Cabot Energy PLC (LON:CAB) shares traded around 23% higher on Tuesday as investors welcomed the news of an upgrade to the company’s reserves and resources.
Proved and probable reserves increased by 26% to 3.6mln barrels, according to the annual statement produced by consultant McDaniel & Associates. Notably, 90% of last year’s ‘probable’ barrels were upgraded to the ‘proven’ classification.
READ: Cabot Energy “encouraged” with strong cash flow in first half
Reserves were valued at US$48.3mln (on a discounted net asset value basis) and that equated to US$13.4 per boe.
At the same time, the ‘mid-case’ estimate of contingent and prospective resources was stated at 42.2mln boe, representing a 339% improvement since the last assessment.
Chief executive Aitken pleased
Describing himself pleased, Cabot chief executive Scott Aitken said: “With 33,000 bpd facilities and pipeline capacity combined with 282 well locations, the company has demonstrated that predictable production growth beyond September 2018's 653 bopd, can be delivered in Canada through the drillbit, without major facilities capital investment, at attractive financial netbacks.”
Aitken added: “We are now focussed on structuring the balance sheet to fund a scalable and repeatable development drilling programme in Canada.
“Additionally, an independent resources report on our 100% owned and operated, high-impact offshore Italian exploration acreage is currently being finalised and we continue to make progress on farm-out negotiations to fund our exploration activities."
In Tuesday afternoon’s deals, Cabot shares were up 0.38p or 23.75% changing hands at 1.98p.