Cabot Energy shares slide as production and sales dive

Cabot Energy's shares slid on Tuesday after it reported a steep decline in second quarter production and sales as cost-cutting efforts took their toll on operations.

The Canada-focused oil and gas company said second quarter gross production averaged 459 barrels of oil per day, down from 781 bopd during the same period last year, as expenditure has only been made on critical items since June 2018 while normal well and field declines also took effect.

Meanwhile, second quarter sales volumes came in at 41,284 barrels for the three month period, down from 73,021 in last year's second quarter, though Edmonton Light Oil sales prices enjoyed a 9% quarter-on-quarter rise to $48 per barrel.

The AIM traded company said it continues to implement disciplined cost controls and continues to assess the benefits of divesting its interest in certain non-core assets to generate funds for ongoing working capital requirements, with the business currently holding sufficient working capital to last through to the end of August.

Non-core assets that Cabot is considering disposing of include some in its Italian portfolio after that country's government signed a decree on 12 February 2019 to suspend work on oil and gas exploration permits or applications for new exploration permits in Italy whilst a national review was undertaken.

Scott Aitken, chief executive of Cabot, said: "Having successfully reduced production costs to less than $20/bbl, we are seeing average sales prices rising quarter-on-quarter this year. Our key focus now is to finalise the crucial asset-level debt financing and, if necessary, any further equity funding required to fund our work programmes in Canada. Provided that a positive outcome is reached, we look forward to executing our plans for these scheduled work programmes."

Cabot Energy's shares were down 17.65% at 3.50p at 0932 BST.