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Cabot Oil & Gas Corporation Increases Proved Reserves 27 Percent to 3.8 Tcfe



 Cabot Oil & Gas Corporation Increases Proved Reserves 27 Percent to 3.8 Tcfe

2012 Marcellus Drilling Program Averages 13.9 Bcf per Well

PR Newswire

HOUSTON, Feb. 21, 2013

HOUSTON, Feb. 21, 2013 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG)
today reported year-end 2012 proved reserves of 3.8 trillion cubic feet
equivalent (Tcfe), an increase of 27 percent over year-end 2011. This is 100
percent organically generated growth and represents the third consecutive year
of reserve growth exceeding 20 percent, after adjusting for the sale of its
Rocky Mountain properties in 2011. Total reserve replacement from all sources
was 417 percent at a finding cost of $0.87 per thousand cubic feet equivalent
(Mcfe). "In spite of a 33 percent decrease in the benchmark natural gas price
used in calculating proved reserves in 2012, we grew year-end proved reserves
significantly without an increase to our PUD percentage," said Dan O. Dinges,
Chairman, President and Chief Executive Officer. "Our all sources finding cost
of $0.87 per Mcfe is our lowest in 15 years and further highlights the capital
efficiency of our portfolio." 

Cabot's reserve growth was primarily driven by its drilling programs in the
Marcellus Shale, Eagle Ford Shale and Marmaton oil play, which resulted in
926.8 billion cubic feet equivalent (Bcfe) of additions for the year. The
Company reported an additional 369.6 Bcfe of positive revisions for the year,
primarily as a result of performance improvements in the Marcellus Shale. The
Company also recognized 114.5 Bcfe of negative price revisions due to lower
natural gas prices in 2012 and 66.5 Bcfe of negative revisions due to
reclassification of legacy East Texas proved undeveloped (PUD) reserves to the
probable category in compliance with current Securities and Exchange
Commission regulations.

 

Proved Reserves Reconciliation (in Bcfe)
Balance at December 31, 2011   3,032.7
Additions                      926.8
Revisions                      188.6
Production                     (267.7)
Sales                          (38.0)
Balance at December 31, 2012   3,842.4

 

Marcellus Shale proved reserves increased more than 51 percent in 2012 as a
result of the continued success of Cabot's drilling program in the play. This
increase included 420.8 Bcf of positive performance revisions due to increased
reserve bookings on producing/drilled wells and increased reserve bookings on
PUD locations from an estimated ultimate recovery (EUR) of 7.5 Bcf  to 9 Bcf
per well.  All sources reserve replacement for the Marcellus Shale properties
was 603 percent at a finding cost of $0.49 per Mcf, 25 percent lower than the
$0.65 per Mcf in 2011. "Our Marcellus program continues to demonstrate
outstanding results. Our 2012 drilling program's average producing Marcellus
well was drilled with a 4,087 foot useable lateral length and completed with
17.6 frac stages yielding an EUR of 13.9 Bcf per well," commented Dinges. "As
we continue to drill longer lateral wells and utilize reduced frac stage
spacing across the entire Marcellus program, we anticipate additional
increases in EURs, further improving our already superior well economics in
the play."

Natural gas represented approximately 96 percent of the Company's year-end
2012 proved reserves, in line with year-end 2011. Cabot's undrilled PUD
reserves percentage remained flat at 36 percent while the overall PUD
percentage decreased slightly to 40 percent.  Similar to prior years, the
Company took a conservative approach to its PUD bookings in the Marcellus
Shale recognizing 0.7 offset PUD locations for each of its proved developed
wells.

The Company's reserve base continues to be comprised of long-lived assets with
a total reserves-to-production ratio of 14.4 years. "Based on our current
estimates of identified drilling locations, we have a significant amount of
running room with over three decades worth of drilling opportunities based on
our planned 2013 drilling activity," stated Dinges.

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
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

Website: http://www.cabotog.com
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