Current COG Stock Info

Cabot Oil & Gas (ticker: COG) is the second-largest producer by volume in the Marcellus Shale, but the E&P continues to dial up operations in another prolific shale play: the Eagle Ford.

On September 24, 2014, Cabot announced the acquisition of 30,000 net acres in the Eagle Ford – 17,000 of which are near the company’s Buckhorn operating area. The properties were purchased from an undisclosed seller and include current production of 1,600 BOEPD (92% liquids). Pro forma for the acquisition, Cabot now has 83,000 net Eagle Ford acres wi...

Analyst Commentary

KLR Group - (9.24.14)



COG ($31.59, A, $42) – Reasonable Northern Tier Oil Window Eagle Ford Acquisition, Gross Marcellus Production Tracking 3Q/14 Exit Rate, ’14 Production/Capex Refinements – Cabot announced the acquisition of additional acreage in the Eagle Ford and an update on its guidance/share repurchase program. The company acquired ~30,000 net acres in the Eagle Ford for ~$210 million including ~17,000 net acres near COG’s Buckhorn area in Atacosa, Frio and LaSalle Counties, TX. Current production from the properties is ~1,600 Boepd (~92% liquids) and assuming ~$70k per flowing Boe, the acquisition equates to a reasonable ~$3,300 per acre net of production. Additionally, Cabot added a fourth rig in the Eagle Ford. The company increased its ’14 capital plan ~$75 million to $1.45-$1.55 billion and increased its ’14 drilling activity guidance to 165-175 net wells (~55 net Eagle Ford wells) from 150-170 net wells (40-50 net Eagle Ford wells). Cabot anticipates production to grow ~2% q/q, below our growth expectation of ~8% q/q, due to infrastructure constraints. Exiting 3Q/14, gross Marcellus production reached ~1.68 Bcfpd, tracking our expectation. Additionally, the company downwardly revised the top end of its ’14 production guide to 530-555 Bcfe from 530-585 Bcfe. Preliminarily, we expect to remain at the lower half of company guidance. Further, COG reaffirmed its ’15 production growth guidance of 20%-30%. Currently, we are at the mid-point of ’15 growth guidance. In 3Q/14, the company purchased ~2.7 million shares, ~0.7% of total shares outstanding. This announcement should have a minor positive value impact due to the Eagle Ford acquisition/additional rig as gross Marcellus production is tracking our 4Q/14 expectation.  


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