Cabot O&G Begins Plugging Operations in Susquehanna County

Cabot O&G provided an update on its efforts to comply with the Modified Consent Order (MCO), along with additional information regarding its business practices as they relate towards the environment, water resources and the citizens of Pennsylvania. A rig is on location preparing to commence the required plugging operations in accordance with the MCO and all the published requirements. Additional technical operations will be included, all of which have been presented to the Pennsylvania Department of Environmental Protection (PaDEP). "We expect to make significant progress, if not being complete with the plugging of all three required wells by the end of next week," said Dan O. Dinges, Chairman, President and Chief Executive Officer. In terms of the permanent water solution requirements, the necessary equipment started arriving on April 26 and is ready for installation. This solution is designed to remove methane, a constituent of natural gas, from the water stream before it enters a home. "We are committed to resolving this issue with a long-term solution," commented Dinges.

"We have been an active member of the Appalachia exploration and production community for over 120 years, and throughout that time we have been committed to conducting compliant, safe operations," stated Dinges. "Additionally, we take every issue involving people and the environment very seriously, and we appreciate the sensitive nature of methane in the water for the citizens of the Commonwealth.

In regard to the water supplies of Pennsylvania, methane was present long before Cabot began its operations in Susquehanna County. In fact, the PaDEP website has contained information about the migration of natural gas into water supplies for many years. This natural migration is also well-documented in other official government publications. Nevertheless, as a business decision Cabot has accepted the responsibility for remediating the situation, even though the Company believes its operations did not cause this gas migration. After the complaints surfaced, Cabot began testing natural gas levels in aquifers before it drilled in an area. These tests have revealed that a majority of water wells in Susquehanna County already contain measurable quantities of naturally occurring gas. "We will make the results of these tests available to interested parties, and we now closely monitor natural gas levels before and after we drill to identify changes, if any," said Dinges. "So far, since we began our pre-testing program, our drilling activities have not affected any water supplies. It is not in anyone's interests, least of all our own, to cause environmental issues or to appear to have done so."

Over the past few years spills and incidents have occurred as Cabot commenced operating in Susquehanna County. Each of these minor incidents was self-reported and remedied with no long term consequence and with the full participation and cooperation of the PaDEP. "While even one incident is too many, we continue to focus on improving our preventative measures and are working towards our goal of zero incidents," said Dinges. "Additionally, out of this effort came advances to better protect the environment, including tarping and berming all locations, recycling all flowback water and repairing and improving roads.

"We have had our differences with the PaDEP but we have found them to be an able and effective regulator. Cabot appreciates the PaDEP's level of concerns in aggressively fulfilling its duties in protecting the people and water supply of Susquehanna County," commented Dinges. "Although Cabot believes it followed all the applicable rules and regulations in conducting our drilling operations, we intend to work with the PaDEP to make improvements to the regulations and to our drilling procedures. I am committed to furthering our working partnership with state and local regulators. I will continue to work with Secretary Hanger to ensure we craft the best procedures and regulations designed to protect all Pennsylvanians. I will seek regular meetings with Secretary Hanger to keep open the lines of communication," stated Dinges. "In the coming weeks and months we will continue to provide additional information regarding Cabot's operations and to address issues as they arise."