Cabot Oil & Gas Corp., Houston, expects to average three rigs and two completion crews in the Marcellus shale during 2018, resulting in 85 net wells drilled and 95 net wells completed.
Cabot has about 179,000 net acres in the dry gas window of the Marcellus shale, primarily in Susquehanna County, Pa., with two rigs running. The average lateral length for the 2018 Marcellus shale drilling program is 8,300 ft and the expected average well cost is $8.3 million for drilling, completion, and facilities.
The company provided updated guidance with its full-year 2017 and fourth-quarter 2017 financial and operational results, outlining its focus on its Marcellus assets.
In December 2017, the company announced plans to sell both operated and non-operated Eagle Ford assets to Venado Oil & Gas LLC (OGJ Online, Dec. 21, 2017). Commenting on the deal, Cabot Chairman, Pres., and Chief Executive Officer Dan O. Dinges said the Eagle Ford assets were “a nice complement” to the company’s Marcellus shale position, providing capital allocation optionality in a higher priced oil environment, but that based on its oil market outlook and resulting rates of return compared to its Marcellus returns, there were no plans to allocate capital to assets beyond maintenance capital levels.
Cabot has provided first-quarter 2018 net production guidance of 1,775-1,825 MMcfd for natural gas, 7,500-8,000 b/d for crude oil and condensate, and 700-800 b/d for NGLs. These numbers assume a Feb. 28, 2018, closing date for the Eagle Ford divestiture and reflects the impact of an in-service delay for two new third-party compressor stations in the Marcellus.
The company reaffirmed its 2018 production growth guidance of 10-15% (18-23% on a divestiture-adjusted basis to reflect the impact of its Eagle Ford, East Texas, and West Virginia dispositions).
“Our 2018 production growth is weighted toward the second half of the year driven by anticipated midyear in-service dates for the Moxie Freedom power plant, Lackawanna Energy Center power plant, and Atlantic Sunrise pipeline,” Dinges said.
A breakdown of the company’s updated $950-million 2018 capital budget is as follows: Marcellus shale, $800 million; exploration areas, $75 million; pipeline investments, $60 million; and corporate, $15 million.
Contact Mikaila Adams at [email protected].