Cabot Maintains 3Q Production Guidance
Cabot Oil & Gas Corporation today announced that its third quarter production guidance is unaffected by recent operational challenges and the logistics of moving gas in northeast Pennsylvania that have been publicized. "In our published guidance (of 521 Mmcfe per day to 567 Mmcfe per day), we allow for some level of disruptions because history shows unforeseen circumstances can occur," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "We have experienced solid and expanding production levels in July and August that solidify the quarter's production outlook. Additionally, prior to the end of September our year-to-date production levels will surpass those posted for all of 2010, with the entire fourth quarter representing growth."
In terms of the fourth quarter, current guidance is 562 Mmcfe per day to 608 Mmcfe per day. Imbedded in these numbers are some risked production levels expected from the new Laser pipeline (effective October) and the new Springville pipeline (effective December). The exact timing of these pipelines may be affected a week or two as a result of the recent weather delays. "However, should further delays occur and assuming Cabot moves no volumes on either of these projects in the fourth quarter, we can still attain the low-end of our published fourth quarter production guidance," commented Dinges. "Since our last teleconference, we have set a new 24-hour record for gross production out of Marcellus at 483 Mmcf per day and have reached a peak inter-day rate over 520 Mmcf per day – all without the benefit of the new Laser or Springville pipelines."
The overall market conditions have put pressure on realizations. On average for the third quarter, the price differentials on unhedged gas in that market have moved negative to the low 30¢ range. Cabot has approximately 55 to 60 percent of these volumes hedged above $5.00 per Mcf. Dinges added, "Even at the recent prices received for our product in the Marcellus, these returns are still above every gas project in the domestic energy business and nearly all oil projects."