HOUSTON, Dec. 16 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation
(NYSE: COG) today announced that the Company has been active in adding to its
2003 oil and gas hedge position during the first two weeks of December.
Specifically, Cabot sold an additional 40,000 Mmbtu per day of its natural gas
production for the period January through December 2003, along with
1,500 barrels per day of its oil production for July through December 2003.
In aggregate, Cabot now has hedged approximately 50% of 2003's anticipated
natural gas volumes, all at a NYMEX equivalent price of $4.00 per Mmbtu or
higher. Additionally, Cabot sold 25,000 Mmbtu per day of its natural gas
production for 2004 also above the $4.00 NYMEX equivalent level.
Approximately 40% of the Company's 2003 anticipated oil production is now
covered by either a costless collar or a range swap.
"Our focus of layering in hedged volumes as the opportunities arise has
been consistent," said Dan O. Dinges, Chairman and Chief Executive Officer.
"Locking in natural gas prices at least $1.00 per Mmbtu above our budgeted
project economic hurdle level provides Cabot with an array of value creating
options for the incremental free cash flow. We will continue to evaluate the
merits of entering into additional hedge positions for both 2003 and 2004 at
levels consistent with our existing positions."
Two of the five new natural gas hedges are costless collars and three are
straight swaps. The following tables summarizes by operating area the volumes
and prices (per Mmbtu) of the new gas hedge positions.
Location Mmbtu/day Period Price/Mmbtu*
Gulf Coast 20,000 2003 $4.00 floor / $4.62 ceiling
5,000 2003 $4.00 floor / $4.60 ceiling
Rocky Mountains 10,000 2003 $3.20
Mid-Continent 5,000 2003 $3.85
Gulf Coast 25,000 2004 $4.06
* Net of regional basis differentials
The new oil hedge is in the form of a "range swap" which provides for a
fixed price swap at $27.75 per barrel. To receive the premium swap price
Cabot agreed to a "fade-out" provision that calls for the Company to receive
the market price for any month the crude oil NYMEX contract average is less
than $21.00 per barrel during that single month.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading
domestic independent natural gas producer and marketer with substantial
interests on the Gulf Coast, including onshore 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