Angola's Sonangol To Buy Cobalt International's Stake In Two Offshore Oil Blocks

(RTTNews) - Angola's state-owned oil company Sonangol has agreed to acquire oil and gas producer Cobalt International Energy Inc.'s (CIE) 40 percent stake in two offshore oil blocks for $1.75 billion, the two companies said Monday.

Houston, Texas-based Cobalt International's 40 percent participating interest in Blocks 21/09 and 20/11 offshore Angola will be acquired by Sonangol, with an effective date of January 1, 2015. The deal is subject to the Angolan government's customary approvals, which are expected prior to the end of the year.

The two companies noted that the deal underscores their commitment to attain the final investment decision for the Cameia development in Block 21/09 by year end 2015 in order to deliver first oil from Cameia in 2018. Despite Cobalt continuing as operator for an interim period, all costs going forward will be borne by Sonangol.

Joseph Bryant, Cobalt's Chairman and Chief Executive Officer 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. We remain committed to continuing our joint efforts with Sonangol to move the Cameia development project to sanction by year end."

Cobalt noted that the transaction represents a gain of about $600 million to the company, and its adjusted unrestricted cash or liquidity will increase by $2.1 billion to $3.75 billion upon close of the entire transaction.

Further, Cobalt noted that following close of transaction, its discovered asset portfolio will be concentrated in the deepwater Gulf of Mexico, with Heidelberg on track for first oil by mid-2016.

The company will evaluate high potential deepwater exploration opportunities, such as Mexico and Eastern Canada.

CIE closed Friday's trading at $7.24, down $0.06 or 0.82 percent on a volume of 4.54 million shares. In Monday's pre-market activity, the stock is down $0.24 or 3.31 percent to $7.00.