Cabot Sells Legacy Conventional Midcon Properties For $123 Million

To buy legacy conventional Midcontinent assets with production of 15 Mmcfe/d and 94% gas.

Cabot Oil & Gas Corp. is continuing its string of selling non-core properties, letting go of its legacy conventional Midcontinent assets for $123 million, the company announced Dec. 9.

Cabot recently entered into a purchase and sale agreement with an undisclosed buyer to sell certain legacy conventional oil and gas properties located in the Midcontinent. Current production from these properties is 15 million cubic feet equivalent per day (MMcfe/d) with 94% gas.

"To date we have announced approximately $325 million of non-core asset sales, with proceeds being reinvested into our higher-return projects through the drill-bit and through share repurchases at prices materially below our intrinsic value," Dan O. Dinges, chairman, president and CEO, said in the release.

Cabot announced on Oct. 17 that it had sold its assets in Oklahoma and Texas for $160.1 million to Chaparral Energy and its West Texas legacy conventional properties to an undisclosed buyer for $28 million. The assets include current production of 260 barrels of oil equivalent per day (BOE/d) and proved reserves of 1.5 MMBOE, as of 2012 year-end.

The company plans to use proceeds from the previously announced Marmaton and West Texas divestitures to fund share repurchases. During the fourth quarter, the company has repurchased some 4.8 million shares, representing 25% of the 19.2 million shares authorized under its current share repurchase program.

Evercore acted as financial advisor to Cabot for its Midcontinent transaction. This transaction is expected to close by year-end 2013.

Cabot is an independent energy company with core assets in the Marcellus and Eagle Ford. The company is headquartered in Houston.