Cabot O&G 2Q18: Income Doubles, Drilled 24 Wells, Ends Permian

One of our favorite Marcellus drillers, Cabot Oil & Gas, issued their second quarter 2018 update on Friday. Some of the highlights include: net income doubling, from $21.5 million to $42.4 million year over year; drilled 24 and completed 23 wells (down just a tad y/y, from 27 drilled and 26 completed in 2Q17); and Marcellus production was 1.89 billion cubic feet per day (Bcf/d), a new all-time high, up 4% from first quarter 2018. Cabot’s CEO Dan Dinges talked about the company ending its dalliance with the Permian Basin, shutting down “exploratory area #1” in 2Q18, but continuing work on “exploratory area #2”–which is in central Ohio. He said more details on Ohio exploration will be forthcoming in the Q3 update. As we looked through the official update, the PowerPoint slide deck and a transcript of the conference call (all below), we found a few more items that caught our interest. (1) Cabot says they have another 35 years worth of drilling to do in the Marcellus, with the current leases they have in place. (2) The “break even” price at which they begin to make money has now gone all the way down to just under one dollar per Mcf. (3) The company’s plans still count on the Constitution Pipeline getting built. (4) Train 1 of the Lackawanna Energy Center (gas-fired electric plant near Scranton) is up and running and burning 70 Mmcf/d of Cabot’s Marcellus gas, train 2 will be online by October 1st, and train 3 by December 1st. Here’s the good news from Cabot…

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