Goldman Comments on Cobalt International Energy (CIE) Lontra Test

December 2, 2013 10:57 AM EST
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Price: $1.11 -1.77%

Rating Summary:
    11 Buy, 8 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Cobalt International Energy (NYSE: CIE) stock declined on Monday following flow test results at its Lontra discovery. In the view of Goldman Sachs analyst Brian Singer, "while the exploration success rate exceeds expectations, questions on resource size and commercial value remain."

"On a December 2 conference call, management responded to two key questions surrounding the discovery," said Singer. "(1) Can CIE monetize gas resource based on contract terms and local demand? Management estimates that up to 5 Tcf of gas has been discovered in Lontra, Cameia and Mavinga. Management indicated that the government of Angola prefers to have simultaneous development of gas (CIE sees growing local demand) with liquids, which would require/imply a change in contract terms that currently do not give CIE gas resource rights. (2) What could the well produce without restriction? 30K BOE/d –7.5K bpd of liquids, 125 MMcf/d of gas. The range of 0.7-1.1 billion BOE implies multiple development wells of similar rate, and multiple appraisal wells will likely be required."

Goldman Sachs has a Buy rating on Cobalt International Energy with a price target of $34.00

For an analyst ratings summary and ratings history on Cobalt International Energy (NYSE: CIE) click here. For more ratings news on Cobalt International Energy click here.

Shares of Cobalt International Energy closed at $22.23 yesterday.

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