|Cabot Oil & Gas Corporation to Purchase South Louisiana Oil and Gas Properties; Acquisition to Increase Gulf Coast Reserves by 130%|
HOUSTON, Dec. 14 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced plans to acquire the onshore South Louisiana properties of Oryx Energy Company in a transaction valued at approximately $72 million. Under the terms of the agreement, Cabot Oil & Gas will purchase 10 fields (six operated, four non-operated) covering 34,345 net acres with 68 producing wells. The acquired producing assets are concentrated in three primary fields that each provide Cabot with a high working interest. These fields comprise 80% of the value assigned to the transaction.
Current production from the acquisition is 14 Mmcfe of natural gas per day. Total proved reserves are 74 Bcfe with total unrisked reserve potential approaching 190 Bcfe. The transaction is expected to close before year-end with a December 1, 1998, effective date.
"Cabot Oil & Gas is acquiring producing assets, a 3-D seismic inventory and a reserve base with excellent upside potential," said Ray R. Seegmiller, President and CEO. "This acquisition provides a geographic fit with our existing onshore 3-D effort in Terrebonne Parish where we have 33% interest in a joint exploration play covering 95,000 net acres." Seegmiller added, "This acquisition is anticipated to boost total production in our Gulf Coast region by more than 5 Bcfe in 1999. Production will be increased from the existing 14 Mmcfe per day by reworking a portion of the non-producing wells and commencing a wildcat and development drilling program."
The three primary fields are Belle Isle in St. Mary Parish, Lake Pelto in Terrebonne Parish and Chacahoula in Lafourche Parish. There are 160 square miles of 3-D seismic included with these three primary fields. The other areas included in the transaction are: Deer Island, Point Au Fer, Gibson and Humphreys in Terrebonne Parish; West Starks in Calcasieu Parish; Rayne Field in Acadia Parish; and Beaver Dam in St. Helena Parish.
The Oryx acquisition will be funded by the Company's newly expanded revolving line of credit with 10 lending institutions. Seegmiller commented, "We are extremely pleased with the level of banking interest in Cabot Oil & Gas. In a difficult market, we were able to double the number of banks in our credit facility, and we received commitments totaling 40% more than the required level." Additionally, Cabot Oil & Gas intends to evaluate its reserves, selling non-strategic assets when appropriate, in an ongoing effort to high grade the Company's asset base. The proceeds will be used to reduce debt.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the Appalachia, Anadarko, Rocky Mountain, and Gulf Coast regions. For additional information about Cabot Oil & Gas Corporation, visit the Company's internet homepage at http://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 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