Amends Stockholder Rights Plan
HOUSTON, Dec. 18 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that daily production for the Company now exceeds 200 Mmcfe. This is an increase of 11% from the average 180.5 Mmcfe per day produced during the first nine months of the year, resulting primarily from the Company's first three Etouffee wells and a new development well in south Louisiana. "All year we have discussed the prolific production potential and high quality of the Etouffee wells and this latest increase highlights their impact on the Company," commented Ray Seegmiller, Chairman and Chief Executive Officer.
Specifically on the Etouffee prospect (located in the Kent Bayou Field), production from the discovery Continental Land & Fur #1 well and two development offsets has been substantially increased following the completion of the facility's expansion project. The wells are producing a total of 9,000 barrels of oil per day and 47 Mmcf of gas per day with flowing tubing pressures in excess of 10,000 psi. Net to Cabot these wells are producing 23.2 Mmcfe per day. A fourth well is currently drilling with total depth expected by early 2001. If successful, the well should be turned in-line during the second quarter of 2001. Cabot has a 23% net revenue interest in these wells. The operator is Anadarko Petroleum Corporation.
The Krescent prospect in the Kent Bayou Field was drilled to 13,275 feet to the Bourg Sand and encountered 53 feet of net pay. This development well was completed in November and turned in-line with initial production rates of 10 Mmcf of natural gas and 400 barrels of oil per day with a flowing tubing pressure of 7,700 psi. Cabot has a 44% net revenue interest in this well.
"In a short period of time our Gulf Coast presence has opened a new dimension for Cabot," said Seegmiller. "The completion of the Krescent well and recently maximized production levels from the Etouffee wells have increased production significantly. As a company with 91% of its production being natural gas (only 10% of which is hedged through next April), coupled with the continued upward pressure on natural gas prices, Cabot should experience a strong start to the new year."
Within the last two months in Appalachia, Cabot has drilled three successful Oriskany wells including two exploration wells and one development well. These three wells had significant natural open flows while drilling with air and are expected to produce, net to Cabot, 3.5 Mmcf of natural gas per day in-line. Two additional Oriskany wells are currently drilling. Cabot has an average 67% working interest in these wells.
Cabot also announced that its Board of Directors approved a budget of $167 million for calendar year 2001, a 37% increase over the $122 million anticipated for the 2000 capital program. The Company expects to fund this program from cash flow. Of the total program, $112 million is slated for drilling including 42% for exploration wells and 58% for development wells. The exploration component will test several impact prospects in the Gulf Coast and Rocky Mountains.
During its December meeting, the Board of Directors amended and restated the Company's existing stockholder rights plan, which is designed to protect stockholders from coercive or unfair takeover techniques. Under the plan, each outstanding share of common stock currently includes one right. The rights plan would be triggered if an acquiring party accumulates 15% or more of the Company's common stock and would entitle holders of the rights to purchase either the Company's stock or shares in an acquiring entity at half of market value. The Company is generally entitled to redeem the rights at $.01 per right at any time until an acquiring party owns 15% or more of the common stock. As amended, the rights plan will expire on January 21, 2010.
"This plan is a means of safeguarding stockholders from abusive takeover tactics," explained Seegmiller. "It is not being extended in response to any accumulation of shares or hostile takeover attempt. Our Board of Directors believes that the rights plan represents a sound and reasonable means of safeguarding the interests of the Company's stockholders. This rights plan is similar to those adopted by over 2,000 other companies." Details of the amended rights plan will be outlined in the Company's SEC filings.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the onshore Texas and Louisiana Gulf Coast, Rocky Mountains, Appalachia and Mid-Continent. 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
Web site: http: //www.cabotog.com
Company News On-Call: http: //www.prnewswire.com/comp/129660.html or fax, 800-758-5804, ext. 129660
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993