Cabot’s Q2 2018 Production Highlights: Forecasts for 2018


Aug. 2 2018, Updated 9:02 a.m. ET

Cabot Oil & Gas’s Q2 2018 production

Cabot Oil & Gas’s (COG) production in the second quarter was 1,895 MMcfe (million cubic feet equivalent) per day. This compares to 1,902 MMcfe per day reported in the second quarter of 2017 and 1,884 MMcfe per day reported in the first quarter. The year-over-year decline in COG’s production volumes resulted from its Eagle Ford asset divestiture, which closed in February.

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COG’s price realizations

Natural gas price realization, including hedges, in the second quarter totaled $2.15 per Mcf (thousand cubic feet), compared to $2.38 per Mcf in the second quarter of 2017 and $2.44 per Mcf in the first quarter.

After the Eagle Ford divestiture, natural gas made up 100% of Cabot’s total production in the second quarter.

Q3 2018 and 2018 production guidance

Cabot Oil & Gas has provided third-quarter production guidance of 2.1 billion–2.2 billion cubic feet per day. As we can see in the image above, COG expects its production to increase in every quarter in 2018.

COG’s 2018 daily production growth guidance range is 10.0%–12.0%, and its previous guidance range was 10.0%–15.0%. This decrease was attributed to delays in third-party compressor stations in the first quarter and downtime on the Transco and Millennium pipelines during the second quarter. However, the company expects that its 2018 exit production rate in the Marcellus Shale could be ~35.0% higher than its 2017 exit rate.

Cabot Oil & Gas expects its production growth in 2018 to be tilted toward the second half of the year, which could result from the in-service stage of crucial infrastructure projects in the Marcellus Shale. Cabot is allocating 83.0 of its 2018 capex to the Marcellus Shale.

Some of the significant projects that are underway in the Marcellus Shale include Williams Partners’ (WPZ) Atlantic Sunrise pipeline project. Other upcoming pipeline projects that could significantly impact the Marcellus volumes include the PennEast pipeline. Partners in this venture include NJR Pipeline (NJR), Spectra Energy Partners (SEP), and UGI Energy Services (UGI). Construction of the pipeline is expected to begin in 2018 with a target in-service date in 2019.


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