HOUSTON, Sept. 24, 2014 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced the closing of a $925 million private placement of senior unsecured notes, an acquisition of approximately 30,000 net acres in the Eagle Ford Shale and an update on its share repurchase program.
Private Placement of Senior Unsecured Notes
The Company recently closed a private placement of senior unsecured notes to a group of institutional investors. In total, the Company raised $925 million through the following three series of notes: $100 million of 7-year 3.24% notes due 2021, $575 million of 10-year 3.67% notes due 2024 and $250 million of 12-year 3.77% notes due 2026. Proceeds from the offering will be used to repay the Company's outstanding borrowings under its credit facility, fund the Eagle Ford Shale acquisition and for other general corporate purposes.
Eagle Ford Shale Acquisition
Cabot recently entered into a definitive purchase and sale agreement to acquire approximately 30,000 net acres in the Eagle Ford Shale from an undisclosed seller for $210 million, subject to customary due diligence and closing adjustments. The assets were producing approximately 1,600 barrels of oil equivalent per day (92% liquids) as of the effective date of the transaction and include approximately 17,000 net acres near Cabot's Buckhorn operating area, increasing the total Buckhorn leasehold position to approximately 60,000 net acres and Cabot's total Eagle Ford Shale leasehold position to approximately 83,000 net acres. Based on the Company's current spacing configuration of 400 feet between laterals, Cabot has identified 191 net locations on this additional Buckhorn area acreage with an average lateral length of over 6,500 feet. The Company is currently testing 300-foot downspacing across its existing Buckhorn position, which would add an additional 45 net locations on the acquired leasehold. As a result of this transaction, the Company has added a fourth operated rig in the Eagle Ford to begin drilling on the newly acquired properties. The transaction is expected to close in October 2014.
"In addition to the number of new locations, this acreage will allow synergies in our operations on many fronts including infrastructure and facility utilization," commented Dan O. Dinges, Chairman, President, and Chief Executive Officer. "Our typical Buckhorn well yields an attractive return at current oil prices and this acreage will complement those returns."
Share Repurchase Program
Since the second quarter conference call, the Company has repurchased approximately 2.7 million shares. The Company has approximately 11.7 million shares remaining under its share repurchase program. "We continue to believe that there is a meaningful disconnect between the long-term value creation provided by our assets and our current market valuation," stated Dinges. "As a result, we will continue to be opportunistic on share repurchases without compromising the financial flexibility that is provided by our strong balance sheet."
As a result of the addition of a fourth rig in the Eagle Ford, the Company has increased its 2014 capital budget guidance range from $1.375 - $1.475 billion to $1.45 - $1.55 billion (excluding the Eagle Ford acquisition cost). The Company now expects to drill approximately 55 net wells in the Eagle Ford and 165 - 175 net wells company-wide in 2014.
For the third quarter of 2014, the Company expects to grow daily net production volumes by approximately two percent sequentially over the second quarter of 2014. "While the Company recently achieved a new gross Marcellus production record of 1.678 billion cubic feet (Bcf) per day, we did not reach this production level until much later in the quarter than originally expected due to continued infrastructure issues in the field," noted Dinges. "As a result, we are updating our full-year production guidance range to 530 - 555 billion cubic feet equivalent (Bcfe) and reaffirming our 2015 production growth guidance range of 20 to 30 percent." Dinges added, "With our current record production rate and two ten-well pads and one nine-well pad scheduled to be placed-on-production during the fourth quarter, we are confident that we will finish the year strong operationally."
Cabot today announced the promotion of Matt Kerin to Treasurer. Kerin most recently served as Manager – Finance and Investor Relations and has been with the Company since March 2012. Prior to joining the Company, Kerin served as an Associate in the Oil and Gas Investment Banking group at J.P. Morgan Securities. Kerin holds a BBA in Accounting and a MS in Finance from Texas A&M University and a MBA with a concentration in Finance and Energy from the Jones Graduate School of Business at Rice University.
"Matt has proven to be a valuable addition to our management team," said Dinges. "He possesses an in-depth understanding of the exploration and production space, a tremendous working knowledge of the finance profession and an ability to quickly assess and evaluate market trends. We are pleased to add Matt as an officer of Cabot Oil & Gas Corporation."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer with its entire resource base located in the continental United States. For additional information, visit the Company's website 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.
FOR MORE INFORMATION CONTACT
Matt Kerin (281) 589-4642
SOURCE Cabot Oil & Gas Corporation