Cabot Energy Regulatory News (CAB)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

Cabot Energy Plc

("Cabot Energy", the "Group" or the "Company")

Operational update

Cabot Energy (AIM: CAB), the AIM quoted oil and gas company focused on production led growth balanced with high impact exploration and appraisal opportunities, provides an update on the Company's operations during 2018, including the Canadian winter drilling programme.

Highlights

Group production

▪ The Company's Canadian oil production in April has averaged approximately 950 barrels of oil per day ("bopd")

- additional 200 bopd expected to be on production during Q2

▪ Production for the first quarter averaged 725 bopd

- base production for most of the quarter was reduced by approximately 130 bopd due to the Company's internal pipeline inspection programme ("ILI Programme") and the temporary loss of a high rate well due to casing issues

▪ Production from the first two sidetrack wells drilled in 2017 still producing at approximately 180 bopd combined

▪ Company remains on track to meet full year exit production rate of 1,600 - 2,000 bopd and average production guidance of 1,000 - 1,200 bopd

Canadian winter work programme

▪ Four successful sidetrack wells drilled, tied in to the Company's facilities and now on production at a combined rate of 450 bopd

- the original wells were producing at a combined rate of 30 bopd prior to drilling

▪ Well test of previously suspended well, 03-02, gave a test production rate of 200 bopd and is expected to produce initially at 100 bopd, following tie in, to best manage long term reservoir production

▪ Second export route to market established following pipeline tie-in work from the 13-06 facility

▪ Completion of comprehensive ILI Programme

▪ Workover of four existing wells to bring them back on production

▪ Preparation work underway for resumption of sweet gas production of approximately 130 barrels of oil equivalent per day ("boepd") from the Bluesky formation

Southern Adriatic marine monitoring programme

▪ The Company completed a 60 day marine mammal monitoring programme in the southern Adriatic, offshore southern Italy

▪ Data to be submitted to and reviewed by the Italian regulator in advance of a planned 3D seismic acquisition programme across the Giove oil discovery and Cygnus exploration prospect

Keith Bush, Chief Executive Officer of Cabot Energy, commented:

"The results of the drilling programme have been excellent and are testament to the technical work performed by the team. The new wells demonstrate the Company's strategy of core value growth through increasing production from the existing asset base in Canada.

"With each additional well drilled, the interpretation of the available data improves, allowing for future opportunities to be effectively optimised. The lessons learned in the winter programme will be taken forward to ensure that the summer work programme provides similarly successful wells.

"These activities will allow the Company to achieve the planned production growth and provide a strong platform for further development into 2019 and beyond."

Production

Production during April has averaged approximately 950 bopd. An additional 100 bopd is currently shut in due to pump repair work and production optimisation on two wells and the replacement of a pipeline section identified by the ILI Programme. These issues are expected to be remedied during the second quarter of this year. The 03-02 well, tested and recompleted as described below, is expected to produce later in April at an initial rate of 100 bopd.

Production during the first quarter, which averaged 725 bopd, was reduced by the ILI Programme and the temporary halt in production of a high rate well which required a casing repair. These items accounted for a loss of approximately 130 bopd of production, all of which should return by the end of the second quarter.

The annual spring thaw is now beginning and usually continues through to the end of May. During this period, restricted trucking from the wells not directly tied into any of the production facilities is likely to reduce production from these wells.

The Company remains on track to meet its full year exit production rate of 1,600 - 2,000 bopd and average production guidance of 1,000 - 1,200 bopd.

Canadian winter work programme

Sidetrack wells

The winter drilling campaign of four sidetrack wells in the Rainbow area of north west Alberta ("Rainbow") was completed by the third week in March, ahead of schedule. The sidetracks were drilled from existing wells into Keg River carbonate reefs, targeting high porosity sections of the reef with the use of 3D seismic attribute analysis.

The original vertical well bores were abandoned below the new kick off point and the sidetrack well was then drilled as a highly deviated section, averaging a further 270 metres in length. Results from each well showed strong correlation to the seismic attribute work, providing support to the Company's view that 3D seismic can be used to identify opportunities in existing reefs. The wells were completed open hole in the reservoir and all four wells have been put on long term production with pumps. The original wells were tied in to the Company's 13-36 facility and the sidetracks have now been equipped and tied in using the same export route.

The original wells were producing at a combined production rate of 30 bopd and all four sidetracks are now producing at a combined rate of 450 bopd. Three of the four wells encountered high porosity units within the reefs and are now each producing at an average 135 bopd, and the fourth well drilled a reef that had lower porosity overall, but still penetrated the higher porosity section in that reef as expected and is averaging approximately 45 bopd. These results will be integrated into the summer drilling programme starting in Q3 of 2018.

The wells were drilled, completed, equipped and tied in at an average cost of approximately US$1.4 million per well, which included approximately US$0.2 million of original well bore abandonment cost.

Other activity

The subsurface work programme conducted during 2017 identified a restart opportunity from a suspended well, 03-02. This well was re-entered early in 2018 and tested to establish potential production rates. During the well test production from the well reached 200 bopd at a 50 per cent. water cut. As a result, the well has been recompleted and is currently being tied-in to the Company's 13-36 facilities. The performance of this well shows that while the majority of future value from the Rainbow asset will be realised through drilling operations, there are still well re-entry opportunities that can add material production.

During the first three months of 2018, capital continued to be invested in the Rainbow infrastructure. The Group's facilities in Rainbow were originally acquired in 2016 when production totalled less than 150 bopd. Since then more wells and pipelines have been brought back into production and a programme of infrastructure upgrades and maintenance has been instigated. With much larger volumes of production planned to be processed through the facilities, proactive infrastructure upgrades and preventative maintenance are key to minimising production downtime and maximising production efficiency.

The Group began internal inspection of its pipelines in 2017, deploying sensor tools to measure the thickness and condition of the pipelines. This programme completed in March 2018 and resulted in one three kilometre section of pipeline being shut in due to a reduction in pipeline wall thickness greater than the Company's acceptable limit. The pipeline is planned to be replaced in the second quarter of this year, with approximately 40 bopd deferred until this work is completed. One further line requires minor repairs, which will be completed during 2018, and all other lines passed their inspection tests.

Workover activity on four wells was undertaken alongside the drilling campaign. The work included changing out broken rods and remedying a casing issue on a high rate production well.

The Company commenced work on restoring approximately 130 boepd of sweet Bluesky gas production that was shut in during 2012 due to the loss of an export route. An alternative route to market has now been developed requiring some minor pipeline re-configuration work and the restoration of well and compression facilities. All work requiring winter access has now been completed with only summer pipeline tie-in work and commissioning remaining. The company expects to have this gas production online during Q3 2018.

Southern Adriatic marine monitoring programme

The Company undertook a 60 day marine mammal monitoring programme, which is an Italian regulatory requirement prior to acquiring seismic offshore. The data is being analysed and will be submitted to the Ministry of Environment in Italy to obtain final approval to acquire 3D seismic. Subject to the timing of receiving approval the 3D seismic campaign is planned for the end of 2018.

The 3D seismic programme is designed to delineate the Giove oil discovery and the Cygnus exploration prospect, which are currently assessed to contain 26 million barrels of contingent resource and 446 million barrels of mean prospective resource respectively by ERC Equipoise Limited, the independent reserves engineers.

The 3D seismic will assist in the positioning of an appraisal well on Giove, which is the final hurdle to completing the design of a development programme on the discovery. On current 2D seismic data, there is no indication of a closure between the Cygnus oil prospect and the nearby producing Aquila oil field. 3D seismic will provide further understanding of the possible link between Aquila and Cygnus, the structure of the prospect and help locate an exploration well.

The acquisition of onshore production and development assets in Italy from Rockhopper Exploration Plc is still awaiting Italian regulatory approval.

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In Accordance with AIM Rules - Guidance for Mining and Oil & Gas Companies, the information contained in this announcement has been reviewed and signed off by the CEO of Cabot Energy, Mr Keith Bush, who has 26 years' experience as a petroleum engineer. He has read and approved the technical disclosure in this regulatory announcement. The technical disclosure in this announcement complies with the SPE standard.

 Note to Editors:

Cabot Energy is an oil and gas company focused on production led growth. The Company is undertaking a redevelopment and production project in north west Alberta (where it owns a 100 per cent. interest in the Rainbow and Virgo assets) and has a broader portfolio of exploration and appraisal opportunities in countries of relatively low political risk, primarily Italy. Comprehensive information on Cabot Energy and its oil and gas operations, including press releases, annual reports and interim reports are available from Cabot Energy's website: www.cabot-energy.com