HOUSTON, Feb. 22, 2011 /PRNewswire/ -- Cabot Oil & Gas
Corporation (NYSE: COG) today announced that its year-end 2010
proved reserves increased 31 percent to 2.7 Tcfe over the prior
year. Generating this growth was an organic drilling program
that achieved 603 percent production replacement (from additions
and revisions only); an all-sources finding cost of $1.05 per Mcfe ($0.89 when lease acquisitions are removed); all
while maintaining proved undeveloped (PUD) reserve bookings at 36
percent of the total. Additionally, Cabot increased its
proved liquids reserves by 22 percent to 9.5 million barrels.
A significant portion of Cabot's reserve adds were in its
industry-leading area of the Marcellus, which provides
substantially higher rates of return. Indicative of the value
of Cabot's acreage position in the Marcellus is the 10 Bcf average
EUR per producing well booked from its 2010 drilling program.
Because of the overall small sample pool in the Marcellus
play (44 producing horizontal wells at year-end), Cabot took a
conservative approach to its PUD bookings recognizing 0.9 offset
PUD locations per well drilled with an EUR of 6.5 Bcf for each,
assuming a 10-stage frac.
Cabot's overall PUD reconciliation also includes the removal of
183 Bcfe that was reclassified to probable from the Company's
conventional resource basins. Although these reserves remain
economic, with Cabot's multi-year inventory of industry-leading
Marcellus locations, the Company has no current plans to drill
these reserves within five years. The revision category was
also impacted by a slight gain with year-end pricing of 35 Bcfe and
a significant positive revision of 285 Bcfe, based on superior
performance of the Marcellus producing wells. This decision
significantly enhances the overall value of Cabot's PUD bookings.
More importantly, this PUD inventory carries a future
development cost of $1.3 billion, a
number easily funded by cash flow in the five-year required
drilling window.
"Our 2010 drilling program illustrates the value every dollar
invested yields to our shareholders," said Dan O. Dinges, Chairman, President and Chief
Executive Officer. "On a debt-adjusted per share basis, we continue
to add value with increases in reserves and production. Not
only has our Marcellus operation demonstrated its prolific nature;
we have also transitioned our capital allocation in our South
region to 100 percent liquids for 2011." Dinges added, "We
grew our reserves by 31 percent in 2010 at a very attractive
finding cost, even with a very conservative posture for PUD
booking. I anticipate our 2011 drilling program will continue
to yield similar results with an added positive of more liquids in
the mix."
The reserve reconciliation for the year includes the
following:
|
Beginning balance
(Bcfe)
|
2,059.9
|
|
|
Activity:
|
|
|
|
|
Additions
|
650.6
|
|
|
|
Revisions
|
136.7
|
|
|
|
Purchases
|
0.6
|
|
|
|
Production
|
(130.6)
|
|
|
|
Sales
|
(16.1)
|
|
|
Ending Balance (Bcfe)
|
2,701.1
|
|
|
|
|
|
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.
FOR MORE INFORMATION
CONTACT
|
|
Scott Schroeder (281)
589-4993
|
|
|
SOURCE Cabot Oil & Gas Corporation