HOUSTON, Jan. 4 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that the Company has initiated hedges covering 97,000 Mmbtu per day of its natural gas production for the period from February 2001 through October 2001. All these hedges were in the form of "costless collars" with a weighted average floor price of $5.15 per Mmbtu and a ceiling price of $8.92 per Mmbtu. This translates into a floor price of $5.50 per Mcf and a ceiling price of $9.55 per Mcf.
These new hedges cover approximately 51% of the anticipated 2001 natural gas production for this nine month period. After taking into account all open hedges, the Company estimates that 45% of its natural gas production during this same period remains subject to market pricing. The following table summarizes by operating area the volumes and weighted average contract prices of the new hedges for the nine month period:
Location Mmbtu/Day Floor Ceiling Appalachia 35,000 $5.43 $9.09 Mid-Continent 25,000 5.00 8.57 Gulf Coast 37,000 5.00 9.00 Total 97,000 $5.15 $8.92
"We continue to be encouraged by the fundamentals of the natural gas market," commented Ray Seegmiller, Chairman and Chief Executive officer. "While we believe there is a sustained strengthening in natural gas prices, this environment of extremely high prices, combined with the daily volatility in the futures market, creates the opportunity and need for some price protection. We will continue to evaluate the merits of adding to this position; however, we have no plans at this time to hedge beyond October of 2001." Seegmiller added, "This action will allow the Company to realize a minimum price (related to the new hedged volumes) that is more than $1.00 per Mcf higher than the original 2001 budget for this same nine month period."
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.
SOURCE Cabot Oil & Gas Corporation
Web site: http: //www.cabotog.com
Company News On-Call: http: //www.prnewswire.com/comp/129660.html or fax, 800-758-5804, ext. 129660
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993