Cabot announced continued positive progress on all fronts, including the receipt of new drilling permits and additional drilling success in Pennsylvania, the execution of an area of mutual interest in the Eagle Ford, and another Haynesville shale success in east Texas.
"Each of these areas (Pennsylvania, east Texas and south Texas) is significant to Cabot's growth and creates years of opportunity and resource potential," said Dan O. Dinges, Chairman, President and Chief Executive Officer. Dinges added, "With the ramping up of our Marcellus production, our recent completion in the Haynesville, coupled with a new plan of activity in the Eagle Ford, we are well-positioned to take our success to another level."
The Company, together with the Pennsylvania Department of Environmental Protection "PaDEP," continues to work together on the correct long-term solution regarding water for those involved in the Modified Consent Order. Through this joint effort, the Company entered into a second Modified Consent Order and because of this and the completion of the other operational matters, the PaDEP has begun to process and issue permits outside the affected area. "We are pleased with our progress, and we remain committed to working with all the regulators and affected parties to achieve the best solution for all," stated Dinges.
Operationally the North region has seven rigs drilling. Recently the Company drilled its 101st well in the Marcellus, with 61 of those being horizontal wells. Of the 67 wells currently on line, 34 of those are horizontal and account for the majority of the Company's current Marcellus production. The Company has over 30 wells completing or waiting to be completed with several that include 17-to-19 stage fracs in 4,500' to 4,900' laterals.
"At this time we have wells with over 340 stages drilled, cased and waiting on fracs or already completed and moving towards turning in line. Our Marcellus gross production level has held steady at about 165 Mmcf per day over the last 30 days, and with a couple of new wells turned in line over the weekend, we are producing over 180 Mmcf today," stated Dinges. "We also established a new high watermark for ourselves in the Marcellus with a 24-hour initial production rate of 18.4 Mmcf per day on a recent completion."
The Company recently finished its second operated Haynesville Shale well that was completed with a 16-stage frac, on a 4,925' lateral. The well produced at a max rate of 20.5 Mmcf per day and at a restricted 24-hour rate of 15.5 Mmcf per day. In addition to this well, the Company has three completions occurring in the area at this time, with six additional Haynesville/Bossier wells drilling or waiting on completion. "Information from Cabot's wells and numerous industry wells around County Line indicates the Haynesville shale is a prolific productive zone in this area," said Dinges. "With this latest result and expectations for the new completions, Cabot's Haynesville production has the potential to increase significantly during the second half of the year. Adding to this potential is our first Bossier test which, based on recent prolific nearby industry wells, creates more excitement."
Cabot has entered a 50/50 joint venture agreement with EOG Resources, Inc. to develop approximately 18,000 acres in the mature oil window of the Eagle Ford shale in Atascosa County. Under the terms of the agreement, each party contributed the same amount of acreage and EOG will operate. Dinges added, "We are excited about the location of this acreage and for the opportunity to participate with one of the most experienced, active operators in the trend."
As it relates to this trend outside of this joint venture, Cabot's second operated Eagle Ford well has been drilled and cased with completion operations set to begin in late August-early September. A third operated Eagle Ford effort will spud by month-end.
"We have remained focused on our production growth in the Marcellus and our capital allocation in our South region. With our continued success in both areas and the fact that our current production level is above current guidance, we are raising our production guidance to a full-year growth range of 21 to 25 percent. With continued execution of our current drilling program, we are very confident of our outlook for the rest of the year and into 2011," said Dinges.
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