Cabot Oil & Gas Corporation Provides Operations Update
Announces Success in Initial Pearsall Well
HOUSTON, Oct. 25, 2012
HOUSTON, Oct.25, 2012 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG)
today announced success in its initial Pearsall effort, continued Marcellus
momentum and a breakthrough in long-awaited gathering permits. "This year has
seen many new ideas and ongoing efforts come to fruition, including a joint
venture with an international company and innovations with well and frac
spacing in key plays, that have translated into continued industry-leading
production growth," said Dan O. Dinges, Chairman, President and Chief
Pearsall / Marmaton / Eagle Ford
Cabot's initial short lateral well in the Pearsall was successfully completed
in 11 stages and had an initial production rate of more than 1,400 barrels of
oil equivalent (BOE) per day. In 20 days of production, the well averaged
more than 900 BOE per day, roughly 50 percent oil. Currently, Cabot is
completing a second well and drilling three additional wells. "We are excited
about this initial exploration success and pleasantly surprised with the
product mix," stated Dinges. "We are cautiously optimistic and expect more
completions to further delineate this discovery."
In other regional activity, the first extended lateral Marmaton well was
drilled with a lateral length of approximately 9,500 feet and completed with
30 frac stages. This well has just started flowing back. Cabot's second
Marmaton extended lateral well is drilled and scheduled for completion by the
end of October. "Additionally, we continue to see impressive results in our
Eagle Ford area," commented Dinges. "We have completed another well with an
initial production rate just under 1,000 BOE per day, with a 95 percent oil
mix." The Company plans to complete 16 net wells in the fourth quarter
between the Pearsall, Marmaton and Eagle Ford, roughly half of these will be
completed in December.
The Company continues to find ways to exploit this already prolific resource
base. "We recently began producing two new wells in the Zick area, bringing
the total well count in this area to seven," said Dinges. "These two wells
combined had a peak production rate of more than 43 million cubic feet (Mmcf)
of natural gas per day and a 20-day production rate of over 32 Mmcf per day
from a total of 25 narrower spaced frac stages - slightly less than 200 feet
apart per stage." Cabot implemented this pilot program this summer to explore
the merits of reduced spacing between frac stages. The Company currently has
a sample group of wells that have used the tighter frac spacing, which has
enhanced efficiencies with higher initial production rates, increased 30-day
rates and generated higher expected estimated ultimate recoveries (EURs) per
foot of lateral.
Related to infrastructure, the Company has been notified by Williams that it
has received 90 percent of the 2012 gathering line permits. With this news,
there are currently numerous construction crews in the field, which should
allow for approximately 30 wells to begin producing during the fourth quarter,
roughly half of these will occur in December.
The Company has revised its 2013 Marcellus program to reflect tighter frac
spacing. This was the main catalyst for the increase in the low end of
production guidance and for the slight increase in program spending to cover
this initiative.Guidance detail can be found on theCompany's website under
the Investor Relations tab. "Even with this change, we will still be cash
flow positive at our budget prices of $3.50 and $90.00 for 2013," affirmed
Dinges. "For 2012 we have narrowed production guidance (moving the lower-end
higher and the top-end lower) due to delayed receipt of the gathering permits
and the current schedule to begin producing our wells. Also, we have
reaffirmed that there were no changes to our 2012 capital plans."
"We continued to move forward on all fronts with new drilling initiatives
showing enhanced results, be it new plays or new techniques," said Dinges.
"Our ability to provide significant production growth with free cash flow in
the near-term is a differentiating factor for Cabot."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading
independent natural gas producer, with its entire resource base located in the
continental United States. For additional information, visit the Company's
Internet homepage at www.cabotog.com.
The statements regarding future financial performance and results and the
other statements which are not historical facts contained in this release are
forward-looking statements that involve risks and uncertainties, including,
but not limited to, market factors, the market price (including regional basis
differentials) of natural gas and oil, results of future drilling and
marketing activity, future production and costs, and other factors detailed in
the Company's Securities and Exchange Commission filings.
FOR MORE INFORMATION CONTACT
Scott Schroeder (281) 589-4993
SOURCE Cabot Oil & Gas Corporation
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