Exhibit 28.1
February 7, 2003
Cabot Oil & Gas Corporation
1200 Enclave Parkway
Houston, TX 77077-1607
Re: Reserves and Future Net Revenues
As of December 31, 2002
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, 2002. 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 Revenues as of December 31, 2002
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Net Reserves Future Net Revenues
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Discounted at
Reserve Category Liquids, Gas, Undiscounted, 10% Per Year,
MBbls. MMcf M$ M$
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Proved Developed 13,267 819,412 2,985,839 1,379,240
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Proved Undeveloped 5,126 241,547 828,730 336,660
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Total Proved 18,393 1,060,959 3,814,569 1,715,900
========================================================================================================
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.
Cabot Oil & Gas Corporation February 7, 2003
Page 2
All reserves discussed herein are located within the continental United
States and Canada. 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 for oil, natural gas liquids, and gas as of Cabot's fiscal year
end, December 31, 2002, 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 percent 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 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
Cabot Oil & Gas Corporation February 7, 2003
Page 3
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. No
director, officer or key employee of Miller and Lents, Ltd. Has any financial
ownership in Cabot. Our compensation for the required investigations and
preparation of this report is not contingent on the results obtained and
reported, and we have not performed other work that would affect our
objectivity. Production of this report was supervised by an officer of the firm
who is a professionally qualified and licensed Professional Engineer in the
State of Texas with more than 20 years of experience in the estimation,
assessment, and evaluation of oil and gas reserves.
If you have any questions regarding this evaluation, or if we can be of
further assistance, please contact us.
Very truly yours,
MILLER AND LENTS, LTD.
By /s/ James A. Cole
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James A. Cole
Senior Vice President
JAC/mk