6 Dec 2018 07:00
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. With the publication of this announcement, this information is now considered to be in the public domain.
6 December 2018
Cabot Energy Plc
("Cabot Energy" or the "Company")
Update on Alberta production and Edmonton oil price
Cabot Energy (AIM: CAB), the AIM quoted oil and gas company creating predictable production growth in Canada balanced with high impact exploration in Italy, notes the planned oil production cutbacks by the Alberta government and is pleased to confirm that these do not affect the Company's current level of oil production where netbacks remain positive compared to operating and development costs.
On 2 December 2018, the Alberta government announced its intention to begin a mandated short-term reduction of oil production by 325,000bbl/d, representing an 8.7 per cent reduction, until excess oil in storage is drawn down. The cuts, which are due to begin on 1 January 2019, will not impact Cabot Energy due to an exemption each producer receives for their first 10,000bbl/d of production.
Research published by Macquarie Capital Markets ("Macquarie") on 3 December 2018 estimates that the restriction on Alberta oil production should lead to a rapid narrowing of the West Texas Intermediate ("WTI") - Edmonton spread, tightening by US$5-10/bbl from the current US$20-25/bbl range.
Whilst the exact impact and timing of the spread tightening estimated in the Macquarie report is difficult to quantify, the Alberta mandated short-term reduction of oil production is expected to accelerate the return of the WTI-Edmonton benchmark price differential from the current divergence to normal levels. This, in turn, is expected to lead to an improvement in the average sale price per barrel of oil received by the Company.
Enquiries:
Cabot Energy Plc | +44 (0)20 7469 2900 |
Scott Aitken, CEO Petro Mychalkiw, CFO |
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SP Angel Corporate Finance LLP | +44 (0)20 3470 0470 |
Nominated Adviser and Joint Broker |
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Richard Morrison, Richard Hail, Richard Redmayne |
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GMP FirstEnergy | +44 (0)20 7448 0200 |
Joint Broker |
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Jonathan Wright, David van Erp |
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Luther Pendragon | +44 (0)20 7618 9100 |
Financial PR |
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Harry Chathli, Alexis Gore, Joe Quinlan |
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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 CTO of Cabot Energy, Mr Campbell Airlie, who has over 35 years' experience as a petroleum engineer, and is supported by the Cabot Energy Board of Directors. 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 (AIM: CAB) is an oil and gas company creating predictable production growth in Canada balanced with high impact exploration in 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