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Cabot Oil & Gas Provides Operations Update
Feb 12, 2009

HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today provided an update on its Pennsylvania Marcellus shale play, along with its activity in east Texas. In addition, Cabot announced that due to the underlying economic conditions in the industry, it is lowering its investment level for 2009.

Marcellus

The Pennsylvania Marcellus shale play continues to exceed expectations with production approaching 20 Mmcf per day at December 31, 2008.

To date, Cabot is producing from 15 wells with one horizontal well turned-in-line. There are five horizontal wells waiting on completion or pipeline hook-up and two vertical wells waiting on pipeline. "These wells will provide the next step in our production increase for Pennsylvania," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "From completion activity, together with our 2009 Marcellus program remaining at 60 wells, 30 horizontal and 30 vertical, we expect further reserve and production enhancements."

Dinges added, "Additionally, at this time, we have five rigs running, two drilling horizontals with the other smaller rigs drilling the vertical sections for later horizontal work. We will drill this program with five rigs expanding to six by the end of the first quarter and then growing our rig count to seven or even eight rigs as permits allow. We will be flexible and adjust our 30/30 split towards more horizontals when possible."

    Marcellus Well Highlights:
    --  Previously announced Ely 6H producing 5.3 Mmcf per day (30-day
        average) from 2,178' vertical section after six-stage fracture
        stimulation.
    --  Black 2H tested 4.1 Mmcf per day (20 percent frac fluid recovered)
        from 1,302' vertical section after four-stage stimulation.
    --  Ely 4V producing 2.3 Mmcf per day (30-day average) from high angle
        well bore after three-stage stimulation.
    --  Ely 5H drilled to record 10,394' with a vertical section of 3,046'.
        Nine-stage completion scheduled for mid-March.

The Company continues to focus on improving its drilling and completion practices. Working with the service partners, the Company made significant changes to the drilling mud systems, bit utilization and mud motors, which have materially improved the penetration rate. "Our first horizontal attempt took 19 days from kick-off point to reach total depth of 8,925', while our last well took 15 days from kick-off point to reach total depth of 10,394', a 27 percent improvement," commented Dinges. "We continue to modify our completion practices by increasing the number of fracs per well, shortening the distance between fracs, increasing the pump rates and sand concentration in each frac. Our data indicates a positive impact to production levels of as much as 40 percent per stage as compared to our earlier completion techniques. These technical enhancements will continue."

East Texas

Since closing the east Texas acquisition in August, Cabot has been running four rigs drilling vertical Cotton Valley wells with many of these deepened to test the Haynesville limestone. The upside in this zone, that was not valued for the acquisition, appears to be working as numerous wells have been completed in the limestone.

    Recent vertical successes include:
    --  Jarrell #4 was tested from the Haynesville lime at 3.3 Mmcf per day at
        2,800 pounds and the Cotton Valley at 1.7 Mmcf per day.  The two zones
        have been commingled.
    --  Hays #4 was tested from the Haynesville lime at 1.1 Mmcf per day with
        Cotton Valley pay behind pipe.
    --  Hughes #2 was completed in the Haynesville lime at 1.5 Mmcf per day at
        2,200 pounds and the Cotton Valley at 2.2 Mmcf per day.  This well
        will be commingled.

In addition to the vertical opportunities, the Company drilled and completed two horizontal wells to test the Haynesville limestone and the middle Bossier shale. Both wells were drilled from the same pad to improve efficiencies and completed back to back and have been the source of interest for some time.

The Pinkerton 11H, the first horizontal shale test in Minden, was drilled to a measured total depth of 14,144' in the middle Bossier shale with a 3,000' lateral. This well reached total depth on August 17, 2008, and completion operations were delayed due to a lack of frac sand in east Texas. The well was treated between 11,296 to 14,000 feet, pumping 1.1 million pounds of sand over ten stages. The completion procedure was not optimal, as the Company experienced difficulty in opening the frac ports and believe that an optimal treatment did not occur. "We are evaluating this completion to determine if remedial work is warranted or if we need to drill another well to test the concept," stated Dinges.

The Pinkerton 12H was drilled to a measured depth of 14,427' in the Haynesville limestone and reached total depth on September 27, 2008. Completion was delayed here also due to access to frac sand. The well was stimulated between 11,929 and 14,384, with 2 million pounds of sand over ten stages. Cabot encountered mechanical problems when pumping this job and could not open the frac ports. "We do not believe that we got an effective stimulus, and the low producing rates suggest this," commented Dinges. "We are currently undergoing well diagnostics to determine whether we treated any of the Hayneville lime. We are presently planning to either sidetrack this well or drill a new well to continue our evaluation of the Haynesville lime in this area, which we know is very prospective due to the vertical results mentioned in this release."

The Company's third initiative was to drill a deep vertical test of the Haynesville section at County Line. This test, the Von Goetz #3 was drilled to a total depth of 13,800 feet through the Haynesville limestone. Excellent shows were encountered throughout the shale and limestone section. Production casing was run and three fracs were performed. The Haynesville limestone, lower Bossier (Haynesville) shale and the middle Bossier shale were all tested. "We are extremely pleased with the results, but with the competitive nature of this play, we will not release specifics at this time," said Dinges. "We do plan to move in a rig and drill a horizontal test to evaluate these zones in the near future."

Rig Utilization

The current price environment has forced Cabot to reassess its drilling plans going forward. To this end, the Company has adjusted its 2009 program to be well within cash flow at $475 million and also adjusted its production guidance accordingly. The focus of the new program is Pennsylvania Marcellus and east Texas. As Cabot entered 2009, it had 18 rigs operating, and today there are 15 rigs operating. This level is expected to fall slightly by June 2009 to 13 rigs operating with the only increases occurring in the Marcellus play. "We, like all of our peers, are in a hunker-down mode to weather this economic downturn and allow service cost to calibrate with commodity prices," said Dinges. "While I like where we are positioned, we will still be cautious in our actions."

Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer with substantial interests in the Gulf Coast, including Texas and Louisiana; 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 of Cabot Oil & Gas Corporation,
+1-281-589-4993