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