Cabot Oil & Gas Corp. on Sunday announced continued success in all of its initiatives.
"We have spent much of the last three-plus months with our heads down, focused on moving our Marcellus and East Texas operations forward," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "The results highlighted below are a culmination of that effort."
During the third quarter call, Cabot announced its intent to complete one well per week through the end of the year in its Marcellus operation. This effort was successful although weather at year-end and a stream-crossing delay slowed several wells from being turned in line. During this period ten wells were completed with five wells flowing to sales and five wells waiting on pipeline. "These five wells, that were turned in line, had an average 30 day production rate of 6 Mmcf per day," stated Dinges. "Included in this population was the Company's first horizontal Purcell Limestone test that had a 30 day production rate of 7.3 Mmcf per day. The Purcell is located between the Upper and Lower Marcellus under our acreage position in Susquehanna County, PA." Dinges added, "This success potentially opens up additional locations and prospectivity."
In total for 2009, the Company drilled 30 horizontal wells with 14 being completed and turned in line. The average initial production (IP) rate for these wells was 7.5 Mmcf per day with an average 30 day production rate of 6.9 Mmcf per day. "Because of the production history and the consistency of results, we are now estimating ultimate reserves of 5.5 Bcf per well, up from our original disclosure of 4.5 Bcf per well," commented Dinges.
The enhanced pace of completions has carried through to 2010 with three more horizontal wells turned in line and gross production over 100 Mmcf per day as of February 19, 2010. Since January 1, the range of 24-hour IP rates for the 2010 completions has been from 2.6 Mmcf to 16.1 Mmcf per day. "We currently have 17 horizontal wells waiting on completion with five rigs running and two completions underway in Susquehanna County. We also have a significant pipeline laying operation ongoing," said Dinges. "One year ago in the Marcellus we were producing 16 Mmcf per day and now our rate is just above 100 Mmcf per day."
In terms of infrastructure, Cabot recently executed binding Agreements to anchor a new 20" high pressure gathering line. Williams Partners L.P. will construct and operate the 28-mile gathering line, which will run from Cabot's Susquehanna County operating area south to Williams Partners' Transco interstate gas pipeline. The new line is expected to be in service by mid-summer 2011. Cabot will be the majority capacity holder and this firm service will add additional flexibility to its current takeaway position. "This firm takeaway commitment goes a long way to providing the next wedge of needed capacity for the Company," stated Dinges.
Operationally, since the last call, the East Texas region has successfully completed three Pettet horizontal oil wells, two James Lime gas wells and a horizontal Cotton Valley Taylor sand well, while drilling and casing the first Company operated horizontal Haynesville shale well.
The Pettet oil wells produced consistent results with average IP rates from the three wells of 714 Bbls of oil (with one well testing 947 Bopd) and 1,900 Mmcf of gas per day. Currently the 2010 plan has eleven Pettet wells in the mix, with one flowing back, two wells to complete, two drilling and four wells to be drilled.
The Cotton Valley Taylor Sand horizontal confirmation well was a success with IP of 8.9 Mmcf per day and a 30-day production rate of 5.9 Mmcf per day. This 94 percent working interest well has an estimated ultimate recovery of over 6 Bcfe. The Company is currently drilling its third well in this play.
In St. Augustine County, the Company has drilled and cased its first operated horizontal Haynesville shale well. "We expected to have this well completed in early January, but the combination of a significant inventory of 2009 deferred completions for the industry, coupled with fewer high pressure pumping crews, has created a back-log in this completion space," commented Dinges. "Right now this well is in the queue for late February or early March."
"The combination of strong production coming from our Marcellus and the success with the drill bit in several east Texas operations provides a great jump start to 2010," commented Dinges.
Cabot Oil & Gas Corp., headquartered in Houston, Texas is a leading independent natural gas producer with substantial its entire resource base located in the continental United States.
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