Clean Energy Stronger Communities

Report to the Community2014

CONTENTSLackawanna College School of Petroleum & Natural Gas .......... 4

Endless Mountains Health Systems ........................................... 6

Historic Dennis Farm ................................................................ 8

A Commitment to the Community ........................................... 12

Operational Innovations .......................................................... 18

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Tapping into Pennsylvania’s rich natural gas resources requires meaningful partnerships with our communities and the careful use and protection of the environment.

Cabot Oil & Gas Corporation has invested more than $5.5 million just through our partnerships with organizations

across northeastern Pennsylvania. We are proud to be active members of the community we live in and strive to give back to the area of our operations.

We believe that a good community partner helps to make the region stronger: through healthcare facilities, education, nonprofit organizations and cultural events, we strive to build relationships now that will have a lasting positive effect for generations to come.

This Corporate Social Responsibility Report is a brief snapshot of the robust partnerships we have built since beginning operations in the region in 2010.

George E. Stark Director, External Affairs Cabot Oil & Gas Corporation

Lackawanna College School of Petroleum & Natural Gas – Empowering education, enriching lives

Cabot Oil & Gas Corporation is helping to advance opportunities for northeastern Pennsylvania residents by investing in the region’s educational offerings, which provides a gateway to well-trained, well-paid jobs in the burgeoning petroleum and natural gas industries.

After collaborating on curriculum and joining forces for field trips and intern opportunities, Cabot gifted $2.5 million to the Lackawanna College School of Petroleum & Natural Gas for scholarships, equipment, development and long-term needs to continue producing work-ready local residents for the region’s petroleum and natural gas firms.

“Our partnership with Cabot enhances tremendously the ability of the School of Petroleum & Natural Gas to provide a world-class education designed to prepare a ready workforce that fits the needs of the multiple companies across the industry,” said college President Mark Volk. “Beyond just an investment in Lackawanna College, through this collaborative effort Cabot is making an investment in our students and our community.”

The school, which opened in 2009, offers four associate’s degree programs in the field: petroleum and natural gas technology; natural gas

compression technology; petroleum and natural gas measurement; and petroleum and natural gas business administration.

Learning from the industry perspective gives students a significant career advantage. In fact, the curriculum is so current that it changes a little every year to align with what the industry needs at the moment. The formula is working: Nearly 100 percent of students who are actively seeking employment after graduation find it in the oil and gas industry – and more than 70 percent of the school’s graduates are hired by major oil and gas companies.

In addition to assisting with curriculum design, Cabot helps set up lectures with industry experts and provides field visits to drilling and production sites for all students.

Cabot’s partnership with the School of Petroleum & Natural Gas is helping to ensure our neighbors have access to the education and training that today’s jobs require, especially those in their own backyard. And best of all, these jobs will last for generations to come.

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Brian Hollister, Class of 2011

Endless Mountains Health Systems, a not-for-profit corporation established in the 1950s to provide health care in the Montrose area, undertook a bright new future with the help of Cabot Oil & Gas Corporation.

In 2012 the entire community recognized the need for a larger, modernized medical facility. While the health system received a federal loan for hospital construction it still faced a challenge in raising funds for an outpatient clinic.

Cabot stepped forward to kick start that funding drive for a new facility with a $1 million donation and created the Cabot/EMHS Community Match Fund.

The Community Match Fund accepted donations from individual and corporate donors and even town wide fundraising events, and we pledged to match that dollar for dollar up to $1 million.

The community support was overwhelming – the region raised more than $1.2 million in just four months. Impressed with the community outpouring, we decided to match the entire $1.2 million raised by the community.

After an additional community foundation donation brought the fundraising total to $4.4 million, the

facilities took shape and opened in September 2013. The hospital includes 25 beds, as well as emergency, imaging, lab, surgery, cardiopulmonary, and rehabilitation services. It also features a Physician Practice Suite, integrating primary and specialty care within the hospital’s services.

Now, the quality of the facility matches the quality of its staff – all to the benefit of the community.

“For Susquehanna County, this is huge. This will be the nucleus of the medical delivery system in the county for not just this generation, but the next generation,” said Endless Mountain Health Systems CEO Rex Catlin. “Cabot really has done wonderful things not only for (EMHS) but for our area.”

Thanks to the generosity of its neighbors and the hard work of the community, the newly constructed EMHS facility has attracted several new specialty doctors and increased the size and scope of the procedures available. This growth has increased the quality of health care for the Endless Mountains region.

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Rex Caitlin, CEO of Endless Mountains Health System

Cabot and Dennis Farm Charitable Land Trust – Preserving history, enriching the present

The Dennis Farm sits on 153 acres in

Susquehanna County and is a unique

blend of Pennsylvanian, African-American

and national history.

The farm was purchased in 1793 by Prince Perkins, a free African-American and an ancestor from whom the Dennis family directly descends. Free black landowners in the north more than a half-century before the Civil War began were rare. The Perkins-Dennis family has owned the land through seven generations over more than 200 years and has left a well-preserved history.

Denise Dennis, the trust’s CEO, and her late aunt, Hope Dennis, established the land trust in 2001. Ms. Dennis has developed the farm and land into an educational and cultural site for scholars, researchers, cultural heritage tourists, school groups and others.

When Cabot approached Dennis about accessing the natural gas rights on her property, Ms. Dennis took steps to gain education about industry

operations, with the goal of protecting the farm and its significant natural and cultural landscape. After discussions with the management team, Ms. Dennis leased the land to Cabot for natural gas production.

“I believe the farm has greater protection now than if I had remained a hold out,” explained Ms. Dennis.

With the funding from her agreement with Cabot, The Dennis Farm Charitable Land Trust has been able to expand its preservation and restoration efforts and work towards its goal of establishing an interpretive center on the grounds. Weathered by time and damaged by Hurricane Irene, the farmhouse was stabilized through some of the Cabot funding. In 2013 the Dennis Farm was listed on the National Register of Historic Places, with the

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National Trust for Historic Preservation calling it a “rare and highly significant African-American cultural landscape.”

Cabot sponsored the first two Dennis Farm Symposiums to share the property’s significance with business, education and public service leaders. Even before the farm gained its historical designation, it had a successful partnership with the State University of New York Binghamton, which held archaeological field schools there. Historical, cultural and educational groups have continued to visit the farm.

In 2015, the Dennis Farm will be featured in a brand new Smithsonian National Museum of African American History and Culture exhibit on the National Mall.

The trust continues to fundraise to achieve its vision of sharing the historical site with visitors from across the country.

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Denise Dennis, President & CEO of the Dennis Farm Charitable Land Trust

The Second Annual Dennis Farm Symposium at the Dennis Farm

The Careers in Energy Program teaches students about the energy they use every day.

A Commitment to the Community

To understand our dedication to the region and its residents, one needs only to talk to one of Cabot’s dedicated employees – or look at the numbers. Since 2010, Cabot Oil & Gas Corporation has given back $5.5 million to the community. Here’s a look at some of the efforts we continue to support.:

Careers in Energy

The Careers in Energy program, created by Junior Achievement in partnership with the energy industry, exposes students to the profound impacts of today’s energy revolution and presents opportunities for young adults to secure family-sustaining careers.

Since the program’s inception in northeastern Pennsylvania, we’ve made an impact on students at schools including Valley View High School, Elk Lake High School, Montrose High School and beyond.

It works like this: Cabot and other energy-related companies across the spectrum host a day-long career exploration program in which students rotate through several core areas: engineering, geology,

alternative energies, nuclear power generation, pipelines, utilities, and oil & natural gas development. Experts from each field provide background information, discuss career opportunities and present interactive, hands-on activities to fortify what they just learned.

Students not destined for a career in the energy industry take a lot away from the program, too, seeing firsthand that everyday things like plastics, pharmaceuticals, fertilizers and even hairspray are not possible without access to affordable, abundant energy.

First Responders Grant Program

At Cabot, we recognize how integral first responders are to the fabric of a community – and it’s why we established an annual grant program to help area fire companies purchase much-needed emergency management equipment.

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The Careers in Energy Program teaches students about the energy they use every day.

Recipients so far have used the funding to purchase everything from search and rescue gear to radio equipment. They include: United Fire Company (Montrose), Springville Volunteer Fire Company, Hop

Bottom Hose Company, Elk Lake Volunteer Fire Company, Forest Lake Volunteer Fire Company and Harford Volunteer Fire Company, Clifford Township Volunteer Fire Company, Rush Volunteer Fire Department, and Meshoppen Volunteer Fire Department.

Rush Volunteer Fire Company Chief Tom Jauss had this to say about the importance of the fire company grant money

from Cabot: “Not just one department reaps the benefits of the equipment awards, as the local fire companies work together. The new equipment will help the entire area.”

Our contributions to first responders don’t end there. Cabot’s water withdrawal impoundments in the Marcellus region are now equipped to assist fire companies in emergency situations. Fire companies equipped with a special access code can now fill tankers to help fight fires – a crucial support to the rural communities in the county that don’t have hydrants.

EITC Program

Pennsylvania’s Education Improvement Tax Credit is another way Cabot is able to give back directly towards educational programs. Over the past four years over $500,000 has been awarded through scholarships to preschool programs and to students at Susquehanna County Career and Technology Center for their school supplies. It has also supports programs like The Challenge Program, Inc. and Junior Achievement. The EITC funds are maintained and distributed by The Community Foundation of the Endless Mountains which allows the entire region to benefit from the dollars available and make real impacts on the lives of students.

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Employees engage with local students about their opportunities in the energy industry.

Toys collected during the 2014 annual toy drive benefitting Susquehanna and Wyoming County Interfaith.

Funding for the career center has helped students acquire the necessary tools and equipment for their selected studies, says Dr. Alice Davis, Administrative Director of SCCTC. Before scholarship funds were available, students who could not afford the supplies often dropped out.

“It’s really a win-win for everybody with Cabot,” Davis says. “They’re here to educate (and) give back to the community.”

Investing in Our Community

Cabot is proud to be involved in a variety of community events including annual toy drives to benefit local Interfaith programs, Christmas in Montrose, The Blueberry Festival, Montrose Chocolate & Wine Festival and many others which benefit area nonprofit organizations.

In addition to the direct involvement with the community, Cabot has also paid back $50.6 million through the Act 13 Impact fee and $450 million in Royalties.

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$181 M

$269 M

$450 M

2013 2014 TOTAL

$9.6 M

2012

$12.7 M

2013

$13.3 M

2014

$15 M

2014

$50.6 M

TOTAL

Royalties Paid by CabotFrom 2013-2014 Cabot paid $450 million in royalty payments to landowners.

Impact Fees Paid by CabotBy April 2015, Cabot will have paid more than $50 million in impact fees which go toward projects across Pennsylvania.

Operational Innovations

At Cabot Oil & Gas Corporation we work diligently every day to safely produce clean burning natural gas. We even use it to displace gasoline and diesel to fuel our own vehicles, power drilling equipment and supply our hydraulic fracturing operations.

As a result, Cabot is experiencing measurable

economic and environmental savings – thereby

creating significant cost advantages – all by

utilizing natural gas we produce.

Transportation

In 2013, Cabot opened a compressed natural gas

(CNG) station in Springville Township – the heart

of our Marcellus Shale operations. This station is

the first of its kind in Susquehanna County, where

there is little distribution infrastructure.

Drilling Operations

Cabot is one of the first operators in the Marcellus to

power our drilling rigs with natural gas. While other

operators in this basin have used liquefied natural

gas (LNG), Cabot instead opted to use either line gas

or CNG for our fuel needs. Because of the high quality

of the gas we produce – approximately 97% methane

and less than 3% heavier hydrocarbons – it is uniquely

possible for our company to retrofit the generators

on our drilling rigs with dual-fuel technology that

can use the gas.

In 2013, Cabot successfully

drilled 19 wells on natural

gas through use of line gas

or tube trailers. A total of

67 wells were drilled using

natural gas in 2014.

Hydraulic

Fracturing Operations

Frac’ing a well is one of

the most power-intensive

processes of our

operations. During the

summer of 2013, Cabot became

the first operator in Northeast Pennsylvania to use

dual-fuel engines during completion operations,

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The centrally-located CNG station allows for easy access for Cabot’s trucks and equipment.

specifically during the hydraulic fracturing process.

On a 10 well pad site with 170 stages, a fleet of 14

pumps capable of running on a mixture of diesel

fuel and field gas was utilized.

Studies show that these pumps are capable

displacing 70% of diesel fuel. During this particular

completion operation, 110,000 gallons of diesel

were offset. This is the equivalent of 16 resupply

runs, reducing not only the cost for fuel and the

environmental impact but the heavy logistics

associated with completions operations.

The environmental savings when utilizing

natural gas are astounding: 70% less carbon

monoxide (CO); 87% less non-methane organic

gas (NMOG); 87% less nitrogen oxide (Nox);

25% less carbon dioxide (CO2).

In 2013, Cabot completed 422 hydraulic fracturing

stages using natural gas. 2,603 stages were

completed using line gas in 2014.

By usng natural gas across our operations, over

1 million gallons of diesel and gasoline have been

displaced in 2013 and 2014. To put this into

perspective, a fuel tanker truck that delivers diesel

and gasoline to Cabot’s sites holds approximately

11,000 gallons of fuel. By using natural gas from

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CNG STATION

GASOLINE GALLON

EQUIVALENT

DIESEL GALLON

EQUIVALENT

Pickups 11,344 89,556

Drill Rigs 44,274 328,168

TOTAL CNG 55,618

LINE GAS

Drilling 53,795 398,740

Completion 49,143 364,259

TOTAL LINE GAS 102,938

TOTAL FUEL SAVED 89,556 1,091,667

All amounts in Mcf

Natural Gas Operations for 2103 & 2014

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our own wells, we have displaced approximately

90 trucks from the road. By doing so, we are

further reducing emission levels associated

with our operations and having a far less impact

on the communities surrounding our areas

of development.

By continuing to supplant these fuels with

cleaner burning natural gas in our drilling and

completions operations and as our fuel for

transportation, Cabot Oil & Gas Corporation is

committed to reducing our environmental impact

by lessening our emissions via use of cleaner-

burning natural gas.

117.6 million gallons

256.2 million gallons

88.2 million gallons

50.4 million gallons

2014

TOTAL

20132012

Water Recycled by CabotSince 2012, Cabot has recycled more than 100 million gallons of water while conducting Marcellus Shale drilling, completion, and production operations. Cabot believes in recycling, reusing and reducing the wastewater we generate while harvesting natural gas resources.

Road Maintenance Paid by CabotSince beginning Marcellus Shale operations Cabot has spent more than $44 million in road maintenance. Cabot is committed to ensuring the roadways and bridges we use in our areas of operation are well-maintained and remain in as good a condition, if not better, than before.

$44.4

million

Clean Energy Stronger Communities