Cabot Releases Earnings and Updates Marcellus Activity

First to Market Marcellus Shale Gas in Northeast PA

Cabot currently has three rigs drilling (two vertical, one horizontal) on its approximately 120,000-acre block in Susquehanna County, northeast Pennsylvania. To date, the Company has drilled eight vertical wells with four wells completed. Three additional wells have been drilled to a horizontal kick-off point currently ahead of a larger rig. Pipeline construction is ongoing with first production occurring today. This production will represent the first Marcellus production ever in northeast Pennsylvania. "It is Cabot's plan to continue to expand its pipeline infrastructure, test our first horizontal Marcellus well and expand our operation from a current three-rig program to an eight-rig program in 2009," commented Dinges. "The first phase of our infrastructure investment has been to build ten miles of pipeline, set compression and tap the interstate line. With the next phase that will be added in 2009, Cabot will add another 57 miles of pipeline."

Operations Update at http://phx.corporate-ir.net/phoenix.zhtml?c=116492&p=irol-newsArticle&ID=1179212&highlight=

Earnings Report at http://phx.corporate-ir.net/phoenix.zhtml?c=116492&p=irol-newsArticle&ID=1179213&highlight=

Range Revelations

On the Range Resources Q2 earnings conference call today, management revealed some additional information regarding development of the Marcellus.

In an update given earlier this month it was stated that the last 10 wells came in at 4.2 mmcf/d but today it was noted that the subsequent 7 wells averaged 4.9 mmcf/d.

The company has secured takeaway capacity with multiple transmission companies for a total of 150 mmcf/d and is seeking to double that amount. Pinkerton noted that 6 of the 8 largest US transmission lines run right through Range's acreage in the play. He also said that a lot of people with a lot of money are getting involved in developing gathering and midstream assets so he doesn't view that a constraint.

As well, Range now has four separate agreements in place which will satisfy their water source and disposal needs for the next few years.

Rig count in the play will increase to around 8 by the end of 2009 including 2 fit for purpose rigs now being built. Expected completions by then should ramp to 80-100. "Where can it go? Can it get to 20, 30, 40 rigs? Yes, certainly, over time"

No decline data was released but it was noted that several vertical wells have been on line for two years or more and a number of horizontals for 1 year now. With the other 100 wells drilled including 22 horizontals, and other wells drilled by Atlas and Chesapeake, CEO John Pinkerton feels that there is a very strong geologic model which they will reveal probably around March once the bulk of the acreage has been acquired.

Shareholders will be pleasantly surprised when more technical data is released at that time.

Earnings release at http://www.b2i.us/profiles/investor/ResLibraryView.asp?BzID=790&ResLibraryID=25428&Category=1261

New York Streamlines Process for Marcellus Development

As anticipated, New York Gov. David Paterson this afternoon signed a bill that fast-tracks horizontal drilling in the state's Marcellus Shale, despite the opposition of environmental groups that claim the drilling technique could contaminate groundwater. Permit processing to take as little as twelve weeks.

Full Story at http://www.djnewsplus.com/article/DN-CO-20080723-017557.html?mod=J1&a=T+Wire&h=UPDATE%3A+NY+Gov+Signs+Bill+Updating+Oil%2C+Gas+Drilling+Law+

XTO Quietly Expanding in Marcellus

During yesterday's Q2 earnings conference call, XTO revealed having 280,000 acres in the Marcellus play. This is 128,000 acres higher than the previously reported 152,000 acres acquired from Linn in April. A good portion of the increase is probably attributable to the Deposit NY landowners group which at last count was negotiating with 37,000 acres though no final acreage amounts have been released.

In response to a question about water resource and infrastructure issues impacting development, President Keith Hutton noted that "Yes, there are going to be some issues with water handling and disposal and so forth" but that given the huge potential of the play, the industry would figure it out. He also said that because of the sheer size of the play the hotter areas will be more spread out and thus require a longer time for delivery infrastructure build out. "The Marcellus is a five year type game before it gets running real hard."

Full Transcript at http://seekingalpha.com/article/86362-xto-energy-inc-q2-2008-earnings-call-transcript?page=-1&find=marcellus

XTO Announces $1.68 Billion Stock Offering

At the close of trading today, XTO announced plans to sell 26 million shares of common stock to fund recent acquisitions in the nation's shale plays. The issuance would be 29.9 million shares with over allotments. Estimated proceeds assume yesterday's closing price of $57.98. In after hours trading, the stock is trading down $6.23 to $51.75. At this price, the anticipated proceeds would be over $185 million less.

Full Story at http://phx.corporate-ir.net/phoenix.zhtml?c=97780&p=irol-news

XTO Earnings - The Season Opener for E&P

XTO announced Q2 earnings this morning with a $.04 upside surprise. Expectations were $1.05/share on average with a range of $.95-$1.18. During the June quarter last year, XTO earned $.91. Revenues were up 45.7% over last year and gas production year over year were up 35%.

XTO also announced today that it has entered into definitive agreements with multiple parties to purchase producing properties located in its Eastern and San Juan Regions and acreage positions in the Marcellus, Fayetteville, Barnett, and Haynesville shales, for a total of about $1.3 billion, of which $1 billion closed during the second quarter.

In a separate release, XTO announced the acquisition of 12,900 acres in the Barnett for $800 million. The acreage is currently producing 35 mmcf/day. The seller was not disclosed.

Full Stories at http://phx.corporate-ir.net/phoenix.zhtml?c=97780&p=irol-news

Leasing Update

$3,000/acre Bonus Barrier Broken

Since the last report in late May, prices have risen throughout the play with the greatest percentage increases seen in southwestern PA. Prices for 5 year leases have cracked the $3,000 level in the northeast with reports up to $3,400 an acre while a few deals in the $2,700-$3,000 range have been made in PA's southwestern most Greene County. This is remarkable considering that two months ago, the highest reports in the area were in the $1,500 range with the average lease being under $1,000. It seems that the water issues in the Susquehanna basin and Range Resources' recent successes in Greene county are creating more interest there.

Between those hot spots, prices trend lower in more central PA as you head west and south. From $2,500 in Tioga to $1500 in Clearfield to $800 in Somerset counties.

West Virgina has seen increases in the northern part of the state in Preston and Tucker counties where bonuses have moved from the $350 to $450/acre area.

Royalties are following the bonus trends and have stayed fairly flat in the 12.5% to 18% range.