Cabot has announced that its Marcellus initiative in northeastern Pennsylvania is gaining momentum and is currently producing over 13 Mmcfe per day. Most recently, Cabot completed its first Marcellus horizontal well with a measured depth of 8,925' and a horizontal leg at 2,000' using a six-stage frac. The result was a 24-hour average initial production rate of 6.4 Mmcf per day.
"Adding this to our series of vertical wells, which have been turned in line over the last five months and have a 30-day average IP of 750 Mcf per day, has allowed Cabot to exceed our original year-end Marcellus production target of six to nine Mmcf per day," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "We expect this to increase considerably over the next few weeks as we have nine additional wells (six vertical and three horizontal) ready to be completed or in the final stages of pipeline hookup."
To date, the Company has drilled 18 total wells in the field, four of these as horizontal tests. Five rigs are currently working with plans to increase to eight rigs in 2009. "Our 2008 program will be 16 vertical wells plus seven horizontal wells," added Dinges. Cabot has four vertical wells and three horizontal wells remaining to be drilled this year and will continue operations seamlessly into 2009. Total well costs range between $1.3 million to $1.5 million for a typical vertical well and $2.6 million to $2.9 million for a horizontal well. The average depth of a vertical well is 7,200'; the average horizontal leg is approximately 2,200'.
In terms of infrastructure, the Company has completed its first phase pipeline build-out totaling 10 miles and has started up its first compressor with a second unit on site and ready to be utilized once production volumes justify the need. "We continue to actively secure rights of way and gain permits to expand our pipeline infrastructure for our 2009 drilling program," commented Dinges.
In other news, Cabot completed its first horizontal Berea well in southern West Virginia. This well came on line at approximately 900 Mcf per day, from a 1,600' lateral section. Early production rates suggest ultimate recovery between 1.0 - 1.2 Bcfe from this zone at a finding cost of less than $1.50/Mcfe. The Company has identified over 60 additional locations on the current acreage.
"We continue to work with vendors to secure the frac sand for our completion operations," stated Dinges. "Currently we expect the horizontal Haynesville/Bossier shale at Minden and the deep vertical test at County Line, both to be fraced in mid-December."
In east Texas, the Company is testing its first horizontal Haynesville lime well. The Pinkerton 12H was drilled to a total depth of 14,407' with a 3,100' horizontal section. It was stimulated with an eight-stage treatment with 1.6 million pounds of proppant. It is too early to tell how this well will perform as the company continues to flow back completion fluid. This completion and others in the company have been delayed due to a lack of proppant which seems to be an industry-wide problem.
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