HOUSTON, Oct. 7, 2020 /PRNewswire/ -- Cabot Oil &
Gas Corporation (NYSE: COG) ("Cabot" or the "Company") today
provided an operational update for the third quarter of 2020 and
announced updated 2020 guidance.
Third Quarter 2020 Operational Update
"On September 18, 2020, Cabot
commenced a strategic curtailment program in response to weakness
in regional natural gas prices throughout Appalachia, resulting in
an estimated average daily curtailment of approximately 372 million
cubic feet equivalent (Mmcfe) per day of gross production during
the last 13 days of the quarter," stated Dan O. Dinges, Chairman, President and Chief
Executive Officer. "While our low cost structure affords us the
opportunity to deliver cash margins even in the lows of the natural
gas price cycle, we continue to evaluate all opportunities to
enhance value for our shareholders including the decision to
temporarily forgo production in anticipation of generating higher
margins for our volumes in the near future. Despite our
price-related curtailments in September, Cabot's third quarter
production still fell within our previously disclosed guidance
range."
Cabot expects production for the third quarter of 2020 to be
approximately 2,406 Mmcfe per day. Natural gas price realizations,
including the impact of derivatives, are expected to be
$1.57 per thousand cubic feet (Mcf)
in the third quarter of 2020. Excluding the impact of derivatives,
natural gas price realizations for the quarter are expected to be
$1.51 per Mcf, representing a
$0.47 discount to NYMEX settlement
prices.
Updated 2020 Guidance
Taking into account the anticipated impact of continued
price-related curtailments in October, which have averaged an
estimated 450 Mmcfe per day of gross production month-to-date,
Cabot has provided a fourth quarter 2020 production guidance range
of 2,300 to 2,350 Mmcfe per day, resulting in an updated full-year
2020 production guidance range of 2,325 to 2,340 Mmcfe per day
based on a capital program of $575
million. "While natural gas prices across North America currently remain challenged due
to lower seasonal demand during the shoulder season and storage
levels that are nearing capacity, we remain optimistic about the
improving natural gas supply and demand outlook heading into 2021,
which has resulted in a significant increase in the 2021 natural
gas price futures since late July," noted Dinges. "This improvement
in the natural gas price outlook is expected to result in a
meaningful expansion in Cabot's free cash flow next year, which
will allow the Company to utilize excess free cash flow for
increased return of capital to shareholders and the repayment of
our 2021 debt maturities."
2021 NYMEX Hedging Update
Cabot recently initiated its 2021 hedging position as a result
of the improvement in the NYMEX futures for 2021. Currently, the
Company has 138.5 million Mmbtu of NYMEX natural gas collars with a
weighted average floor price of $2.63
per Mmbtu and a weighted average ceiling price of $3.01 per Mmbtu. The Company also has 18.3
million Mmbtu of NYMEX natural gas swaps with a weighted average
price of $2.74 per Mmbtu. "Given the
improvement in the 2021 NYMEX futures during the third quarter, we
have implemented a price risk management strategy for 2021 to
mitigate downside risk while still offering upside potential,"
commented Dinges. "Our hedging strategy continues to be focused on
opportunistically locking in downside protection while maintaining
some level of market price exposure if natural gas prices continue
to move higher as a result of improving natural gas balances."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent
natural gas producer with its entire resource base located in the
continental United States. For
additional information, visit the Company's website at
www.cabotog.com.
This press release includes forward–looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The statements regarding future financial and operating
performance and results, returns to shareholders, strategic
pursuits and goals, market prices, future hedging and risk
management activities, and other statements that are not historical
facts contained in this report are forward-looking statements. The
words "expect", "project", "estimate", "believe", "anticipate",
"intend", "budget", "plan", "forecast", "outlook", "predict",
"may", "should", "could", "will" and similar expressions are also
intended to identify forward-looking statements. Such statements
involve risks and uncertainties, including, but not limited to, the
continuing effects of the COVID-19 pandemic and the impact thereof
on the Company's business, financial condition and results of
operations, the availability of cash on hand and other sources of
liquidity to fund our capital expenditures, the repayment of our
debt maturities and our dividends, actions by, or disputes among or
between, the Organization of Petroleum Exporting Countries and
other producer countries, market factors, market prices (including
geographic basis differentials) of natural gas and crude oil,
results of future drilling and marketing activity, future
production and costs, pipeline projects, legislative and regulatory
initiatives, electronic, cyber or physical security breaches and
other factors detailed herein and in our other Securities and
Exchange Commission (SEC) filings. See "Risk Factors" in Item 1A of
the Company's most recent Annual Report on Form 10-K and subsequent
Quarterly Reports on Form 10-Q for additional information about
these risks and uncertainties. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those
indicated. Any forward-looking statement speaks only as of
the date on which such statement is made, and the Company does not
undertake any obligation to correct or update any forward-looking
statement, whether as the result of new information, future events
or otherwise, except as required by applicable law.
FOR MORE INFORMATION CONTACT
Matt Kerin (281) 589-4642
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SOURCE Cabot Oil & Gas Corporation