EX-99.1 9 cog12312020ex991.htm EX-99.1
Exhibit 99.1
January 27, 2021
Cabot Oil & Gas Corporation
Three Memorial City Plaza Building
840 Gessner Road, Suite 1400
Houston, Texas 77024-4152
Re: Audit of Reserves and Future Net Revenues
As of December 31, 2020
SEC Price Case
Ladies and Gentlemen:
At your request, Miller and Lents, Ltd. (M&L) performed an audit of the estimates of proved reserves and the future net revenues associated with these reserves that Cabot Oil & Gas Corporation (Cabot) attributes to its net interests in oil and gas properties as of December 31, 2020. The audit report was prepared for the use of Cabot in its annual financial and reserves reporting and was completed on January 27, 2021. Cabot's estimates, shown below, are in accordance with the definitions contained in Securities and Exchange Commission (SEC) Regulation S-X, Rule 4-10(a).
Reserves and Future Net Revenues as of December 31, 2020

Reserves Category | Net Reserves | Future Net Revenues
Oil and Condensate, MBbls. | NGL, MBbls. | Gas, Bcf | Undiscounted, M$ | Discounted at 10% Per Year, M$
Proved Developed | 15 |  | — |  | 8,608 |  | 6,984,446 |  | 3,086,221 |
Proved Undeveloped | — |  | — |  | 5,064 |  | 3,004,386 |  | 802,614 |
Total Proved | 15 |  | — |  | 13,672 |  | 9,988,833 |  | 3,888,836 |

Oil and condensate and NGL volumes are expressed in thousand barrels (MBBL). Gas volumes are expressed in billion cubic feet (BCF). Future net revenues are expressed in thousand dollars (M$).
M&L prepared independent estimates of 100 percent of the proved reserves reported by Cabot. Based on M&L’s investigations and subject to the limitations described hereinafter, it is M&L’s judgment that (1) the reserves estimation methods employed by Cabot were appropriate, and its classification of such reserves was appropriate to the relevant SEC reserves definitions, (2) its reserves estimation processes were comprehensive and of sufficient depth, (3) the data upon which Cabot relied were adequate and of sufficient quality, and (4) the results of those estimates and projections are, in the aggregate, reasonable.
The reserves reported herein were estimated in accordance with the definitions and regulations contained in Title 17 of the Code of Federal Regulations, Modernization of Oil and Gas Reporting: Final Rule, released January 2009. This includes Regulation S-X, Rule 4-10, as well as the regulations specified under Subpart 1200 of Regulation S-K. The estimates in this report further conform to the Financial Accounting Standards Board Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas, pertaining to oil and gas reserves estimation and disclosures, amended in January 2010.
Cabot’s reserves estimates were based on decline curve extrapolations, material balance calculations, volumetric calculations, analogies, or combinations of these methods for each well, reservoir, or field. Proved undeveloped reserves were assigned to some locations offset by more than one location from existing production. These proved undeveloped reserves are supported by seismic data and geological cross-sections that appropriately demonstrate reservoir continuity with a high degree of certainty. Reserves estimates from volumetric calculations and from analogies are often less certain than reserves estimates based on well performance obtained over a period during which a substantial portion of the reserves were produced. All proved undeveloped reserves are scheduled to be developed within five years of initial disclosure.
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 represented that the future net revenues reported herein were computed based on prices for oil and gas calculated in accordance with SEC definitions, utilizing the unweighted arithmetic 12-month average of the first-day-of-the-month price for each month within the 12-month period prior to December 31, 2020. Cabot used benchmark prices of $39.57 per barrel based on the West Texas Intermediate Spot Price at Cushing, Oklahoma and $1.985 per MMBTU based on the Henry Hub Spot Price for its reserves estimates. The average realized prices used in this report for proved reserves, after appropriate adjustments, were $32.53 per barrel for oil and $1.637 per MCF for gas. The present value of future net revenues was computed by discounting the future net revenues at 10 percent per year. 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 making its projections, Cabot included cost estimates for well abandonment and well site reclamations. Cabot's estimates include no adjustments for production prepayments, exchange agreements, gas balancing, or similar arrangements. M&L was provided with no information concerning these conditions and it has made no investigations of these matters as such was beyond the scope of this investigation.
In conducting this evaluation, M&L relied upon, without independent verification, Cabot’s representation of (1) ownership interests, (2) production histories, (3) accounting and cost data, (4) geological, geophysical, and engineering data, and (5) development schedules. These data were accepted as represented and were considered appropriate for the purpose of the audit report. To a lesser extent, nonproprietary data existing in the files of M&L, and data obtained from commercial services were used. M&L employed all methods, procedures, and assumptions considered necessary in utilizing the data provided to prepare the report.
The evaluations presented in this report, with the exceptions of those parameters specified by others, reflect M&L’s informed judgments and are subject to the inherent uncertainties associated with interpretation of geological, geophysical, and engineering information. These uncertainties include, but are not limited to, (1) the utilization of analogous or indirect data and (2) the application of professional judgments. Government policies and market conditions different from those employed in this study may cause (1) the total quantity of oil, natural gas liquids, or gas to be recovered, (2) actual production rates, (3) prices received, or (4) operating and capital costs to vary from those presented in this report. At this time, M&L is not aware of any regulations that would affect Cabot’s ability to recover the estimated reserves.
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 Katie M. Reinaker, P.E., an officer of the firm who is a licensed Professional Engineer in the State of Texas and is professionally qualified, with more than 10 years of relevant 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.
Texas Registered Engineering Firm No. F-1442
By: /s/ BETHANY L. HANCOCK
Bethany L. Hancock
Reservoir Engineer
By /s/ JENNIFER GODBOLD
Jennifer A. Godbold, P.E.
Vice President
By /s/ KATIE REINAKER
Katie M. Reinaker, P.E.
Senior Vice President

Appendix
Reserves Definitions
In Accordance With Securities and Exchange Commission Regulation S-X
Reserves
Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.
Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).
Proved Oil and Gas Reserves
Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible-from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations-prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.
The area of the reservoir considered as proved includes:
•The area identified by drilling and limited by fluid contacts, if any, and
•Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.
Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
•Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and
•The project has been approved for development by all necessary parties and entities, including governmental entities.
Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Developed Oil and Gas Reserves
Developed oil and gas reserves are reserves of any category that can be expected to be recovered:
•Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
•Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.
Undeveloped Oil and Gas Reserves
Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.
Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.
Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined below, or by other evidence using reliable technology establishing reasonable certainty.
Probable Reserves
P robable reserves or those additional reserves that or le ss ce rtain to be recovered than proved re se r ves but which, together wi th pro ved reserves, are as l ikely as not to be recovere d.
When deterministic methods are used, it is as l i ke l y as not that actua l remaining quantities recovered will exceed t h e su m of estimated proved plus probable re serves. When probabilistic meth ods a re used, there should be at least a 50% probability that the actual quanti t ies recovered w i ll equal or exceed the proved plus probab l e reserve s es t imates.
Probable reserves may be assigned to areas of a re se rvoir adjacent to proved reserves where data cont rol or interpretations of avai l able data are less certain, even if the interpreted re se rv o ir continuity of s tructure or produc ti vi t y does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.
Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.
Possible Reserves
Possible reserves are th ose add i tional reserves that are l ess cer t ain to be recovered t han probable reserves.
When deterministic methods are used, the total quantities ultimately reco vere d from a project hove a l ow probability of e xc eeding proved plu s probable plus possib l e re se rves. When probabi l istic methods ore used, there shou l d be at least a 1 0% probab ili ty that the tota l quantities ultimatel y recovered will equal or exceed the proved plus probable plus possible reser ves estimates.
Possible reserves may be assigned to areas of a reser vo ir adjacent to probable reserves where data control and interpretations of available data are progressively l ess certain. Frequently, thi s will be in areas whe re geoscience and engineering data are unable to define clearly the area and vertical limits of commercia l production from the re se r voi r by a defined project.

Possible reserve s also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in p l ace t han the recovery quantities a ssu med for probable reserves.
The proved plus probab l e and proved plus probable plus po ssi ble re se r ves es t imates must be based on reasonable a l ternative technical and commercial interpretations within the reservoir are subjec t project that are c learl y documented, in clud ing compar i so n s to re s u l t s in s ucce ss ful sim i l ar project s.
Possible r ese r ves may be assigned where geoscience and engineering data identify direct l y adjacent portions of a reservoir within the some accumulation that may be sep arated from proved areas by f aults wi th displacement l ess than formation thickness or other geological di scont inuit ies and that hove not been penetrated by a wellbore, and the registrant believes that s uch adjacent portion s ar e i n communica t ion with t he known (pro ved) reservoir. Po ssible reserves may be assigned to areas that are st ructurally higher or lower than the proved area i f th ese areas are in communication wi t h the proved re servoir.
Where direct observation has defined a highest kno wn oil (HKO) eleva t ion and the potential exists f or on a ssociate d gas cop, proved oil reserves s hould be a ss igned in the s tru cturally higher portions of the re servoir abo ve t he HKO only if t he higher contact con be established wi th reasonable certainty through reliable technology. Portions of the reservoir that do not meet thi s reasonable ce rtainty criter i o n may be a ssigne d as probable and p ossi ble oil or gas based on reservoir fluid properties and pressure gradient interpretations.
Additional Definitions
Analogous Reservoir
Analogous reservoirs, as used in resources assessments, hove sim i lar r ock and f l u i d propert i es, reservoir conditions (dept h, temperature, and pressure) and drive mechanisms, but are typically at a more advanced s t age of development tha n t he reservoir of i nterest and t h us may provide concepts to assist in the interpretation of more limited data and estimation of recovery. W h en used to support proved reserves, on "ana l ogous reservoir" refers to a reservo i r that s h ores the following characteri s tics with the reservoir of i nterest: (1) some geologica l formation (but not necessarily in pressure commun i cation with the reservoir of interest); (2) some environment of deposit i on; (3) similar geologica l structure; and (4) some drive mechanism.
Reservoir proper t ies must, i n aggregate, be no more favorable in the analog than in the r eservoir of interest.
Economically Producible
The term economica ll y producib l e, as it re l ates to a resource, means a resource wh i ch generates revenue that exceeds, or is r easonably expected to exceed, t he costs of the operation. The value of the prod u cts that generate revenue shall be determ i ned at the terminal point of oi l and gas producing act i vities.
The oil and gas production function shall be regarded as ending at a terminal point, which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it my be appropriate to regard the terminal point for the production function as:
•The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal; and
•In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser prior to upgrading, the first point at which natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility which upgrades such natural resources into synthetic oil or gas.
Reasonable Certainty
If determ i nistic methods ore used, reasonab l e certainty means a high degree of conf i dence that the quanti ti es wi ll be recovered. If probabilistic methods ore used, t he r e should be at least a 90% p r obabi l i t y that t he quantities actuall y

recovered w ill equal or exceed the estimate. A high degree of conf i dence exists i f the q uanti t y is much more likely to be achieved than not, and, as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data ore mode to estimated ultimate recovery (E UR) with time, reasonably certa i n EUR i s much more likely to increase or remain constant than to decrease.
Reliable Technology
Reliable technology is a grouping of one or more technologies (including computat i ona l me t hods) that has been field teste d and has been demonstrated to provide reasonably certa i n results with consistency and repeatability in the formation being evaluated or in on analo gous fo rmat ion.
I n a c cordance wi t h t he Financial Accoun t ing and R e p or ti n g f or Oil an d G a s P r od uci n g Act ivi t i es Pursu a n t t o the F ed e ral Se cu ri t i e s La ws an d t he E nerg y Po licy a n d C onservation Act of 1 97 5. R e g. § 2 10.4-1 0.