalt s first mover advantage has captured large structures BBO gross discovered 1 st Movers Orca Bicuar Lontra Mavinga Cameia Kwanza Basin Campos (Brazil) Pre-salt Greater than 2.5 BBO of remaining gross potential on our blocks; 20+ remaining prospects Big discoveries have the lowest finding and development costs.and often get bigger with time (1) WoodMac Pathfinder 2Q 2014 Sequence of Discoveries Biggest discoveries are typically made early in the exploration cycle 9

10 Pre-Salt Post-Salt Mupa Prospect Now Drilling Large Stratigraphic Prospect on Block 21 Block 21 Cobalt 40% (Operator) Mavinga Cameia 450 1,100 MMBO resource potential Prospect located 23km (14 miles) southeast of the Bicuar 1A Pre-Salt Discovery (2013) Cobalt License Cobalt Discovery Bicuar Mupa 8 Seismic character similar to excellent reservoir encountered in the Orca and Lontra discoveries Cobalt Prospect Currently Drilling 0 16 mi Upside of the prospect relies on stratigraphic trap; contains smaller base salt closure 25 km Prospect Key Risk Stratigraphic Trap Cobalt Bicuar 1A Discovery (2013) Block 21 Cobalt Mupa 1 Post-Salt Salt Sag Post-Salt Syn-Rift Basement Salt Sag Basement Syn-Rift 10

11 Cobalt Gulf of Mexico Assets Progressing on Multiple Fronts Greater North Platte Inboard Lower Tertiary (ILT) exploration North Platte appraisal begins in early 2015 Continued reprocessing of full azimuth seismic and maturation of offsetting prospects Shenandoah Project Second appraisal well drilling; well results expected 4Q 2014 or early 2015 Pre development engineering has begun Heidelberg Project Spar hull recently arrived in Gulf of Mexico; topsides module under construction Development drilling program began 2Q 2014 On schedule for first oil in 2016 Anchor Exploration Well Well re-spud early 3Q 2014 due to mechanical failure in first well bore 4Q Q 2015 well results Inboard Lower Tertiary objective with secondary Miocene target 11

12 Shenandoah One of the Largest Oil Accumulations in the Gulf of Mexico (1) Shenandoah Basin Shenandoah #3 Cobalt 20% Shenandoah #2 well found >1000 of net pay with no oil-water contacts Garden Banks Keathley Canyon Green Canyon Walker Ridge 0 50 Miles #1 #2R 0 3 mi 5 km #1 #2 Yucatan Shenandoah #3 appraisal well currently drilling; results expected by year end or early 2015 Seeking to identify oil-water contacts and confirm reservoir quality and thickness of eastern flank Initial pre-development planning underway Cobalt Leases Cobalt Discovery Cobalt Successful Well Currently Drilling Results of nearby Yucatan appraisal well under review by partners (1) Per Anadarko Petroleum Company comments at 2014 AAPG Convention 12

13 North Platte Field Looking More Impressive Williams Fork Cobalt Leases Cobalt Discovery Cobalt Prospects Resource estimate MMBOE GARDEN BANKS KEATHLEY CANYON Baffin Bay North Platte Latvian South Platte Fraser Appraisal well to be drilled with the new build Rowan Reliance drillship Seismic reprocessing has improved subsalt imaging Potential for fewer development wells; improving overall economics Accelerated maturation of offsetting prospects NW Williams Fork Baffin Bay North Platte Discovery Proposed Appraisal Well South Platte SE First appraisal well planned updip of the discovery well Salt Oligocene 30,000 Wilcox Salt 40,000 13

14 Gabon Exploration Continues to Show High Potential Cobalt 21.25% (TOTAL Operator) Gabon Angola Rabi-Kounga 940 MMBOE Elf Maruba # discovery Diaman #1B Discovery Gabon Diaman de-risked Gabon s deepwater Pre-salt play Oil expected toward East and West where source rocks are shallower and cooler 2014 additional 3D covers the large N dem prospect Cobalt License Cobalt Discovery Cobalt Prospect Industry Discovery 0 Elf Moubenga # discovery Operator expects to drill next exploration well in 2016 Multiple prospects with 200+ MMBOE potential Cobalt remains committed to pursuing additional deepwater licenses with Pre-salt potential W N dem Prospect Diaba Block Mango Prospect DIAMAN #1B Discovery Koussou Prospect Kunengue Prospect Elf Muruba Marine #2 (1981) 1250 BOPD E Source Gamba Dentale Basement Source Rock Thermal Maturity Oil Mature Condensate Mature Gas Mature 14

15 New Ventures Will Provide Future Exploration Prospect Inventory While we have no shortage of prospects in our existing inventory, we remain focused on future exploration opportunities Long term exploration success results from the process of high grading prospects from a deep inventory pool Investment TODAY in new ventures creates drillable prospects in Pursuing opportunities that leverage proven expertise Offshore, deepwater, and oil focused Frontier and underexplored basins Challenging Pre- and sub- salt plays Focus remains the Atlantic Basin; in particular Mexico and Canadian East Coast 15

16 Strong Balance Sheet to Pursue Exploration and Development Program Estimated 2014 Cash Uses and Ending Balance ($BN) Funding principles remain unchanged Maintain balance sheet strength Complement with proactive portfolio management Cash position on 9/30/14~ $2.4 B Future funding preferences Regional partnerships / ventures with financial or oil and gas entities Asset-secured development (bank) lending 12/31/2013 Restricted and Unrestricted Cash May 2014 Convert Proceeds Estimated 2014 Capital and Operating Expenditures & Other Items 12/31/2014 Estimated Restricted and Unrestricted Cash (2) Restricted & Unrestricted Cash Convert Proceeds Capital & Operating Expenditures Other Items (1) (1) Other Items includes interest payments, Angola contractual obligations, long lead drilling items and rig mobilizations (2) Includes $1.27 BN net convertible proceeds. Unrestricted Cash includes cash, cash equivalents, short-term investments and long-term investments. Restricted Cash includes cash collateralized Angola LOCs. Actual results could materially differ. 16

17 Cobalt s Investor Base Continues to Diversify Cobalt Equity Investors 28% Public Investors Original Investors: No longer represented on Board Original Investors: Represented on Board 100% 76% Each original investor owns less than 10% today One original investor sold down holdings in 2Q in the open market 72% Pre-IPO IPO % 12% 2Q 2014 Two original investor directors today: down from 7 Cobalt management holdings have remained relatively unchanged at 5% since IPO 17

18 Major Milestones Expected Through 2015 Portfolio management New Ventures basin entry Gulf of Mexico campaign North Platte appraisal Followed by exploration of surrounding prospects Shenandoah appraisal results move field towards sanction Heidelberg development drilling and additional reserve booking High impact partner-operated exploration Anchor followed by Goodfellow and others West Africa campaign Sanction of Cameia development followed by start of development drilling GOLD Project advanced towards sanction Orca #2 and Lontra #2 appraisal drilling High impact exploration drilling; starting with Mupa Further exploration activity in Gabon 18

19 Cobalt Plans for A Decade of Increasing Production from Current Portfolio Identified prospects with potential to provide additional discoveries and developments Discovered fields requiring further appraisal to prioritize development Discovered fields with clear paths to production Fields Expected on Production (1) Gabon Prospects GOM Prospects Angola Prospects Mupa Bicuar Bicuar N. Platte N. Platte Mavinga (2) Mavinga (2) GOLD GOLD GOLD Shenandoah Shenandoah Shenandoah Cameia Cameia Cameia Cameia Heidelberg Heidelberg Heidelberg Heidelberg Heidelberg Gulf of Mexico Angola Gabon (1) Year does not necessarily represent expected first year of production. (2) Mavinga expected to tie back to Cameia facility. 19

20 Our Commitment to Creating Significant Shareholder Value Cobalt Commitments Focused Operating Model Safe and efficient operations Leading Basin Positions Proven Exploration Results High-Margin Developments Exploration Upside and Renewal Strong Balance Sheet Industry leading finding cost per barrel Consistent growth in booked reserves Project sanction every 12 to 18 months Discoveries in a new basin by 2019 Significant ongoing portfolio reshaping 20

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