HOUSTON, June 13 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation
(NYSE: COG) today announced that its year-to-date operations and drilling
program are on track to meet or exceed expectations. Cabot is participating
in 20 rigs currently drilling and has 35 wells completing or waiting on
pipeline. "Though the investment community is soft on our sector, our success
across all our regions has led to a positive impact on production and has
positioned us well with activity expected to continue to ramp up in the coming
weeks," said Dan O. Dinges, Chairman, President and Chief Executive Officer.
The initial results at the Company's Minden project in east Texas have
been very positive. One rig has been operating continually for seven months,
with two more rigs to be added by the end of June. To date, nine wells have
been drilled (seven completed) in the field establishing over 12 Mmcfe per day
of gross production. The program has 15 more wells to drill in 2006, and with
7,800 acres under lease, nearly 200 locations remain in the Minden inventory.
Cabot has a 100% working interest in the field.
In north Louisiana, the initial wildcat well at our Castor prospect, the
Weyerhaeuser 24-1, is waiting on completion. Cabot found 14 feet of pay in a
Hosston sand and will start completion operations about June 23, 2006. The
second well at Castor, approximately four miles to the northeast of the
Weyerhaeuser 24-1, the Brazzel 4-1, has reached total depth and is waiting on
completion. The Company found approximately 40 feet of net sand in the Cotton
Valley section plus over 50 feet of net pay in five separate Hosston sands.
We will start completion operations on or about June 19. "We are cautiously
optimistic about the Cotton Valley potential at Castor and see significant
potential in the Hosston sandstones on the structure," stated Dinges.
Redfish Bay, in south Texas, continues to add value to the portfolio. The
production profile has been enhanced with the recent re-completion of our
ST277 #1 in the Frio F-80 sandstone, flowing 13.5 Mmcf of gas plus 138 barrels
of oil per day at 5,420 flowing tubing pressure. Cabot has a 75 percent
The Company has now drilled and completed five horizontal wells in the
Sissonville Huron shale project. "We are encouraged with our progress in both
cost structure and production profiles with this program. Our production
rates have steadily improved with each well and the cost efficiencies continue
to show progress," said Dinges. The latest well, the Amherst 24H, was drilled
to a measured total depth of 6,615 feet, including 2,600 feet of lateral hole
(100% WI). It was recently completed flowing 1.1 Mmcf per day after a four-
stage frac at a total cost of $1.5 million. "We are currently drilling our
sixth horizontal well in Sissonville and will be starting our first well on
the Hurricane acreage by the end of June. Hurricane was one of our new
acreage initiatives mentioned late last year where we have nearly 130,000
gross acres under lease," stated Dinges.
Cabot has spud a confirmation well at its Hinton discovery in northwest
Alberta. This 11,000-foot offset should reach total depth in 50-60 days. The
discovery well is flowing at a pipeline constrained rate of four Mmcf per day.
To mitigate the constraints, Cabot and others are contracting for 50 Mmcf per
day of expanded capacity with construction expected to start in August and be
completed in February, 2007.
At Musreau, Cabot has received approval to downspace its development
acreage from 640 to 320 acres per well, with further downspacing to 160 acres
expected. This will provide an additional 30 locations in the field on 160-
acre spacing. Additionally, Cabot is laying a new pipeline to access the
Cutbank plant gas pipeline thereby bypassing a bottle neck which has
significantly impacted daily production. This line will be completed by the
end of June.
Expanding its resource acreage base and drilling inventory is the catalyst
for Cabot's success in Canada. Recently Cabot has been successful in
acquiring an interest in a 37,120-acre block adjacent to the Musreau
development area at a cost of $4.5 million in the form of cash and drilling
dollars. Cabot's interest will range between 16 to 40 percent working
interest on this acreage. The initial well location has been built, and the
Company expects the first well to spud in June. With success, Cabot could be
exposed to as many as 120 gross locations, assuming 160-acre spacing.
Cabot has spud its initial well at the McKenna project in San Juan County,
Utah. The McKenna 14-14 (75 percent working interest) well is drilling below
2,646 feet, targeting Honaker Trail, Ismay and Paradox Group shales at 10,000
feet. Cabot has leased approximately 40,000 gross acres over this project.
Cabot has also spud its first operated Frontier/Dakota infill well in the
Moxa Arch area based on 80-acre spacing. With successful down-spacing
operations, Cabot has 700 additional locations on its Moxa Arch acreage.
Cabot's equivalent guidance for the second quarter (as posted on its
website) is between 240 and 252 Mmcfe per day. "At the time of this release,
we have a production profile for April and May that is at slightly above the
upper end of this guidance due to the activity I just highlighted," stated
Stock Buy Back
"With the softness occurring in the E&P space and our underlying
valuation, we have been an active participant in our stock, buying in shares,"
commented Dinges. "When you compare the industry's acquisition prices and its
organic finding costs, allocating a portion of our capital to buying our own
reserves in the stock market is very attractive."
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 an expansion effort in Canada. 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
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation,
1341 06/13/2006 08:30 EDT http://www.prnewswire.com