(By Balachander) Cobalt International Energy Inc. (NYSE: CIE) announced a "significant" oil discovery at its North Platte prospect in the deepwater Gulf of Mexico, and its shares soared nearly 17 percent in premarket trading on Wednesday.
The oil-focused exploration company said North Platte represents the "first major discovery" in its Gulf of Mexico alliance with TOTAL (NYSE: TOT).
"The discovery well encountered several hundred feet of net oil pay in multiple Inboard Lower Tertiary sands," Cobalt said in a statement. North Platte is in line with the predrill estimate of net pay based on preliminary analysis of well and wireline data, the company added.
Cobalt holds a 60 percent working interest in the prospect along with Total, which has a 40 percent working interest.
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Paris-based Total estimates this discovery can have a potential of several hundred million barrels of oil.
The results of the well confirm the the presence of liquid hydrocarbons, Total noted.
North Platte is located in roughly 4,400 feet of water and was drilled to a total depth of around 34,500 feet.
"North Platte is particularly important for Cobalt because it confirms our geologic model of the Inboard Lower Tertiary Trend where Cobalt holds a substantial acreage position with several follow-on prospects," commented James Farnsworth, Cobalt's Chief Exploration Officer.
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CIE shares, which have been trading in the 52-week range of $8.77 to $36.51, ended at $23.78 on Tuesday.