8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 28, 2004

CABOT OIL & GAS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-10447	04-3072771
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		Identification No.)

1200 Enclave Parkway
Houston, Texas	77077
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (281) 589-4600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On October 28, 2004, we issued a press release with respect to our 2004 third quarter earnings. The press release is furnished as Exhibit 99.1 to this Current Report and incorporated by reference herein. The press release contains certain measures (discussed below) which may be deemed “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended. In each case, the most directly comparable GAAP financial measure and information reconciling the GAAP and non-GAAP measures is also included in the press release.

The information furnished pursuant to this Item 12, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

From time to time management discloses Discretionary Cash Flow and Net Income excluding selected items and Earnings Per Share excluding selected items. These non-GAAP financial measures and reconciliations to the most comparable GAAP financial measure are included in Exhibit 99.1 to this Current Report, furnished to the Securities and Exchange Commission.

Discretionary Cash Flow is defined as Net Income plus non-cash charges and Exploration Expense. Discretionary Cash Flow is widely accepted as a financial indicator of an oil and gas company’s ability to generate cash which is used to internally fund exploration and development activities, pay dividends and service debt. Discretionary Cash Flow is presented based on management’s belief that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies that use the Full Cost method of accounting for oil and gas producing activities or have different financing and capital structures or tax rates. Discretionary Cash Flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating activities, as defined by GAAP, or as a measure of liquidity, or an alternative to Net Income.

Net Income excluding selected items and Earnings Per Share excluding selected items are presented based on managements belief that these non-GAAP measures enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods. Net Income and Earnings Per Share excluding selected items is not a measure of financial performance under GAAP and should not be considered as an alternative to Net Income and Earnings Per Share, as defined by GAAP.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

99.1 Press release issued by Cabot Oil & Gas Corporation dated October 28, 2004.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CABOT OIL & GAS CORPORATION
By:	/s/ Henry C. Smyth
	Henry C. Smyth Vice President, Controller and Treasurer

Date: October 28, 2004

EXHIBIT INDEX

99.1 —     Press release issued by Cabot Oil & Gas Corporation dated October 28, 2004.

EX-99.1

Exhibit 99.1

FOR RELEASE	FOR MORE INFORMATION CONTACT
October 28, 2004	Scott Schroeder (281) 589-4993

CABOT OIL & GAS REPORTS THIRD QUARTER RESULTS

HOUSTON, October 28, 2004—Cabot Oil & Gas Corporation (NYSE: COG) today announced third quarter net income of $17.8 million, or $0.55 per share, compared to $22.7 million, or $0.70 per share, in last year’s comparable quarter. Cash flow from operations in the third quarter increased to $70.1 million in 2004 from $65.9 million in 2003, while discretionary cash flow increased to $77.0 million in 2004 versus $63.9 million in 2003.

“Highlights for the quarter were increased equivalent production in each of our regions versus the 2004 second quarter and record third quarter level of operating cash flow,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “The net income figure, which was impacted by two non-cash items, does not reflect the full positive impact of the quarter. The largest impact was the $4.3 million after tax mark-to-market requirement (see attached Impact of Mark-to-Market Accounting Requirements for details) for derivatives that do not qualify for hedge accounting. The rules specify that the Company record not only the current period impact of derivatives, but also the impact on all future periods. These instruments cover a portion of Cabot’s oil production. The other item was a $2.1 million after tax impairment of a two-well field in South Louisiana,” added Dinges. Excluding the non-cash impact of the mark-to-market on derivative positions not qualifying as hedges, the impairment, and a small gain on the sale of assets, the net income comparison would have been $24.2 million, or $0.75 per share, versus $21.2 million, or $0.66 per share, for the third quarters of 2004 and 2003, respectively (see attached Selected Item Review and Reconciliation for details).

Increased natural gas production and higher realized commodity prices between comparable third quarter periods were offset by lower oil production and an unrealized mark-to-market loss on oil positions, resulting in an overall reduction to operating revenues between periods. On the expense side of the equation, lower exploration expense, interest expense, and brokered natural gas cost led the way to lower overall operating expenses between comparable third quarters. Of note, general and administrative expense continues to experience growing costs associated with Sarbanes-Oxley section 404 compliance in the amount of $0.6 million

for the quarter, compared to zero last year. Also, the impact of the stock compensation plans (performance shares and restricted stock awards) has been separated from G&A for press release financial statement purposes to better reflect its impact. In addition, the mark-to-market impact of the performance shares is highlighted in an attached table.

“Operationally, I am pleased with our continued progress, particularly the increase in production quarter over quarter,” stated Dinges. “While the Gulf of Mexico hurricanes did not dramatically impact the Company, we did shut-in, deferring approximately .5 Bcfe of production leading up to and immediately following the storm.” Dinges added, “Our production guidance for the fourth quarter of 2004 has been adjusted to reflect higher expected oil volumes and lower gas volumes which have been impacted by completion delays on some of our outside operated properties, but we still anticipate sequential growth over the third quarter.” New guidance for 2005 has been posted to the Company’s website and will be discussed on the conference call on October 29.

Year-to-Date

For the nine months ended September 2004, Cabot reported net income of $56.2 million, or $1.73 per share, along with cash flow from operations of $215.9 million and discretionary cash flow of $211.3 million. These figures compare favorably with last year’s nine month net income of $1.3 million, or $0.04 per share, cash flows from operations of $205.7 million and discretionary cash flow of $194.1 million.

Again, both time frames were impacted by some of the same non-cash selected items (mark-to-market of derivatives and impairments). Taking these into account, the net income comparison would have been $66.5 million, or $2.05 per share, versus $61.5 million, or $1.92 per share last year, (see attached Selected Item Review and Reconciliation for details).

Higher realized commodity prices were offset by lower production for the comparable periods making revenues essentially flat. Removing the impairments, expenses were driven down by lower brokered natural gas costs, reduced exploration expenses and lower interest, which were partially offset by higher general and administrative, and depreciation, depletion and amortization expense.

“Last year, we were pleased to return to profitability following the first quarter impairment. This year, we have already surpassed our highest record net income for any year, highlighting the excellent results we are having both operationally and financially,” commented Dinges.

During the third quarter of 2004, the Company continued to repurchase stock under its stock purchase program. Cabot bought 86,000 shares in the third quarter at an average price of $39.42 per share in the open market. Cabot has purchased 244,100 shares during 2004 at an average price of $35.77 per share in the open market.

“Cabot will continue to focus on the repurchase of its stock as an investment strategy. We believe our stock is an attractive investment, especially when compared to the alternative investment opportunities in the current marketplace,” stated Dinges.

Late in the third quarter, Cabot added to its hedge positions five natural gas collars and one oil collar covering production in 2005. The natural gas collars cover either the first quarter or entire year, while the oil collar is for the entire year. Prices range from a $4.75 by $7.00 per Mmbtu for a full-year Rocky Mountain collar to a $7.00 by $10.35 per Mmbtu for a first quarter Henry Hub trade. During this same time frame a full-year 2005 oil trade received a $40.00 floor and a $50.50 per barrel ceiling. Details of the entire 2005 hedge program can be accessed on the Company website at www.cabotog.com.

“Because of the volatility in the commodity markets and our recent experience with range swaps, we will target future hedge positions towards products that qualify for hedge accounting to avoid earnings swings of the magnitude we experienced in the third quarter,” added Dinges.

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s 2004 third quarter financial and operating results discussion with financial analysts on Friday, October 29, at 9:30 AM EDT (8:30 AM CDT) at www.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), passcode 1430138. A replay will be available from Friday, October 29 through Friday, November 5, 2004. The latest financial guidance, including the Company’s hedge positions, along with a replay of the webcast, which will be archived for one year, are available in the investor relations section of the Company’s website at www.cabotog.com.

* * *

Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid-Continent; the East and an expansion effort in Canada. For additional information, visit the Company’s Internet homepage at www.cabotog.com.

Forward-Looking Statements

The statements regarding future financial performance and results and the other statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, market factors, the market price (including regional basis differentials) of natural gas and oil, results of future drilling and marketing activity, future production and costs, and other factors detailed in the Company’s Securities and Exchange Commission filings.

CABOT OIL & GAS RESULTS — Page 4

OPERATING DATA

	Quarter Ended September 30,						Nine-Months Ended September 30,
	2004			2003			2004			2004
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
Natural Gas
Gulf Coast		8.4			7.7			23.6			21.8
West		5.5			5.9			16.3			18.0
East		5.0			4.9			14.3			13.9
Canada		0.0			0.0			0.0			0.0
Total		18.9			18.5			54.2			53.7
Crude/Condensate
Gulf Coast		450			683			1,391			2,027
West		37			46			120			146
East		7			7			20			20
Canada		1			0			1			0
Total		495			736			1,532			2,193
Natural Gas Liquids		1			3			10			38
Equivalent Production (Bcfe)		21.9			22.9			63.5			67.1
PRICES
Average Produced Gas Sales Price ($/Mcf)
Gulf Coast	$	5.26		$	4.68		$	5.17		$	4.83
West	$	4.68		$	3.75		$	4.72		$	3.65
East	$	5.19		$	5.24		$	5.41		$	5.17
Canada	$	4.39		$	0.00		$	4.39		$	0.00
Total	$	5.07		$	4.53		$	5.10		$	4.53
Crude/Condensate Price ($/Bbl)
Gulf Coast	$	31.01		$	28.32		$	30.71		$	29.50
West	$	42.85		$	29.75		$	38.06		$	30.07
East	$	39.64		$	28.02		$	35.99		$	28.67
Canada	$	36.63		$	0.00		$	36.63		$	0.00
Total	$	32.03		$	28.40		$	31.36		$	29.53
WELLS DRILLED
Gross		75			55			205			123
Net		66			44			179			99
Gross Success Rate		95	%		87	%		97	%		90	%

{CABOT OIL & GAS RESULTS — Page 5

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

	Quarter Ended September 30,				Nine-Months Ended September 30,
	2004		2003		2004		2003
Net Operating Revenues
Natural Gas Production (1)	$	96,111	$	84,555	$	276,518	$	242,841
Brokered Natural Gas		13,224		18,709		60,411		73,929
Crude Oil and Condensate (1)		8,514		21,455		34,833		65,098
Other		1,574		752		4,007		6,275
		119,423		125,471		375,769		388,143
Operating Expenses
Brokered Natural Gas Cost		11,627		16,602		53,944		66,402
Direct Operations—Field and Pipeline		13,297		11,271		38,489		36,022
Exploration		6,979		13,999		32,691		43,053
Depreciation, Depletion and Amortization		30,788		25,984		84,950		77,929
Impairment of Long-Lived Assets		3,458		5,870		3,458		93,796
General and Administrative		6,506		5,419		19,686		17,336
Stock Compensation (2)		2,495		383		5,613		1,233
Taxes Other Than Income		10,115		9,301		30,138		28,176
		85,265		88,829		268,969		363,947
Gain on Sale of Assets		120		6,988		7		7,593
Income from Operations		34,278		43,630		106,807		31,789
Interest Expense and Other		5,577		6,972		16,399		18,549
Income Before Income Taxes		28,701		36,658		90,408		13,240
Income Tax Expense		10,879		13,990		34,257		5,044
Net Income Before Cumulative Effect of Accounting Change		17,822		22,668		56,151		8,196
Cumulative Effect of Accounting Change (3)		—		—		—		(6,847	)
Net Income	$	17,822	$	22,668	$	56,151	$	1,349
Net Earnings Per Share—Basic	$	0.55	$	0.70	$	1.73	$	0.04
Average Common Shares Outstanding		32,548		32,179		32,491		32,000

⁽¹⁾ See the "Impact of Mark-to-Market Accounting Requirements" table for additional information.

⁽²⁾ Includes the impact of the Company's performance share mark-to-market requirement and restricted stock amortization.

⁽³⁾ Cumulative effect of accounting change relates to the adoption of SFAS 143, "Accounting for Asset Retirement Obligations."

CABOT OIL & GAS RESULTS—Page 6

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(in thousands)

	September 30, 2004		Dec. 31, 2003
Assets
Current Assets	$	184,151	$	143,331
Property, Equipment and Other Assets		977,868		902,805
Deferred Income Taxes		16,337		8,920
Total Assets	$	1,178,356	$	1,055,056
Liabilities and Stockholders' Equity
Current Liabilities	$	198,235	$	156,527
Long-Term Debt		270,000		270,000
Deferred Income Taxes		232,127		208,955
Other Liabilities		74,645		54,377
Stockholders' Equity		403,349		365,197
Total Liabilities and Stockholders' Equity	$	1,178,356	$	1,055,056

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)

	Quarter Ended September 30,						Nine-Months Ended September 30,
	2004			2003			2004			2003
Cash Flows From Operating Activities
Net Income	$	17,822		$	22,668		$	56,151		$	1,349
Cumulative Effect of Accounting Change		—			—			—			6,847
Change in Derivative Fair Value		7,023			(1,218	)		13,295			(24	)
Impairment of Long-Lived Assets		3,458			5,870			3,458			93,796
Income Charges Not Requiring Cash		33,553			26,544			90,216			78,821
Gain on Sale of Assets		(120	)		(6,988	)		(7	)		(7,593	)
Deferred Income Taxes		8,268			3,072			15,449			(22,176	)
Changes in Assets and Liabilities		(6,900	)		1,955			4,676			11,633
Exploration Expense		6,979			13,999			32,691			43,053
Net Cash Provided by Operations .		70,083			65,902			215,929			205,706
Cash Flows From Investing Activities
Capital Expenditures		(55,317	)		(33,985	)		(157,747	)		(85,384	)
Proceeds from Sale of Assets		164			15,821			186			18,181
Restricted Cash		—			(15,761	)		—			(15,761	)
Exploration Expense		(6,979	)		(13,999	)		(32,691	)		(43,053	)
Net Cash Used by Investing		(62,132	)		(47,924	)		(190,252	)		(126,017	)
Cash Flows From Financing Activities
Sale of Common Stock Proceeds		200			3,393			11,123			5,851
Decrease in Debt		—			(19,000	)		—			(80,000	)
Purchase of Treasury Stock		(3,390	)		—			(8,732	)		—
Dividends Paid		(1,304	)		(1,287	)		(3,906	)		(3,755	)
Net Cash Used by Financing		(4,494	)		(16,894	)		(1,515	)		(77,904	)
Net Increase in Cash and Cash Equivalents	$	3,457		$	1,084		$	24,162		$	1,785

(*) Net income plus non-cash charges and exploration. Excludes net proceeds on property sales.

CABOT OIL & GAS RESULTS — Page 7

Selected Item Review and Reconciliation of Net Income and Earnings Per Share

(In thousands, except per share amounts)

	Quarter Ended September 30,						Nine-Months Ended September 30,
	2004			2003			2004			2003
As Reported—Net Income	$	17,822		$	22,668		$	56,151		$	1,349
Reversal of Selected Items, Net of Tax:
Impairment of Long-Lived Assets		2,141			3,634			2,141			58,060
Gain on Sale of Assets		(74	)		(4,326	)		(4	)		(4,700	)
Change in Derivative Fair Value		4,347			(754	)		8,230			(15	)
Cumulative Effect of Accounting Change		—			—			—			6,847
Net Income Including Reversal of Selected Items	$	24,236		$	21,222		$	66,518		$	61,541
As Reported—Net Earnings Per Share	$	0.55		$	0.70		$	1.73		$	0.04
Per Share Impact of Reversing Selected Items		0.20			(0.04	)		0.32			1.88
Net Earnings Per Share Including Reversal of Selected Items	$	0.75		$	0.66		$	2.05		$	1.92
Average Common Shares Outstanding		32,548			32,179			32,491			32,000

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)

	Quarter Ended September 30,						Nine-Months Ended September 30,
	2004			2003			2004			2003
Discretionary Cash Flow
As Reported—Net Income	$	17,822		$	22,668		$	56,151		$	1,349
Plus:
Cumulative Effect of Accounting Change		—			—			—			6,847
Change in Derivative Fair Value		7,023			(1,218	)		13,295			(24	)
Impairment of Long-Lived Assets		3,458			5,870			3,458			93,796
Income Charges Not Requiring Cash		33,553			26,544			90,216			78,821
Gain on Sale of Assets		(120	)		(6,988	)		(7	)		(7,593	)
Deferred Income Taxes		8,268			3,072			15,449			(22,176	)
Exploration Expense		6,979			13,999			32,691			43,053
Discretionary Cash Flow		76,983			63,947			211,253			194,073
Plus: Changes in Assets and Liabilities		(6,900	)		1,955			4,676			11,633
Net Cash Provided by Operations	$	70,083		$	65,902		$	215,929		$	205,706

CABOT OIL & GAS RESULTS — Page 8

Impact of Mark-to-Market Accounting Requirements

(In thousands)

	Quarter Ended September 30,						Nine-Months Ended September 30,
	2004			2003			2004			2003
Unrealized Gain (Loss) on Derivatives (1)
Natural Gas	$	349		$	676		$	(69	)	$	(324	)
Crude Oil		(7,372	)		542			(13,225	)		348
Incentive Stock Compensation Expense (2)
Performance Shares		(1,378	)		—			(3,158	)		—
Mark-to-Market Impact, Before Income Tax	$	(8,401	)	$	1,218		$	(16,452	)	$	24
Mark-to-Market Impact, Income Tax		3,201			(464	)		6,268			(9	)
Mark-to-Market Impact on Net Income	$	(5,200	)	$	754		$	(10,184	)	$	15

⁽¹⁾ These amounts represent the ineffective gain (loss) associated with the mark-to-market valuation of open positions. These amounts are reflected in the respective line items of Net Operating Revenues. Therefore, the computation of our reported realized commodity prices can be obtained by adding (subtracting) the loss (gain) from the respective Net Operating Revenues line item and dividing by reported production.

⁽²⁾ This amount relates to the mark-to-market valuation of the Company's performance share incentive stock compensation awards that is reflected in general and administrative expense. At September 30, 2004 the Company recognized stock compensation expense based on Cabot's ranking against a predetermined peer group based on total shareholder return. Cabot must calculate its liability at the balance sheet date under the assumption that its relative ranking remains constant throughout the measurement period (January 1, 2004 - December 31, 2006), creating an assumed ultimate liability which is then amortized over the measurement period (percent payout multiplied by shares multiplied by stock price at reported balance sheet date multiplied by the pro-rata time expired in the measurement period). Expense recognition will fluctuate between reporting periods due to the valuation of the performance shares at the reported balance sheet date.