Phoenix Exploration Company Acquires Gulf of Mexico / Gulf Coast Assets from Cabot Oil and Gas Corporation for $340 Million

Houston, TX - Phoenix Exploration Company LP ("Phoenix") announced today that it has entered into a definitive agreement to acquire all of the Gulf of Mexico and south Louisiana assets (the "properties") currently owned by Cabot Oil and Gas Corporation and one of its affiliates ("Cabot") for $340 million, subject to customary adjustments at closing. The transaction will be effective as of August 1, 2006, and is expected to close in late September 2006. At Phoenix's request, Cabot has entered into hedges for a portion of the anticipated production from the properties for the period from October 2006 through December 2010. These hedges will be transferred to and assumed by Phoenix at closing and consist of crude oil swaps at prices from $70.37 to $76.30 per barrel and natural gas swaps at prices from $8.135 to $9.745 per mmbtu. Phoenix will finance this acquisition with a combination of equity contributed by its private equity investors and debt provided under its existing credit facility.

The properties to be acquired include interests in 22 fields located onshore and in state waters along the Louisiana Gulf Coast, as well as 34 offshore leases on the Gulf of Mexico shelf. At this time, the properties are producing approximately 52 mmcfe per day, with over 65% of this production currently being operated by Cabot. Total acreage associated with the properties includes approximately 240,000 gross acres and 187,000 net acres, of which approximately 67% is undeveloped. Total proved reserves associated with the properties are approximately 98 bcfe as of August 1, 2006 with proved and probable reserves totaling approximately 135 bcfe as of that date. The reserve base is approximately 70% natural gas. During its ownership of the properties, Cabot internally developed 20 exploitation prospects and 35 exploration prospects, all of which will become Phoenix's property upon the closing of the transaction. Phoenix estimates these prospects have a total unrisked reserve potential of 1.2 tcfe.

Phoenix Chief Executive Officer, William H. Flores said, "Our founding partners - Steve Heitzman, John Parker, Keith Westmoreland, Tim Duncan and I - are very pleased to have the opportunity to acquire these properties. Cabot's election to narrow the focus of its operations and capital allocation has resulted in a very synergistic outcome for both Cabot and Phoenix. We are particularly pleased with this opportunity because it creates a stable asset and cash flow base from which to further develop Phoenix while it also includes significant upside opportunities. A sizeable portion of this upside is "drill-ready" due to Cabot's dedicated efforts to maximize the value of the properties. We believe that the properties have substantial additional upside that we can exploit through an aggressive redevelopment program, the efficient application of advanced seismic processing, state of the art exploration methodologies and our team of outstanding explorationists. In particular, the properties include three fields, which have collectively produced in excess of three tcfe of hydrocarbons, that we believe will have additional upside through the application of our planned redevelopment program." Steve Heitzman, Phoenix Chief Operating Officer added, "Cabot has done a fine job of operating these properties, and we look forward to integrating these operations into Phoenix." Concluding his remarks, Flores said, "As we stated at the time of our formation, our goal is to create value through a balanced strategy of exploration and acquisitions. This acquisition will become a key component of the foundation for executing this strategy."

The Houston office of Mayer, Brown, Rowe & Maw LLP assisted Phoenix in the transaction.

About Phoenix Exploration Company LP
In April 2006, Carlyle/Riverstone and management formed Phoenix with a $250 million capital commitment to pursue a balanced strategy of oil and gas exploration and the acquisition and exploitation of properties along the Gulf Coast and the Gulf of Mexico shelf utilizing regional 3-D seismic data. The Company’s business plan was developed by a group of five industry executives (William H. Flores, Stephen E. Heitzman, John A. Parker, Keith O. Westmoreland and Timothy S. Duncan) who, prior to Phoenix, served in senior positions at Gryphon Exploration Company. Gryphon, a Warburg Pincus portfolio company, was formed in late 2000 and was acquired in August 2005 by Woodside Energy. In early July, Phoenix received an additional $100 million private equity commitment from Soros Strategic Partners LP and HNBridge LP, a fund organized by Howard Newman and primarily funded by Soros Strategic Partners LP. In late July, J.P. Morgan Securities Inc. arranged and led a $300 million reserve-based credit facility for Phoenix that included a consortium of banks consisting of JPMorgan Chase Bank, N.A., Union Bank of California, Macquarie Bank Limited, and BNP Paribas.