Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO


FOR RELEASE		FOR MORE INFORMATION CONTACT
July 23, 2009		Scott Schroeder (281) 589-4993

Cabot Oil & Gas Announces Second Quarter Results

HOUSTON, July 23, 2009 - Cabot Oil & Gas Corporation (NYSE: COG) today reported second quarter net income of $25.5 million, or $0.25 per share. Removing the selected items, (which are detailed in the Selected Items Table and include the loss related to the sale of the Company’s Canadian operations), the quarter’s net income was $39.1 million, or $0.38 per share. These figures compare to the 2008 second quarter numbers (for both the reported results and after the removal of selected items) of $54.6 million, or $0.55 per share, and $69.9 million, or $0.71 per share, for net income respectively.

Cash flow from operations for the 2009 second quarter totaled $147.9 million, while discretionary cash flow was $133.6 million. Comparatively, 2008 second quarter cash flow from operations was $143.7 million, and discretionary cash flow was $147.1 million.

“This marks our 25th consecutive quarter of profitability,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “These results include a ten percent increase in second quarter 2009 equivalent production over the second quarter of 2008 but also reflect a reduced commodity price realization.” The production growth rate was driven by a 42 percent increase in the East region and a 20 percent increase in the Gulf Coast region for comparable year over year quarters. On the pricing front, even with the hedge benefit, the price realization fell short of last year. Realized natural gas prices were $7.25 per Mcf in the 2009 second quarter versus $9.30 per Mcf in the 2008 second quarter. Realized oil prices fell 15 percent to $83.76 per barrel.”

In terms of cost comparisons, overall reported expenses were higher, but per unit levels were lower in this second quarter versus last year’s second quarter. The higher components of DD&A, interest and exploration expense are related to the impact of the August 2008 east Texas acquisition.

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Year-to-Date

In the six months ended June 30, 2009, Cabot reported net income of $73.1 million, or $0.71 per share, compared to $100.6 million, or $1.03 per share, for the same period last year. The cash flow comparisons for the six months ended June 30, 2009 and June 30, 2008, respectively, are cash flow from operations of $300.4 million versus $276.4 million and discretionary cash flow of $271.7 million versus $285.5 million. The 2009 six-month net income figure, after removal of the selected items, was $81.3 million, or $0.78 per share, versus $126.9 million, or $1.29 per share for the six-month period ended June 30, 2008.

“The same dynamic that drove the quarter results apply to the year-to-date periods – increased production and lower price realizations,” stated Dinges. “Production was up approximately 13 percent while natural gas and oil prices each fell 14 percent.” Expenses including financing costs were up three percent between the six-month year-to-date comparable periods.

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s second quarter financial and operating results discussion with financial analysts on Friday, July 24, 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 18590704. The replay will be available through Sunday, July 26, 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 its entire resource base located in the continental United States. 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 June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
Natural Gas
East		8.4			5.9			15.7			11.9
Gulf Coast		9.3			7.7			19.7			15.1
West		6.2			7.1			12.4			13.5
Canada		0.4			1.4			1.0			2.6

Total		24.3			22.1			48.8			43.1


Crude/Condensate/Ngl
East		5			6			9			12
Gulf Coast		147			136			300			280
West		44			43			79			79
Canada		2			5			6			11

Total		198			190			394			382


Equivalent Production (Bcfe)		25.6			23.2			51.2			45.4

PRICES
Average Produced Gas Sales Price ($/Mcf)
East	$	7.09		$	9.64		$	7.67		$	8.96
Gulf Coast	$	8.79		$	10.36		$	8.55		$	9.35
West	$	5.36		$	8.04		$	5.45		$	7.67
Canada	$	3.22		$	8.41		$	3.40		$	7.91
Total ⁽¹⁾	$	7.25		$	9.30		$	7.38		$	8.63

Average Crude/Condensate Price ($/Bbl)
East	$	54.24		$	118.33		$	46.90		$	103.89
Gulf Coast	$	94.51		$	91.87		$	90.72		$	88.11
West	$	52.15		$	118.18		$	43.37		$	108.12
Canada	$	45.14		$	96.89		$	36.46		$	87.26
Total ⁽¹⁾	$	83.76		$	98.68		$	79.55		$	92.58

WELLS DRILLED
Gross		33			116			82			201
Net		28			97			65			162
Gross Success Rate		100	%		99	%		98	%		99	%

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


	Quarter Ended June 30,					Six Months Ended June 30,
	2009		2008			2009		2008
Realized Impacts to Gas Pricing	$	4.15	$	(0.97	)	$	3.74	$	(0.48	)
Realized Impacts to Oil Pricing	$	30.78	$	(21.19	)	$	34.87	$	(14.88	)

CABOT OIL & GAS RESULTS — Page 4

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)


	Quarter Ended June 30,					Six Months Ended June 30,
	2009			2008		2009			2008
Operating Revenues
Natural Gas Production	$	176,213		$	202,689	$	360,735		$	369,248
Brokered Natural Gas		11,704			27,188		45,085			62,808
Crude Oil and Condensate		16,210			18,600		30,452			35,087
Other		697			377		2,491			1,362

		204,824			248,854		438,763			468,505

Operating Expenses
Brokered Natural Gas Cost		10,684			24,140		40,433			54,430
Direct Operations - Field and Pipeline		23,073			22,636		48,552			40,127
Exploration		10,397			7,290		16,863			12,351
Depreciation, Depletion and Amortization		61,838			48,401		126,930			94,668
General and Administrative (excluding Stock-Based Compensation)		10,946			11,782		22,882			21,779
Stock-Based Compensation ⁽¹⁾		6,171			21,695		11,300			39,271
Taxes Other Than Income		10,914			19,225		23,812			36,122

		134,023			155,169		290,772			298,748
Gain / (Loss) on Sale of Assets ⁽²⁾		(16,562	)		401		(3,855	)		401

Income from Operations		54,239			94,086		144,136			170,158
Interest Expense and Other		15,046			6,207		29,272			12,198

Income Before Income Taxes		39,193			87,879		114,864			157,960
Income Tax Expense		13,691			33,254		41,782			57,360

Net Income	$	25,502		$	54,625	$	73,082		$	100,600

Net Earnings Per Share – Basic	$	0.25		$	0.55	$	0.71		$	1.03
Weighted Average Common Shares Outstanding		103,640			98,467		103,581			98,092

⁽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 loss on sale of assets in 2009 primarily relates to a loss on our April 2009 sale of our Canadian properties, partially offset by a gain on sale of assets from the first quarter 2009 sale of the Thornwood properties in the East.

CABOT OIL & GAS RESULTS — Page 5

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)


	June 30, 2009		December 31, 2008
Assets
Current Assets	$	370,822	$	460,551
Property, Equipment and Other Assets		3,252,862		3,241,113

Total Assets	$	3,623,684	$	3,701,664


Liabilities and Stockholders’ Equity
Current Liabilities	$	265,127	$	378,913
Long-Term Debt, excluding Current Maturities		795,000		831,143
Deferred Income Taxes		628,234		599,106
Other Liabilities		98,851		101,940
Stockholders’ Equity		1,836,472		1,790,562

Total Liabilities and Stockholders’ Equity	$	3,623,684	$	3,701,664

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)


	Quarter Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Cash Flows From Operating Activities
Net Income	$	25,502		$	54,625		$	73,082		$	100,600
Unrealized (Gain) / Loss on Derivatives		126			2,909			(815	)		2,909
Income Charges Not Requiring Cash		69,151			50,692			140,443			114,498
(Gain) / Loss on Sale of Assets		16,562			(401	)		3,855			(401	)
Deferred Income Tax Expense		11,903			31,955			38,252			55,515
Changes in Assets and Liabilities		14,210			(8,005	)		28,705			(9,061	)
Stock-Based Compensation Tax Benefit		—			4,642			—			—
Exploration Expense		10,397			7,290			16,863			12,351

Net Cash Provided by Operations		147,851			143,707			300,385			276,411


Cash Flows From Investing Activities
Capital Expenditures		(121,941	)		(244,510	)		(292,970	)		(372,611	)
Proceeds from Sale of Assets		64,604			1,150			79,667			1,150
Exploration Expense		(10,397	)		(7,290	)		(16,863	)		(12,351	)

Net Cash Used in Investing		(67,734	)		(250,650	)		(230,166	)		(383,812	)


Cash Flows From Financing Activities
Sale of Common Stock Proceeds		1			313,867			150			316,107
Net Increase / (Decrease) in Debt		(62,000	)		(105,000	)		(52,000	)		(85,000	)
Capitalized Debt Issuance Costs		(10,409	)		—			(10,409	)		—
Stock-Based Compensation Tax Benefit		—			(4,642	)		—			—
Dividends Paid		(3,110	)		(2,943	)		(6,213	)		(5,873	)

Net Cash (Used in) / Provided by Financing		(75,518	)		201,282			(68,472	)		225,234


Net Increase in Cash and Cash Equivalents	$	4,599		$	94,339		$	1,747		$	117,833

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 June 30,					Six Months Ended June 30,
	2009		2008			2009			2008
As Reported - Net Income	$	25,502	$	54,625		$	73,082		$	100,600
Reversal of Selected Items, Net of Tax:
(Gain) / Loss on Sale of Assets ⁽¹⁾		9,596		(253	)		1,629			(253	)
Stock-Based Compensation Expense		3,875		13,668			7,091			24,723
Unrealized (Gain) / Loss on Derivatives ⁽²⁾		79		1,833			(511	)		1,833

Net Income Excluding Selected Items	$	39,052	$	69,873		$	81,291		$	126,903

As Reported - Net Earnings Per Share	$	0.25	$	0.55		$	0.71		$	1.03
Per Share Impact of Reversing Selected Items		0.13		0.16			0.07			0.26

Net Earnings Per Share Including Reversal of Selected Items	$	0.38	$	0.71		$	0.78		$	1.29

Weighted Average Common Shares Outstanding		103,640		98,467			103,581			98,092

⁽¹⁾

The loss on sale of assets in 2009 primarily relates to a loss on our April 2009 sale of our Canadian properties, partially offset by a gain on sale of assets from the first quarter 2009 sale of the Thornwood properties in the East. The loss on sale of assets for the three and six months ended June 30, 2009 considers a tax benefit associated with foreign tax credits.

⁽²⁾	This unrealized (gain) / loss 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.

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)


	Quarter Ended June 30,					Six Months Ended June 30,
	2009		2008			2009			2008
Discretionary Cash Flow
As Reported - Net Income	$	25,502	$	54,625		$	73,082		$	100,600
Plus / (Less):
Unrealized (Gain) / Loss on Derivatives		126		2,909			(815	)		2,909
Income Charges Not Requiring Cash		69,151		50,692			140,443			114,498
(Gain) / Loss on Sale of Assets		16,562		(401	)		3,855			(401	)
Deferred Income Tax Expense		11,903		31,955			38,252			55,515
Exploration Expense		10,397		7,290			16,863			12,351

Discretionary Cash Flow		133,641		147,070			271,680			285,472
Changes in Assets and Liabilities		14,210		(8,005	)		28,705			(9,061	)
Stock-Based Compensation Tax Benefit		—		4,642			—			—

Net Cash Provided by Operations	$	147,851	$	143,707		$	300,385		$	276,411

Net Debt Reconciliation

(In thousands)


	June 30, 2009			December 31, 2008
Current Portion of Long-Term Debt	$	20,000		$	35,857
Long-Term Debt		795,000			831,143

Total Debt	$	815,000		$	867,000
Stockholders’ Equity		1,836,472			1,790,562

Total Capitalization	$	2,651,472		$	2,657,562

Total Debt	$	815,000		$	867,000
Less: Cash and Cash Equivalents		(29,848	)		(28,101	)

Net Debt	$	785,152		$	838,899

Net Debt	$	785,152		$	838,899
Stockholders’ Equity		1,836,472			1,790,562

Total Adjusted Capitalization	$	2,621,624		$	2,629,461

Total Debt to Total Capitalization Ratio		30.7	%		32.6	%
Less: Impact of Cash and Cash Equivalents		0.8	%		0.7	%

Net Debt to Adjusted Capitalization Ratio		29.9	%		31.9	%