Exhibit 28.1
[Miller and Lents, Ltd. Letterhead]
February 4, 2000
Cabot Oil & Gas Corporation
1200 Enclave Parkway
Houston, Texas 77077-1607
Re: Reserves and Future Net Revenue
As of December 31, 1999
SEC Price Case
Gentlemen:
At your request, we reviewed the estimates of proved reserves of oil,
natural gas liquids, and gas and the future net revenues associated with these
reserves that Cabot Oil & Gas Corporation, hereinafter Cabot, attributes to its
net interests in oil and gas properties as of December 31, 1999. Cabot's
estimates, shown below, are in accordance with the definitions contained in
Securities and Exchange Commission Regulation S-X, Rule 4-10(a) as shown in the
Appendix.
Reserves and Future Net Revenue as of December 31, 1999
-------------------------------------------------------
Net Reserves Future Net Revenue
--------------------- ------------------------------
Discounted at
Liquids, Gas, Undiscounted, 10% Per Year,
Reserve Category MBbls. MMcf M$ M$
- --------------------------------------------------------------------------------
Proved Developed....... 5,546 720,670 1,278,934 598,092
Proved Undeveloped..... 2,644 208,932 336,014 139,726
----- ------- --------- -------
Total Proved........ 8,190 929,602 1,614,948 737,818
===== ======= ========= =======
We made independent estimates for all the proved reserves estimated by
Cabot. Based on our investigations and subject to the limitations described
hereinafter, it is our judgment that (1) Cabot has an effective system for
gathering data and documenting information required to estimate its proved
reserves and to project its future net revenues, (2) in making its estimates and
projections, Cabot used appropriate engineering, geologic, and evaluation
principles and techniques that are in accordance with practices generally
accepted in the petroleum industry, and (3) the results of those estimates and
projections are, in the aggregate, reasonable.
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All reserves discussed herein are located within the continental United
States. Gas volumes were estimated at the appropriate pressure base and
temperature base that are established for each well or field by the applicable
sales contract or regulatory body. Total gas reserves were obtained by summing
the reserves for all the individual properties and are therefore stated herein
at a mixed pressure base.
Cabot represents that the future net revenues reported herein were computed
based on prices being received for oil, natural gas liquids, and gas as of
Cabot's fiscal year end, December 31, 1999, and are in accordance with
Securities and Exchange Commission guidelines. The present value of future net
revenues was computed by discounting the future net revenues at 10 per cent per
annum. Estimates of future net revenues and the present value of future net
revenues are not intended and should not be interpreted to represent fair market
values for the estimated reserves.
In conducting our investigations, we reviewed the pertinent available
engineering, geological, and accounting information for each well or designated
property to satisfy ourselves that Cabot's estimates of reserves and future
production forecasts and economic projections are, in the aggregate, reasonable.
We independently selected a sampling of properties in each region and reviewed
the direct operating expenses and product prices used in the economic
projections.
In its estimates of proved reserves and future net revenues associated with
its proved reserves, Cabot has considered that a portion of its facilities
associated with the movement of its gas in the Appalachian Region to its markets
are unusual in that the construction and operation of these facilities are
highly dependent on its producing operations. Cabot has deemed the portion of
the cost of these facilities associated with its revenue interest gas as costs
that are attributable to its oil and gas producing activities, and accordingly,
has included these costs in its computation of the future net revenues
associated with its proved reserves.
Reserve estimates were based on decline curve extrapolations, material
balance calculations, volumetric calculations, analogies, or combinations of
these methods for each well, reservoir, or field. Reserve estimates from
volumetric calculations and from analogies are often less certain than reserve
estimates based on well performance obtained over a period during which a
substantial portion of the reserves were produced.
In making its projections, Cabot estimated yearly well abandonment costs
except where salvage values were assumed to offset these expenses. Costs for any
possible future environmental claims were not included. Cabot's estimates
include no adjustments for production prepayments, exchange agreements, gas
balancing, or similar arrangements. We were provided with no information
concerning these conditions, and we have made no investigations of these matters
as such was beyond the scope of this investigation.
The evaluations presented in this report, with the exceptions of those
parameters specified by others, reflect our informed judgments based on accepted
standards of professional investigation but are subject to those generally
recognized uncertainties associated with interpretation of geological,
geophysical, and engineering information. Government policies and market
conditions different from
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Cabot Oil & Gas Corporation February 4, 2000
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those employed in this study may cause the total quantity of oil, natural gas
liquids, or gas to be recovered, actual production rates, prices received, or
operating and capital costs to vary from those presented in this report.
In conducting these evaluations, we relied upon production histories,
accounting and cost data, and other financial, operating, engineering, and
geological data supplied by Cabot. To a lesser extent, nonproprietary data
existing in the files of Miller and Lents, Ltd., and data obtained from
commercial services were used. We also relied, without independent verification,
upon Cabot's representation of its ownership interests, payout balances and
reversionary interests, the current prices, and the transportation fees
applicable to each property.
Miller and Lents, Ltd. is an independent oil and gas consulting firm. None
of the principals of this firm have any financial interests in Cabot or in any
of its affiliated companies. Our fee is not contingent upon the results of our
work or report, and we have not performed other services for Cabot that would
affect our objectivity.
Very truly yours,
MILLER AND LENTS, LTD.
By: /s/ JAMES A. COLE
--------------------------------
James A. Cole
Senior Vice President
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