|Cabot Oil & Gas Enters Modified Agreement with the Pennsylvania Department of Environmental Protection|
HOUSTON, April 15, 2010 /PRNewswire via COMTEX/ --Cabot Oil & Gas (NYSE: COG) ("Cabot") and the Pennsylvania Department of Environmental Protection ("PADEP") reached agreement on modifications to the Consent Order previously entered on November 4, 2009 concerning certain environmental issues including alleged methane contamination of 14 water wells in Susquehanna County, Pennsylvania. In the modification of the Consent Order, PADEP and Cabot agreed Cabot would provide permanent sources of potable water to 14 households. Cabot has been providing water to these households. Cabot will plug and abandon three vertical wells in close proximity to two of those homes. Cabot has retained Dr. Robert W. Watson, a renowned, recently retired professor of Petroleum Engineering at Penn State University, to assist Cabot in performing its obligations under the Consent Order. Cabot has agreed to postpone drilling of new wells in the area of concern for one year. Cabot currently has no drilling rigs in this area. In settlement of PADEP claims, Cabot will pay $240,000, plus $30,000 per month going forward until all obligations are complete.
Finally, Cabot agreed to complete all compliance measures by November 2010. The modifications to the November 4, 2009 Consent Order represent a continuing joint effort by Cabot and the PADEP to ensure the safety of people, water resources and the environment of Susquehanna County, Pennsylvania. Upon completion of the actions required by the modification order, Cabot believes that this agreement will resolve all outstanding issues.
"This modified order does not impact the number of wells scheduled to be drilled under Cabot's 2010 drilling effort, nor will it impact our production guidance," said Dan O. Dinges, Chairman, President and Chief Executive Officer, Cabot Oil & Gas Corporation. "Specifically, we have no rigs drilling in the area presently, and of the eight wells scheduled in the affected area later in the year, these wells will be replaced with other wells." Dinges added, "We may experience a slight delay for eight wells drilled that are waiting on completion in the area. However, with our better-than-expected results from the overall operation and 49 stages of fracs from six wells waiting to be turned in line, we see no need to adjust production guidance. We are currently producing approximately 110 Mmcf per day with anticipated production increases when we start our first compressor at Lathrop in early May."
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.
SOURCE Cabot Oil & Gas