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Permalink Reply by Carter on February 15, 2009 at 16:00

ogmladvisor, what are your thoughts on the Cabot announcement from Friday re: the two tests in Rusk County, Minden area just north/NW of where we are talking about in this thread?

I was hoping for a more definite answer on that area. Would have been nice to see a monster completion from up that way, as I feel like that would have confirmed a lot about the NW part of Shelby. Cabot blames things on frac problems, but I read it as just more question marks about the area.





Cabot Oil & Gas Provides Operations Update


HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today provided an update on its Pennsylvania Marcellus shale play, along with its activity in east Texas. In addition, Cabot announced that due to the underlying economic conditions in the industry, it is lowering its investment level for 2009.

Marcellus

The Pennsylvania Marcellus shale play continues to exceed expectations with production approaching 20 Mmcf per day at December 31, 2008.

To date, Cabot is producing from 15 wells with one horizontal well turned-in-line. There are five horizontal wells waiting on completion or pipeline hook-up and two vertical wells waiting on pipeline. "These wells will provide the next step in our production increase for Pennsylvania," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "From completion activity, together with our 2009 Marcellus program remaining at 60 wells, 30 horizontal and 30 vertical, we expect further reserve and production enhancements."

Dinges added, "Additionally, at this time, we have five rigs running, two drilling horizontals with the other smaller rigs drilling the vertical sections for later horizontal work. We will drill this program with five rigs expanding to six by the end of the first quarter and then growing our rig count to seven or even eight rigs as permits allow. We will be flexible and adjust our 30/30 split towards more horizontals when possible."

Marcellus Well Highlights:
-- Previously announced Ely 6H producing 5.3 Mmcf per day (30-day
average) from 2,178' vertical section after six-stage fracture
stimulation.
-- Black 2H tested 4.1 Mmcf per day (20 percent frac fluid recovered)
from 1,302' vertical section after four-stage stimulation.
-- Ely 4V producing 2.3 Mmcf per day (30-day average) from high angle
well bore after three-stage stimulation.
-- Ely 5H drilled to record 10,394' with a vertical section of 3,046'.
Nine-stage completion scheduled for mid-March.


The Company continues to focus on improving its drilling and completion practices. Working with the service partners, the Company made significant changes to the drilling mud systems, bit utilization and mud motors, which have materially improved the penetration rate. "Our first horizontal attempt took 19 days from kick-off point to reach total depth of 8,925', while our last well took 15 days from kick-off point to reach total depth of 10,394', a 27 percent improvement," commented Dinges. "We continue to modify our completion practices by increasing the number of fracs per well, shortening the distance between fracs, increasing the pump rates and sand concentration in each frac. Our data indicates a positive impact to production levels of as much as 40 percent per stage as compared to our earlier completion techniques. These technical enhancements will continue."

East Texas

Since closing the east Texas acquisition in August, Cabot has been running four rigs drilling vertical Cotton Valley wells with many of these deepened to test the Haynesville limestone. The upside in this zone, that was not valued for the acquisition, appears to be working as numerous wells have been completed in the limestone.

Recent vertical successes include:
-- Jarrell #4 was tested from the Haynesville lime at 3.3 Mmcf per day at
2,800 pounds and the Cotton Valley at 1.7 Mmcf per day. The two zones
have been commingled.
-- Hays #4 was tested from the Haynesville lime at 1.1 Mmcf per day with
Cotton Valley pay behind pipe.
-- Hughes #2 was completed in the Haynesville lime at 1.5 Mmcf per day at
2,200 pounds and the Cotton Valley at 2.2 Mmcf per day. This well
will be commingled.


In addition to the vertical opportunities, the Company drilled and completed two horizontal wells to test the Haynesville limestone and the middle Bossier shale. Both wells were drilled from the same pad to improve efficiencies and completed back to back and have been the source of interest for some time.

The Pinkerton 11H, the first horizontal shale test in Minden, was drilled to a measured total depth of 14,144' in the middle Bossier shale with a 3,000' lateral. This well reached total depth on August 17, 2008, and completion operations were delayed due to a lack of frac sand in east Texas. The well was treated between 11,296 to 14,000 feet, pumping 1.1 million pounds of sand over ten stages. The completion procedure was not optimal, as the Company experienced difficulty in opening the frac ports and believe that an optimal treatment did not occur. "We are evaluating this completion to determine if remedial work is warranted or if we need to drill another well to test the concept," stated Dinges.

The Pinkerton 12H was drilled to a measured depth of 14,427' in the Haynesville limestone and reached total depth on September 27, 2008. Completion was delayed here also due to access to frac sand. The well was stimulated between 11,929 and 14,384, with 2 million pounds of sand over ten stages. Cabot encountered mechanical problems when pumping this job and could not open the frac ports. "We do not believe that we got an effective stimulus, and the low producing rates suggest this," commented Dinges. "We are currently undergoing well diagnostics to determine whether we treated any of the Hayneville lime. We are presently planning to either sidetrack this well or drill a new well to continue our evaluation of the Haynesville lime in this area, which we know is very prospective due to the vertical results mentioned in this release."

The Company's third initiative was to drill a deep vertical test of the Haynesville section at County Line. This test, the Von Goetz #3 was drilled to a total depth of 13,800 feet through the Haynesville limestone. Excellent shows were encountered throughout the shale and limestone section. Production casing was run and three fracs were performed. The Haynesville limestone, lower Bossier (Haynesville) shale and the middle Bossier shale were all tested. "We are extremely pleased with the results, but with the competitive nature of this play, we will not release specifics at this time," said Dinges. "We do plan to move in a rig and drill a horizontal test to evaluate these zones in the near future."

Rig Utilization

The current price environment has forced Cabot to reassess its drilling plans going forward. To this end, the Company has adjusted its 2009 program to be well within cash flow at $475 million and also adjusted its production guidance accordingly. The focus of the new program is Pennsylvania Marcellus and east Texas. As Cabot entered 2009, it had 18 rigs operating, and today there are 15 rigs operating. This level is expected to fall slightly by June 2009 to 13 rigs operating with the only increases occurring in the Marcellus play. "We, like all of our peers, are in a hunker-down mode to weather this economic downturn and allow service cost to calibrate with commodity prices," said Dinges. "While I like where we are positioned, we will still be cautious in our actions."

Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid-Continent; the East and in Canada. For additional information, visit the Company's Internet homepage at www.cabotog.com.

The statements regarding future financial performance and results and the other statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, market factors, the market price (including regional basis differentials) of natural gas and oil, results of future drilling and marketing activity, future production and costs, and other factors detailed in the Company's Securities and Exchange Commission filings.

SOURCE Cabot Oil & Gas Corporation

CONTACT: Scott Schroeder of Cabot Oil & Gas

Permalink Reply by ogmladvisor on February 15, 2009 at 16:34

I would say it's very discouraging news for the Rusk area, although when you factor in decent results for the three vertical wells, it doesn't seem all bad.

Aren't there other wells in northern Shelby County that have yielded better results?

Permalink Reply by intrepid on February 15, 2009 at 18:10

Cabot seems to be doing fairly well in their County Line area and several wells just noth of it have been good for other companies.

BTW, thanks for your information and contributions to the site. We may have different interests and perspectives but we can all share and help.

Permalink Reply by king john on February 16, 2009 at 4:07

ogmladvisor,
sorry to burst your bubble but i didnt really want your opinion on an 80 acre unit i just wanted to make the point that one should not be intimidated by companys that say they will lease around and not include your acres. i know what the spacing rules are. it really only takes 40 acres to make a unit but better to have 80 so as to drill an off-set well. with all the huge vertical wells being brought in, in shelby county, i would take my chances.
i have been curious why you and adam seemingly have attacked me after almost every posting i have made. i have enough commen sense to know you do not represent mine or anyone elses best intrest. you strike me as a company man influenced by corprate greed and money. i think this web-site is a great place to share ideas, but that is about it.i by nature do not trust landmen i have been burned in the past and i know for a fact they only have their companys profit in mind. after all that is their job. i know there are some good souls on this web-site that are landmen and are genuinely trying to help and educate those of us that are less knowing. to those people my hats off to you and thanks for helping us "dumb as dirt" land owners.
"the only good landman, is the one thats on my payroll"
thats honestly how i feel and that is who i go to for true and accurate information.

Permalink Reply by ogmladvisor on February 16, 2009 at 7:17

King John:

I do not represent your best interest, I work for someone else and that is a fact. But that doesn't make me dishonest or greedy. That's one theme I have noticed here on the boards: If I, as a landman, list rates that my company or other companies are currently offering for a given area (which I have no control over), and they don't meet yours or someone else's expectations, I am instantly labeled a greedy dishonest landman. I think that is unfair.

And no one is tring to intimidate you on your 80 acre tract. I did my level best to give you the absolute truth for both horizontal and vertical well possibilities. I stated that you could drill two vertical wells on your 80 acres (40 acres per well), just like you mentioned above. You apparently were trying to "catch me" giving you bad information, but instead the opposite happened - I told you exactly what you already knew to be fact, and the truth. And in return for taking time to answer your question to the best of my ability, I am labeled as "influenced by corporate greed and money." So thanks for that.

And speaking of your acreage...there is one reason and one reason alone that you sit by with your 80 acres unleased. At the price per acre you are asking, and at current commodity prices, IT IS NOT ECONOMICAL TO DRILL A WELL ON YOUR ACREAGE. PERIOD. Now, I don't much care if you buy what I am saying at this point or not, but you don't sit in a room full of engineers every day like I do and listen to this stuff. If you don't believe me now, then you will believe me at the end of this year (or next year!) when your acreage still sits unleased and undrilled. That is the point at which you might ask yourself, "was I being too greedy asking for 15k/acre?"

Good day sir.

Permalink Reply by Adam on February 16, 2009 at 4:49

Good Luck to you all.

King John, I apologize for attacking you and calling you out on your "opinion."

I believe everyone knows how I feel and we will just leave it at that. Its just like I tell landowners every time I am asked "What should I do?" It is your property, only you can grant access.

We can agree to disagree.

Until next time...

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