Cabot Oil & Gas Corp. has again curtailed natural production volumes that averaged 372 MMcf/d through the last two weeks of September as it continues to weather weak Appalachian prices.
Shut-in volumes have grown to average 450 MMcfe/d since Oct. 1 in anticipation of better prices soon. Cabot has lowered full-year production guidance to 2.300-2.350 Bcfe/d from previous range of 2.350-2.375 Bcfe/d. The 2020 capital program is unchanged at $575 million.
“While natural gas prices across North America currently remain challenged due to lower seasonal demand during the shoulder season and storage levels that are nearing capacity, we remain optimistic about the improving natural gas supply and demand outlook heading into 2021, which has resulted in a significant increase in the 2021 natural gas price futures since late July,” CEO Dan Dinges said.
Despite the third quarter curtailments, Cabot estimated that it produced about 2.4 Bcfe/d, in line with guidance. The company is scheduled to report 3Q2020 earnings on Oct. 29.
Cabot was also forced to curtail volumes in 2Q2020. While gas production has wavered across the country amid a supply glut and weak demand caused by the Covid-19 pandemic, the bulk of volumes have been cut in the Northeast. Appalachian pure-play EQT Corp., the Lower 48’s largest gas producer, cut about 425 MMcf/d of production in September, only two months after it brought back more than 1 Bcfe/d of curtailments.
Cabot, which operates only in Susquehanna County, PA, said it expects average third quarter realized gas prices of $1.57/Mcf, including the impact of derivatives. That would be down from $2.11 realized in 3Q2019.
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