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December 2013 Company Update – Cabot Oil & Gas Corp

Cabot Oil & Gas Corp · Dec 10, 2013 · 34 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. December 2013 Company Update – Cabot Oil & Gas Corp – slide 1
    Investor Presentation December 2013 Company Update
  2. December 2013 Company Update – Cabot Oil & Gas Corp – slide 2
    HIGHLIGHTS FROM CABOTS FIRST 10-WELL MARCELLUS PAD 170 Stages with a Combined Peak Production Rate of 201 Mmcf/d and a Combined Average 30-Day Production Rate of 168 Mmcf/d 10-Well Pad Included Two Upper Marcellus Wells and a 500…
  3. December 2013 Company Update – Cabot Oil & Gas Corp – slide 3
    OVERVIEW OF CABOTS 10-WELL PAD OPERATIONS Water storage tanks Additional sand Bi-fuel metering of storage natural gas to frac pumps Bi-fuel frac pumps Simultaneous Zipper Ops / Pumpdown Wireline Plug-Perf
  4. December 2013 Company Update – Cabot Oil & Gas Corp – slide 4
    UPPER MARCELLUS DE-RISKING AND LOWER MARCELLUS 500 DOWNSPACING PILOT 4 Lower Marcellus wells to the North 1,000 1,000 1,000 Upper Marcellus Well Lower Marcellus Well 2 Upper / 4 Lower Marcellus wells to the South 1,000…
  5. December 2013 Company Update – Cabot Oil & Gas Corp – slide 5
    DRILLING AND COMPLETION EFFICIENCIES ON THE 10-WELL PAD Drilling Cost Per Foot () 325 258 228 2012 1H 2013 10-Well Pad Frac Stages Per Crew Day 6.3 5.1 4.2 2012 1H 2013 10-Well Pad
  6. December 2013 Company Update – Cabot Oil & Gas Corp – slide 6
    PAD DRILLING EFFICIENCIES RESULTING IN LOWER WELL COSTS Marcellus Well Cost For Typical 14 Bcf (18-Stage) Well (mm) 6.4 (0.2) (0.2) (0.2) 5.8 Single Well Cost for Location and Road Drilling Efficiencies Completion Single…
  7. December 2013 Company Update – Cabot Oil & Gas Corp – slide 7
    TRANSITIONING FROM ACREAGE CAPTURE TO PAD DRILLING Percentage of Marcellus Wells Drilled on Pads with 5 or More Wells 60% 23% 2013E 2014E
  8. December 2013 Company Update – Cabot Oil & Gas Corp – slide 8
    COMPANY OVERVIEW
  9. December 2013 Company Update – Cabot Oil & Gas Corp – slide 9
    KEY INVESTMENT HIGHLIGHTS Over 3,000 identified drilling locations in the sweet spot of the Marcellus Shale Extensive Inventory of implying 25+ years of inventory at current drilling levels Low-Risk, High-Return Peer-leading rates of…
  10. December 2013 Company Update – Cabot Oil & Gas Corp – slide 10
    ASSET OVERVIEW 2012 Year-End Proved Reserves: 3.8 Tcfe Q3 2013 Production: 1.164 Bcfe per day 2013E Drilling Activity: 155 165 net wells 2014E Drilling Activity: 170 190 net wells Marcellus Shale 200,000 net acres Current Rig…
  11. December 2013 Company Update – Cabot Oil & Gas Corp – slide 11
    PEER-LEADING PRODUCTION AND RESERVE GROWTH Production Per Debt-Adjusted Share CAGR (2010 2012) 42% 30% 26% 24% 22% 17% 16% 15% 8% 8% Peer median: 11% 2% (0%) (2%) (3%) (9%) COG Peer A Peer B Peer C Peer D Peer E Peer F Peer G…
  12. December 2013 Company Update – Cabot Oil & Gas Corp – slide 12
    TRANSFORMATION TO A MARCELLUS AND EAGLE FORD FOCUSED STORY IN 2014 2013E Capital Program: 2014E Capital Program: 1.1 billion - 1.2 billion 1.375 billion - 1.475 billion Other Other 5% 2% Eagle Ford 24% Eagle Ford / Marmaton /…
  13. December 2013 Company Update – Cabot Oil & Gas Corp – slide 13
    PROVEN TRACK RECORD OF PRODUCTION GROWTH 600 550 500 450 400 2014 Bcfe 350 Guidance: 30% - 50% 300 267.7 Liquids (Net) 250 2013 Gas (Net) Guidance: 200 187.5 44% - 54% 42.8% (increased 150 130.6 from 35%- 43.5%…
  14. December 2013 Company Update – Cabot Oil & Gas Corp – slide 14
    AND RESERVE GROWTH 4.5 4.0 3.8 3.5 3.0 3.0 2.7 26.7% 2.5 12.3% Tcfe 2.1 Liquids (Net) 2.0 31.1% Gas (Net) 1.5 1.0 0.5 0.0 2009 2010 2011 2012 2013E
  15. December 2013 Company Update – Cabot Oil & Gas Corp – slide 15
    INDUSTRY-LEADING COST STRUCTURE Operating Transportation Taxes O/T Income G&A Financing 2.47 2.50 2.12 2.00 1.76 1.67 Guidance 1.50 Midpoint: Guidance 1.37 Midpoint: / Mcfe 1.21 1.00 0.80 0.50 0.00 2009…
  16. December 2013 Company Update – Cabot Oil & Gas Corp – slide 16
    PEER-LEADING CASH FLOW PER SHARE GROWTH WHILE GENERATING SUBSTANTIAL FREE CASH FLOW 50% 2013E 2015E Cash Flow Per Share CAGR 40% 30% 20% 10% 0% (10%) COG Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Peer I Peer J…
  17. December 2013 Company Update – Cabot Oil & Gas Corp – slide 17
    POTENTIAL USES FOR FREE CASH FLOW Return Cash to Expand Core Accelerate Organically Shareholders Acreage Development Build Via Share Positions in of our Positions in Buybacks and the Marcellus Marcellus and New Venture…
  18. December 2013 Company Update – Cabot Oil & Gas Corp – slide 18
    MARCELLUS SHALE
  19. December 2013 Company Update – Cabot Oil & Gas Corp – slide 19
    CABOT CONTINUES TO PRODUCE THE MOST PROLIFIC WELLS IN THE MARCELLUS SHALE Top 20 Pennsylvania Marcellus Wells (January to June 2013) Cumulative Production From January to June 2013 (Bcfe) 6.0 15 of the top 20 (January to June…
  20. December 2013 Company Update – Cabot Oil & Gas Corp – slide 20
    DERISKING OF CABOTS MARCELLUS POSITION LANESBORO Recently Announced Q2 / Q3 2013 Well Results 15 of Top 20 Marcellus Wells HALLSTEAD SILVER LAKE Number of SUSQUEHANNA Total Frac HARMONY Peak 24-Hour (Jan Jun 2013) SILVER LAKE…
  21. December 2013 Company Update – Cabot Oil & Gas Corp – slide 21
    CONTINUED PERFORMANCE IMPROVEMENTS IN THE MARCELLUS Horizontal Length Average IP and 30-Day Rate 4.5 4.1 20.0 3.8 16.8 17.4 4.0 3.4 15.1 14.5 3.5 15.0 14.0 Thousand Ft. 3.0 2.7 11.9 Mmcfpd 2.5 2.1 8.7 10.0 2.0 7.4 7.2…
  22. December 2013 Company Update – Cabot Oil & Gas Corp – slide 22
    MARCELLUS RIG MOVE EFFICIENCIES 10 8.7 Move Days (Release to Spud) 8 7.4 6 4.8 4.0 4 2 0 2011/2012 (25 Moves) Implementation of New Move Average For Last 19 Moves Target Process (4 Moves) Implemented a new rig…
  23. December 2013 Company Update – Cabot Oil & Gas Corp – slide 23
    CABOT IS DRILLING MARCELLUS WELLS FASTER DESPITE LONGER LATERAL LENGTHS Drilling Days (Spud-to-Rig Release) 0 5 10 15 20 25 0 2,500 Measured Depth (Feet) 2011 5,000 2012 2013 YTD 7,500 10,000 12,500
  24. December 2013 Company Update – Cabot Oil & Gas Corp – slide 24
    MARCELLUS COMPLETION EFFICIENCIES FRAC EVOLUTION: Average Frac Stages Per Crew Day 2010 Daylight Operations, single well pads 10 Record of 9 frac stages 9.0 2011 24 Hour operations, multi well pads per crew day 8 (achieved five…
  25. December 2013 Company Update – Cabot Oil & Gas Corp – slide 25
    EVOLUTION OF CABOTS FRAC STAGE SPACING SHORTER STAGE LENGTHS AND REDUCED CLUSTER SPACING RESULTING IN HIGHER EURS PER 1,000 FEET OF LATERAL 4.0 3.7 3.3 EUR Per 1,000 of Lateral (Bcf) 2.9 3.0 2.4 2.0 1.0 0.0 2008 2009…
  26. December 2013 Company Update – Cabot Oil & Gas Corp – slide 26
    COMPRESSED NATURAL GAS (CNG) AND LINE GAS USAGE IN CABOTS MARCELLUS OPERATIONS CNG Usage in Cabots Vehicles - Estimated displacement of 110,000 gasoline gallon equivalents (GGE) in 2014 CNG / Line Gas Usage in Cabots Drilling…
  27. December 2013 Company Update – Cabot Oil & Gas Corp – slide 27
    COG MARCELLUS MARKETING STRATEGY Diversifying on Multiple Pipelines to Multiple Geographic Locations Firm Transportation Arrangements Long-Term Sales Agreements (Firm Sales) Investing in New Pipeline Projects Opportunistic…
  28. December 2013 Company Update – Cabot Oil & Gas Corp – slide 28
    CABOTS MARCELLUS GATHERING CAPACITY Cabots Gross Marcellus Gathering Capacity (Mmcf/d) 4,000 3,800 3,650 Gross Takeaway Capacity (Mmcf/d) 3,000 2,380 2,000 1,580 1,000 650 255 20 95 0 Dec-08 Dec-09 Dec-10 Dec-11…
  29. December 2013 Company Update – Cabot Oil & Gas Corp – slide 29
    INTERSTATE PIPELINE MARKETS Canada VT NH Iroquois NY TGP 200 Line Boston Constitution MA Laser RI Millennium CT TGP 300 Line Hartford Susquehanna Springville County Long Island Transco PA New York City NJ Current…
  30. December 2013 Company Update – Cabot Oil & Gas Corp – slide 30
    SCHEDULED APPALACHIA PIPELINE EXPANSIONS Over 13.3 Bcf/d of pipeline capacity expansions in Appalachia between now and 2017 with even more projects currently in the planning phases 14 13.3 Cumulative Pipeline Capacity Additions…
  31. December 2013 Company Update – Cabot Oil & Gas Corp – slide 31
    CABOTS MARCELLUS ECONOMICS Typical Well IRR Sensitivity 6.5 million D&C 6.0 million D&C 195% 200% 175% 150% BTAX %IRR 170% 150% 125% 115% 130% 100% 80% 100% 75% 70% 50% 3.00 3.50 4.00 4.50 Henry Hub ( / Mmbtu)…
  32. December 2013 Company Update – Cabot Oil & Gas Corp – slide 32
    EAGLE FORD SHALE
  33. December 2013 Company Update – Cabot Oil & Gas Corp – slide 33
    EAGLE FORD SHALE SUMMARY 62,000 net acres Current operated rig count: 2 Pad A Added a second rig in late July that will 4-well pad focus solely on multi-well pad Completing development (3 6 wells per pad) Lateral lengths ranging…
  34. December 2013 Company Update – Cabot Oil & Gas Corp – slide 34
    SIMPLE GROWTH STORY 3,000+ Locations in the Sweet Spot of the Marcellus Shale Implying 25+ Years of Inventory at Current Drilling Levels Currently Producing 1.3 Bcf/d of Gross Marcellus Production From Only 8% of Our Identified…

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