Cabot O&G 3Q – Production & Free Cash Flow Up, Spending Down

Cabot Oil & Gas, one of our favorite Marcellus drillers, continued to impress during 3Q19. The company reports free cash flow popped 150% higher than 3Q18–even though the price of natural gas was down 23% over the same period last year. Production was 2.3 billion cubic feet per day, all of it dry natural gas. They drilled 22 new Marcellus wells (in Susquehanna County, PA) and completed 29 wells, which means they’re drawing down their DUC (drilled but uncompleted) well inventory.
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Cabot Pockets $89 Million Profit on Sale of Atlantic Sunrise Pipe

On Monday MDN brought you the news that NextEra Energy, largely a renewables company, has made the bold move of buying 39% of the Central Penn Line, otherwise known as Williams’ Atlantic Sunrise Pipeline project (see NextEra Energy Buys 39% Stake in Atlantic Sunrise Pipe for $1.37B). There is another aspect of that story worth mentioning–an aspect that involves Cabot Oil & Gas and a tidy profit.
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Cabot O&G Continues to Grow in NEPA, Opens New Facility

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Cabot Oil & Gas, one of our favorite Marcellus Shale drillers, focuses almost exclusively on drilling in Susquehanna County, PA, with a few wells in neighboring Wyoming County. Cabot continues to pour money into northeastern Pennsylvania. On Wednesday Cabot’s wholly-owned subsidiary, GasSearch Drilling Services, officially opened a new 28,000-square foot maintenance facility in Lenox Township (Susquehanna County) with a ceremonial ribbon cutting and open house for energy industry colleagues, neighbors and public officials.
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M-U Companies Dominate Top 10 NatGas Producers in 2019

Quick: Which company which recently had a board and upper management shakeup and focuses exclusively on Marcellus/Utica drilling is the #1 natural gas producer in the United States? That’s right, EQT. In a list of the top 40 natgas producers in the U.S. (full list below), it’s striking to note that eight of the top 10 are focused exclusively or primarily on the M-U.
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Williams & Cabot Help Bring NatGas to Rural NEPA Community

This is one of those “feel good” stories. Going back to 2012, a number of officials in Wyoming County and the borough of Tunkhannock began to dream about connecting the borough to locally extracted Marcellus Shale gas. Among those who helped turn the dream into reality were Williams (the pipeline company) and Cabot Oil & Gas (shale driller). Thanks to the efforts of all involved, Tunkhannock eventually received state-backed funding to build “phase one” of the project (see PA Approves $2.4M Project to Run NatGas Pipes in Wyoming County). Phase one is now ready to go live.
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Cabot: Spending Up (Some) in 2019, Spending Down (Big) in 2020

Cabot Oil & Gas is the only Marcellus/Utica driller that is profitable quarter after quarter and year after year. So the market pays attention to what Cabot does, because they’ve figured out how to make money in a low commodity price environment. Last Friday Cabot released second quarter numbers. CEO Dan Dinges talked about the balance of 2019 and even a bit about what to expect in 2020.
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Capturing the Interest of the Next Generation to Work in PA Shale

The best teachers (people) and the best teacher (method of instruction) have the same thing in common: Hands on. As in tactile, doing stuff, rather than sitting in a chair attempting to learn by information dumping. Particularly with elementary-age kiddies. Cabot Oil & Gas and Southwestern Energy recently sponsored the annual Vehicular Career Day where 400 fifth graders from school districts across Susquehanna County climbed into big rigs, buses, and emergency vehicles. The shale industry was well-represented. Needless to say, the kids loved it.
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Cabot O&G Having a Tough Time Filling Open Jobs in NEPA

Several members of the Marcellus Shale industry spoke at a meeting of the Williamsport/Lycoming Chamber of Commerce yesterday, including MDN friend George Stark from Cabot Oil & Gas. George is director of external affairs. At the meeting he said the Marcellus industry has made tremendous strides in the last 10 years and will be around for decades to come. He said, “It’s booming in our area.” George also said Cabot is having trouble filling vacant jobs.
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Cabot O&G 1Q19: Production Skyrockets 21%, $308M Free Cash Flow

The money-making Marcellus machine known as Cabot Oil & Gas continues to crank out the hits. On Friday Cabot held a conference call to discuss the company’s first quarter 2019 performance. And wow! What a performance! The company made $308 million in net income/profit (up 141% from $128 million in 1Q18), and produced 2.3 billion cubic feet per day equivalent (Bcfe/d) of mostly Marcellus (little bit of Haynesville) gas, up 21% from 1Q18.
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Cabot Settles Overtime Work Lawsuit by 80 PA Workers for $3.56M

A second lawsuit we’re reporting on today that had previously slipped by our usually good radar. A former Cabot Oil & Gas employee filed a lawsuit in October 2017 alleging that he and a number of other “employees” had been stiffed out of overtime payments by Cabot–that Cabot had treated them as independent contractors rather than as employees. The lawsuit was granted class certification.
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Are Marcellus/Utica Shale Drillers Financially Healthy?

We read on a regular basis in mainstream media that shale companies spend more money than they bring in, and that investors are growing tired of pumping money into companies without a return on their investment. We’ve recently noticed a renewed commitment on the part of major drillers to get their financial houses in order–spend less and drill less in order to make more money.¬†We spotted an article by Reuters on the “shale drillers aren’t profitable/healthy” meme which got us investigating the financial health (or lack thereof) for Marcellus/Utica drillers. What we found may interest you.
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Dimock, PA Landowners Paid $5K/Mo by Green Groups to Bash Cabot

A startling revelation came from yesterday’s court hearing in the tiny village of Montrose, PA. Some of the landowners from Dimock, PA who have traveled around the country claiming their water had been contaminated by Cabot Oil & Gas (remember the fraud “documentary” called Gasland?) were actually paid up to $5,000 *per month* by green groups to spread their lies.
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Cabot “Making Offers” to OH Landowners; New Well in Richland Co.

Ohio’s gas counties – click for larger version

We spotted an article about a landowner meeting held last week in Ashland County, Ohio. In the meeting, lawyers advised landowners to hold off on signing a standard lease agreement with Cabot Oil & Gas for $25 per acre with 12.5% royalties. Those offers, from what we are able to determine, were sent a year ago. Since that time Cabot has drilled at least three (possibly four) wells targeting the Knox Formation in Ashland County (see Cabot O&G Fracks Its First OH Knox Well, Drilling 3rd OH Well). A fourth (possibly fifth) well is about to be drilled in neighboring Richland County. Lawyers are telling landowners who haven’t yet signed it’s prudent to hold off and see how these initial test wells perform. We have details about the recent landowner meeting, along with details about a new Cabot well being drilled in Richland County, below.
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Price of NatGas Doubles in NEPA – Thanks to Atlantic Sunrise Pipe

The evidence continues to pour in that the addition of Williams’ Atlantic Sunrise Pipeline, a 200-mile greenfield pipeline from northeastern to southeastern PA where it joins the Transco Pipeline, is having a dramatic and ongoing effect on natural gas prices in northeastern PA. As in, the price drillers get for their gas has doubled. Atlantic Sunrise went online in early October (see FERC Approves Atlantic Sunrise for Startup! Pipe Opens Sat. Oct. 6). The main shipper on Atlantic Sunrise is Cabot Oil & Gas. But Cabot isn’t the only shipper, and not the only beneficiary, of higher prices. Seneca Resources and Range Resources are also shipping gas on Atlantic Sunrise, and reaping the price benefits.
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