Cabot Plans $585 Million Capital Budget In 2010, Most For PA Marcellus Shale Drilling

Cabot Oil & Gas plans to expand its drilling in the Marcellus Shale in 2010. The company has 180,000 net acres in Susquehanna County, Pennsylvania. In 2009, the company drilled 56 wells, 33 horizontal and 23 vertical. In 2010, the company will drill 83 wells, 73 horizontal and 10 vertical.

The company will also increase the efficiency of its drilling in an attempt to lower its cost structure. This includes drilling six horizontal wells per pad, in 2010, up from two per pad in 2009. The company will also drill laterals as long as 5000 feet using up to 12 fracturing stages compared to 3000-foot laterals and 9 fracturing stages in previous years.

Cabot Oil and Gas has set its 2010 capital budget at $585 million. Although this is flat with 2009, the company will be allocating 69 percent of this capital to its northern region, which encompasses the Marcellus Shale.