Susquehanna County

An article on the Investors Business Daily website published yesterday chronicles how Cabot Oil & Gas has built a cash-generating asset (a virtual money machine) with their Marcellus Shale wells in Susquehanna County, PA. One of the analysts quoted in the article says the numbers for Cabot are “wildly economic,” and another wonders what they’ll do with all their available cash!

The interesting tidbit from the article for MDN is an estimate for how much it costs Cabot per thousand cubic feet (Mcf) to get the gas from those Susquehanna County Marcellus wells. Previous numbers we’ve seen thrown around as the breakeven price for Marcellus drilling in northeastern PA are from $2.88 – $3.44 per Mcf. However, the analysts say that for Cabot, the number is MUCH lower…
Read More “Cabot O&G Builds a Cash-Generating Machine in NE PA Marcellus”

Cabot Oil & Gas has jumped on the natural gas-powered drilling rig bandwagon. Yesterday, Cabot announced they have begun using “field gas”–Marcellus Shale gas from the very wells they’re drilling–to help power the drilling rigs they’re using to drill for the gas. According to Cabot, this is the first time field gas has been used in drilling rigs in northeastern PA. Cabot is using Caterpillar engines that run on duel fuel technology–part natural gas, part diesel.

You may recall other Marcellus drillers are also using duel fuel, and some are using 100% natural gas, to power their rigs. Those companies include EQT, CONSOL, Seneca Resources and Antero Resources (see Antero Res 2nd Marcellus Driller to Use 100% NatGas Rig Engines for a description of other drillers’ efforts to date). The unique aspect of Cabot’s announcement is that they’re using field gas and not trucking in LNG to power their duel fuel engines. It means far fewer truck trips to the drill site.
Read More “Cabot O&G Uses Marcellus Shale Gas to Power Drilling Rigs”

Energy analyst and Seeking Alpha blogger Richard Zeits listened in to the recent Cabot Oil & Gas investor’s conference call and came away with some mind-blowing numbers. The bottom line from the call and from Zeits’ analysis is that Cabot has indeed found a “super-productive” location in Susquehanna County, PA where they own leases on about 200,000 acres. New wells they’ve recently drilled prove that all of their acreage is in this sweet spot.

One startling find by Zeits: A well drilled by Cabot in Susquehanna County has, in just 667 days, produced a cumulative 8 billion cubic feet of natural gas–a single well! That equates to an average of 12 million cubic feet of natural gas per day from that one well. Astonishing. (No wonder Southwestern just picked up an additional 51,000 acres from Chesapeake in Susquehanna County earlier this week, for an average of $574 per acre. Chesapeake was taken to the cleaners).

Here’s some of Zeits’ analysis of the Cabot call, with lots of facts and figures:
Read More “Cabot Monster Well in NE PA Yields 8 Bcf in 667 Days”

Yesterday, Cabot Oil & Gas issued financial results for the first quarter of 2013. Natural gas production for the company was up a whopping 50% over last year, and up 13% from last quarter! As MDN had previously noted, the company was the first to hit 1 billion cubic feet of production per day in the PA Marcellus Shale (see Who’s a Member of the Marcellus “1 Bcf/d” Club?).

Net income for the company was up over last year ($42.8M as opposed ti $18.3M last year in 1Q). According to company CEO Dan Dinges, the key to their success is the Marcellus. The Cabot statement from yesterday:

Read More “Cabot Keeps Rockin’ It in the Marcellus Shale”

Cabot Oil & Gas is, so far, the only driller to attain 1 billion cubic feet per day of natural production in the Marcellus Shale (see Who’s a Member of the Marcellus “1 Bcf/d” Club?). Perhaps the most astonishing part of their story is that all of Cabot’s drilling happens in rural northeastern Susquehanna County, PA. Although Cabot is some 10 times smaller than Chesapeake Energy, the value of their stock (market capitalization) recently surpassed Chesapeake (see Guest Post: Corporate Hubris Humbles Chesapeake – Cabot Soars Sure & Steady).

Cabot’s ability to spin gold from hay is in no small part because of their Marcellus operation in Susquehanna County…

At a recent conference, Cabot made an investor presentation (full copy below) that shows, in part, why they’re so profitable—even in a low commodity price environment. As we’re writing this story, the commodity price of natural gas is exactly $4 per thousand cubic feet. Depending on geography, the cost to produce natural gas approaches $4/Mcf for many drillers. But for Cabot? Their average cost per Mcf in 2012 was $1.67, and for 2013 they estimate it will go even lower (see slide 10 below).

Read More “Cabot Spins Gold from Hay with Low Cost Drilling”