Dan O. Dinges - Chairman, President & Chief Executive Officer Jeffrey W. Hutton - Senior Vice President-Marketing.

Doug Leggate - Bank of America Merrill Lynch Phillip Jungwirth - BMO Capital Markets Robert Scott Morris - Citigroup Global Markets, Inc. (Broker) Pearce Wheless Hammond - Simmons & Company International Bob Alan Brackett - Sanford C. Bernstein & Co. LLC Brian A. Singer - Goldman Sachs & Co. David E. Beard - Coker and Palmer Investment Securities, Inc.

David A. Deckelbaum - KeyBanc Capital Markets, Inc..

Good day and welcome to the Cabot Oil & Gas Corporation's Third Quarter 2015 Earnings Conference Call and Webcast. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr.

Dan Dinges, Chairman, President, and CEO. Please go ahead..

Thank you, Carrie, and good morning to all. I appreciate you joining us on this third quarter earnings call. I do have the management team gathered with me. And also, as usual, the forward-looking statements included in this morning's release do apply to my comments today.

We would like to touch upon a couple of financial and operating highlights from the third quarter that were outlined in the release this morning. First, the equivalent net production for the third quarter was 1.544 Bcf billion cubic foot equivalent per day, an increase of 7% as compared to the third quarter of 2014.

Year-to-date, our production volumes have increased 19% relative to the first nine months of 2014. Operating cash flow, discretionary cash flow, and EBITDAX were $146 million, $150 million and $168 million respectively.

All of these financial metrics were lower relative to the third quarter of 2014 primarily as a result of a 34% decline in realized natural gas prices and a 54% decline in realized oil prices which also resulted in a slight loss for the quarter. Operationally, I'll move to the Marcellus first.

Similar to our discussion in the second quarter, we continue to curtail production in the Marcellus during the third quarter due to the weak pricing throughout Appalachia.

There are two takeaway projects coming online during the fourth quarter that will be beneficial to Cabot, one of which comes online in November and one that will be in service beginning in December.

Our new capacity and long term sales on these projects will allow Cabot to accelerate production sequentially in the fourth quarter at better price realizations than we are expecting in the local market today.

We're cautiously optimistic for an improvement in price realizations in 2016 due to the impact of new takeaway capacity coming online over the next few quarters on the demand side, and the impact of significant reduction in industry activity on the supply side.

Currently, there are only nine rigs operating in Northeast Pennsylvania compared to 25 rigs this time last year, that's a 64% decline.

On the completion front, there are less than a handful of frac crews working at any point in time, and those crews have moved primarily to daylight operations which certainly translates into less frac stages being completed per crew.

While our price realizations continue to be challenged as we await new infrastructure, our operations continued to exceed expectations with a focus on continuously improving our capital efficiency. On the drilling side, our team continues to set new records.

In the Marcellus, our average spud-to-spud cycle time during the third quarter was 14 days as compared to 18 days in the third quarter of 2014. That's a 22% improvement, despite our average total measured depth increasing by almost 10%. This has resulted in roughly a 25% decrease in drilling cost per lateral foot.

Most of these savings are sticky, which means that they're not tied to the current cyclical reduction in service cost. We have two rig contracts in the Marcellus expiring at year-end. And we anticipate a significant reduction in day rates going forward, further reducing our drilling cost as we move into 2016.

On the completion side, we have continued to see downward pressure on pumping costs in our operations.

While we are not currently forecasting another meaningful downward step change in frac cost in 2016, I do believe we will see further declines across various service lines given the current and the anticipated activity levels across Appalachia next year. We're currently operating three rigs in the Marcellus.

However, we will drop to two rigs by the end of this year with the intention of accelerating our activity levels in the third quarter of 2016 in anticipation of the in-service of Constitution and Atlantic Sunrise pipelines. More on those pipelines later.

In the Eagle Ford, we experienced an 8% sequential decline in liquid volumes, which reflects the impact of our natural declines as we have reduced the amount of activity in the play due to lower oil prices. To provide context, during the quarter, we completed only seven wells in the Eagle Ford and only placed six wells on production.

Our activity – the current activity levels are driven by obligatory lease and operational commitments. We also anticipate a further reduction in activity in the fourth quarter, which will result in a slight sequential decline in liquid volumes for the third to fourth quarter.

On the positive side, operationally, we have continued to see improvements, especially in our drilling operation. This quarter, we experienced another 15% to 20% reduction in drilling cost per lateral foot as compared to the second quarter, which were driven primarily by improving the operational efficiencies.

Currently, we're drilling our Eagle Ford wells at 30% to 40% faster than our 2014 average. Quite an impressive job by the team.

We are currently operating one rig in the Eagle Ford, and we plan to drop that rig by the end of the second quarter of 2016 when the contract expires unless we see a significant uplift in oil prices during the first half of this next year.

Based on this level of activity in 2016, we should be able to maintain all of our leasehold, while averaging full-year liquids production volumes that are flat to our fourth quarter liquid volumes this year.

On Constitution update, since Constitution's status is likely on everybody's mind, I would like to provide that update as we highlight some of the significant benefits of this project that I personally believe do not get enough attention and are not fully understood.

On the second quarter call, you might recall in July, we outlined the progress Constitution Pipeline had achieved to-date including the filing of the FERC implementation plan, finalizing the reroute variance and finalizing all the outstanding issues with the New York DEC.

We also reported that we were optimistic to begin construction in the fall and we're still planning on an in-service date in the second half to meet the heating season demand for New York and New England next winter.

To be blunt and to the point, we have not received the 401 water quality permit from New York, which is necessary for the mainline construction of the pipeline. There remains a few other outstanding approvals as well, but these issue should fall into place very quickly once New York issues the 401 certificate.

Given the continued delay in the issuance of this permit from New York, I do want to take this opportunity to highlight a number of very important and significant benefits that the Constitution Pipeline will provide both during construction and after in-service. First and foremost, job creation and retention.

Construction of the project is estimated to directly and indirectly create 2,400 jobs and generate about $130 million in labor income to the region. These jobs are high-paying and will utilize the excellent skills of the local unionized labor force.

In fact, Constitution, in conjunction with Leatherstocking Gas Company will directly provide natural gas to one of the largest employers in the area, the Amphenol Aerospace plant in Sidney, New York which employs more than 1,000 unionized employees.

In 2011, the state administration committed to Amphenol that the plant would have access to natural gas and company leaders are on record as stating that access to Constitution Pipeline is a key reason why the plant has chosen to remain in Sidney, New York.

Amphenol was awarded a $750,000 grant by the Delaware County Industrial Development Agency in New York for the construction of a natural gas pipeline from Constitution to their facility.

On tax revenues, another significant benefit on the project, once operational Constitution economic impact is anticipated to result in more than $13 million in annual tax property revenue. This project is privately financed with no government subsidies, tax breaks, or incentives.

Project will pay millions in annual property tax payments to localities and school districts. Approximately 60% of taxes paid by this project will directly benefit local school districts along the pipeline route. Third, Constitution Pipeline will link New York State with lower cost energy.

New York is the fourth largest natural gas consuming state in our country, and their consumers currently experienced some of the highest rates for natural gas in the United States.

Once complete, the pipeline will provide consumers reliable supplies of low-cost energy, addressing one of the key challenges of State New York faces in remaining competitive with other manufacturing regions. The pipeline will transport enough gas – natural gas each day to serve about 3 million homes, many of which will be located in New York.

Plans are already under way to provide new natural gas services in parts of Broome, Chenango, and Delaware Counties, which have never before enjoy natural gas access.

Further delays in issuing the final permit risks the project's 2016 in-service date which means that New York energy consumers will have to wait another full year to receive the relief from the extraordinarily high energy prices experienced during the winter/heating season. Lastly, this pipeline is consistent with the New York State Energy Plan.

Due to ongoing issues with the Indian Point nuclear facility, New York needs an alternative fuel source for power generation in the Long Island area. Constitution will connect to Iroquois gas pipeline which currently serves natural gas electric generation plants in the same area as Indian Point.

Constitution brings additional capacity for new or expanded gas use for power generation in the state. In fact, Constitution Pipeline was specifically highlighted in the New York State Energy Plan as critical gas transmission infrastructure needed to meet New York's expanding energy needs.

The state currently utilizes natural gas for over 36% of its electric generation, and the New York State Energy Plan calls for a 32% increase in natural gas usage which can help reduce emissions as the state transitions away from the usage of coal and heating oil to cleaner fuels like natural gas.

I think you can see how New York State will benefit greatly from Constitution Pipeline. The projects is supported by legislators, local officials, unions, business, trade groups both in New York and throughout New England, as well as several New England governors. We look forward to beginning construction of this project as soon as possible.

Assuming that Constitution team can begin construction activities in the next few months, we are optimistic that the project can be placed in service during the fourth quarter of 2016 in order to help meet the growing natural gas demands in New York.

In the morning's press release, we provided an update of our 2015 guidance, as well as initiated preliminary guidance for 2016. Based on our anticipated production levels for the fourth quarter, we have adjusted our full-year 2015 production guidance to a range of 12% to 14%.

This adjustment reflects our price outlook for the fourth quarter and our corresponding decision to continue curtailments on a portion of our production for the remainder of the year.

While fourth quarter volumes are expected to increase 5% sequentially at the midpoint relative to the third quarter, this does imply a slight year-over-year decline of the fourth quarter driven by our strategy to curtail volumes in light of the current price environment. We have also reduced our 2015 capital program to $850 million.

The reduced capital program is the result of a reduction in our planned level of activity in the fourth quarter as well as the impact of further cost reductions from improving efficiencies and lower service costs.

In addition, we anticipate approximately $35 million of commitments this year associated with the equity ownership in Constitution and Atlantic Sunrise pipelines.

Our preliminary 2016 budget was built from the bottom up with focus on spending within cash flow at recent strip prices, while still providing measured growth in 2016 and still investing the appropriate amount of growth capital for 2017 that allows us to accelerate our production growth into better price points upon in-service of Constitution and Atlantic Sunrise.

Our focus on maximizing efficiencies throughout the program results in a plan that provides economic wellhead returns even at our conservative low price assumptions, and results in a continued reduction in our unit cost.

I will emphasize, however, that this is a preliminary budget based on our current expectations over the next year, and we certainly reserve the right to call an audible on this plan as we monitor the commodity price environment and the approval process of the key takeaway projects we are participating in.

We have initiated our preliminary 2016 production growth guidance in the range at 2% to 10%. Low end to midpoint assumes that the headwinds on price realizations we're experiencing today persists throughout 2016.

And we continue to curtail a modest portion of our production, while the high end assumes an improvement in price realizations and reflects an uncurtailed production profile without spending any additional capital. This production growth range is based on E&P capital budget of $615 million.

Additionally, we have approximately $150 million of equity investment in Constitution and Atlantic Sunrise planned for next year.

Depending on the timing of construction of both these projects, that number could change throughout the year, but currently assumes a fourth quarter 2016 in-service date for our Constitution and a third quarter 2017 in-service date for Atlantic Sunrise.

Drilling, completion and facility capital will account for approximately 93% of the capital budget, with approximately 74% allocated to the Marcellus Shale and 26% allocated to the Eagle Ford Shale. In total, we plan to drill approximately 60 net wells in 2016 and complete approximately 90 net wells.

This level of activity will allow us to meet all of our obligatory drilling and operating commitments, maintain operating efficiencies throughout the program, and sets us up for acceleration of growth into 2017.

While we'd be able to hold our Marcellus production volumes flat this next year by only spending approximately $175 million in drilling, completion capital, and we have allocated capital in next year's program that will provide for expanded growth in 2017 assuming Constitution and Atlantic Sunrise remain on the schedule we've outlined, all while generating free cash flow under our conservative price assumptions.

As we continue to focus on improving capital efficiencies, our average planned lateral length in our 2016 program are approximately 25% longer than the 2015 program at 6,700 feet in the Marcellus and 9,500 feet in the Eagle Ford.

The average drilling and completion cost for Cabot's 2016 program of longer laterals and more stages per well as compared to 2015 are $6.6 million and $6.3 million for the Marcellus and Eagle Ford, respectively. This represents a drilling and completion cost decrease of over 15% on a per-lateral-foot basis relative to our 2015 budgeted cost.

Based on our budgeted price assumptions, 2016 program generates free cash flow before taking in consideration our pipeline commitments.

This assumes a slight improvement year-over-year in the local basis differentials; however, we will be closely monitoring the impact of the following items on local pricing over the next quarters; new takeaway capacity in Appalachia, a supply side rationalization from reduced activity levels, and the winter demand.

The good news is that we have plenty of flexibility in our plan to adopt our program throughout the year as the market warrants.

While 2016 will be a challenged year, our ability to generate free cash flow from our drilling program at these low commodity prices, while also providing production growth and investing a significant amount of growth capital for 2017, speaks to the quality of our assets, our highly efficient operating plan, and our historically low-cost structure.

With that, Carrie, I'll be more than happy to answer any questions..

Thank you. We will now begin the question and answer session. At this time we will pause momentarily to assemble our roster. Our first question comes from Doug Leggate of Bank of America Merrill Lynch. Please go ahead..

Thanks. Good morning, everyone. Good morning, Dan..

Hi, Doug..

So I wonder if you could help us with the shut-in volumes and how we should think about how you're prioritizing the next moves with your slowdown in activity. What I mean is, do you – does the volume come back before you add more rigs? And if you could quantify for me, and I've got a follow-up, please..

Okay, Doug. We have curtailed volumes right now. We have volumes that were not moving that do not require any additional capital to move those incremental volumes. And keep in mind that in regard to curtailed volumes, we might get the question in regard to how much you shut-in and what ability you have to be able to move incremental volumes.

But we have adjusted our capital program as we've gone through 2015 to take in consideration curtailments. And so, that tweaking of our capital allocation has certainly delayed some of our originally scheduled and budgeted frac stage completions. And we've also amended our directives to the frac crew to initiate only during daylight hours.

So, we're sliding out some of that activity. So, as we roll through the year and the amount of activity we're conducting right now, and the various swings that we have through our marketing group on a month-to-month on what we're moving, that curtailed volume is a variable number, if you will..

Okay. I'll maybe follow up offline. My follow-up, Dan, is really more I guess on the assumptions for the spending next year.

Are you looking to spend within cash flow including the pipeline affiliate CapEx? And if so, can you give us some idea – I know it's a really tough question to answer, but what are your thoughts on the differential in your plan for 2016?.

Well, the capital allocation, the $615 million, is to the drilling completion program where 93% of that is directed to that. The additional $150 million is allocated to the Constitution and Atlantic Sunrise.

And that's making the assumption if some of those expenditures fall in line as we have currently predicted which would have an in-service date of Constitution of the end of 2016 and the September in-service date of Atlantic Sunrise.

And the total expenditure, if the $150 million of equity investments and pipeline is made, there will be a slight overspend of cash flow at these conservative prices that we've used.

And as far as the differential is concerned, we have forecast a slight compression of the differentials into 2016, and the assumption we're making there is that some of these takeaway items that we've referenced in November of this year and in December of this year along with the expectation of Constitution coming online, we think on a weighted average basis that our differentials would compact a little bit..

I'll leave it there. Thanks, Dan..

Thank you..

Our next question comes from Phillip Jungwirth of BMO. Please go ahead..

Hey. Good morning..

Good morning..

When you referenced accelerating Marcellus activity in the third quarter in anticipation of Constitution coming online, does this imply that you'll increase the rig count from the two rigs or would you primarily be looking to increase completions? And is three rigs still a good estimate of maintenance activity or what needs to hold 2 Bcf a day of gross production flat?.

Yeah. Phillip, on both those questions you're accurate, we would be around the three rig count in the Marcellus. And we feel like we'll be able to maintain our production flat with the capital program that we've outlined, if that's what we choose to do..

Okay. And then most of your or many of the Appalachian producers are hedged in 2016, and in some cases well beyond that.

Could you update us on your latest thoughts around hedging in 2015 or 2017 both your NYMEX and local pricing exposure?.

Yeah. We're unhedged in 2016 and 2017. And I think the industry as a whole is probably less than 20% hedged in 2016 and certainly lower percentage hedged in 2017. Our desire would be to hedge volumes and protect some of the space. It's been a difficult market to hedge. If you look at it, it has not been a real liquid market.

And the discount that we've been able to realize when we've gotten quotes has not been attractive but enough for us to place the hedges..

And then of the $150 million in JV contributions planned for 2016, could you break that out by Constitution and Atlantic Sunrise? And then, would this be all of the required CapEx for Constitution or would you still have some spending that could fill in to 2017?.

So, we have $100 million allocated to Constitution and $50 million allocated to Atlantic Sunrise for 2016..

Great. Thanks a lot..

Thank you..

Our next question comes from Bob Morris of Citigroup. Please go ahead..

Thanks. Dan, I think in the past, you've indicated that essentially, the drop dead date for beginning construction on Constitution in order to get it completed in on line or in-service next year is early January and that assumes everything went smoothly.

Is that still the case?.

Yeah, Bob. The window is certainly still open for us. We do need the New York approval. And your timing is accurate on being able to commence construction sometime in the mid or latter part of January to be able to move forward and meet our commissioning on the fourth quarter of 2016. That's correct..

And then my second question is, once you drop the rig in the Eagle Ford, what is the oil price you need in order to put a rig back to work there and pick activity back up in Eagle Ford?.

It's not a specific number we're looking at Bob. It's going to be a function of several things. One, how efficient we've been able to execute the program based on the assumptions that we've made.

And also, certainly, looking at the dynamics of the – macro dynamics of the natural gas market and looking at what commodity price differentials we've been able to realize throughout the first part of 2016.

Those things will play into our decision about the allocation of additional capital, obviously, along with the cost of a barrel and what, frankly, what service cost do, in fact, if you do see a increase in the value per barrel..

And on the service cost, you don't expect any reduction in completion cost next year in the Marcellus, why is that?.

We do expect a little bit of reduction in the completion cost in 2016..

Okay. All right, I must have misheard you. Thank you..

No. We expect the drilling completion cost to be over 15% per lateral foot less than what we saw in 2015..

Right. But I thought it was just on the completion side..

No. That's both drilling and complete – yeah..

Okay. Thank you..

Our next question comes from Pearce Hammond of Simmons & Company. Please go ahead..

Good morning, Dan. Thanks for taking my questions..

Pearce..

My first question is on the 2016 production guidance, can you provide any kind of mix or liquids production growth?.

Well, our liquids is going to be consistent with what we exit our fourth quarter of 2015 average. And that's going to be our liquids number. And we were thinking anywhere between 14,000 to 15,500 barrels is the fourth quarter guidance. Natural gas, we're going to be at 1.475 to 1.6 as our fourth quarter guidance..

Great. Thank you. And then how many drilled uncompleted wells do you think you'll have at year end 2015 based on your guidance for 2016? It looks like that's coming down by about 30 wells. I had in my notes previously that you are talking about having about 70 wells in backlog at year-end 2015, about 50 in the Marcellus and about 20 in the Eagle Ford.

I'm just curious if that was still the same..

Okay. We're going to have 55 or so in the Marcellus and we'll have, Steve, 22 wells in the Eagle Ford that are in backlog going into 2016..

And then at year-end 2016, that's going to be reduced by approximately 30 based on your guidance?.

Yeah. We have 39 wells in the Marcellus, and we have about seven wells in the Eagle Ford..

Thank you.

And then one last from me, just a clarification, in the prepared remarks, did you say that it will take about $175 million of CapEx to hold your production flat in the Marcellus?.

Yes. If you wanted to hold it flat....

For maintenance....

Yeah. That's what it would take..

And so, does that imply that there's about $250 million, $280 million of growth CapEx for the Marcellus for this next year?.

That's correct..

Okay. All right. Thank you very much, Dan..

And some of that obviously is directed towards 2017 also..

Great. Thank you, Dan..

Yeah..

Our next question comes from Bob Brackett of Bernstein Research. Please go ahead..

Hi. Good morning. Thanks, guys, for the color on your curtailed production and kind of wells in backlog.

What do you see your competitors in Northeast, PA having in terms of those two curtailed production and wells in backlog?.

Bob, that's hard to get our arms around. We think there are curtailed volumes up there. There certainly has been a reduction in the level of activity as we referenced nine rigs and only a handful of rigs and, I mean, completion crews.

And we think there will be, from this point forward, we think there'll be less than 700 or so stages completed between now and year-end up in the Northeast, PA. So, to be able to say how much is curtailed and how much is being worked off, it's a hard number to come up with..

Okay. Thanks.

And a quick question, going from 24-hour to 12-hour completion crews, is there a cost related to that or loss of efficiency?.

I think, we probably – I think, it's safe to say you have a little bit loss of efficiency by not doing 24/7 operations. But overall, when we reference our decrease in cost from 2015 to our anticipated cost in 2016, we certainly have taken that ineffective part of our program into consideration..

Okay. Great. Thank you..

Thank you..

Our next question comes from Brian Singer of Goldman Sachs. Please go ahead..

Thank you. Good morning..

Hi, Brian..

If we take your 2016 CapEx guidance together with your backlog and curtailments, what production capacity should we expect you to have at the end of 2016? And really trying to think about the upside case in which Constitution and Atlantic Sunrise come on by 2017, what additional drilling you'll need to meet those obligations?.

Hard number to come up with, specifically, on what we have. I'm kind of looking around the table and nobody's raised their hand yet on that, Brian. But let me say it this way that as we put together our program for 2016, we felt and certainly feel very comfortable about what we're able to deliver in volumes for 2016.

Highlighting that point is the amount of capital necessary to just keep us flat is – it's not inconsequential but it's not a very, very high number at all. But looking at 2016 was not really the target of what we tried to accomplish with our program.

We approach it in a conservative manner, trying to stay within cash flow, using a conservative commodity price.

And, frankly, in our range that we used, again, risking our number, though our expectation is Constitution will be a 2016 event, we have actually not included any volumes in our 2% to 10% range on the production range that we provided in our guidance.

So, in looking at what we're able to have rolling out of 2016 with our current capital program, and looking at our ability to ramp up in a fairly short fashion, if we wanted to add some incremental capital, we have no question rolling into the end of 2016 and the beginning of 2017 that we're going to be able to fill not only Constitution but also Atlantic Sunrise which gets us to the 1.35 additional incremental – 1.35 Bcf a day that we expect to be moving in 2017..

Okay. Thanks.

I mean, that kind of dovetails to the usual question of when Constitution comes online and frankly when Atlantic Sunrise comes online, assuming they do, is that your intention to grow incrementally by that 1.35 Bcf a day or would you take some of your production currently oversupply in the local market and divert it on to those pipelines? My sense here is you're more willing to guide to/consider the latter, but maybe you could expand on that and then further follow-up that if you did want to grow by 1.35 Bcf a day from here, would you need a big ramp up in the rig counts?.

Well, yes. We're going to need to grow – the total volume to be incremental, we would have to move the rig count up a little bit and we would complete additional stages then we have forecast for, probably the latter part of 2016.

But, I still feel like, and if Phil was sitting here, that if we see that everything is staying online in the latter part of 2016 that everything, or Atlantic Sunrise is in queue moving towards the September commissioning that we would be able to meet those volumes, 850 million a day as incremental volumes with our anticipated 2017 program.

Certainly, we haven't made the guidance in release of what our capital program and activity level would be in 2017. But we would be able to meet the September commissioning of Atlantic Sunrise with incremental volumes to where we stand today..

Got it. Assuming some normal but not – assuming some ramp-up in the rig count, as you mentioned..

That's right..

Okay. Great. Thank you very much..

Thank you..

Our next question comes from David Beard of Coker Palmer. Please go ahead..

Hi. Good morning, Dan. Most of my questions have been asked. But I wonder if you could give us a little color on the service costs that you outlined.

Is that a 15% decline from average of this year or from this point going forward? And could you give us any color of that number between efficiencies and actually price cuts?.

Yeah. Okay. The cost – the 15% drilling completion cost – total well cost reduction is from our average of 2015 costs. And I'm sorry, David, I didn't get the second part of your question..

And just of that 15% decline per lateral foot, how much of that comes from efficiencies versus price declines from vendors?.

We had a slide in our most recent investor presentation. And on the completion side, the majority of the cost is from cost reductions. On the drilling side, the majority of the cost is from efficiencies.

And we have a slightly higher cost on the total well cost, drilling and complete, completion costs represent a little bit higher percentage of total well cost than the drilling side..

Good. That's helpful. Appreciate the color. Thanks for the time..

Thank you..

Our next question comes from David Deckelbaum of KeyBanc Capital Markets. Please go ahead..

Good morning, Dan. Thanks for all the color and everything..

Yeah, David..

Just as a point of clarification, with Atlantic Sunrise, obviously, being larger volumetrically coming on in second half of 2017, is it fair to say that the 2016 program that you have lined out right now, even if Constitution gets delayed even further that this is sort of like the minimal amount of activity that you would have going on in the Marcellus because there's obviously not a whole lot of capital required to keep the production flat.

But as you're looking at this multi-year progression ramping into what would be required for Atlantic Sunrise as well, if by some measure we end up thinking that Constitution is going to come on line materially later than anticipated, is there some downside to that 2016 CapEx number?.

Downside in the sense that we would reduce our capital program..

You'll be spending less than – yeah..

Yeah. We would manage that, yes. We would manage that allocation of capital, and we certainly do not want to have capital sitting out in the field that we can't monetize.

So, we would probably reduce our exposure, reduce our capital until the appropriate time that we could plan for the commissioning of the pipeline if we were to see a significant delay in the commissioning. But I wouldn't have expected the approval to occur on Constitution prior to this time.

However, I'm not disillusioned to the extent that we don't expect it to come in a timely manner for 2016's estimated commissioning..

I appreciate that. And just a last one for me, Dan or Jeff.

Could you contrast, I mean, qualitatively from an operator perspective the differences of the risk in your mind of waiting on Constitution relative to waiting on Atlantic Sunrise and how those two processes – as investors wait for Constitution to come on here and the process is quite delayed? Can you contrast the experience so far with Atlantic Sunrise and maybe the difference in that risk of delay?.

Well, Atlantic Sunrise is making – I'll let Jeff weigh in in a second to make kind of editorial comment. But on Constitution, we have been years in discussions, preparation and have fulfilled all of the requests, all the mitigating factors, all of the hurdles that have been brought by the interested parties, including the New York DEC.

We have added certainly some of the mitigating factors, added incremental cost to the project. We had a major reroute of the – that was fine with Constitution to mitigate any watershed issues. And in fact, by that reroute, we improved what we think was any impact.

And we have again on stream crossings have extensive plan in place that mitigates any of the concerns about stream crossings. And that has been well documented by the DEC and now has been prepared into a final document. So, I think everybody's pleased with that effort.

Atlantic Sunrise is in that same process now in having discussions for the mitigation factors and looking at the right of ways to be able to mitigate any concerns that any stakeholders might have at that stage. I feel comfortable that the outline and the timing of commissioning that we've laid out is going to be met. Jeff, you can weigh in on....

Yeah. David, probably the biggest difference on the two projects besides just the learning curve aspect of the second project is the route on the Greenfield portion of Atlantic Sunrise is totally in the State of Pennsylvania, where we have a long history of working with the DEP and with the FERC.

And so, I think from a simpler project aspect, it's gone smoothly so far. I mean, the community outreach portion of the project's been very successful. The survey permissions and the right of way acquisitions been very successful to-date. Project is on schedule.

And we're – at this point in time, we look very good in terms of hitting the in-service date..

That's helpful, guys. Thank you..

Thanks, David..

This concludes our question-and-answer session. I would now like to turn the conference back over to Dan Dinges for any closing remarks..

Well, I appreciate the interest in Cabot. I know there are some frustration by all of us on our ability to be able to get the infrastructure in place and commissioned and to be able to move the natural gas in support of all those that are looking forward to having it.

I do hope that the takeaway this morning is that Cabot does remain focused in all the right areas, and that is a disciplined focus on the efficiencies and returns while managing our business for the long-term success of the organization.

Additionally, we remain committed to effectively managing those controllable variables that we have in our program and also mitigate the uncontrollables the best as we possibly can. So, again, thank you. And certainly, I think Cabot has some brighter days out in front of it. Thank you, Carrie..

Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day..