HOUSTON, March 11 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that the Company has initiated hedge positions covering 162,000 Mmbtu per day of its natural gas production for the period from May through August. The hedges are in the form of costless collars based on a NYMEX equivalent average floor and ceiling price of $2.40 and $3.00 per Mmbtu, respectively. This translates into a floor price of $2.59 per Mcf and a ceiling price of $3.24 per Mcf, after adjusting for the btu content.
In aggregate, Cabot has downside price protection in place for approximately 75% of the anticipated natural gas production during the four-month period which spans the second and third quarters. Taking into account regional basis differentials, the following table summarizes by operating area the volumes and weighted average prices (per Mmbtu) of the new hedges for the four-month period.
Location Mmbtu/day Floor Ceiling Gulf Coast 70,000 $2.41 $3.01 Appalachia 40,000 2.53 3.06 Rocky Mountains 25,000 1.90 2.42 Mid-Continent 27,000 2.25 2.85 Total 162,000 $2.33 $2.91
"We view this recent increase in natural gas prices as technically driven," stated Ray Seegmiller, Chairman and Chief Executive Officer. "Thus, we chose to take advantage of this price rally with an extension of our previously announced (January through April) collars. We are encouraged that prices have improved, but remain very concerned in the short term due to the underlying weak fundamentals involving storage levels, as well as demand." Seegmiller added, "We will continue to evaluate the merits of entering into additional hedge positions in the future."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the onshore Texas and Louisiana Gulf Coast, Rocky Mountains, Appalachia and Mid-Continent. 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.
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CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, +1-281-589-4993