HOUSTON, Feb. 2, 2016 /PRNewswire/ -- Cabot Oil & Gas
Corporation (NYSE: COG) ("Cabot" or the "Company") today provided
an operational update for the fourth quarter and full year 2015 and
announced an updated 2016 operating plan and capital budget.
Fourth Quarter and Full Year 2015 Operational Update
Cabot expects production for the fourth quarter of 2015 to be
approximately 1,642 million cubic feet equivalent (Mmcfe) per day,
including approximately 1,552 million cubic feet (Mmcf) per day of
natural gas and approximately 14,977 barrels (Bbl) per day of
liquids (crude oil/condensate/natural gas liquids). Equivalent
production for the quarter is expected to exceed the midpoint of
the Company's guidance range of 1,626 Mmcfe per day. Based on the
expected production volumes for the fourth quarter, the Company
expects its total production growth for 2015 to be approximately 13
percent.
Natural gas price realizations, including the effect of hedges,
are expected to be $1.94 per thousand
cubic feet (Mcf) in the fourth quarter of 2015. Excluding the
impact of hedges, natural gas price realizations for the quarter
are expected to be $1.52 per Mcf,
representing a $0.75 discount to
NYMEX settlement prices and an improvement relative to the
Company's fourth quarter guidance range of $0.90 to $1.00 below NYMEX settlement prices.
Realized natural gas prices exceeded the Company's expectations due
to an improvement in basis differentials throughout Appalachia
during the quarter. Oil price realizations are expected to be
$37.74 per Bbl.
Cabot expects to incur approximately $97
million in capital expenditures associated with activity
during the fourth quarter of 2015. Based on this anticipated level
of spending during the quarter, the Company expects to incur
approximately $774 million in capital
expenditures associated with activity during the full year of 2015,
compared to the Company's 2015 capital program guidance of
$850 million. The lower capital
spending was a result of reduced activity levels in the fourth
quarter, along with continued improvements in operating
efficiencies and further reductions in service costs. Including the
change in accrued capital costs relating to 2014 operating activity
that was paid in 2015, total capital expenditures (including
acquisitions) for 2015 are expected to be approximately
$972 million. Contributions to equity
method investments for 2015 are expected to be approximately
$29 million.
Cabot expects to recognize a non-cash, after-tax impairment
charge of approximately $73 million
in the fourth quarter of 2015 primarily associated with legacy,
non-core fields due to the significant decline in commodity
prices.
2016 Operating Plan and Capital Budget Update
In response to the decline in both crude oil and natural gas
prices since releasing its preliminary 2016 budget in October 2015, Cabot has reduced its 2016 capital
budget to $325 million, which
represents a reduction of 47 percent from the preliminary budget of
$615 million and a reduction of 58
percent from the 2015 capital program of $774 million. Drilling, completion and facilities
capital will account for approximately 92 percent of the capital
budget, with approximately 70 percent allocated to the Marcellus
Shale and approximately 30 percent allocated to the Eagle Ford
Shale. The Company expects to drill approximately 30 net wells in
2016, including 25 net wells in the Marcellus Shale and 5 net wells
in the Eagle Ford Shale. The Company anticipates completing
approximately 55 net wells in 2016, including 40 net wells in the
Marcellus Shale and 15 net wells in the Eagle Ford Shale. Cabot
plans to reduce its rig count to one rig company-wide by
mid-February 2016. As a result of the
significant reduction in planned operating activity, the Company's
2016 production growth guidance range is being reduced at the
top-end from 2 - 10 percent to 2 - 7 percent.
In addition to the $325 million
capital budget associated with development activities, Cabot
anticipates between $80 million and $150
million of contributions to its equity method investments in
the Constitution and Atlantic Sunrise pipelines, which will
ultimately be dependent on the regulatory approval process and the
corresponding impact on the timing of construction activities.
Based on current market indications for commodity prices at the
time of this press release, Cabot expects its natural gas price
realizations before the impact of hedges to average $0.75 below NYMEX for the full year of 2016, an
improvement relative to the preliminary guidance provided in
October 2015 of $0.85 below NYMEX. For further disclosure on the
Company's updated cost guidance for 2016, please see the current
Guidance slide in the Investor Relations section of the Company's
website.
"Consistent with our philosophy of disciplined capital
investment through all commodity cycles, we have reduced our 2016
capital program in response to the lower commodity price
environment and its anticipated impact on our operating cash
flow for the year," said Dan O.
Dinges, Chairman, President and Chief Executive Officer.
"Our reduction in capital spending reflects our commitment to
maintaining a strong balance sheet and highlights the capital
efficiency of our asset base." Dinges added, "Given the
productivity of our assets in the Marcellus Shale, we will be
prepared to accelerate our production growth in a capital efficient
manner when market conditions warrant, as we anticipate over 1.3
billion cubic feet (Bcf) per day of new firm transport capacity and
firm sales by the third quarter of 2017 and an incremental 425 Mmcf
per day by the third quarter of 2018."
2016 Derivative Position Update
The Company has approximately 52 Bcf of natural gas swaps for
the period of April to October 2016
at a weighted average price of approximately $2.51 per Mcf.
Fourth Quarter and Full Year 2015 Conference Call
A conference call is scheduled for Friday, February 19, 2016, at 9:30 a.m. Eastern Time to discuss fourth quarter
and full year 2015 financial and operating results. To access the
live audio webcast, please visit the Investor Relations section of
the Company's website at www.cabotog.com. A replay of the call will
also be available on the Company's website. The latest financial
guidance, including the Company's hedge positions, is also
available in the Investor Relations section of the Company's
website.
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 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.
FOR MORE INFORMATION CONTACT
Matt Kerin (281) 589-4642
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cabot-oil--gas-corporation-provides-fourth-quarter-and-full-year-2015-operational-update-announces-updated-2016-operating-plan-and-capital-budget-300213358.html
SOURCE Cabot Oil & Gas Corporation