EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

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FOR RELEASE   FOR MORE INFORMATION CONTACT
April 28, 2009   Scott Schroeder (281) 589-4993

 

Cabot Oil & Gas Announces First Quarter Profits

HOUSTON, April 28, 2009—Cabot Oil & Gas Corporation (NYSE: COG) today reported that for the first quarter of 2009 the Company had net income of $47.6 million, or $0.46 per share, compared to $46.0 million, or $0.47 per share, for last year’s first quarter. The 2009 earnings figure benefited from a gain on the sale of assets and a gain on derivatives in 2009, while both periods were negatively impacted by charges related to stock compensation. Removing these selected items for both first quarter periods, the comparison for net income is $42.2 million, or $0.41 per share, for 2009 versus $57.0 million, or $0.58 per share, in 2008.

The Company also reported cash flow from operations for the quarter of $152.5 million, up almost $20 million from the $132.7 million recorded in last year’s first quarter. Discretionary cash flow was relatively flat between comparable periods at $138.0 million for 2009, compared to $138.4 million for 2008.

“The key drivers for the quarter’s results were a 16 percent increase in equivalent production and solid price realizations aided by our hedge position,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “For the quarter, Cabot reported 25.6 Bcfe of production, compared to last year’s first quarter figure of 22.2 Bcfe. This increase represents a combination of growth in our organic program and from production related to last summer’s acquisition,” commented Dinges. “Roughly half was the result of acquired wells and half from our drilling effort.”

Natural gas price realizations were $7.51 per Mcf in 2009 versus $7.92 per Mcf in 2008 for the quarter comparisons. This year’s quarter experienced a $3.34 per Mcf pick-up from the Company’s hedge position, where last year’s impact was only a positive $0.03 per Mcf. While oil comprises a small portion of Cabot’s production, the hedge per unit impact was much more dramatic, moving realized oil prices up $39.07 per barrel for the first quarter 2009 versus a decline of $8.60 per barrel in the first quarter 2008.

 

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“Expenses between comparable quarters trended higher but within expectations,” added Dinges. “DD&A increased due to higher production, costs related to the acquisition and leasehold amortizations.”

“In light of the business environment, I am pleased with the quarter results, the areas we have to allocate our capital and the stronger financial position we possess,” said Dinges. “Even with the current economic conditions, I believe 2009 will be another growth year for Cabot.”

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s first quarter financial and operating results discussion with financial analysts on Wednesday, April 29, 2009 at 9:30 a.m. EDT (8:30 a.m. CDT) at www.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 93093519. The replay will be available through Friday, May 1, 2009. The latest financial guidance, including the Company’s hedge positions, along with a replay of the web cast, 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; and in the East. For additional information, visit the Company’s Internet homepage at www.cabotog.com.

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.

 

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CABOT OIL & GAS RESULTS - Page 3

OPERATING DATA

 

     Quarter Ended
March 31,		  
     2009     2008  
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)     

Natural Gas

     

East

      7.3       6.0  

Gulf Coast

      10.4       7.4  

West

      6.2       6.4  

Canada

      0.6       1.2  
                

Total

      24.5       21.0  
                

Crude/Condensate/Ngl

     

East

      4       6  

Gulf Coast

      153       144  

West

      35       36  

Canada

      4       6  
                

Total

      196       192  
                

Equivalent Production (Bcfe)

      25.6       22.2  
PRICES     

Average Produced Gas Sales Price ($/Mcf)

     

East

    $ 8.34     $ 8.28  

Gulf Coast

    $ 8.34     $ 8.30  

West

    $ 5.54     $ 7.26  

Canada

    $ 3.51     $ 7.38  

Total (1)

    $ 7.51     $ 7.92  

Average Crude/Condensate Price ($/Bbl)

     

East

    $   37.25     $ 90.04  

Gulf Coast

    $ 87.02     $ 84.58  

West

    $ 32.22     $ 95.66  

Canada

    $ 32.01     $ 79.38  

Total (1)

    $ 75.25     $ 86.55  
WELLS DRILLED     

Gross

      49       85  

Net

      37       65  

Gross Success Rate

      96 %     98 %

 

(1)

These realized prices include the realized impact of derivative instrument settlements.

 

     Quarter Ended
March 31,		  
     2009    2008  

Realized Impacts to Gas Pricing

    $ 3.34    $ 0.03  

Realized Impacts to Oil Pricing

    $   39.07    $ (8.60 )

CABOT OIL & GAS RESULTS - Page 4

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

 

     Quarter Ended
March 31,
     2009    2008

Operating Revenues

      

Natural Gas Production

    $ 184,522    $ 166,559

Brokered Natural Gas

      33,381      35,620

Crude Oil and Condensate

      14,242      16,487

Other

      1,794      985
             
     233,939      219,651

Operating Expenses

      

Brokered Natural Gas Cost

      29,749      30,290

Direct Operations - Field and Pipeline

      25,479      17,491

Exploration

      6,466      5,061

Depreciation, Depletion and Amortization

      65,092      46,267

General and Administrative (excluding Stock-Based Compensation)

      11,936      9,997

Stock-Based Compensation (1) 

      5,129      17,576

Taxes Other Than Income

      12,898      16,897
             
     156,749      143,579

Gain on Sale of Assets (2)

      12,707      —  
             

Income from Operations

      89,897      76,072

Interest Expense and Other

      14,226      5,991
             

Income Before Income Taxes

      75,671      70,081

Income Tax Expense

      28,091      24,106
             

Net Income

    $ 47,580    $ 45,975
             

Net Earnings Per Share - Basic

    $ 0.46    $ 0.47

Weighted Average Common Shares Outstanding

      103,521      97,716

 

(1)

Includes the impact of the Company’s performance share awards and restricted stock amortization as well as expense related to stock options and stock appreciation rights. Also includes expense for the Supplemental Employee Incentive Plans which commenced in 2008.

(2)

The gain on sale of assets primarily relates to the sale of the Thornwood properties in the East.

CABOT OIL & GAS RESULTS - Page 5

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)

 

     March 31,
2009		    December 31,
2008

Assets

      

Current Assets

    $ 457,074    $ 460,551

Property, Equipment and Other Assets

      3,291,697      3,241,113
             

Total Assets

    $ 3,748,771    $ 3,701,664
             

Liabilities and Stockholders’ Equity

      

Current Liabilities

    $ 312,314    $ 378,913

Long-Term Debt, excluding Current Maturities

      840,286      831,143

Deferred Income Taxes

      623,340      599,106

Other Liabilities

      103,937      101,940

Stockholders’ Equity

      1,868,894      1,790,562
             

Total Liabilities and Stockholders’ Equity

    $ 3,748,771    $ 3,701,664
             

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)

 

     Quarter Ended
March 31,		  
     2009     2008  

Cash Flows From Operating Activities

     

Net Income

    $ 47,580     $ 45,975  

Unrealized Gain on Derivatives

      (941 )     —    

Income Charges Not Requiring Cash

      71,292       63,806  

Gain on Sale of Assets

      (12,707 )     —    

Deferred Income Tax Expense

      26,349       23,560  

Changes in Assets and Liabilities

      14,495       (1,056 )

Stock-Based Compensation Tax Benefit

      —         (4,642 )

Exploration Expense

      6,466       5,061  
                

Net Cash Provided by Operations

      152,534       132,704  
                

Cash Flows From Investing Activities

     

Capital Expenditures

      (171,029 )     (128,101 )

Proceeds from Sale of Assets

      15,063       —    

Exploration Expense

      (6,466 )     (5,061 )
                

Net Cash Used in Investing

      (162,432 )     (133,162 )
                

Cash Flows From Financing Activities

     

Sale of Common Stock Proceeds

      149       2,240  

Net Increase in Debt

      10,000       20,000  

Stock-Based Compensation Tax Benefit

      —         4,642  

Dividends Paid

      (3,103 )     (2,930 )
                

Net Cash Provided by Financing

      7,046       23,952  
                

Net Increase / (Decrease) in Cash and Cash Equivalents

    $ (2,852 )   $ 23,494  
                

CABOT OIL & GAS RESULTS - Page 6

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

(In thousands, except per share amounts)

 

     Quarter Ended
March 31,
     2009     2008

As Reported - Net Income

    $ 47,580     $ 45,975

Reversal of Selected Items, Net of Tax:

     

Gain on Sale of Assets (2)

      (7,967 )     —  

Stock-Based Compensation Expense

      3,216       11,055

Unrealized Gain on Derivatives (1)

      (590 )     —  
              

Net Income Excluding Selected Items

    $ 42,239     $ 57,030
              

As Reported - Net Earnings Per Share

    $ 0.46     $ 0.47

Per Share Impact of Reversing Selected Items

      (0.05 )     0.11
              

Net Earnings Per Share Including Reversal of Selected Items

    $ 0.41     $ 0.58
              

Weighted Average Common Shares Outstanding

      103,521       97,716

 

(1)

This unrealized gain is included in Natural Gas Production Revenues in the Condensed Consolidated Statement of Operations and represents the mark to market change related to the Company’s natural gas basis swaps.

(2)

The gain on sale of assets primarily relates to the sale of the Thornwood properties in the East.

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)

 

     Quarter Ended
March 31,		  
     2009     2008  

Discretionary Cash Flow

     

As Reported - Net Income

    $ 47,580     $ 45,975  

Plus / (Less):

     

Unrealized Gain on Derivatives

      (941 )     —    

Income Charges Not Requiring Cash

      71,292       63,806  

Gain on Sale of Assets

      (12,707 )     —    

Deferred Income Tax Expense

      26,349       23,560  

Exploration Expense

      6,466       5,061  
                

Discretionary Cash Flow

      138,039       138,402  

Changes in Assets and Liabilities

      14,495       (1,056 )

Stock-Based Compensation Tax Benefit

      —         (4,642 )
                

Net Cash Provided by Operations

    $ 152,534     $ 132,704  
                

Net Debt Reconciliation

(In thousands)

 

     March 31,
2009		     December 31,
2008		  

Current Portion of Long-Term Debt

    $ 36,714     $ 35,857  

Long-Term Debt

      840,286       831,143  
                

Total Debt

    $ 877,000     $ 867,000  

Stockholders’ Equity

      1,868,894       1,790,562  
                

Total Capitalization

    $ 2,745,894     $ 2,657,562  

Total Debt

    $ 877,000     $ 867,000  

Less: Cash and Cash Equivalents

      (25,249 )     (28,101 )
                

Net Debt

    $ 851,751     $ 838,899  

Net Debt

    $ 851,751     $ 838,899  

Stockholders’ Equity

      1,868,894       1,790,562  
                

Total Adjusted Capitalization

    $ 2,720,645     $ 2,629,461  

Total Debt to Total Capitalization Ratio

      31.9 %     32.6 %

Less: Impact of Cash and Cash Equivalents

      0.6 %     0.7 %
                

Net Debt to Adjusted Capitalization Ratio

      31.3 %     31.9 %