Cabot Oil & Gas Corporation Announces First Quarter Profits, Record Quarterly Production Volumes

Cabot Oil & Gas Corporation Announces First Quarter Profits, Record Quarterly
                              Production Volumes

PR Newswire

HOUSTON, April 25, 2012

HOUSTON, April 25, 2012 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE:
COG) today announced an improvement in first quarter profits over last year,
driven primarily from continued expansion of the Company's production base,
with both oil and natural gas volumes setting new Company production records.

The Company posted net income of $18.3 million, or $0.09 per share, cash flow
from operations of $131.8 million and discretionary cash flow of $138.5
million for the first quarter of 2012. This compares to the first quarter of
2011 when the Company reported net income of $12.9 million, or $0.06 per
share, cash flow from operations of $91.2 million and discretionary cash flow
of $112.3 million. Excluding the effect of certain selected items detailed in
the tables below, first quarter 2012 net income was $28.5 million, or $0.14
per share, compared to $20.7 million, or $0.10 per share, in first quarter
2011.

Production during the first quarter 2012 was 59.7 Bcfe, with 56.4 Bcf of
natural gas production and 538 thousand barrels of liquids production. These
figures represent increases of 58 percent, 55 percent, and 138 percent
respectively, compared to the first quarter 2011. Production was the strongest
ever reported; however, realized pricing was mixed. Natural gas price
realizations were down 22 percent to $3.65 per Mcf in first quarter 2012,
while oil price realizations were up 11 percent to $96.67 per barrel. "Even
with the significant reduction in realized natural gas prices between first
quarters, we were able to grow oil and gas revenues by 36 percent as a result
of our record production growth," said Dan O. Dinges, Chairman, President and
Chief Executive Officer. "These results highlight how efforts in each of our
areas of focus continue to generate positive momentum. Fortunately, we have
the assets, the balance sheet, and the operational ability to weather this
cycle and still be opportunistic in order to generate value over the
long-term." Total expenses trended higher between the comparable first
quarters, with DD&A, transportation and gathering and taxes other than income
increasing the most. However, total per unit costs continued their downward
trend due to the ramp up in production.

Conference Call
Listen in live to Cabot Oil & Gas Corporation's first quarter financial and
operating results discussion with financial analysts on Thursday, April 26,
2012 at 9:30 a.m. EDT (8:30 a.m. CDT) at www.cabotog.com. 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.

FOR MORE INFORMATION CONTACT
Scott Schroeder (281) 589-4993

CABOT OIL & GAS RESULTS -- Page 3
 OPERATING DATA               
                                                Quarter Ended
                                                March 31,
                                                2012             2011
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
Natural Gas
 Appalachia                                     49.6             27.1
 Other                                          6.8              9.3
 Total                                          56.4             36.4
Crude/Condensate/NGL                            538              226
Equivalent Production (Bcfe)                    59.7             37.7
PRICES ^(1)
Average Produced Gas Sales Price ($/Mcf)
 Appalachia                                   $ 3.77           $ 4.62
 Other                                        $ 2.82           $ 4.85
Total                                         $ 3.65           $ 4.68
Average Crude/Condensate Price ($/Bbl)        $ 96.67          $ 87.15
WELLS DRILLED 
  Gross                                         31               24
  Net                                           23               17
  Gross Success Rate                            100%             100%
(1)  These realized prices include the
realized impact of derivative instrument
settlements.  
                                                Quarter Ended
                                                March 31,
                                                2012             2011
     Realized Impacts to Gas Pricing            $         1.00   $          
                                                                 0.37
     Realized Impacts to Oil Pricing            $       (2.57)   $        
                                                                 (1.42)

 CABOT OIL & GAS RESULTS -- Page 4  
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 (In thousands, except per share amounts)
                                              Quarter Ended
                                              March 31,
                                              2012              2011
 Operating Revenues
   Natural Gas                                $       206,782   $  170,098
   Brokered Natural Gas                       13,444            18,408
   Crude Oil and Condensate                   49,981            18,592
   Other                                      1,929             1,928
                                              272,136           209,026
 Operating Expenses
   Brokered Natural Gas Cost                  11,872            15,362
   Direct Operations                          27,320            27,007
   Transportation and Gathering               30,258            12,868
   Taxes Other Than Income                    18,583            8,151
   Exploration                                4,001             6,308
   Depreciation, Depletion and Amortization   110,357           77,124
   General and Administrative (excluding      20,894            16,161
 Stock-Based Compensation) 
   Stock-Based Compensation(1)                1,655             8,138
                                              224,940           171,119
 Gain (Loss) on Sale of Assets                (535)             (1,517)
 Income from Operations                       46,661            36,390
 Interest Expense and Other                   16,917            17,367
 Income Before Income Taxes                   29,744            19,023
 Income Tax Expense                           11,426            6,137
 Net Income                                   $         18,318  $    12,886
 Earnings Per Share - Basic(2)                $                 $         0.06
                                               0.09
 Weighted Average Common Shares               209,128           208,288
 Outstanding(2)

    Includes the impact of the Company's performance share awards and
(1) restricted stock amortization as well as expense related to stock
    appreciation rights.  Also includes expense for the Supplemental Employee
    Incentive Plan.
    All Earning Per Share and Weighted Average Common Share figures have been
(2) retroactively adjusted for the 2-for-1 split of the Company's common stock
    effective January 25, 2012.

CABOT OIL & GAS RESULTS -- Page 5
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
  (In thousands)
                                   March 31,             December 31,
                                   2012                  2011
Assets
Current Assets                     $          339,727    $           345,800
Properties and Equipment, Net      4,011,203             3,934,584
Other Assets                       51,864                51,109
   Total Assets                    $       4,402,794     $        4,331,493
Liabilities and Stockholders'
Equity
Current Liabilities                $          322,154    $           343,344
Long-Term Debt, excluding Current  1,012,000             950,000
Maturities
Deferred Income Taxes              814,189               802,592
Other Liabilities                  129,495               130,789
Stockholders' Equity               2,124,956             2,104,768
   Total Liabilities and           $       4,402,794     $        4,331,493
Stockholders' Equity
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
  (In thousands)
                                   Quarter Ended
                                   March 31,
                                   2012                  2011
Cash Flows From Operating
Activities
Net Income                         $            18,318   $             12,886
Deferred Income Tax Expense        9,724                 6,543
Loss (Gain) on Sale of Assets      535                   1,517
Exploration Expense                49                    493
Unrealized (Gain) Loss on          (42)                  (17)
Derivatives
Income Charges Not Requiring Cash  109,951               90,858
Changes in Assets and Liabilities  (6,755)               (21,067)
Net Cash Provided by Operations    131,780               91,213
Cash Flows From Investing
Activities
Capital Expenditures               (188,547)             (203,169)
Proceeds from Sale of Assets       1,280                 5,043
Net Cash Used in Investing         (187,267)             (198,126)
Cash Flows From Financing
Activities
Net Increase (Decrease) in Debt    62,000                80,000
Dividends Paid                     (4,177)               (3,122)
Other                              81                    (1,018)
Net Cash Provided by Financing     57,904                75,860
Net Increase / (Decrease) in Cash  $              2,417  $            (31,053)
and Cash Equivalents

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,
                                                  2012           2011
   As Reported - Net Income                       $              $          
                                                  18,318         12,886
   Reversal of Selected Items, Net of Tax:
     (Gain) Loss on Sale of Assets                327            941
     Stock-Based Compensation Expense             1,013          5,046
     Pension Expense (1)                          3,824          1,872
     Unrealized Loss (Gain) on Derivatives(2)     (26)           (11)
     Pennsylvania Impact Fee(3)                   5,067          -
   Net Income Excluding Selected Items            $              $        
                                                   28,523         20,734
   As Reported - Earnings Per Share(4)            $              $            
                                                    0.09           0.06
   Per Share Impact of Reversing Selected         0.05           0.04
Items (4)
   Earnings Per Share Including Reversal
     of Selected Items(4)                         $              $            
                                                    0.14           0.10
   Weighted Average Common Shares Outstanding(4)  209,128        208,288

 

    On July 28, 2010, the Company notified its employees of its plan to
    terminate its qualified and non-qualified pension

    plans, effective September 30, 2010. The quarter ended March 31, 2012 and
    2011 amounts represent pension expenses

    related to the plan terminations and expenses related to the acceleration
    of amortization of prior service costs and

(1) actuarial losses over the expected amortization period until final
    distribution of assets from each plan. Final distribution

    is expected to occur at the end of the second quarter 2012, at which time
    the accounting for the costs associated with

    the pension termination will be complete. Pension expense is included in
    General and Administrative expense in the

    Condensed Consolidated Statement of Operations. 
    This unrealized loss (gain) is included in Natural Gas Revenues in the
    Condensed Consolidated Statement of Operations
(2)
    and represents the change in fair value related to derivatives not
    designated as hedging instruments.
    In February 2012, the Pennsylvania state legislature authorized the
    assessment of an impact fee on Marcellus shale

(3) production. This amount represents the adjustment related to our 2011 and
    prior wells. Expense associated with the impact fee

    is included in Taxes Other Than Income in the Condensed Consolidated
    Statement of Operations.
    All Earning Per Share and Weighted Average Common Share figures have been
(4) retroactively adjusted for the 2-for-1 split

    of the Company's common stock effective January 25, 2012.

Discretionary Cash Flow Calculation and Reconciliation  
(In thousands)
                                          Quarter Ended
                                          March 31,
                                          2012               2011
   Discretionary Cash Flow
   As Reported - Net Income               $                  $          
                                          18,318             12,886
   Plus / (Less): 
   Deferred Income Tax Expense            9,724              6,543
   Loss (Gain) on Sale of Assets          535                1,517
   Exploration Expense                    49                 493
   Unrealized Loss (Gain) on Derivatives  (42)               (17)
   Income Charges Not Requiring Cash      109,951            90,858
   Discretionary Cash Flow                138,535            112,280
   Changes in Assets and Liabilities      (6,755)            (21,067)
   Net Cash Provided by Operations        $         131,780  $          
                                                             91,213
Net Debt Reconciliation
(In thousands)
                                          March 31,          December 31,
                                          2012               2011
   Total Debt                             $    1,012,000     $        950,000
   Stockholders' Equity                   2,124,956          2,104,768
        Total Capitalization              $    3,136,956     $    3,054,768
   Total Debt                             $    1,012,000     $       950,000
   Less:  Cash and Cash Equivalents       (32,328)           (29,911)
        Net Debt                          $       979,672    $       920,089
   Net Debt                               $       979,672    $       920,089
   Stockholders' Equity                   2,124,956          2,104,768
        Total Adjusted Capitalization     $    3,104,628     $    3,024,857
  Total Debt to Total Capitalization      32.3%              31.1%
Ratio
   Less:  Impact of Cash and Cash         0.7%               0.7%
Equivalents
        Net Debt to Adjusted              31.6%              30.4%
Capitalization Ratio

 

SOURCE Cabot Oil & Gas Corporation