Cabot Oil & Gas - COG - Announces Pearsall Joint Venture

Cabot Oil & Gas (NYSE: COG) announced the Company has signed a definitive agreement with a wholly-owned U.S. subsidiary of Osaka Gas Co., Ltd. for the sale of a 35 percent non-operated working interest in the Pearsall Shale in approximately 50,000 net acres leased by the Company in Atascosa, Frio, La Salle and Zavala counties of Texas for a total price of $250 million. Closing of the transaction, including the joint venture agreement, is anticipated to occur on June 26, 2012. Under the agreement Osaka will pay $125 million in cash to Cabot at closing and will pay an additional $125 million to carry 85 percent of Cabot's share of future drilling costs ("drilling carry") in the Pearsall Shale. The drilling carry is expected to be fully utilized by year-end 2013 based on current drilling plans. Initial plans call for two rigs to operate under the JV with drilling commencing in July 2012. A third rig will be added to the drilling program during 2013 and a fourth rig will be added in 2014. Cabot will retain its lease rights above the Pearsall, including the Eagle Ford Shale formation.



Dan O. Dinges, Cabot's Chairman, President and Chief Executive Officer, commented, "We are excited to partner with Osaka, one of Japan's leading energy companies, in developing our leasehold in the Pearsall Shale. We believe the Pearsall Shale could prove to be an additional liquids-rich catalyst in our portfolio and are pleased with the results we have seen to date--both internally and from neighboring peers. This transaction will provide the capital necessary to accelerate drilling of this formation, while still maintaining Cabot's 100 percent interest in our Eagle Ford leasehold."



About Cabot Oil & Gas Corporation - COG



Cabot Oil & Gas Corporation (COG), headquartered in Houston, Texas is a leading independent natural gas producer with its entire resource base located in the continental United States.



COG is an independent oil and gas company engaged in the development, exploitation and exploration of oil and gas properties exclusively in the continental United States. As of December 31, 2011 the Company had approximately 3,033 Bcfe of total proved reserves. Cabot continues to refine its operating focus, narrowing its natural gas development effort to the Marcellus shale in northeast Pennsylvania and its oil development effort to the Eagle Ford shale in South Texas and the Marmaton, in the Oklahoma and Texas Panhandle. Approximately 96% of Cabot’s reserves and 95% of Cabot’s production is natural gas. Cabot, a mid-sized independent, trades on the New York Stock Exchange under the ticker “COG” and is a member of the S&P 500 Index.