|Cabot Oil & Gas Announces New Hedge Positions|
HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that the Company has initiated new hedge positions covering 25,000 Mmbtu per day of its Eastern natural gas production for the period February through December of 2003, and 10,000 Mmbtu per day of the Company's Rocky Mountains natural gas production for the period March through December of 2003. The Company also entered into a range swap involving 500 barrels of oil per day produced from July through December of 2003.
"With the ongoing bullish sentiment in the commodity markets, we continue to follow our hedging strategy of layering in additional hedges," said Dan O. Dinges, Chairman and Chief Executive Officer. "These latest hedges are dominated by collars to provide the potential for additional upside and to better balance our current overall hedge position that consists of 42% swaps and 20% collars, or 62% of total equivalent anticipated production for 2003."
In aggregate, Cabot has downside price protection in place for approximately 66% of the anticipated natural gas production at a combined price of $4.38 per Mcf. Cabot also has 45% of oil production covered by derivatives (11% with collars and 34% with range swaps). Under the range swap agreement the Company receives an above current market swap price in exchange for giving up the downside protection below a certain price during any one month.
The following table summarizes by operating area the volumes and prices (per Mmbtu) of the new hedge positions for the remainder of the year.
Location Mmbtu/day Transaction Period Price/Mmbtu* East 20,000 Costless collar Feb. - Dec. $4.50 floor / $5.72 ceiling 5,000 Swap Feb. - Dec. $5.15 Rocky 5,000 Costless collar March - Dec. $3.50 floor / Mountains $4.55 ceiling 5,000 Swap March - Dec. $4.00 Total 35,000 * Net of regional basis differentials
The oil hedge provides for a fixed price swap at $30.00 per barrel with a "fade-out" provision. During any month if the crude oil NYMEX contract average is less than $22.00 per barrel, Cabot receives the market price for that month.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid-Continent; and the East. 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 Corporation