Cabot to Reduce Spending in the Eagle Ford

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.

During a recent earnings call, 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.

“Despite a significant reduction in our Eagle Ford operating activity, including no wells drilled and only three wells completed during the quarter, our oil volumes for the second quarter exceeded our guidance due to outperformance from the newer wells that were placed on production. We are forecasting declines in our oil production volumes for the remainder of the year (…) and our plan is to continue to allocate a minimum amount of capital to our Eagle Ford assets”

— Dan O. Dinges – Chairman, President & Chief Executive Officer

Second quarter highlights include:

Cash flow from operating activities was $85.2 million ($171.2 million for 2015)
Net loss was $62.9 million ($27.5 million for 2015)
Operating expenses decreased to $2.22 per thousand cubic feet equivalent (Mcfe), a 12% improvement