Cabot Oil & Gas To Sell Conventional Mid-Continent Properties For $123 Mln

(RTTNews) - Cabot Oil & Gas Corp. (COG) Monday announced that it recently entered into a purchase and sale agreement with an undisclosed buyer to sell certain legacy conventional oil and gas properties located in the Mid-Continent for approximately $123 million. Current production from these properties is approximately 15 Mmcfe per day, of which 94 percent is gas.

The sale is in addition to the previously announced Marmaton and West Texas divestitures.

Cabot expects the transaction to close by year-end 2013, subject to customary closing conditions and adjustments.

Dan Dinges, Chairman, President, and Chief Executive Officer, said, "To date we have announced approximately $325 million of non-core asset sales, with proceeds being reinvested into our higher-return projects through the drill-bit and through share repurchases at prices materially below our intrinsic value."

In the deal, Evercore acted as financial advisor to Cabot.

Cabot also reported results from its first 10-well pad in the Marcellus Shale. The company noted that it recently turned-in-line its first 10-well pad in the Marcellus, which included eight Lower Marcellus wells and two Upper Marcellus wells.

The 10-well pad was completed with 170 fracture stimulation (frac) stages with a combined peak production rate of 201 million cubic feet (Mmcf) per day and a combined average 30-day production rate of 168 Mmcf per day.

As a result of the drilling and completion efficiency gains on its first 10-well pad, Cabot said it anticipates well costs for the company's typical 14 Bcf well will decrease to $5.8 million or less on a 10-well pad from $6.4 million on a two-well pad.