During the third quarter, Cabot participated in 10 wells with nine being successful. Of the nine, four are producing and five are completing. The one well not producing or completed is the VK251 #3, which is being temporarily abandoned pending further evaluation. Additionally, Cabot has five rigs currently drilling. Specific regional highlights include:
Production from the East has grown 10 percent for the first nine months of 2005 versus the first nine months of 2004. These results are on the strength of a drilling program that has drilled 145 wells to date, with 98 being turned in line, 24 waiting on hook-up, and 23 completing. Cabot currently has nine rigs drilling in the East. Highlights include:
"For the fourth consecutive year we continued to make advances on both our reserves and production profile in the East," commented Dinges. "With a larger program planned to exploit our one million acres for next year, some R&D opportunities in front of us (including various extraction techniques) and with the higher degree of interest in the basin for both the conventional reserves and unconventional gas in the Ohio Shale, we anticipate greater expansion in Cabot's reserves and production and their underlying value contribution to the Corporation."
Through the third quarter, the Western Region participated in 63 gross wells (29.2 net) with an overall success rate of 95%. Twenty-eight of the 63 wells were company-operated. The year-to-date program included 60 development wells (38 in the Rockies and 22 in the Mid-Continent) and three wildcats (all in the Rockies). Five of the wells are waiting on completion and six additional wells are in progress. Through the third quarter, the region produced 18.1 Bcfe, which represents a growth of six percent over the same nine-month period in 2004.
In Cabot's development play at Musreau, the Company has had six successes in six attempts. The Musreau 7-3-62-6W6 (40% working interest) is completing with favorable initial results. The most recent well, Musreau 10-14-62-6W6 (24% working interest) has reached total depth, logged and cased. At this time, Cabot believes the well may be the best well in the field. Presently, the Musreau field produces 13.6 Mmcfe per day (3.2 Mmcfe per day, net). "We have an estimated 10 Mmcf per day (4 Mmcf per day net) completed and waiting on pipeline," added Dinges. "We plan one additional well in 2005 and at least four wells in 2006 at Musreau."
Cabot came through both Hurricanes relatively unscathed, with deferred production of approximately 465 Mmcfe as a result of Katrina and 535 Mmcfe from Rita. Most of this deferral will be reflected in the third quarter production numbers as the majority of production was back on line by October 1, 2005. The Company still has 8 Mmcfe per day shut-in, with most of that related to non-operated offshore production. "These properties have limited damage; however, downstream problems continue to delay bringing the wells on line," said Dinges.
Cabot purchased interest in three production units in the Vernon field, Jackson Parish, Louisiana from an undisclosed third party for $18 million during September. The acquisition included 18 producing wells making 2.0 Mmcfe per day net to Cabot. Proved and probable reserves are estimated at 9 Bcfe, including four Lower Cotton Valley and one Upper Cotton Valley drill-ready locations. Cabot will become the operator of one of the units acquired. The Company plans to initiate drilling in the fourth quarter of 2005.
"In each of our regions, we have new and exciting opportunities consistent with our strategic direction. Our drilling, acquisitions, and leasing efforts are focused on building an asset profile that balances our reserve and production portfolios towards moderate declines with more predictable drilling locations," Dinges concluded.
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