With additional transport capacity added this quarter and with Marcellus gas flowing readily from its wells in Pennsylvania, Cabot Oil & Gas Corp. adjusted its 2013 production growth guidance from a low of 44% to the 50-55% range on Thursday.

In a financial and operational update, CEO Dan Dinges noted that this week marks one year since Cabot surpassed the 1 Bcf/d milestone in the Marcellus, adding that gross production in 2013 hit a record high of 1.5 Bcf/d for a 50% year-over-year increase.

The company also said Thursday that it had locked in free cash flow by securing 55 natural gas hedge contracts for 2014 with volumes of 970 MMcf/d protected from any dip in prices at a weighted average floor of $4.12/Mcf. That along with an uptick in transport capacity had financial analysts raising their earnings estimates for Cabot through 2015.

With current price projections looking up, Garbriele Sorbara, vice president of E&P research at Topeka Capital Markets, said in a research note that Cabot will likely come in near the top of its production growth guidance next year, which the company has already forecast to be up 30-50% from 2013 (see Shale Daily, Oct. 25).

“Given the recent uptick in the natural gas strip for 2014, we have opportunistically added these hedge contracts to protect downside risk and lock in pricing that provides best-in-class rates of return,” Dinges said. “Additionally, these hedging initiatives, combined with our continued marketing efforts, mitigate a portion of potential summer pricing volatility.”

Cabot remains a street favorite in the Marcellus. Earlier this month, it announced stellar results at a 10-well pad there, billing the technology it used as a new standard moving forward in the play (see Shale Daily, Dec. 9). The company plans to spend more than $1 billion on capital expenditures next year, while it also continues to divest noncore acreage to focus on the Marcellus and tidy-up its balance sheet.

During the fourth quarter, Cabot added 280 MMcf/d of transport capacity, and it revealed on Thursday that it has executed a definitive agreement with Pacific Summit Energy LLC to sell 350,000 MMBtu/d of natural gas from the Marcellus for a term of 20 years when the Dominion Cove Point LNG liquefaction project is in service in 2017.

Summit Energy is a subsidiary of the Japanese trading and investment firm Sumitomo Corp. In September, Cove Point was given approval to export liquefied natural gas (see Daily GPI, Sept. 12).

“We are extremely excited to be partnering with Sumitomo to provide a long-term source of natural gas to the Cove Point LNG facility and ultimately to the people of Japan,” Dinges said. “This long-term firm sales agreement is another milestone for Cabot’s marketing efforts and ensures the continuing development of our Marcellus Shale position in Northeast Pennsylvania for years to come.”

Dinges added that the company will continue to focus on adding to its portfolio of transport contracts and long-term sales agreements “with the focus on improving our netbacks and flexibility.”