HOUSTON, Sept. 21 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) announced today the divestiture of 59.5 Bcfe of Appalachia properties to Enervest Management Company, L.C. for $46.2 million. Proceeds from the transaction will be used to acquire 10.3 Bcfe of proved reserves adjacent to the Company's existing assets in the Wyoming Green River Basin and to repay debt.
"We have indicated throughout this year that we would sell non-strategic properties as we continue to high grade our reserve base," commented Ray R. Seegmiller, Chairman and CEO. "By divesting non-strategic properties in Appalachia and acquiring properties we believe have considerable upside potential in the Rocky Mountains, we are also increasing our assets in our faster growth areas." Seegmiller added, "These transactions, together with previously closed deals, eliminate approximately 25% of our total well count (1,108 wells) while reducing production by only 13 Mmcfe per day, or about 6%. In spite of this reduction, we still anticipate a 5% production increase for the year over 1998. Most of the employees affected by the sale are being absorbed by the purchaser, while Cabot's asset purchase requires no additional personnel. So far this year we have sold 73.9 Bcfe of non-strategic reserves for $60 million across all regions."
The largest concentration of reserves divested was the Clarksburg properties, located in northern West Virginia. This Eastern divestiture included a total of 791 wells, producing a net 8.7 Mmcfe per day. These reserves were not contiguous to the Company's Cranberry pipeline system and high quality drilling opportunities were limited. The Rocky Mountains acquisition included 18 wells located in the Blue Forest Unit of the Moxa Arch with production of 2.4 Mmcfe per day net and proved reserves of 10.3 Bcfe. The acquired assets produce predominantly from the Dakota formation. In addition, nine potential drilling locations have been identified to date. Cabot Oil & Gas will be the unit operator for all wells on the property.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in basins in Appalachia, the Mid-Continent, Rocky Mountains and the Gulf Coast. For additional information, visit the Company's internet home page 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 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
SOURCE Cabot Oil & Gas Corporation
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CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993