Cabot Oil & Gas Corp. is forecasting a slight decline in sequential production during the third quarter and weaker realized prices, but management still expects growth as the company exits the year and heads into 2018, when more takeaway capacity could help to double its Marcellus Shale production.

“Our Marcellus price expectations and realizations remained strong during the second quarter, increasing approximately 50% year-over-year,” said CEO Dan Dinges during a call on Friday to discuss the period’s results. “While we are forecasting a slight widening of basis during the third quarter based on the current strip, we anticipate that fourth quarter differentials will revert back to levels similar to the first quarter of this year before significantly improving in the first quarter of 2018.”

That improvement, Dinges said, is expected to result from the 6 Bcf/d of takeaway projects that are scheduled to come online throughout the Appalachian Basin between now and the end of 1Q2018. Cabot, which has volumes secured on Tennessee Gas Pipeline Co. LLC’s Orion project, moved up its expected in-service date for the expansion to December from a previous estimate of June 2018. It also still expects the Atlantic Sunrise project to be in-service by mid-2018. Management said Pennsylvania regulators are putting the “finishing touches” on key water-crossing and earth disturbance permits.

Cabot also continues to wait for the 650 MMcf/d Constitution Pipeline, on which it has 500 MMcf/d contracted. New York denied the pipeline’s water quality certification last year. The project’s sponsors continue to wait for a decision about their challenge from the U.S. Court of Appeals for the Second Circuit, which is expected sometime in the third quarter, Dinges said. He added that the company continues to closely watch similar cases involving New York’s regulatory decisions that are before the court and the Federal Energy Regulatory Commission involving National Fuel Gas Co. subsidiaries and Millennium Pipeline Co. LLC.

Cabot produced 173.1 Bcfe in the second quarter, up from 151.8 Bcfe in the year-ago period, but relatively flat compared to 1Q2017 when the company produced 170.1 Bcfe. The company only brought online six Marcellus wells during the quarter as it had planned. Eagle Ford Shale oil production was held back by longer than expected cleanup times for longer lateral wells.

Dinges said a mechanical issue at a third-party compressor station in the Marcellus that started in June is expected to persist in August, which could lead to a 3% sequential production decline in the third quarter. The company still anticipates meeting its full-year guidance of 8-12% production growth.

Dinges said the company would continue to execute on its Eagle Ford program in Texas, even as oil prices slide. He noted that Cabot’s capital allocation for the play is mostly committed to leasehold maintenance for the rest of the year.

“We have obviously experienced a weakening in the outlook for oil prices since our first quarter call, which puts pressure on all oil projects, including returns in the Eagle Ford, despite continued improvements in our operating efficiencies,” Dinges said. “As we begin formulating our plans for 2018, I want to reiterate that we plan to remain disciplined with our capital allocation. We’ve evaluated all of our opportunities and we continue to evaluate all of our opportunities.”

Earlier this year, Cabot announced that it had identified two exploratory areas that could eventually compete with its core acreage. Dinges said Friday one of those prospects is somewhere in Texas but he continued to withhold the second prospect’s location. The company is focused on oil in the exploratory areas in an effort to better diversify its portfolio. Cabot plans to drill five test wells in the prospects by the end of the year.

The company also announced that it has agreed to sell legacy oil and gas properties in West Virginia, Virginia and Ohio for $41.3 million to an undisclosed buyer. Cabot hasn’t allocated any capital to those assets since 2009. The acreage together has produced 38.8 MMcfe/d year-to-date, and the company plans to retain the deep rights across the acreage.

Natural gas price realizations improved significantly during the second quarter, up 36% from the year-ago period to $2.38/Mcf. Over the same time, oil price realizations increased 12% to $44.96/bbl. Higher prices helped boost revenue to $460.5 million for the period from $246.8 million in 2Q2016.

Cabot reported net income of $21.5 million (5 cents/share) for the second quarter, compared with a net loss of $62.9 million (minus 14 cents) in the year-ago period.