Cabot

Cabot Oil & Gas Corp. has plans to stay flexible this year amid an uncertain commodity price environment that’s further complicated by a lack of clarity about when some of the company’s key infrastructure projects will come online to serve bottlenecked Marcellus Shale production in Northeast Pennsylvania.

Cabot Oil & Gas Corp. will sharply cut its 2016 capital budget in response to the commodities downturn, electing to preserve its cash flow, await more takeaway capacity in the Appalachian Basin and run one rig company-wide, the company said Tuesday.

A sample of six Marcellus Shale operators taken by Fitch Ratings shows, not surprisingly, that weak realized natural gas prices related to an ongoing supply glut in the Northeast could further inhibit production growth in the play next year.

Construction that was soon expected to begin with a late 2016 target in-service date for the Constitution Pipeline — a crucial linchpin for plans to unlock stranded natural gas in Northeast Pennsylvania — appears increasingly unlikely as New York regulators continue holding up the project.

Cabot Oil & Gas Corp.’s production fell considerably between the first and second quarters, as low commodity prices prompted it to curtail 500 MMcf/d of gross natural gas volumes in the Northeast.

Cabot Oil & Gas Corp. said low commodity prices for oil and natural gas are forcing it to trim more than $600 million from its capital expenditures (capex) budget for 2015, and it plans to cut four rigs deployed in the Marcellus and Eagle Ford shales by the second quarter.

Despite admitting that 2015 could be one of the toughest years yet for oil and gas prices, Cabot Oil & Gas Corp. management on Friday reaffirmed the company’s plans to grow annual production by 20-30%, with a drilling program that could eventually lean more heavily on the Eagle Ford Shale of South Texas.

The Pennsylvania Department of Environmental Protection (DEP) has levied a $76,546 fine against Cabot Oil & Gas Corp. for an incident at a natural gas well in Susquehanna County in January, DEP said.

Despite falling slightly short of its expectations in the Marcellus Shale, Cabot Oil & Gas Corp. continued making the kind of progress in the Eagle Ford Shale that surprised financial analysts and helped it to surpass their expectations for second quarter earnings and production.