After watching Cobalt International Energy (NYSE:CIE) rise to a new 52 week high back in May I have begun to ponder a question that has been whispering to me in the back of my mind for some time now; Where's the oil?
According to all available press releases, production from Cobalt International Energy's Angola's wells is due to come to fruition in 2016.
I actually bought some shares of cobalt at around 9 bucks per share and sold out at 21 after having discovered this obscure oil company buried in Goldman Sachs' 13F filing back in the fall of 2011.
Since that time the shares plowed even higher to $34 bucks a share and then dropped back down to around $26 earlier this year as Goldman Sachs and their original partner The Carlyle Group reduced their initial stake in the company by 90 million shares.
However, since that time I watched a great movie called The Way We Live Right Now which is based on a rather famous 19th Century novel written by Anthony Trollope entitled The Way We Live Now in which a con man and stock promoter by the name of August Melmott takes London by storm pitching a railroad he champions to be built that will run from Salt Lake City to Veracruz, Mexico...a railroad as it turns out that he never intends build in the first place. The young and enthusiastic engineer Paul Montague who pitched the project to Melmott really believes there will be a railroad and packs off to Mexico to start construction only to learn that Melmott has other ideas for the capital he raised from London's upper crust gentry.
And yes, this movie got me to thinking...could it be possible to pull off such a con in the 21st Century? Cobalt International Energy immediately came to mind. Why? Because the whole operation from the get-go has been mired in international intrigue and sketchy politics that involve government wheel greasing that would land most company executives in the penitentiary.
Has Goldman Sachs pulled off the con of the century with Cobalt International Energy? Is there really oil at the bottom of the ocean in Angola? I am beginning to wonder if Goldman Sachs is not just "taking a piss" on the investing public as the British would phrase it.
It would be quite easy to pull off as the company is new and the employees seem to have been hand-picked for the job.
Only time will tell. But if you wish to be entertained, you may be interested in watching a great movie while you are waiting for your oil well to come in.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.