Thursday, October 29, 2009

Cabot: Getting Excited about the Haynesville Play

Last week, Cabot Oil & Gas held its quarterly earnings call and updated the market on its progress in the Haynesville Shale. The company has 61,000 gross acres (32,000 net) but is mostly piggybacking on other operators for its initial horizontal drilling operations.

In its most recent announcement, Cabot touted its first horizontal well, operated by Common Resources, in the County Line Field that has an initial production rate of 21.0 MMcf/day at a flowing casing pressure of 7,800 psi. The IP rate was stated at eleven days, but it might have been a peak rate - the relase was unclear. The release and the conference call were a little short on specifics. The well was not named (we'll find out eventually), nor was the exact location specified (based on a map from an earlier Cabot presentation, the new well should be "AMI #1" which is located in San Augustine Co.). The well cost approximately $10 million and had 14 frac stages.

Common Resources has completed a couple of big wells in San Augustine Co. over the past few months, Red River 164 #1 (13.4 MMcf/day, reported in August 2009) and Red River 619 #1 (16.7 MMcf/day, reported October 2009). I'm not sure if the second of these wells is the one Cabot refers to or if it is another one. Unfortunately, Common Resources is a private company and is not compelled to release lots of specifics.

Cabot, with a partner, has completed a second well ("AMI #2" above) but the company did not release results, and a third well will be spud in December. The company is planning five Haynesville Shale wells in 2010.

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