From the Marcellus Drilling News:

Energy analyst and Seeking Alpha blogger Richard Zeits listened in to the recent Cabot Oil & Gas investor’s conference call and came away with some mind-blowing numbers. The bottom line from the call and from Zeits’ analysis is that Cabot has indeed found a “super-productive” location in Susquehanna County, PA where they own leases on about 200,000 acres. New wells they’ve recently drilled prove that all of their acreage is in this sweet spot.

One startling find by Zeits: A well drilled by Cabot in Susquehanna County has, in just 667 days, produced a cumulative 8 billion cubic feet of natural gas–a single well! That equates to an average of 12 million cubic feet of natural gas per day from that one well. Astonishing. (No wonder Southwestern just picked up an additional 51,000 acres from Chesapeake in Susquehanna County earlier this week, for an average of $574 per acre. Chesapeake was taken to the cleaners).

Here’s some of Zeits’ analysis of the Cabot call, with lots of facts and figures:

Marcellus Results Continue Strong

Recent step-out test results continue to validate Cabot’s view that the super-productive sweet spot in Susquehanna extends all the way to the eastern flank of the company’s acreage. During the first quarter, Cabot turned in-line two wells located approximately three miles to the east of its Zick pad, representing about a ten mile step-out from its initial area of development (the map below). The initial production rates for these two wells were 16.3 MMcf/d from 9 frac stages and 22.2 MMcf/d from 17 frac stages. This equates to IP rates of 1.8 MMcf/d and 1.3 MMcf/d per stage, respectively, which is in line with better well results seen on the western flank of Cabot’s acreage where the majority of drilling activity has been concentrated so far.

The new data point is in-line with the very strong production data from the Zick Pad and early flow test results from the Reilly Pad (which is located at the eastern edge of Cabot’s leasehold and does not have gathering pipeline access yet – expected in service during the third quarter).

While the northern and southern portions of the acreage still need delineation in my opinion, production evidence is building up to prove that a very significant part of Cabot’s 200,000-acre land position in Susquehanna is indeed “super-productive.” (Cabot has indicated that the northwestern part of its acreage, which represents approximately 10% of the total, may be somewhat less prolific as the Marcellus is thinner in that area at ~250 feet compared to ~350 feet in the “core” of the acreage).

Cabot’s wells continue to impress. On the conference call the company mentioned a well which has reach 8 Bcf of cumulative production during its first 667 days, which equates to 12 MMcf/d on average over almost two years. My guess, the well is the King 2 which I now estimate has 25+ Bcf EUR Potential (see the list at the end of the note). Noteworthy is the relatively shallow flow rate decline: the well appears to be flowing at ~6 MMcf/d, in my estimate, after almost two years, which may indicate that pressure levels have been sustained at a good level. Another two wells have reached 3 Bcf and 6 Bcf of cumulative production in only 88 days and 270 days, respectively. My guess, those wells are the T Flower 2 and the A Heitzenroder 3, also shown on the list at the end of the note. My EUR Potential estimates for those two wells may also need an upward revision – 30+ Bcf EURs for those two wells certainly cannot be ruled out at this point.*

Click the link below to continue reading Zeits’ fantastic analysis of Cabot’s NE PA Marcellus “super-productive” operation in Susquehanna County, PA.

*Seeking Alpha/Richard Zeits (Apr 29, 2013) – Cabot Oil & Gas: ‘Quiet’ Press Release Conceals Catalysts