Wednesday, June 2, 2010

Carlyle Group's Timely IPO for Cobalt Energy

The Carlyle Group/Riverstone Holdings conducted an IPO on Cobalt Energy in December 2009. It raised $851 million for the deepwater energy company months before BP's Deepwater Horizon blew out.

The market wasn't excited about Cobalt as shares priced at $13.50, well below the targeted $15 to $17 range. Today, Cobalt trades at $6.65, down 50% in six months. The company expects a six month delay from the government's suspension of all drilling operations in the Gulf of Mexico.

Cobalt's future is linked to BP's handling of the disaster. Oddly, BP's prior CEO, Lord John Browne, hangs his hat at Riverstone, Carlyle's joint venture energy partner. Will the Good Lord call Tony Hayward? The pair would love to get drilling back on track.