Cabot Oil & Gas Corporation Provides Operations Update, Announces Share Repurchases and Sale of Conventional Mid-Continent

   Cabot Oil & Gas Corporation Provides Operations Update, Announces Share
        Repurchases and Sale of Conventional Mid-Continent Properties

PR Newswire

HOUSTON, Dec. 9, 2013

HOUSTON, Dec. 9, 2013 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG)
today reported results from the Company's first 10-well pad in the Marcellus
Shale. Additionally, the Company provided an update on its share repurchase
program and announced the sale of legacy conventional Mid-Continent
properties.

Cabot's First 10-Well Marcellus Pad

Cabot recently turned-in-line its first 10-well pad in the Marcellus, which
included eight Lower Marcellus wells and two Upper Marcellus wells. The
10-well pad was completed with 170 fracture stimulation (frac) stages with a
combined peak production rate of 201 million cubic feet (Mmcf) per day and a
combined average 30-day production rate of 168 Mmcf per day. The production
rates per 1,000' of lateral exceeded the Company's 14 Bcf type curve, further
reiterating the consistency of results across Cabot's Marcellus position.

"This 10-well pad represents the new standard for operational efficiencies and
technological advancement in our Marcellus operations," stated Dan O. Dinges,
Chairman, President, and Chief Executive Officer. "From de-risking of the
Upper Marcellus and downspacing initiatives in the Lower Marcellus to drilling
and completion efficiencies and bi-fuel utilization in our operations, our
achievements on this pad showcase the innovation and ingenuity our team
continues to demonstrate day-in and day-out."

Highlights from the 10-well pad include:

Upper Marcellus De-Risking

Two Upper Marcellus wells were completed on the pad with a total of 37 frac
stages with an initial production (IP) rate of 32 Mmcf per day and a 30-day
production rate of 24 Mmcf per day. These wells were spaced 1,000' apart in
the Upper Marcellus and were offset 500' by a Lower Marcellus well. "We
continue to monitor these wells to evaluate the productivity of the Upper
Marcellus; however, based on the results to date, we continue to believe that
the Upper Marcellus across our acreage position will provide rates of return
that rival or exceed most unconventional resource plays," explained Dinges.

500' Downspacing Pilot Program

The 10-well pad included a pilot program that tested 500' downspacing between
three Lower Marcellus wells as compared to Cabot's current Lower Marcellus
spacing of 1,000' between laterals. The three wells were completed with a
total of 62 frac stages with an IP rate of 62 Mmcf per day and a 30-day
production rate of 56 Mmcf per day. "While more production data and testing
are needed to determine the optimal spacing of laterals across the play, the
results from this pilot program reinforce our belief that tighter downspacing
will increase recoverable resource across our position, further enhancing the
value of our Marcellus asset," affirmed Dinges.

Drilling and Completion Efficiencies / Cost Savings

Cabot experienced significant efficiency gains in its drilling and completion
operations on the pad, which resulted in approximately $6 million of cost
savings for the 10-well pad. On the drilling side, Cabot reduced its drilling
cost per foot on this pad by 30 percent compared to 2012 and 12 percent
compared to the first half of 2013 as a result of location cost savings,
reduced move time between wells and additional drilling efficiencies captured
by pad drilling. On the completions side, Cabot completed 170 stages over a
27-day period, which included 15 days with over seven completed stages per day
while twice achieving a new Company record of 9 completed stages in a 24-hour
period. The average of 6.3 completed stages per crew day for this pad
represents a 50 percent increase over the average for 2012 and a 24 percent
increase over the average for the first half of 2013. 

As a result of the drilling and completion efficiency gains on its first
10-well pad, Cabot anticipates well costs for the Company's typical 14 Bcf
well will decrease from $6.4 million on a two-well pad to $5.8 million or less
on a 10-well pad. "The savings on this pad highlight the impact of pad
drilling on our cost structure moving forward and we expect to capture further
savings as we move to larger, multi-well pads across our entire drilling
program," asserted Dinges. "While we still have some needs to hold acreage in
the near-term which limits our ability to move to complete pad drilling,
approximately 60 percent of our 2014 program will be drilled on pads with five
or more wells."

Bi-Fuel Operations

This 10-well pad is the Company's first location to have been hydraulically
fractured by an entirely bi-fuel frac fleet. Cabot's frac service provider,
Baker Hughes, utilized a fleet powered by bi-fuel engines via line gas from
nearby producing Cabot wells. The use of a bi-fuel frac fleet on the pad
resulted in substantial cost savings for Cabot, while reducing the Company's
environmental footprint through the displacement of approximately 110,000
gallons of diesel with its own natural gas. "The bi-fuel operations on this
pad represent the future for Cabot's drilling and completion activities in the
Marcellus and we expect these initiatives to be implemented across our entire
program over the next few years," said Dinges.

Share Repurchase Program

During the fourth quarter, the Company has repurchased approximately 4.8
million shares, representing 25 percent of the 19.2 million shares authorized
under its current share repurchase program. The recent share repurchases will
be funded by the proceeds from the Company's previously announced Marmaton and
West Texas divestitures. "The recent share repurchases highlight our continued
commitment to creating long-term value for our shareholders," stated Dinges.
"We will remain opportunistic on this front with the material disconnect
between market valuation and the Company's intrinsic value, while still
maintaining the financial flexibility and liquidity needed to fund our
operations." 

Mid-Continent Asset Sale

In addition to the previously announced Marmaton and West Texas divestitures,
Cabot recently entered into a purchase and sale agreement with an undisclosed
buyer to sell certain legacy conventional oil and gas properties located in
the Mid-Continent for approximately $123 million. Current production from
these properties is approximately 15 Mmcfe per day (94% gas). This transaction
is expected to close by year-end 2013, subject to customary closing conditions
and adjustments. "To date we have announced approximately $325 million of
non-core asset sales, with proceeds being reinvested into our higher-return
projects through the drill-bit and through share repurchases at prices
materially below our intrinsic value," explained Dinges.

Evercore acted as financial advisor to Cabot on this transaction.

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
Matt Kerin (281) 589-4642

SOURCE Cabot Oil & Gas Corporation

Website: http://www.cabotog.com
 
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