Cabot Oil & Gas Corporation announced that for the first time in its history, the Company's Marcellus operations surpassed one Bcf of gross production per day. The achievement of this milestone resulted in Cabot's total Company net production simultaneously exceeding the one Bcfe per day level, also a new record high.
"The successful collaboration of our employees and members of the Williams' team made this accomplishment possible," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Throughout the month of December we have been gaining production momentum and month-to-date our total Company average net production rate is 930 Mmcfe per day, which is above our exit rate expectation expressed in our third quarter call." Dinges added, "Clearly, production will vary day to day due to field logistics, but our new baseline for production has moved significantly higher and we will work to build on this throughout 2013."
This record was primarily the result of new Marcellus wells and additional infrastructure. Specifically, a recent turned-in-line two-well pad illustrates the production potential of the Company's Marcellus assets. This pad has wells with lateral lengths of approximately 6,900' and 4,400', and a combined initial production rate of over 66 Mmcf per day. Also, additional compression and dehydration facilities allow Cabot to expand its takeaway capacities. The Company is currently delivering approximately 55 percent of its production to Transco, 40 percent to Tennessee Gas Pipeline and 5 percent to Millennium Pipeline. "Our ability to reach multiple markets with deliveries into three major interstate pipelines strengthens our competitive advantage and provides more opportunities for growth in Marcellus production," commented Dinges.
The Company has agreed to terms on the sale of four South Texas fields to an undisclosed third party. The sale includes legacy conventional properties with approximately 18 Bcfe of booked reserves and 2.2 Mmcfe per day of current production. Proceeds from the sale will approximate $29 million, subject to closing adjustments, and will result in a book loss of approximately $12 million after-tax. Closing is scheduled for this week. "We continue to explore opportunities to high grade our portfolio by monetizing legacy assets and redeploying those funds into our high-return projects," commented Dinges.