The Pennsylvania Oil and Gas Association and the Independent Oil and Gas Association of Pennsylvania have formed a joint Marcellus Shale Committee to represent the natural gas industry as it develops the Marcellus play.
Other Subject: Cabot Oil and Gas Corp. has reported its 3rd quarter earnings. A replay of a conference call that discussed the earning's report will be available through Saturday. The replay is accessible at, 800-642-1687 or, passcode 66519033.
At the end of the 3rd quarter, Cabot reported a net income of $67 million. Last year, the company reported a third-quarter net income of $35.5 million.
Cash flow from operations were at $148.3 million, compared with $86.8 million in last year's third quarter.
Discretionary cash flow totaled $161.0 million versus $121.7 million in last year's third quarter.
Below are excerpts from a press release issued by Cabot about its 2009 operations:
"We have always exercised significant discipline in our capital spending, regardless of general market conditions," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Over the last three years our investments have been around 120 percent of cash flow on average, working off an extremely low leverage ratio, and our 2008 organic effort will be consistent with our past discipline."
Marcellus Shale
Cabot's Marcellus play is focused in northeast Pennsylvania. During the second quarter call, the Company announced its first Marcellus production from a vertical well. Currently, Cabot has five producing wells (all vertical) with a combined average daily volume of 4-5 Mmcf per day. "Our goal was to be producing between 6-9 Mmcf per day by year-end. With the recent success of our wells, I now anticipate exceeding those early targets," commented Dinges.
The first horizontal well was completed with only three of six planned fracs. The well will be flowing to sales shortly. The Company plans to test the first three fracs and then proceed with the remaining three fracs in the next several weeks. "Right now we have two more horizontal wells cased and waiting for completion, along with five vertical wells in various stages of completion. We anticipate having all these wells flowing to sales by year- end," added Dinges.
The capital plan for 2009 is $600 million. "Much of this investment will be spent in East Texas and Pennsylvania," said Dinges. "Only nine percent of our planned expenditures is allocated to our other plays in the Company."
Dinges added, "We plan to allocate over 90 percent of our 2009 capital to the Marcellus and East Texas. In each area, we have received and continue to gather significant new data points. We have been delayed somewhat in our efforts with regulatory issues in Pennsylvania and limited quantities of frac material in East Texas. However, with that being said, we are very excited about the information we have gathered in each area and look forward to receiving test information from key wells that is imminent."
