Discusses Marcellus Shale
HOUSTON, Feb. 13 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation
(NYSE: COG) announced success with its initial wells at Trawick field,
continued success with its horizontal drilling program at County Line in east
Texas, more success at Hinton in Canada and the success of its early
initiatives in the Marcellus shale in Appalachia.
"Our focused 2008 drilling program allocates over 80 percent of Cabot's
initial budget towards ongoing success in east Texas and our core drilling in
Appalachia, plus expanding on our initial successes in the Marcellus shale,"
said Dan O. Dinges, Chairman, President and Chief Executive Officer.
County Line - East Texas
Thus far in the field, the Company has drilled 12 successful horizontal
James wells with initial production rates as indicated below:
County Line Prospect
Horizontal James Drilling Results
Well Number IP Mmcf per day
Aggregate 30 day average rate: 5.7 Mmcf of gas per day
Proved area: 12 miles
Potential locations: 100-110 proved + 70-100 unproved
Average working interest: 90 percent
Cabot will have three rigs in the field with a 2008 program scheduled to
drill a minimum of an additional 32 wells.
Total field production has gone from discovery to approximately 35-40 Mmcf
per day in the last 15 months, with 17 operated and non-operated wells turned
in line. Three wells are currently drilling or completing. Three new
gathering lines have expanded the pipeline capacity to over 100 Mmcf per day,
with additional pipe currently being planned. The Company's north to south
producing well extent at County Line covers 12 miles with several more miles
yet to be exploited on its 26,000-acre position. The Company estimates that
in this 12 mile area, it has 100-110 undrilled locations. The Company's most
recent well, the Timberstar Perry #2 (75% working interest) was completed with
an eight-stage frac in a 5,000' lateral at an initial production rate of 15.4
Mmcf per day.
"This is an exciting development project for us. The yield per well of
both production and reserves is impressive with outstanding returns on our
capital. We will continue our development of the James Lime objectives and
later start an initiative to produce the Pettet objective, which has higher
percentage of oil in the production stream. We estimate about 150 to 200
Pettet locations on our acreage," Dinges commented.
Cabot has two areas of focus in the Trawick area. With its exploration
acreage around the core of the field, Cabot has participated in six successful
Travis Peak wells with initial production ranges of 1.0 to 4.0 Mmcf per day.
These wells expose Cabot to 1.0 - 1.3 Bcf at a cost of about $1.4 to $2.0
million. In the core area of Trawick field, under a farm-in arrangement, Cabot
has committed to drill eight wells to earn the acreage. The first earning
well has been drilled, completed and tested in the deepest objective, the
Haynesville, and has Cotton Valley and Travis Peak opportunities behind pipe.
The well is currently being connected to the pipeline for production. The
second well, drilling for the same deep objective, is currently drilling and
should be logged in approximately three weeks.
"This is a very large contiguous acreage position in east Texas that holds
significant potential in the sparsely drilled deeper section with Haynesville
and Cotton Valley potential," said Dinges. "Strategically we are working on
the approval to commingle these zones. In addition, there are numerous
un-drilled locations in the Travis Peak, James and Pettet formations that
exist in the field." Dinges added, "Pursuant to the farm-out agreement we are
progressing on a staged earning schedule and have 12 wells planned for 2008.
Working with our partner, I feel Cabot will be drilling in this field for many
years to come."
Appalachia - Marcellus
"The most exciting new play in the U.S. right now is the Marcellus section
of the Devonian shale in the east," commented Dinges. "Cabot has a substantial
holding of acreage with Marcellus potential and an ongoing program gathering
multiple data points."
The Company continues its extensive leasing program in six targeted areas
in Pennsylvania and West Virginia, targeting the Marcellus shale. To date,
well over 100,000 net acres have been leased. In addition, two vertical wells
have been drilled in one area with limited tests from a thick Marcellus
section at rates between 800 Mcf and 1,000 Mcf per day. This rate exceeds
most of reported industry rates from vertical Marcellus completions. With
information from these wells, Cabot has initiated its 20 well development
program for 2008 in the area. The third well (vertical) will spud by month-end
with the fourth well (horizontal) to spud in March. Pipeline applications and
infrastructure support work has begun with expected first production in the
"The reason we are excited about this play is the fact that the Marcellus
regional shale could contain several hundred TCF of gas in place. This shale
is sparsely drilled, both vertically and geographically, it is normal to
over-pressured in contrast to the shallower pays in the basin, and it appears
to be extensively fractured. Also, the rocks are at the optimum maturation
level, with the rock mechanical properties appropriate for maximum stimulation
effectiveness. Cabot holds a very large acreage position, both existing and
new, with Marcellus potential," said Dinges.
Dinges added, "In addition to our leasing, we have begun an effort on our
existing leasehold that has proven Marcellus under several hundred thousand of
Cabot's acreage in West Virginia." The Company has deepened several wells to
the Marcellus and determined that slick water stimulation is more effective
than nitrogen fracs in the higher pressured Marcellus section. Most recently
Cabot drilled three vertical wells on its West Virginia acreage and applied
slick water fracs to the Marcellus with encouraging flow test rates between
1.2 and 1.8 Mmcf per day. Cabot has recently spud its first horizontal
Marcellus test in West Virginia.
"As we continue gathering this encouraging information we are evaluating
different options of capital allocation to enhance our program," stated
Successful development continues at the Hinton field in Canada. Cabot
recently added the Upper Mountain Park sandstone in the Cabot-RSX Hinton 9-20,
the fourth well in the field, which is flowing at 7.4 Mmcf per day. The
Cabot-RSX Hinton 14-20, the sixth well drilled at Hinton, was completed at an
initial test rate of 6.7 Mmcf per day at 6,186 lbs. flowing casing pressure.
"We expect this well to improve after pipeline hook-up," said Dinges. "Cabot
has reached total depth on the Cabot-RSX Hinton 4-15 and will complete the
logged pay in the Mountain Park sandstone." Dinges added, "We have also found
in each of our wells apparent shallow fractured shale, which made significant
gas while drilling. We plan to attempt a completion in this zone in the near
Cabot recently took advantage of the natural gas market's strength to
expand its 2008 hedge position and initiate a 2009 position. In total the
Company executed contracts (all zero cost collars), covering 2008 and six
contracts covering 2009. "Details of the company's positions are on our
website; the 2009 positions were executed at the basis location and were
completed off of a $9.60 NYMEX price per Mcf," commented Dinges. "We will
continue to be opportunistic and add to our hedge position."
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; the East and in Canada. For additional information, 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 (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
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation,