HOUSTON, July 24, 2012 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE : COG ) announced today that current equivalent production for July is greater than the second quarter level with recent wells turned in line. "As reported, our volume increase, particularly in the Marcellus, would happen periodically as gathering lines are placed in service," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Though this dynamic will continue for the remainder of this year, the overarching theme is the continued production growth we see in the plays as detailed below."
During the quarter, Cabot turned-in-line eight wells with the majority of this activity occurring in June. Of note is a two-well pad which has been online for 39 days, with each well producing more than 1 billion cubic feet (Bcf) since first production. "Based on this preliminary data, these wells have the potential for significant estimated ultimate recoveries (EURs)," commented Dinges. "Additionally, we have turned-in-line ten wells so far in July, three of which exceeded 20 million cubic feet (Mmcf) per day initial production rates."
Cabot has been monitoring its recent pilot program to evaluate the productivity of the upper Marcellus, along with the downspacing of the lower Marcellus. "Since commencing in mid-April, with initial production rates of 8 Mmcf per day from the upper Marcellus and 16 Mmcf per day from the lower Marcellus, we have been plotting the decline characteristics," stated Dinges. "Based on our modeling, both of these wells are expected to exceed our EUR expectations that were 7.5 and 11 Bcf, respectively."
Since the end of the first quarter, Cabot's net equivalent production in the Marmaton has increased 45 percent. "Driving this growth has been our continued success in the play," said Dinges. "Our last five operated wells have delivered initial production rates from 650 to 2,000 barrels of oil per day (Bopd). One well has averaged 1,320 Bopd and 1.5 Mmcf per day for the last thirty days. With these completed wells costing between $2.9 to $3.4 million on average, we are generating a very good return on our investment."
In the last release, Cabot highlighted the very early results of its 400' downspacing program in the Eagle Ford. "I am pleased to report now that one of these wells has provided the best 30-day average production rate of any of our 33 wells to date in the play," commented Dinges. "The other well has trended above the average 30-day rate of our overall program. This reinforces our reduced spacing concept of 400' and, as a result, we are currently drilling our second set of wells to continue our evaluation process."
Cabot's initial Utica test in Northwest Pennsylvania, operated by Range Resources, is drilling ahead at this time; the Company's initial Pearsall well in the Buckhorn area is also drilling ahead, with a second rig commencing in the Pearsall in August. In regard to the Brown Dense, Cabot will continue to watch for industry data points prior to allocating additional capital to the play.
Dinges summarized, "Our well results, combined with the recent strategic joint venture, has added momentum for 2012 and sets us up for continued growth in 2013. While production increases throughout the year will be somewhat dependent on the timing of our gathering line connections in the Marcellus, by year-end we will report an increase in reserves, strong production growth and lower costs."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer with its entire resource base located in the continental United States. 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.
Cabot Oil & Gas Corporation
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SOURCE Cabot Oil & Gas Corporation