Infrastructure, which includes 33 miles of pipeline, 5,400 horsepower
of compression and four water disposal wells, valued at about
These properties were acquired by Cabot to realize significant growth in
production and reserves and also to capture additional opportunity to exploit
the Bossier/Haynesville. "Cabot has drilled 77 wells in the Minden area on
its 12,700 acres with a 100% success rate since our initial discovery in 2006.
The acquired acreage lies in immediate proximity to our existing acreage,
which enhances our ongoing development of the Pettet, Travis Peak and Cotton
Valley formations. There is also significant incremental exposure to the
emerging Bossier/Haynesville opportunities," said Dan O. Dinges, Chairman,
President and Chief Executive Officer. "The property is essentially cash flow
neutral at the current production rate with four rigs drilling. Anticipated
production growth from future drilling activity will generate additional cash
flow to allocate towards exploitation of the Bossier/Haynesville," Dinges
added. "Over 98 percent of Cabot's combined total acreage of 37,700 in the
greater Minden area is undeveloped below the Cotton Valley formation. The
timing of this acquisition fits well considering we will spud our first of
several planned horizontal Bossier/Haynesville wells on Cabot's existing
Minden acreage in the next several weeks."
To lock in margins and to ensure cash flow to execute the drilling program
without dilution to Cabot's 2008 capital program, the Company placed swaps
covering estimated production for the remainder of 2008, and all of 2009 and
2010. The volumes swapped during this period represent revenues of over $600
million from 47.5 Bcfe, or approximately 27 percent, of the acquired proved
reserves. Swaps for 2008, 2009 and 2010 were set at $13.15, $12.18, and
$11.43 per Mcf, respectively, net to the properties for natural gas and
$125.35 average swap price for oil over the same period.
In addition to the proved reserves disclosed above, Cabot expects to
benefit from significant resource potential through 300-400 probable and
possible deepenings or new locations. This transaction is subject to
customary closing conditions and will be financed through a combination of
debt and common equity. The Company will host a conference call Thursday,
June 5, 2008 at 9:30 a.m. CDT to discuss the details of the transaction. You
are invited to listen to the call which will be broadcast live over the
Internet at http://www.cabotog.com.
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