HOUSTON, Oct. 29 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced its remaining operational plans for 2008, its plans for 2009 and its recent drilling success in both its Marcellus and Haynesville/Bossier projects. "We have always exercised significant discipline in our capital spending, regardless of general market conditions," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Over the last three years our investments have been around 120 percent of cash flow on average, working off an extremely low leverage ratio, and our 2008 organic effort will be consistent with our past discipline."
Cabot's Marcellus play is focused in northeast Pennsylvania. During the second quarter call, the Company announced its first Marcellus production from a vertical well. Currently, Cabot has five producing wells (all vertical) with a combined average daily volume of 4-5 Mmcf per day. "Our goal was to be producing between 6-9 Mmcf per day by year-end. With the recent success of our wells, I now anticipate exceeding those early targets," commented Dinges.
The first horizontal well was completed with only three of six planned fracs. The well will be flowing to sales shortly. The Company plans to test the first three fracs and then proceed with the remaining three fracs in the next several weeks. "Right now we have two more horizontal wells cased and waiting for completion, along with five vertical wells in various stages of completion. We anticipate having all these wells flowing to sales by year- end," added Dinges.
The first horizontal Bossier shale test in the Minden area was recently cased and is waiting on proppant for a 10-stage frac. "We are experiencing some difficulty in accessing frac sand and that has delayed the completion of this well," commented Dinges. "This delay in no way impacts our positive view of this opportunity." Also, the other horizontal well drilled from this pad-site into the Haynesville Lime will be completed immediately following the Bossier shale completion.
Excluding acquisitions, both producing property and lease acquisitions, the Company's published guidance for capital spending remains the same, at $750 million. Due to the effects of Hurricanes Gustav and Ike, along with delay in completions (mentioned above), Cabot's 2008 full year production levels are expected to be 96 to 97 Bcfe, or a 12.3 to 13.5 percent growth over 2007. "These numbers along with the existing commodity prices should provide us with record levels for many key metrics in 2008," said Dinges.
For next year, the Company will again have a capital program that is within estimated cash flow to start the year. The capital plan for 2009 is $600 million. "Much of this investment will be spent in East Texas and Pennsylvania," said Dinges. "Only nine percent of our planned expenditures is allocated to our other plays in the Company." This level of spending will allow Cabot to grow its production levels by double digits over 2008. See guidance on the website for specific production and expense expectations.
Dinges added, "We plan to allocate over 90 percent of our 2009 capital to the Marcellus and East Texas. In each area, we have received and continue to gather significant new data points. We have been delayed somewhat in our efforts with regulatory issues in Pennsylvania and limited quantities of frac material in East Texas. However, with that being said, we are very excited about the information we have gathered in each area and look forward to receiving test information from key wells that is imminent."
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 http://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,