Cabot Energy has operations throughout the US, but the Eagle Ford Shale, Haynesville Shale, and to the greatest extent the Marcellus Shale are the company’s core assets.
Cabot’s oil-weighted drilling activity is focused on its 89,000 net acre position in the Eagle Ford Shale, principally located in Atascosa and Frio Counties, Texas. The company added approximately 40,000 net acres to its position in 2015 through a combination of bolt-on acquisitions and grassroots leasing efforts.
Cabot is currently operating three rigs in the Eagle Ford Shale, with plans to decrease to one rig by the end of 2015 in response to current lower commodity prices. The company currently plans to drill approximate 45 net wells in the Eagle Ford Shale in 2015, with 40% of the company’s capital allocated to the area.
The company largely targets the liquids-rich and shale oil windows of the Eagle Ford where returns are supported by higher oil prices. Approximately one-third of the company’s acreage is operated by EOG Resources.
To a larger extent, the company is also developing 94,000 net acres that are prospective for the Pearsall Shale. Development of the Pearsall is supported by a $250 million JV with Osaka Gas and has yielded wells producing as much as 50% oil.
Cabot Oil & Gas Corporation (NYSE: COG) is a growing US independent that has leveraged its ability into the many of the major shale plays. The company headquarters is in Houston, TX, and its South Texas assets are serviced by the Corpus Christi field office. The company’s reserves are located across the US in the Rocky Mountains and Mid-Continent, and the Gulf Coast (South and East Texas to North Louisiana). The company also operates over 3,000 miles of pipelines that service its upstream assets. The bulk of current activity is focused in Northeast Pennsylvania where the company targets the Marcellus Shale.
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Cabot Eagle Ford Shale Quarterly Commentary
Cabot Oil reported a strong financial position for Q3 with over $500 million cash on hand. Executives announced plans to allot 21% of its E& P budget to Eagle Ford in 2017, where they will focus on the following:
- Maintaining lease hold
- Holding oil volumes flat
- Generating a cash-flow-neutral operating program
- Drill approximately 15 net wells in the Eagle Ford Shale
- Complete 25 net wells in the Eagle Ford Shale
Cabot Oil and Gas announced second quarter results, highlighting a 10% production increase, costs reductions of 12% and three Eagle Ford wells added to production.
Cabot executives commented on their Eagle Ford operations, saying it is likely they will cut back on the money spent in the region for the rest of 2016. Though the company’s Eagle Ford assets assets exceed the capitol costs, the return doesn’t warrant additional spending at this time.
Cabot’s Eagle Ford Shale assets achieved net production of 14,312 barrels of oil equivalent (Boe) per day during the second quarter, an increase of 10% over the first quarter of 2016. The Company completed and placed on production three net wells during the quarter and plans to drill two Eagle Ford wells during the third quarter.
During the first quarter of the year, Cabot continued to focus on capital efficiency and cost savings for its Eagle Ford operations. Completions costs were down by approximately 30% compared to the same quarter in 2015. The company is not currently operating any rigs in the Eagle Ford Shale, but have plans to drill three additional wells in the second half of 2016.
Other Eagle Ford highlights include:
- Net oil production was 11,908 Bbls per day, a decrease of 6 percent sequentially compared to the fourth quarter of 2015.
- Drilled 3 net wells and completed and placed nine net wells on production
- Wells have an average completion lateral length of 7,760 feet
- Completed the company’s longest Eagle Ford well to-date with 46 stages and a lateral length of 11,200 plus feeta
Cabot executives said that the company’s Eagle Ford operations experienced an exceptional 2015 with the following highlights:
- Reducing the spud-to-TD drilling days for a 7,700 foot lateral to eight days.
- 45% reduction in drilling cost relative to 2014
- Longest lateral drill to date of 11,588 feet in 11.6 days from spud to TD with the total measured depth of 19,930 feet.
- The rig we utilized during 2015 ranked second in total footage drilled among the roughly 200 rigs that our third-party provider contracted throughout all basins in 2015
- Drilling completion and facility capital account for approximately 92% of the capital budget with approximately 70% allocated to the Marcellus and 30% allocated to the Eagle Ford shale.
Mr. Dan Dinges, Chairman, President and CEO commented that, “We do anticipate an eventual recovery in oil prices and we believe our 86,000 net acres in the Eagle Ford can provide for long-term value creation in a slightly more favorable price environment. As a result our focus in 2016 is to reduce our operating activity to the minimum levels needed to ensure we maintain all our core acreage.”
Cabot Oil & Gas’ third quarter results failed to meet expectations, including a slowdown in its Eagle Ford operations.
For its Eagle Ford operations, Cabot experienced an 8% decline in liquid volumes, resulting from the reduced amount of activity in the play due to lower oil prices. Other Eagle Ford highlights include:
- Experienced another 15% to 20% reduction in drilling costs over Q2
- Completed seven wells in the Eagle Ford and placed six wells on production
- Drilling Eagle Ford wells was 30% to 40% faster than our 2014 average
- Currently operating one rig in the Eagle Ford
Cabot’s net production in the Eagle Ford during the second quarter included net production pf 17,889 barrels of oil equivalent (Boe) per day, an increase of 74 percent over the prior year’s comparable quarter. Other Eagle Ford highlights from the second quarter:
- Cash unit costs were approximately $15.00 per Bbl
- Decreased our drilling days by about 20% relative to 2014
- Increased the average number of completions per day by about 20%
- Upwards of 30% cost reductions across all service lines
- Currently operating three rigs in the Eagle Ford Shale, with plans to decrease to one rig by the end of 2015
- Plans to drill approximate 45 net wells in the Eagle Ford Shale in 2015
April 24, 2014
Cabot’s net production in the Eagle Ford during the first quarter of 2014 was 7,271 boe/d, a 42% year-over-year increase. This included 6,839 b/d of liquids, an increase of 49 % over the prior year’s comparable quarter.
Prior to the end of the first quarter, Cabot placed its first six-well pad in the Eagle Ford on production. The wells achieved an average peak 24-hour initial production (IP) rate of 1,045 Boe per day per well (89% oil) during the first ten days on production. Pad-drilling efficiencies resulted in $600,000 of cost savings per well on the six-well pad.
“We have been very pleased with the strides our Eagle Ford team has made over the last six months. Based on the continued improvement in production rates and realized cost savings, which have resulted in higher rates of return, we are adding a third rig to our Eagle Ford program beginning in the third quarter,” said Cabot CEO Dan Dinges.
During the first quarter, Cabot added approximately 4,000 net acres to its Eagle Ford position through organic leasing efforts and is actively pursuing additional acreage.
October, 24, 2012
The company’s initial short lateral well in the Pearsall was completed in 11 stages and had an initial production rate of more than 1,400 boe/d. In 20 days, the well averaged more than 900 boe/d, ~ 50% oil. Cabot is completing a second well and drilling three additional wells.
“We are excited about this initial exploration success and pleasantly surprised with the product mix,” stated Dinges. “We are cautiously optimistic and expect more completions to further delineate this discovery.”
The company continues to see impressive results in our Eagle Ford area,” commented Dinges. “We have completed another well with an initial production rate just under 1,000 BOE per day, with a 95 percent oil mix.” The Company plans to complete 16 net wells in the fourth quarter between the Pearsall, Marmaton and Eagle Ford, roughly half of these will be completed in December.
July 24, 2012
In the last release, Cabot highlighted the very early results of its 400′ downspacing program in the Eagle Ford. “I am pleased to report now that one of these wells has provided the best 30-day average production rate of any of our 33 wells to date in the play,” commented Dinges. “The other well has trended above the average 30-day rate of our overall program. This reinforces our reduced spacing concept of 400′ and, as a result, we are currently drilling our second set of wells to continue our evaluation process.”
April 27, 2012 – Conference Call
In the South Texas oil window of the Eagle Ford Buckhorn area. The company has drilled a total of 30 wells. Each well is 100% working interest in Frio, La Salle or Atascosa County. 29 of these wells are all in production with one well waiting to be completed and one well drilling. Our down-spacing test results in the Eagle Ford has indicated success based on the early test data coming from the 2 wells. These 2 wells were drilled with approximately 5,900-foot laterals at a spacing of 400 feet between the wells, which translates into approximately 55 acres per well. The test rates of each well had approximately 790 barrels of oil per day over 24-hour period are certainly encouraging. We plan to continue to monitor these wells complete additional down-spacing test later this year. Should these results be implemented in our total development plan, we would have anywhere between 550 to 700 total potential locations just in the Buckhorn area. Gross production from both Buckhorn and the Atascosa area, which is a joint venture area with EOG, is approximately 9,800 barrels per day, with our net production from the Eagle Ford at 5,700 barrels per day. Cabot intends to drill or participate in 20 to 25 net Eagle Ford wells in 2012.
February 21, 2012
In the Buckhorn area of the Eagle Ford. The company has drilled a total of 28 wells. . 27 of these wells are in production with one well waiting on completion and one well drilling. As we gather information results, we realize how much additional running room we have. Some of the positives from our ongoing study are a 26% increase in booked EURs in our 2011 program versus our 2010 program, a 34% increase in EUR per foot of lateral drill, a 23% increase in our maximum peak production rate and near sevenfold increase in gross oil production from the Eagle Ford. Recent well highlights include the last 7 wells, all in the fourth quarter, averaged 24-hour peak rate was 861 boe/d with 3 wells over 1,000 BOE. The 30-day average of all these wells was 566 BOE. In our AMI area with EOG, there are 9 wells presently on production in this 18,000-acre area with the last 3 wells testing at peak rates that averaged over 1,000 BOE per day. Gross production from both areas in the Eagle Ford is approximately 7,600 BOE per day. Cabot intends to drill or participate in approximately 25 to 30 net Eagle Ford wells in 2012. As was highlighted last week by a peer and in our operations release, Cabot is testing downspacing in the Eagle Ford down to 50-acres.
October 27, 2011
Now let’s move to the south region. In our Buckhorn area in the Eagle Ford, the company has drilled 24 wells. Each well is 100% working-interest well in Frio and La Salle County. 21 of these wells are on production with 2 wells completing, 1 well waiting on completion and 1 well drilling. The 2 most recently completed wells produced at initial 24-hour rates of 938 barrels of oil equivalent per day and 791 barrels of oil equivalent per day. In our AMI area with EOG, there are 6 wells currently on production in this 18,000-plus-acre area with 3 of these wells drilled and completed in the third quarter and the results are at anticipated levels. Gross production for both areas in the Eagle Ford is over 7,600 barrels of oil equivalent per day. Science efforts drove our exploration cost above guidance essentially $0.03 for the quarter. Fortunately, we do have long lease terms remaining to work with. Now moving to 2012 plans in Pennsylvania for 2012, Cabot will have on average 5 rigs running. We’re planning 70 to 78 Marcellus wells. We also anticipate running 1.5 frac crews for the year. In Texas and Oklahoma, we will remain focused on acreage production. In the Eagle Ford, Cabot will drill or participate in 20 to 30 wells. Plans call right now for the company to operate one rig in the Eagle Ford and one in the Marmaton. We believe our 2012 program will yield greater efficiencies from a dollar invested perspective than our 2011 program.
July 28, 2011
In our Buckhorn area, in the Eagle Ford, the company has drilled a total of 17 wells. Each well is 100%-working interest well in Frio County. 11 of these wells are on production, with 3 wells completing, 3 wells waiting on completion and 2 wells currently drilling. As the press release highlighted, 4 of the 11 producing wells were placed on production during the second quarter. These 4 wells each produced at a combined average initial 24-hour rate of 721 barrels of oil equivalent. Up til now, we have had the flare of the residual gas, as there was no pipeline connection…..our new pipeline system now in place at Buckhorn. In partnership with the TexStar Midstream Services, the pipeline infrastructure commenced service in early July, and approximately 3 million cubic foot per day are presently being produced into the pipeline. Our old pipeline infrastructure is scheduled to be in service early in the fourth quarter. Both projects will greatly enhance our overall operation in the Eagle Ford area. In our AMI area with EOG, there are 2 wells presently drilling in this 18,000-plus acre area. Cabot intends to participate, in total, 25 to 30 net Eagle Ford wells in 2011. Press Release
April 27, 2011
“…In the Eagle Ford shale, the Company added three more successful operated completions with 24-hour initial production rates ranging from 345 to 958 barrels of oil per day equivalent. “This range of results highlights the variability as we continue to evaluate completion techniques in the early stages of development in this play,” stated Dinges. “Presently we have three more wells drilled, cased and in the queue for completion in our Buckhorn area.”…”