|Cabot Oil & Gas Announces Gulf Coast and Rocky Mountains Drilling Update|
HOUSTON, July 29 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced the results of its recent drilling activity that included its first Gulf of Mexico and Rocky Mountains exploration successes. The activity includes a total of seven exploration/exploitation wells located in south Texas, south Louisiana, Gulf of Mexico and Wyoming.
The Lawson #1 exploration well located on the Ellis prospect in Acadia Parish, Louisiana, was drilled to a total depth of 14,100 feet and encountered approximately 50 feet of net pay in the Nonion Struma sandstone. The well is currently completing. Cabot has a 55 percent working interest in this well, along with partners Palace Exploration and Samson Resources.
Also in south Louisiana, Cabot is completing the DS&B #119 well (50 percent working interest) after reaching a total depth of 6,680 feet. This well encountered 323 feet of net pay in the Big 2 sand section on the southern flank of the Chacahoula dome in LaFourche Parish. This new well is expected to be producing by early August. The DS&B #119 is an offset to Cabot's DS&B #116, which was drilled earlier this year and was completed flowing 350 barrels of oil per day from 50 feet of Dibert sandstone, with an additional 47 feet of pay logged and behind pipe in the Big 2 sand. Other working interest partners are Palace Exploration, Yuma Exploration, Liberty Energy Corporation and Neumin Production Company.
Cabot's Nantucket prospect, found on the northern flank of the Chacahoula dome, was drilled to a total depth of 14,310 feet. The DS&B #118 well found the objective Rob series of sands to be water bearing and the well was subsequently plugged and abandoned. Cabot had a 30 percent working interest in the well, along with the same Chacahoula partner group as stated above.
Cabot's first successful exploration test in the offshore area, the NCX operated Breton Sound 41 #2, is currently completing and is expected to produce at a rate greater than 12 Mmcf per day plus associated condensate beginning in the fourth quarter. An offset location is currently drilling. Cabot has a 17.5 percent working interest in this prospect area.
Cabot's Matador prospect, a deep Frio test under the Raymondville field in Willacy County, Texas, was drilled to a total depth of 14,150 feet. The Yturria H #4-5 well (58 percent working interest) found 60 feet of net pay in six shallow Frio sandstones. The deep objective Frio sands were found to be tight and non-productive. The lower portion of the well was abandoned and the shallow zones are now being completed. Production rates are anticipated at approximately 2 Mmcf per day from the lowest productive sand with first production in August. Multiple offset locations are expected from the exploration success. Palace Exploration and Esenjay Petroleum also hold working interests in this project.
"Exploration is key to our forward-looking strategy here at Cabot," stated Dan O. Dinges, Chairman, President and Chief Executive Officer. "Our goal has been and will continue to be to provide the shareholder with consistent exploration exposure quarter over quarter with the goal of announcing successfully added new reserves and offsets as highlighted above."
Cabot has an apparent wildcat discovery at the Nickey prospect in the Green River basin. The Wind Dancer #10-28 well encountered log pay in the Lance, Lewis and Almond sandstones. Completion operations are currently underway. A successful completion will yield a significant number of offset development locations. Cabot owns approximately 50 percent interest in 11,000 acres of leases around the discovery.
Also in the Rocky Mountains, Cabot recently drilled and plugged the Rader wildcat prospect. The Federal #10-34 well was drilled to 13,500 feet and tested the objective Fort Union and Lance sandstone section. While net pay was found in widely separated sandstones, the well was determined to be non- commercial and Cabot chose not to complete it. "We were disappointed in the outcome of this wildcat as we are with any well determined to be non- commercial, however we will continue our Wind River basin centered gas play strategy with our Gold Nugget wildcat scheduled to be drilled later this year," added Dinges.
"Due to the recent successes and the commodity price environment, Cabot has increased its capital program for 2003 to $183 million, or up about 20 percent, versus the original program for the year," said Dinges. "This increment relates to investments in the East and Gulf Coast." Dinges added, "While our production outlook remains relatively flat with those levels reported for 2002, our recent successes, the exploration exposure in the second half of 2003 drilling program and the capital commitment to infrastructure improvements position us well for a higher year-end exit rate and a great start to 2004."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer 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