8-K

UNITED STATES

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): February 16, 2006

CABOT OIL & GAS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-10447	04-3072771
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer 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 (see General Instruction A.2):

¨ 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 February 16, 2006, we issued a press release with respect to our 2005 fourth quarter earnings. The press release is furnished as Exhibit 99.1 to this Current Report. 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.

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, Net Income excluding selected items, Earnings per Share excluding selected items and Net Debt calculations and ratios. These non-GAAP financial measures, to the extent included in Exhibit 99.1, are reconciled to the most comparable GAAP financial measures in Exhibit 99.1.

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 management’s 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.

The total Debt to total Capitalization ratio is calculated by dividing total Debt by the sum of total Debt and total Stockholders’ Equity. This ratio is a GAAP measurement which is presented in our annual and interim filings and management believes this ratio is useful to investors in determining the Company’s leverage. Net Debt and the Net Debt to total Capitalization ratio are non-GAAP measures which have been presented in Exhibit 99.1. Net Debt is calculated by subtracting Cash and Cash Equivalents from Total Debt. Management believes that these measurements are also useful to investors since the Company has the ability to and may decide to use a portion of its Cash and Cash Equivalents to retire Debt. Additionally, as the Company may incur additional expenditures without increasing debt, it is appropriate to apply Cash and Cash Equivalents to Debt in calculating the Net Debt to total Capitalization ratio.

Item 9. 01 Financial Statements and Exhibits.

(c) Exhibits

99.1 Press release issued by Cabot Oil & Gas Corporation dated February 16, 2006.

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: February 16, 2006

EXHIBIT INDEX

99.1     —     Press release issued by Cabot Oil & Gas Corporation dated February 16, 2006

EX-99.1

Exhibit 99.1

FOR RELEASE	FOR MORE INFORMATION CONTACT
February 16, 2006	Scott Schroeder (281) 589-4993

Cabot Oil & Gas Corporation Establishes New Records

2005 Net Income, Cash Flow Metrics and Reserves Surpass 2004 Record Levels

HOUSTON, February 16, 2006—Cabot Oil & Gas Corporation (NYSE: COG) today released year-end financial results including net income of $148.4 million, or $3.04 per share, cash flow from operations of $364.6 million and discretionary cash flow of $374.4 million. All of these figures were significantly above the levels recorded for 2004, the previous benchmark for financial success in the Company. The comparison levels for 2004 include $88.4 million, or $1.81 per share, for net income (all 2004 per share data has been adjusted for the 3-for-2 stock split in March 2005), $273.0 million for cash flow from operations and discretionary cash flow of $294.3 million.

“It is no secret that commodity prices were the key drivers for Cabot and many of its peers reporting such robust results,” stated Dan O. Dinges, Chairman, President and Chief Executive Officer. “Even with a portion of the upside hedged away, the cash generated provided funding for Cabot’s largest ever organic capital program.”

For the full year, natural gas price realizations were $6.74 per Mcf, compared to $5.20 per Mcf in 2004. The Company also experienced an increase in oil prices, recording $44.19 per barrel in 2005 versus $31.55 per barrel in 2004. “Expense inflation occurs as the industry reacts to higher prices by increasing its activity levels and its demand for services,” commented Dinges. “In 2005, our expenses increased over 2004, with the largest percent increases coming from exploration expense, stock compensation, and other taxes.”

For the year, Cabot reported 84.4 Bcfe of production, down less than one percent versus 2004’s 84.8 Bcfe. “Deferred volumes the last four months of the year from hurricanes Katrina and Rita are estimated at 1.4 Bcfe,” said Dinges. “This highlights how close we are in transitioning to and establishing a growing production profile from an organic program.” Dinges added, “Reinforcing this point are two important facts: (1) we continue to grow our natural gas production, and (2) our equivalent fourth quarter 2005 production volumes increased versus the comparable quarter in 2004.”

Fourth Quarter

The Company set a new quarterly high in the fourth quarter of 2005, reporting net income of $58.5 million, or $1.20 per share, compared to $32.2 million, or $.66 per share, in 2004. Quarterly cash flow comparisons were just as robust, with cash flow from operations of $117.4 million, more than doubling last year’s figure of $57.1 million, and discretionary cash flow of $119.3 million, up 44 percent. Higher realized prices and production more than offset the increase in expense levels.

Selected Items

The selected items that impacted the quarter and full year earnings figures, but had no impact on cash flow related items, included a gain on sale of assets, an unrealized change in derivative fair value, and an impairment of oil and gas properties in the 2004 full year period. Taking these into account the net income comparison for 2005 versus 2004 is $144.3 million, or $2.95 per share, versus $91.8 million, or $1.88 per share. The quarter comparison for net income is $53.1 million, or $1.09 per share, and $25.3 million, or $.52 per share.

Balance Sheet

Long-term debt increased over last year as the Company used its credit facility to fund about $70 million in acquisitions. During the course of the year, but predominately in the fourth quarter, the Company repurchased 452,300 shares of its common stock at a weighted average purchase price of $42.41. “With the inherent value in Cabot’s capital program, we recommenced buying shares in late November and early December with the market pull back,” stated Dinges. “We still see a lot of merit and long-term value for the shareholders in looking at COG stock as an investment alternative.”

Reserves

Cabot increased reserves by 10.7% in 2005, bringing year-end total proved reserves to 1,330.9 Bcfe – the highest level ever for the Company. To accomplish this, Cabot grew reserves in each of its operating regions and replaced 252% of 2005 production. The Company’s 2005 drilling program added 187.9 Bcfe, a limited acquisition program added 20.1 Bcfe, and the Company had a 4.9 Bcfe positive revision. The all-in finding cost was $1.91 per Mcfe.

“With the high demand for materials and services in our industry and the resulting inflationary pressure we have experienced during the year, I am very pleased with our overall reserve and finding cost for 2005,” said Dinges. “I am particularly happy with the drilling only finding cost of $1.77 per Mcfe, while replacing 223% of production. I should add that these figures reflect a proven, undeveloped (PUD) component consistent with historical levels.”

Outlook

For 2006, Cabot once again is expanding its drilling program. “We have secured the rigs necessary to complete our program, a program that focuses on more development activity and less risk,” said Dinges. “The current forecasted activity level calls for 391 wells, with increased activity in each region including expanded drilling on each of the acquisition plays purchased in 2005.”

Given the current outlook on prices and the hedge philosophy for 2006 of wide range collars, Cabot is well positioned to participate more fully in any up market for 2006 commodity prices. On a weighted average basis, Cabot’s natural gas collars range from $8.25 to $12.74 per Mcf while its oil collar ranges from $50.00 to $76.00 per barrel. These derivatives cover 34% of anticipated 2006 equivalent production.

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s 2005 year-end/fourth quarter financial and operating results discussion with financial analysts on Friday, February 17, 2006 at 9:30 AM EST (8:30 AM CST) at www.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), passcode: 4293569. A replay will be available from Friday, February 17 through Friday, February 24, 2006. 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 North American exploration and production independent. The Company’s reserves are focused in both conventional and unconventional basins including the East, the West (Rocky Mountain and Mid-Continent), the Gulf Coast (South and East Texas to North Louisiana) and 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 December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
Natural Gas
Gulf Coast		7.1			7.7			28.1			31.3
West		5.9			5.6			23.2			21.9
East		5.7			5.1			21.4			19.4
Canada		0.4			0.2			1.2			0.2
Total		19.1			18.6			73.9			72.8
Crude/Condensate/Ngl
Gulf Coast		339			411			1,530			1,809
West		45			40			172			163
East		7			7			27			27
Canada		4			2			18			3
Total		395			460			1,747			2,002
Equivalent Production (Bcfe)		21.5			21.3			84.4			84.8
PRICES
Average Produced Gas Sales Price ($/Mcf)
Gulf Coast	$	6.73		$	5.55		$	6.38		$	5.27
West	$	7.82		$	4.83		$	6.00		$	4.75
East	$	11.06		$	6.13		$	8.02		$	5.60
Canada	$	8.89		$	4.69		$	6.79		$	4.69
Total(1)	$	8.42		$	5.49		$	6.74		$	5.20
Crude/Condensate Price ($/Bbl)
Gulf Coast	$	43.13		$	30.52		$	42.81		$	30.67
West	$	58.70		$	47.18		$	55.37		$	40.29
East	$	56.36		$	44.95		$	53.84		$	38.28
Canada	$	47.08		$	37.93		$	43.39		$	37.93
Total(1)	$	45.09		$	32.18		$	44.19		$	31.55
WELLS DRILLED
Gross		87			51			316			256
Net		70			41			247			220
Gross Success Rate		94	%		90	%		95	%		95	%

⁽¹⁾ These realized prices include the realized impact of derivative instruments.

CABOT OIL & GAS RESULTS — Page 5

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

	Quarter Ended December 31,					Twelve Months Ended December 31,
	2005		2004			2005		2004
Operating Revenues
Natural Gas Production (1)	$	161,611	$	103,143		$	499,177	$	379,661
Brokered Natural Gas		37,837		24,005			98,605		84,416
Crude Oil and Condensate (1)		25,098		25,189			82,348		60,022
Other		536		2,302			2,667		6,309
		225,082		154,639			682,797		530,408
Operating Expenses
Brokered Natural Gas Cost		33,634		21,273			87,183		75,217
Direct Operations - Field and Pipeline		18,579		15,092			61,750		53,581
Exploration		14,444		15,439			61,840		48,130
Depreciation, Depletion and Amortization		30,932		28,538			121,424		113,488
Impairment of Oil & Gas Properties		—		—			—		3,458
General and Administrative (excluding Stock-Based Compensation)		7,518		8,512			28,028		28,198
Stock-Based Compensation (2)		2,793		924			9,622		6,537
Taxes Other Than Income		17,240		10,884			54,293		41,022
		125,140		100,662			424,140		369,631
(Loss) / Gain on Sale of Assets		—		(131	)		74		(124	)
Income from Operations		99,942		53,846			258,731		160,653
Interest Expense and Other		7,036		5,630			22,497		22,029
Income Before Income Taxes		92,906		48,216			236,234		138,624
Income Tax Expense		34,401		15,989			87,789		50,246
Net Income	$	58,505	$	32,227		$	148,445	$	88,378
Net Earnings Per Share - Basic (3)	$	1.20	$	0.66		$	3.04	$	1.81
Weighted Average Common Shares Outstanding (3)		48,831		48,722			48,856		48,733

⁽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⁾ Reflects the 3-for-2 split of the Company’s Common Stock on March 31, 2005.

CABOT OIL & GAS RESULTS — Page 6

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)

	December 31, 2005		December 31, 2004
Assets
Current Assets	$	230,312	$	194,679
Property, Equipment and Other Assets		1,245,471		1,001,422
Deferred Income Taxes		19,587		14,855
Total Assets	$	1,495,370	$	1,210,956
Liabilities and Stockholders’ Equity
Current Liabilities	$	218,584	$	196,889
Long-Term Debt		320,000		250,000
Deferred Income Taxes		289,381		247,376
Other Liabilities		67,194		61,029
Stockholders’ Equity		600,211		455,662
Total Liabilities and Stockholders’ Equity	$	1,495,370	$	1,210,956

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)

	Quarter Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Cash Flows From Operating Activities
Net Income	$	58,505		$	32,227		$	148,445		$	88,378
Unrealized Change in Derivative Fair Value		(8,677	)		(11,292	)		(6,626	)		2,003
Impairment of Oil & Gas Properties		—			—			—			3,458
Income Charges Not Requiring Cash		33,581			29,234			131,227			119,448
Loss / (Gain) on Sale of Assets		—			131			(74	)		124
Deferred Income Tax Expense		21,403			17,264			39,628			32,713
Changes in Assets and Liabilities		(1,807	)		(25,908	)		(9,880	)		(21,232	)
Exploration Expense		14,444			15,439			61,840			48,130
Net Cash Provided by Operations		117,449			57,095			364,560			273,022
Cash Flows From Investing Activities
Capital Expenditures		(109,802	)		(49,599	)		(351,306	)		(207,346	)
Proceeds from Sale of Assets		—			(67	)		996			119
Exploration Expense		(14,444	)		(15,439	)		(61,840	)		(48,130	)
Net Cash Used by Investing		(124,246	)		(65,105	)		(412,150	)		(255,357	)
Cash Flows From Financing Activities
Sale of Common Stock Proceeds		498			1,351			4,586			12,474
Net Increase in Debt		60,000			—			70,000			—
Decrease in Book Overdrafts		(25,691	)		—			—			—
Purchase of Treasury Stock		(18,612	)		(6,899	)		(19,183	)		(15,631	)
Dividends Paid		(1,959	)		(1,300	)		(7,213	)		(5,206	)
Net Cash Provided / (Used) by Financing		14,236			(6,848	)		48,190			(8,363	)
Net Increase / (Decrease) in Cash and Cash Equivalents	$	7,439		$	(14,858	)	$	600		$	9,302

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 December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
As Reported - Net Income	$	58,505		$	32,227		$	148,445		$	88,378
Reversal of Selected Items, Net of Tax:
Impairment of Oil & Gas Properties		—			—			—			2,139
Loss / (Gain) on Sale of Assets		—			81			(46	)		77
Unrealized Change in Derivative Fair Value		(5,374	)		(6,985	)		(4,108	)		1,239
Net Income Including Reversal of Selected Items	$	53,131		$	25,323		$	144,291		$	91,833
As Reported - Net Earnings Per Share	$	1.20		$	0.66		$	3.04		$	1.81
Per Share Impact of Reversing Selected Items		(0.11	)		(0.14	)		(0.09	)		0.07
Net Earnings Per Share Including Reversal of Selected Items	$	1.09		$	0.52		$	2.95		$	1.88
Weighted Average Common Shares Outstanding		48,831			48,722			48,856			48,733

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)

	Quarter Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Discretionary Cash Flow
As Reported - Net Income	$	58,505		$	32,227		$	148,445		$	88,378
Plus:
Unrealized Change in Derivative Fair Value		(8,677	)		(11,292	)		(6,626	)		2,003
Impairment of Oil & Gas Properties		—			—			—			3,458
Income Charges Not Requiring Cash		33,581			29,234			131,227			119,448
Loss / (Gain) on Sale of Assets		—			131			(74	)		124
Deferred Income Tax Expense		21,403			17,264			39,628			32,713
Exploration Expense		14,444			15,439			61,840			48,130
Discretionary Cash Flow		119,256			83,003			374,440			294,254
Plus: Changes in Assets and Liabilities		(1,807	)		(25,908	)		(9,880	)		(21,232	)
Net Cash Provided by Operations	$	117,449		$	57,095		$	364,560		$	273,022

Net Debt Reconciliation

(In thousands)

	December 31, 2005			December 31, 2004
Current Portion of Long-Term Debt	$	20,000		$	20,000
Long-Term Debt		320,000			250,000
Total Debt	$	340,000		$	270,000
Stockholders’ Equity		600,211			455,662
Total Capitalization	$	940,211		$	725,662
Total Debt	$	340,000		$	270,000
Less: Cash and Cash Equivalents		(10,626	)		(10,026	)
Net Debt	$	329,374		$	259,974
Net Debt	$	329,374		$	259,974
Stockholders’ Equity		600,211			455,662
Total Adjusted Capitalization	$	929,585		$	715,636
Total Debt to Total Capitalization Ratio		36.2	%		37.2	%
Less: Impact of Cash and Cash Equivalents		0.8	%		0.9	%
Net Debt to Adjusted Capitalization Ratio		35.4	%		36.3	%

CABOT OIL & GAS RESULTS — Page 8

Impact of Mark-to-Market Accounting Requirements

(In thousands)

	Quarter Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Unrealized Gain / (Loss) on Derivatives (1)
Natural Gas	$	1,300		$	983		$	1,114		$	914
Crude Oil		7,377			10,309			5,512			(2,917	)
Incentive Stock Compensation Expense (2)
Performance Shares		(785	)		(26	)		(3,357	)		(3,184	)
Mark-to-Market Impact, Before Income Tax	$	7,892		$	11,266		$	3,269		$	(5,187	)
Mark-to-Market Impact, Income Tax		(2,999	)		(4,297	)		(1,242	)		1,978
Mark-to-Market Impact on Net Income	$	4,893		$	6,969		$	2,027		$	(3,209	)

⁽¹⁾ These amounts represent the unrealized gain / (loss) associated with the mark-to-market valuation of open positions which do not qualify for hedge accounting or are ineffective. These amounts are reflected in the respective line items of Operating Revenues. Therefore, the computation of our reported realized commodity prices can be obtained by adding the loss or subtracting the gain from the respective 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 December 31, 2005 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, 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.