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Cabot Oil & Gas Provides Operations Update, Increases Capital Program
Jul 24, 2008

HOUSTON, July 24 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) announced today significant progress in its shale activity and in other areas in which the Company operates with its new initiatives. To this end, the Company has been actively leasing in and around its core areas, spending $55 million, adding 82,000 net acres through the first six months of 2008. "We are in the largest land grab in decades, particularly in the East and east Texas," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "We presently have 125,000 gross acres in the Bossier play and approximately 135,000 gross acres in the Pennsylvania over-pressured Marcellus play, making us well-positioned to participate in these new plays. Additionally, we have added over 50 wells toward the end of 2008 in this year's program. To that end we have raised our capital program to about $750 million, and it could go higher depending on the success in future lease activity."

Marcellus Shale

The Company currently has three rigs drilling (two vertical, one horizontal) on its approximately 120,000-acre block in Susquehanna County, northeast Pennsylvania. To date, the Company has drilled eight vertical wells with four wells completed. Three additional wells have been drilled to a horizontal kick-off point currently ahead of a larger rig. Pipeline construction is ongoing with first production occurring today. This production will represent the first Marcellus production ever in northeast Pennsylvania. "It is Cabot's plan to continue to expand its pipeline infrastructure, test our first horizontal Marcellus well and expand our operation from a current three-rig program to an eight-rig program in 2009," commented Dinges. "The first phase of our infrastructure investment has been to build ten miles of pipeline, set compression and tap the interstate line. With the next phase that will be added in 2009, Cabot will add another 57 miles of pipeline."

Gulf Coast

The Company currently has six rigs drilling in the Gulf Coast region, including three drilling horizontally.

At County Line, in east Texas, the Company extended its horizontal James play to the southernmost extent of its acreage with a successful completion. The Katherine Von Goetz #1 well tested at 7.3 Mmcf per day with flowing casing pressure of 1,300 psi. "This seven-mile extension provides an excellent data point and proves up a significant portion of our 31,000-acre block in this field," said Dinges.

Also in this field, the Company has several initiatives to evaluate or enhance the stratigraphic section deeper than its traditional field pay zones. Specifically, Cabot will spud a vertical well testing the Bossier and Haynesville sections in the middle of August. "This is a 35-day well with results conservatively expected by November," added Dinges.

In the Minden field, Cabot's first horizontal Bossier shale well is drilling below 11,000'. Subsequent to reaching total depth and prior to completion, Cabot will skid the rig approximately 30' and drill a horizontal Haynesville lime test from the same pad site. Completion operations will commence immediately following drilling operations. "These two wells are significant to Cabot in several ways; first, they will be our initial horizontal wells into the Bossier and Haynesville. With success, production rates would be enhanced, and we could gain some efficiencies producing two horizontals from one location. Additionally, success would open extensive opportunities under our 37,000-acre position in Minden. We would expect to have both wells completed in late October or early November," commented Dinges.

In Trawick, the Company has recently completed and tested its second Bossier shale test. The well tested a vertical section in the upper Bossier shale, flowing at 3.3 Mmcf per day with flowing casing pressure of 1,800 psi. The Company will continue to drill its one rig program until all eight earning wells are complete. Meanwhile, the Company is preparing to drill its initial horizontal test in Trawick to exploit the success found in the Bossier section.

The summer drilling program in Canada has started with an indicated discovery at Musreau. The Musreau 14-15 logged a total of 19 meters of gas pay from three sandstone reservoirs. "After an extended break-up season, we are pleased the first well is a discovery," said Dinges. "Additionally, we will spud our ninth well at Hinton in the next few weeks."

Other News

Cabot remains on track to close its pending acquisition on or before August 20, 2008. The 25,000-acre block currently has four rigs drilling for Cabot's account. "Our updated guidance only assumes one month of third quarter production for the acquisition and a full inclusion in the fourth quarter," added Dinges.

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, +1-281-589-4993,
for Cabot Oil & Gas Corporation