HOUSTON, Oct. 26 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that through the first nine months of 2006 its drilling program has experienced a 97 percent success rate on 301 wells, adding 146 Bcfe of new reserves before PUD reconciliation, more than offsetting the recent sale of 68 Bcfe. Additionally, year-to-date production is 67.8 Bcfe.
Presently the Company has 18 rigs drilling, and 28 well completion and pipeline operations taking place. "We are on track to complete our 2006 program as planned," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "In 2006 we will drill a record number of wells, while also making significant investments in both infrastructure and acreage for our future."
Dinges added, "We continue to make progress in all regions as evidenced by the second consecutive quarter of production increases versus last year's comparable periods from each region. The diversity of our portfolio affords us opportunities in the varying commodity price environments we face."
Highlighted below are some of the regions' key recent accomplishments.
The second well at Hinton, the Cabot RSX 6-21 (60% WI) was completed in the Mountain Park sandstone at test rates up to 4 Mmcf of gas per day with 6,817 lbs. shut-in tubing pressure. Expectations are to turn this well to sales during the first quarter 2007. The third well at Hinton, the Cabot RSX 12-15 (75% WI) is currently drilling below 9,370' and is expected to reach total depth in approximately three weeks. The field is currently producing at a restricted rate between 5-7 Mmcf per day, which varies depending on pipeline capacity. Cabot has committed to eliminate this variability by participating in a pipeline expansion project, which will start next week. This project will be complete in February 2007. The expansion capacity net to Cabot will be approximately 25 Mmcfe per day. "Expectation is for much of this capacity to be filled by the development of this field," said Dinges.
Our 80-acre in-fill program on the Moxa Arch targeting the Frontier and Dakota continues to meet expectations. Through September, Cabot and partners have drilled 21 Frontier wells with six penetrating the Dakota. The wells show an average initial rate of 1.2 - 1.4 Mmcfe per day, from the Frontier formation. Some of the Cabot-operated wells in the down spacing program will test the Dakota formation for untapped potential under the Company's acreage. A recent well in the program, the Ballerina 40-10 (WI 67% BPO), was completed flowing 7.4 Mmcfe per day at 3,050 lbs. of flowing tubing pressure from Dakota sandstone. "We plan to drill 15 additional wells in 2006 (four more Dakota) and at least 30 wells in 2007 (15 to the Dakota)," said Dinges.
The McKenna 14-14 (WI 75%), San Juan County, Utah wildcat has been tested in four Paradox group shales without establishing commercial gas flows. The low rate flows suggest a gas-charged system controlled by very low permeability reservoirs in this area of our acreage. The Company plans to plug the 14-14 well and continue to evaluate the data for additional opportunities.
East - Horizontal
Cabot has completed eight wells in its 2006 horizontal shale well program. Many factors, the details of which will remain confidential, have contributed to its successful results, including reducing drilling and completion costs to $1MM for a well and effective flow rates after frac that have been improving well by well from approximately 500 to 2,000 Mcf of gas per day. Cabot is cautiously optimistic and will continue its horizontal drilling efforts with at least 12 wells in 2007.
Cabot continues its drilling program in the Minden Field. Twenty-one wells have been drilled to date with a 100% success rate. Thirteen wells are currently producing with completion work progressing on eight additional wells. Up to three rigs have been working this year, and this multi-rig drilling effort will progress throughout 2007.
In our south Texas program we plan to drill four more wells during the fourth quarter to continue to develop our Raymondville and McCampbell field areas.
Recent price declines during October in the Rocky Mountains have prompted Cabot and its partners to shut-in approximately 6 Mmcf of gas per day from several newly completed wells. These wells will be turned back on November 1 to capture the higher pricing.
Additionally during October, we had approximately 5.5 Mmcf of gas per day shut-in in West Virginia due to pipeline repairs and compression installation currently underway by third-party transporting pipeline. "In the East the large interstate pipelines have taken the opportunity of significant storage and line pack to perform maintenance," commented Dinges. "We have been able to limit our exposure to these efforts by redirecting our gas throughout our pipeline system." Nearly all production has been restored.
"With the third quarter sale of our south Louisiana and offshore portfolios, we have successfully transformed Cabot to a more predictable, lower-risk resource focused Company," added Dinges. "This change also has the impact of emphasizing program drilling with much less reliance on one-well prospect opportunities, which are characteristic of south Louisiana and offshore. To that end, our updates going forward will primarily focus on this program aspect."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer with substantial interests onshore Gulf Coast; the West, with the Rocky Mountains and Mid-Continent; the East and 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, +1-281-589-4993, for Cabot Oil & Gas Corporation
3915 10/26/2006 14:09 EDT http://www.prnewswire.com