Cobalt Int'l Energy (CIE)

[ghrcap]

Download an enthusiastic report from Credit Suisse here. (Outperform; target $40)
http://www.sendspace.com/file/d7fdk2

"Bottom Line: We’re somewhat bemused at the lack of shareprice response
to the news that the first well in Lontra, a giant structure as big as Manhattan,
found oil and gas. Of course, we’d prefer that we had the results of the
production test (DST) that Cobalt is preparing (e.g. % oil, net pay, flow rates).
However, management commentary seemed fairly clear – “we’ve found a
very good quality reservoir,” “we’re pleasantly surprised with reservoir quality
at Lontra,” “I will emphasize we are very optimistic at the reservoir quality at
Lontra.” There are several key risks to exploration drilling – presence of
hydrocarbons (tick), a trap/seal (tick), net pay (not declared yet), size of
reservoir (tick), rock quality (tick) and hydrocarbon (still to be determined but
the size of the reservoir compensates). Given the muted response and
coming newsflow from Lontra DST, Bicuar, Orca and Aegean, now is a good
entry point. Our earnings rise in 4Q13 due to lower exploration expense.
■ Significantly Less Downside Risk Is Important to Our Thinking About
the Shares: With the addition of Lontra (and to a lesser degree Mavinga)
into the discovered category, our downside case is now $21/sh, just 10%
lower than the latest share price. Although exploration takes time, CIE
shares now trade some 20% below our risked NAV. The unrisked value of
the company, including the well results from 2014-2015 only, is $47/sh...."

[dan_s]

Thanks, I will assign it to one of the interns in November for a profile. We have to get all the portfolio stocks updated first.