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A Look at Cabot’s 2Q16 Operational Highlights and 2016 Guidance

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2016 production guidance

Cabot Oil & Gas’s 2016 production growth guidance range is 2%–7%. Meanwhile, for 2016, peer EQT (EQT) has provided production growth guidance of ~19% at the midpoint and Antero Resources (AR) has provided growth guidance of 15% at the midpoint. Noble Energy has provided a growth range of 15%.

Cabot’s (COG) 2Q16 production volumes totaled 151.8 Bcfe (billion cubic feet equivalent). In comparison, 2Q15 production volumes stood at 138 Bcfe, and 1Q16 production volumes were 160 Bcfe.

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In its 2Q16 earnings release, COG noted that unscheduled infrastructure maintenance-related downtime negatively impacted its 2Q16 natural gas production by 36 million cubic feet per day. The company stated that “while our daily equivalent production for the quarter was in line with the mid-point of our guidance, the Company would have surpassed the high-end of our guidance range had we not experienced this unexpected downtime during the quarter.”

COG’s two major pipelines

Cabot Oil & Gas has equity investments in the Constitution and Atlantic Sunrise pipelines. The Constitution pipeline is set to be in service in the second half of 2018 and the Atlantic Sunrise pipeline it set to be in service in late 2017. COG has yet to receive the necessary permits and approvals for both pipelines.

In a press release on October 13, 2016, Cabot announced that it had recently received a notice from the Federal Energy Regulatory Commission, stating that it is “evaluating certain alternatives to the Central Penn Line North and South routes, which are portions of the Atlantic Sunrise Project.” An update on this should be available by November 14.

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