Cabot Oil & Gas Corp. is backing out of the Rockies to focus on Appalachia and the Midcontinent.

The Houston-based company recently sold all its assets in Wyoming, Colorado and Utah for $285 million to an undisclosed buyer, the company said Wednesday. The sale includes 170 Bcfe in proved reserves and 27 MMcfe/d of new production and becomes effective in September with a closing date expected in early October.

Cabot CEO Dan O. Dinges said, “When the opportunity arose to monetize and effectively accelerate the cash flows from these assets, we agreed with the thought to redeploy nonvalued capital into our Marcellus activity and our oil initiatives.”

In the second quarter Cabot saw production increase enough to offset sluggish prices (see Shale Daily, April 29). The company earned $54.7 million (53 cents/share) in the second quarter, compared with $21.7 million (21 cents/share) in the second quarter of 2010.

“We see the sale as a modest positive as the company will be able to redeploy proceeds to high-return projects in the Marcellus while potentially reducing operating costs. Cabot has not allocated capital to [its Rockies] assets since early 2009,” Canaccord Genuity Energy Research said in a research note.

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