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Decision making for the long-termWWW.CABOTOG.COM NYSE: COG
Cabot Oil & Gas Corporation
Marcellus Shale Overview
March 14, 2012
CPES Conference
Jeff Hutton
Click to edit Master title styleCabot Oil & Gas Corporation
U.S. Shale“Changing the World”
Click to edit Master title styleU.S. Shale
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Click to edit Master title styleCabot Oil & Gas Corporation
Marcellus Shale
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Named for a distinctive outcrop near the village of Marcellus
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Known formally as the “Marcellus Formation” Is a Middle Devonion‐age black, low density, carbonaceous
(organic rich) shale. Deposition occurred about 390 million years ago.
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Click to edit Master title styleDepth of Marcellus Shale Base
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Click to edit Master title styleMarcellus Shale Wells Year Drilled
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Click to edit Master title styleMarcellus PA Production Growth
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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
MM
cf/d
DTI Transco TETCO TCO Other TGPL
Oct. 2008 Legacy Production: 300 MMcf/d
Dec. 2011 Exceeds 5.0 Bcf/dMarcellus 4.7 Bcf/d
Click to edit Master title styleHow Big Is It?
500‐1,000 trillion cubic feet of Gas in Place
450,000 wells drilled in Appalachian basin over 150 years and have produced 47 TCF
Largest conventional gas field in US – Hugoton 81 TCF
100‐150 trillion cubic feet recoverable reserves under existing technology
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Economic Growth
Click to edit Master title stylePA Dept of Labor & Industry as of August 2011
218,200 employees in Marcellus and related industries
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72,000 hires since 4th Quarter 2009
12,700 new hires in 1st Quarter 2011
7 in 10 hires are from Pennsylvania
Click to edit Master title stylePenn State Summer 2011 Study
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2010 2011 2020
Economic Value Added $11.2 billion $12.8 billion $20.2 billion
State/Local Taxes $1.09 billion $1.23 billion $2 billion
Cumulative Employment 139,889 156,695 256,420
Wells Spudded 1,405 2,300 2,497
Output (bcfe/day) 1.3 3.5 17.5
Click to edit Master title styleGeneral Estimates for Cabot
Cabot generally states that we support more than 200 employees in Susquehanna County and the majority are (70%+) are from the local area.
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Cabot has invested close to $1.5 billion into Susquehanna County and the local community.
Click to edit Master title styleCabot Oil & Gas Corporation
Cabot Marcellus Operations
Click to edit Master title styleCabot’s Snapshot
NYSE: COG
Shares Outstanding • 208 Million
Market Capitalization • $7.5 Billion
Debt outstanding • $1.0 Billion
Enterprise Value • $8.5 Billion
3 Plays
Marcellus – Dry Gas 5 Rigs
Marmaton – Oil 1 Rig
Eagle Ford – Oil 1 Rig
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Click to edit Master title styleNorth Region – Marcellus Area Location Map
CABOTSusquehanna County area
PITTSBURGH
CHARLESTON
Montrose
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Click to edit Master title styleMarcellus Thickness Map – 2005
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DEVONIAN OUTCROP
STEUBE N COUNTY
GREENE CO
ALBANYSCHOHARIE
SCHENECTADY
FULTON SARATOGA
DUCH
ULSTER
ORANGEPUT
WESTC
ROCKLAND
BRONX
BROOKLYN
NEW YORK CITY
RICHMOND
MANHATTAN
CAYUGA
MADISON
CORTLAND
CHENANGO
ONONDAGA
TIOGA
BROOME
TOMPKINS
OTSEGO
DELAWARE
ERIE WYOMING
LIVINGSTON
ALLEGANYCATTARAUGUS
ONTARIO
CHAUTAUQUA
NIAGARA
MONROE WAYNE
HERKIMER
YATES
STEUBEN
MONTGOMERY
BRADFORD SUSQUEHANNA WAYNE
CHAUTAUQUA
FAYETTE
GREENE
JEFFERSON
FOREST
WESTMORELAND
INDIANA
MERCER
LAWRENCE
BEAVER
ALLEGHENY
WASHINGTON
BUTLER
ARMSTRONG
CLARION
CRAWFORD
ERIE
VENANGO
WARREN
CAMBRIABLAIR
SOMERSET BEDFORD
CLEARFIELD
FULTON
JUNIATA
PERRY
POTTER
MC KEAN
ELK CAMERON
TIOGA
YORK
F
NORTHAMPTON
DAUPHIN
LEBANON
NORTHUMBERLAND
LACKAWANNA
CARBON
LUZERNE
DELAWARE
MIFFLIN
HUNTINGDON
CLINTON LYCOMING
MONROE
PIKE
WYOMINGSULLIVAN
COLUMBIAMONTOUR
UNIONCENTRE
SNYDER
CUMBERLAND
FRANKLIN
ADAMS
BERKS
BUCKS
LANCASTER
CHESTER
MONTGOMERY
SCHUYLKILL
LEHIGH
PHILADELPHIA
SULLIVAN
CHEMUNG
CAYUGASENECA
SCH
UYL
ER
116
138
14693
971009592888690
96
132
230
137
145
97
100
150
84
156
88
142
45
162
206
197
208200212
194161 196
43
47
42
60
26
18
6
7271
62
110
170
180162
153148145
138
88
125
108118
113116
133
12386
78
89121
38
21
25
4024
90
55
105150 83
112
50
22
10580
75
88100113
15060
6257
60 60
27
10
60
55
56
50
48
80
44
5442
64 77
152
152
168
151
174159
113
110100
99
34
15
4423
42
53
41
3344
143
130
155
85
169
195
341
207
0 10 20 30 mi
DEVONIAN OUTCROPDEVONIAN OUTCROP
PA
CABOTPROSPECT AREA
CABOTPROSPECT AREA
NY
30 miles
Play DiscoveryPlay Discovery
Click to edit Master title styleSusquehanna Prospect – 2006
4000’
Discovery Well Permit #7
6th well in county1st well in 34 years
Discovery Well Permit #7
6th well in county1st well in 34 years
Teel #1Max flow rate 7 Mmcf(flow rate to atmosphere)
TENNESSEE PIPELINE
2006 Total Leasehold19,500 Net Acres
$31 per acre
2006 Total Leasehold19,500 Net Acres
$31 per acre
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~180,000 acres
Marcellus ShaleGross Isopach
CI: 50 ft
Field Production: 600 MMCF/D
Wells Producing: 118 H, 37V
WOPL: 9 wells (120 Stages)
Completing: 7 wells (119 Stages)
WOC: 22 wells (278 Stages)
Horizontal Rigs: 5
RUSH
HOP BOTTOM
BROOKLYN
SPRINGVILLE
MIDDLETOWN
MONTROSE
NEW MILFORD
HARFORD
NEW MILFORD
JACKSON
JESSUP
LATHROPCLIF
DIMOCK
FOREST LAKE
AUBURN
BRIDGEWATER
LENOX
GIBSON
LEMON
NICHOLSONMESHOPPEN
MESHOPPEN
NICHOLSON
WASHINGTON
BENTON
GREENFIELD
ZONE 2ZONE 3
ZONE 1ZONE 4
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Marcellus Summary
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Best Practices
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Flowback = 15% of water returned to surface to Frac tanks. Flowback water hauled to recycle center – pumped into mobile treatment facility and returned to clean Frac tank for next job.
Disposal = None – 100% of Flowback water is recycled.
Drilling = Cabot utilizes closed loop drilling system – No open pits 100% of drilling location is cover by $20,000 tarps.
Additives = Cabot has always supported full disclosure of additives
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Infrastructure and Market
Click to edit Master title stylePipeline Capacity
Up to 650,000 Dth/d to TranscoUp to 250,000 Dth/d to Millennium
Up to 600,000 Dth/d to TGP 300 Line
Up to 500,000 Dth/d to Iroquois/TGP 200 Line (March 2015)
2 Bcf/d of Market Opportunity on Five Interstate Pipelines!
Total Capacity Summary
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Click to edit Master title styleMarkets
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TGP 200 Line
TGP 300 Line
TransCanada
Boston
NYVT NH
PA
NJ
CT
MA
RI
Long Island
HartfordMillennium
Transco
Susquehanna Cty
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Decision making for the long-termWWW.CABOTOG.COM NYSE: COG
Cabot Oil & Gas Corporation
Thank You!