HOUSTON, Dec 06, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced continued momentum in its operational program, including recent horizontal success in east Texas and further confirmation at Hinton in Canada, along with other noteworthy items. "Cabot continues to experience success across its operations," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "The timing of this year-end success will provide a significant jump start to the new year."
Cabot Oil & Gas recently completed its first horizontal well in east Texas at its County Line prospect. The County Line prospect area is located in Shelby County, east of the Company's Minden field. Cabot controls 13,200 net acres in this play.
The horizontal well (the A.M. Scott #1), in which Cabot has a 100% working interest, is a horizontal Pettet test that reached a total depth of 11,387 feet with 3,400 feet of lateral hole. This well tested flowing at 3.3 Mmcfe per day. It is anticipated the well will be flowing to sales by mid-January 2007.
The horizontal well was an offset to a vertical Pettet and James discovery, the Sustainable Forest #1. This 100% working interest well was dually completed in the James/Pettet at a combined rate of 2.5 Mmcfe per day.
"With the success of this horizontal completion, we are designing a significant drilling program for 2007 and into the future," stated Dinges. "At this time, Cabot has confirmed between 50-80 additional horizontal locations that will test the James/Pettet interval."
At Minden, Cabot has drilled 25 wells with a 100 percent success rate over the last 15 months. Production in the field is now over 25 Mmcfe per day with five wells still waiting on completion. Cabot has amassed 10,170 net acres at Minden, expanding the location potential to between 200 and 250.
"Minden is an instrumental part of Cabot's Gulf Coast portfolio for its ability to add production," said Dinges. "On the strength of plays like Minden, we expect to return to pre-asset sale production levels by the fourth quarter of 2007.
Earlier this year, Cabot reported the successful completion of two wells on its Castor project in North Louisiana. At that time, the Company was waiting on the acquisition of key pipeline rights-of-way to get the wells connected to pipeline. The Company has acquired the necessary rights-of-way and anticipates completion of the five-mile, six-inch pipeline this week with gas flowing to sales by mid-December. "Indications are for both wells to produce between 4 to 5 Mmcf per day in total," said Dinges. "The production from these wells is from the Hosston and Cotton Valley producing intervals with additional drilling scheduled for 2007."
The Company recently reached total depth on its third well at Hinton. This is the second confirmation well and the third well in the complex. The well was drilled to a depth of 11,450 feet and encountered approximately 200 feet of gross pay in the Mountain Park sandstone interval and 26 feet of pay in the Dunvegan formation.
"Both of these intervals are productive in the discovery well, and both intervals encountered good mud log shows," commented Dinges. "Due to the limitations on pipeline capacity, the discovery well is producing at a curtailed rate of 7.5 Mmcf per day, the second well is shut-in, and this third well is scheduled to be frac'd in mid-January. All three wells will be ready to produce when our pipeline work is complete."
The pipeline expansion project that will allow maximum takeaway capacity is on schedule for completion by mid-February. The critical river crossing has been completed, and the 12" looping project and measurement and facility upgrades are underway. Cabot controls 60-75% working interest under 7,680 acres in the Hinton prospect area.
Since the end of the third quarter, Cabot has added to its 2007 hedge position. The Company has placed a wide collar on an additional 25,000 Mmbtu per day for all of 2007 with a floor of $7.82 per Mmbtu and a ceiling of $10.09 per Mmbtu. These trades will be settled at the Columbia Gas Transmission Index.
"With this latest activity, we are approximately 50 percent hedged for 2007, all with wide collars," stated Dinges. "What is attractive is our average floor, which takes into account basis locations, is above $8.00 per Mmbtu with the corresponding average ceiling approaching $11.00 per Mmbtu (which is above $8.50 and $11.50 per Mcf for the floor and ceiling, respectively). We will continue to look for opportunities to add hedges selectively for 2007 and maybe a small amount for 2008."
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
Scott Schroeder of Cabot Oil & Gas Corporation, +1-281-589-4993