Image source: Cobalt International Energy, Inc. 

What: Cobalt International Energy (NYSE: CIE) had a rough May. Its stock sank 31.9% for the month despite rising oil prices. Fueling the sell-off was the company's first-quarter report as well as the quick departure of its CEO.

So what: Cobalt International Energy posted its first-quarter results in early May. That report marked a turning point for the company because it was the first time in its history that Cobalt reported actual oil and gas sales after its Heidelberg project in the Gulf of Mexico came on line. That progress aside, investors were concerned by the lack of progress on a key asset sale, which weighed on the stock last month.

That's after the company noted that the sale of its Angola Blocks 20 and 21 might not close as quickly as expected due to the downturn in the oil market. While Cobalt, the prospective buyer, and the Angolan government support the transaction, the parties have agreed to initiate discussions on alternative options that will facilitate the closing of the transaction amid the weak market conditions. This has investors concerned that the deal could need to be renegotiated or that it might not close at all.

Even more concerning was the abrupt departure of CEO Joseph Bryant on May 31. He resigned as chairman, CEO, and board member effective the very next day with no reason provided to investors for his departure. The CEO position, however, was quickly filled -- former BHP Billiton (NYSE:BHP) petroleum executive Timothy Cutt was hired as its new CEO effective on July 2. Cutt had served as the president of BHP Billiton's petroleum division from mid-2013 until this March. Under his direction, the company focused much of its attention on unconventional North American shale plays, which could potentially point to a strategy shift at Cobalt in the future, though it is worth noting that the bulk of BHP Billiton's shale position was acquired before Cutt took over the division.

Now what: Cobalt International Energy is in transition. Not only did the company produce its first barrels of oil in its history last quarter, but it's selling off its Angola assets to focus its attention on the Gulf of Mexico. Amid that transition, the company's CEO abruptly resigned, which didn't sit well with investors. Because of that and its singular focus on the development of risky offshore projects, investors are better off watching this oil stock from the sidelines.

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