Cabot Raises 2017 Capital Guidance, Production to Grow 5%–10%


Feb. 28 2017, Updated 7:39 a.m. ET

Cabot Oil & Gas’s key operational highlights

Cabot Oil & Gas’s (COG) 4Q16 production volumes totaled 164.2 Bcfe (billion cubic feet equivalent). In comparison, 4Q15 production volumes were 151 Bcfe. COG’s 3Q16 production volumes were 150.8 Bcfe.

Fiscal 2016 production was 627.1 Bcfe, compared to 602.5 Bcfe in 2015. As you can see in the graph above, COG’s annual production has grown at a compound annual growth rate of 15% between 2013 and 2016.

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Cabot Oil & Gas’s 4Q16 realized prices

Cabot Oil & Gas’s average realized price for crude oil (USO) (UCO) rose from $37.74 per barrel in 4Q15 to $42.94 per barrel in 4Q16. Its average realized price for natural gas (UNG) was the same at $1.94 per thousand cubic feet in 4Q15 and 4Q16. Its average realized price for natural gas liquids rose from $11.69 per barrel in 4Q15 to $13.84 per barrel in 4Q16.

Cabot Oil & Gas’s 2016 production and capital guidance

Cabot provided a 2017 production growth guidance range of 5.0%–10.0%.

The company raised its 2017 capital budget from $575 million (provided in 3Q16) to $650 million. COG’s 4Q16 earnings release noted that the incremental capital will mainly be used for funding additional drilling and completion activity in the Eagle Ford. (See Could Cabot Oil & Gas Favor Eagle Ford in the Future? for related research.)

Providing its outlook for 2017, COG’s management commented in the 4Q16 earnings release, “Based on our current outlook for 2017, we anticipate another year of production and reserves growth while generating positive free cash flow.”


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