Cabot Oil & Gas Corporation Announces Full-Year 2012 Results

         Cabot Oil & Gas Corporation Announces Full-Year 2012 Results

Production Growth Exceeds 40 Percent for Second Consecutive Year

PR Newswire

HOUSTON, Feb. 21, 2013

HOUSTON, Feb. 21, 2013 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG)
today reported its financial results for the fourth quarter and full-year
ended December 31, 2012. Highlights for the year include:

  oRecord production of 267.7 billion cubic feet equivalent (Bcfe), an
    increase of 43 percent over 2011.
  oAchieved production growth greater than 40 percent for the second
    consecutive year.
  oRecord revenues of $1.2 billion, the first time Cabot has surpassed the
    billion dollar mark.
  oRecord cash flow from operations of $652.1 million, an increase of 30
    percent over 2011.
  oRecord discretionary cash flow of $680.1 million, an increase of 24
    percent over 2011.

"2012 was one of our best years ever as we delivered top level production
growth with best in class finding costs from a 100 percent organic growth
investment program," said Dan O. Dinges, Chairman, President and Chief
Executive Officer. "Despite a challenging natural gas price environment we
were able to achieve record revenues and cash flows, while maintaining a
strong balance sheet."

Full-Year 2012

Equivalent production was 267.7 Bcfe in 2012, with 253.2 billion cubic feet
(Bcf) of natural gas production and 2.4 million barrels of liquids production.
These figures represent increases of 43 percent, 42 percent, and 67 percent,
respectively, compared to 2011. "Excluding property sales, we achieved an
annual equivalent production growth rate of approximately 49 percent for
2012," commented Dinges.

Cash flow from operations was $652.1 million in 2012, compared to cash flow
from operations of $501.8 million in 2011. Discretionary cash flow was $680.1
million in 2012, compared to discretionary cash flow of $549.2 million in
2011. Higher equivalent production and higher realized crude oil prices drove
the overall improvement in cash flow from operations and discretionary cash
flow compared to 2011. This was partially offset by lower realized natural gas
prices and increased operating expenses associated with higher production.

Net income was $131.7 million in 2012, or $0.63 per share, compared to net
income of $122.4 million, or $0.59 per share, in 2011. Excluding the effect of
selected items (detailed in the table below), net income was $138.9 million,
or $0.66 per share, in 2012, compared to $139.2 million, or $0.67 per share,
in 2011. Net income excluding selected items was down slightly compared to
2011 primarily due to a change in the treatment of deferred income taxes as a
special item.

Natural gas price realizations, including the effect of hedges, were $3.67 per
thousand cubic feet (Mcf) in 2012, down 18 percent compared to 2011. Oil price
realizations, including the effect of hedges, were $101.65 per barrel (Bbl) in
2012, up 12 percent compared to 2011.

While total expenses trended higher between years primarily as a result of
higher production volumes, aggregate per unit costs (including financing)
decreased to $3.69 per thousand cubic feet equivalent (Mcfe) in 2012, down 9
percent compared to 2011. All operating expense categories decreased on a per
unit basis in 2012 except for transportation and gathering expense and taxes
other than income expense. Transportation and gathering expense per unit was
$0.54 per Mcfe in 2012, up 38 percent from $0.39 per Mcfe in 2011.This
resulted primarily from increased production in the Company's Marcellus Shale
operations along with marginal increases in gathering and transportation
rates. Taxes other than income expense per unit was $0.18 per Mcfe in 2012, up
20 percent from $0.15 per Mcfe in 2011.This resulted primarily from the
assessment of an impact fee on Marcellus Shale production that was implemented
in early 2012 by the state of Pennsylvania.

Fourth Quarter 2012

Production in the fourth quarter of 2012 was 78.8 Bcfe, with 74.8 Bcf of
natural gas production and 647 thousand barrels of liquids production. These
figures represent a 44 percent increase in equivalent production compared to
the fourth quarter of 2011, driven by a 45 percent increase in natural gas
production over the same period. Natural gas production for the fourth
quarter increased 19 percent over the third quarter as the Company completed a
record number of frac stages and brought on additional infrastructure capacity
during the quarter. "The exceptional efforts from our employees, in
conjunction with the dedicated work from our Marcellus service and
infrastructure partners during the quarter made this possible," Dinges stated.


Cash flow from operations in the fourth quarter of 2012 was $197.0 million,
compared to cash flow from operations of $126.5 million in the fourth quarter
of 2011. Discretionary cash flow in the fourth quarter of 2012 was $223.7
million, compared to discretionary cash flow of $121.0 million in the fourth
quarter of 2011. Higher equivalent production and higher realized crude oil
prices drove the quarter's overall improvement, partially offset by lower
realized natural gas prices and increased operating expenses associated with
higher production.

Net income in the fourth quarter of 2012 was $40.9 million, or $0.19 per
share, compared to net income of $26.4 million, or $0.13 per share, in the
fourth quarter of 2011. Excluding the effect of selected items (detailed in
the table below), net income was $57.1 million, or $0.27 per share, in the
fourth quarter of 2012, compared to $40.3 million, or $0.20 per share, in the
fourth quarter of 2011.

Natural gas price realizations, including the effect of hedges, were $3.91 per
Mcf in the fourth quarter of 2012, down 3 percent compared to the fourth
quarter of 2011. Oil price realizations, including the effect of hedges, were
$105.40 per Bbl, up 15 percent compared to the fourth quarter of 2011.

Similar to full-year 2012 results, total expenses trended higher between
comparable quarters primarily as a result of higher production volumes;
however, aggregate per unit costs (including financing) decreased to $3.25 per
Mcfe in the fourth quarter of 2012, down 12 percent compared to the fourth
quarter of 2011.

Financial Position and Liquidity

At December 31, 2012, the Company's total debt was $1,087 million, of which
$325 million is outstanding under the Company's credit facility. Total lender
commitments under the Company's credit facility are $900 million, with $574
million of available credit under its facility at December 31, 2012.

As of December 31, 2012, the Company's net debt to adjusted capitalization
ratio was 33.2%, compared to 30.4% at December 31, 2011 (see attached table
for the calculation).

Conference Call

Listen in live to Cabot Oil & Gas Corporation's fourth quarter financial and
operating results discussion with financial analysts on Friday, February 22,
2013, at 9:30 a.m. EST (8:30 a.m. CST) 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 Info 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
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

 OPERATING DATA
                                    Quarter Ended        Twelve Months Ended
                                    December 31,         December 31,
                                    2012       2011      2012        2011
PRODUCED NATURAL GAS (Bcf) & OIL
(MBbl)
Natural Gas
Appalachia                          68.5       44.3      226.6       138.0
Other                               6.3        7.3       26.6        40.8
 Total                             74.8       51.6      253.2       178.8
Crude/Condensate/NGL                647        523       2,407       1,443
Equivalent Production (Bcfe)        78.8       54.8      267.7       187.5
PRICES^(1)
Average Produced Gas Sales Price
($/Mcf)
Appalachia                       $  4.03     $ 3.89    $ 3.80     $  4.32
Other                            $  2.63     $ 4.79    $ 2.61     $  4.93
 Total                         $  3.91     $ 4.02    $ 3.67     $  4.46
Average Crude/Condensate Price   $  105.40   $ 91.90   $ 101.65   $  90.49
($/Bbl)
WELLS DRILLED
 Gross                             66         76        170         161
 Net                               36         29        118         96
 Gross success rate                99%        100%      98%         99%
^(1) These realized prices include the realized impact of derivative
instrument settlements.
                                    Quarter Ended        Twelve Months Ended
                                    December 31,         December 31,
                                    2012       2011      2012        2011
 Realized impacts to gas        $ 0.55    $ 0.71    $ 0.89     $ 0.47
pricing
 Realized impacts to oil        $ 9.49    $ 1.67    $ 5.00     $ 1.01
pricing

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
                         Quarter Ended              Twelve Months Ended
                         December 31,               December 31,
                         2012          2011         2012         2011
Operating Revenues
 Natural gas            $ 293,911     $ 207,541    $ 933,640    $ 796,517
 Crude oil and          62,616        46,180       227,933      125,972
condensate
 Brokered natural gas   10,174        12,243       34,005       51,190
 Other                  3,178         2,061        8,968        6,185
                         369,879       268,025      1,204,546    979,864
Operating Expenses
 Direct operations      33,348        30,531       118,243      107,409
 Transportation and     45,482        24,612       143,309      73,322
gathering
 Brokered natural gas   8,122         10,472       28,502       43,834
 Taxes other than       9,001         6,506        48,874       27,576
income
 Exploration            7,928         5,357        37,476       36,447
 Depreciation,
depletion and            115,984       92,499       451,405      343,141
amortization
 General and
administrative           17,919        16,232       87,728       65,138
(excluding stock-based
compensation)
 Stock-based            10,070        10,181       33,511       39,529
compensation^(1)
                         247,854       196,390      949,048      736,396
Gain (loss) on sale of   (16,407)      26,974       50,635       63,382
assets
Income from Operations   105,618       98,609       306,133      306,850
Interest expense and     16,662        17,735       68,293       71,663
other
Income before income     88,956        80,874       237,840      235,187
taxes
Income tax expense       48,089        54,511       106,110      112,779
Net Income               $  40,867    $  26,363   $ 131,730    $ 122,408
Earnings per share -     $          $         $         $   
Basic^(2)                0.19          0.13         0.63         0.59
Weighted average common  209,850       208,601      209,538      208,498
shares outstanding^(2)
^(1) Includes the impact of the Company's performance share awards, restricted
stock amortization, stock appreciation rights and expense
associated with the Supplemental Employee Incentive Plan.
^(2) All Earnings per share and weighted average common share figures have
been retroactively adjusted for the 2-for-1 split of the
Company's common stock effective January 25, 2012.



CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 (In thousands)
                          December 31,   December 31,
                          2012           2011
Assets
Current assets            $         $     
                          270,310        345,800
Properties and equipment, 4,310,977      3,934,584
net
Other assets              35,026         51,109
 Total assets           $           $   
                          4,616,313     4,331,493
Liabilities and
Stockholders' Equity
Current liabilities       $         $     
                          444,139        343,344
Long-term debt, excluding 1,012,000      950,000
current maturities
Deferred income taxes     882,672        802,592
Other liabilities         146,055        130,789
Stockholders' equity      2,131,447      2,104,768
 Total liabilities and  $           $   
stockholders' equity      4,616,313     4,331,493
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 (In thousands)
                          Quarter Ended                 Twelve Months Ended
                          December 31,                  December 31,
                          2012           2011           2012         2011
Cash Flows From Operating
Activities
Net income                $        $        $          $  
                          40,867         26,363         131,730     122,408
Deferred income tax       38,215         17,363         80,929       74,744
expense
Loss (gain) on sale of    16,407         (26,974)       (50,635)     (63,382)
assets
Exploration expense       1,882          126            14,000       13,977
Unrealized (gain) loss on 45             15             494          965
derivatives
Income charges not        126,303        104,071        503,542      400,462
requiring cash
Changes in assets and     (26,738)       5,509          (27,967)     (47,335)
liabilities
Net cash provided by      196,981        126,473        652,093      501,839
operations
Cash Flows From Investing
Activities
Capital expenditures      (258,779)      (222,290)      (927,977)    (891,277)
Proceeds from sale of     36,586         321,548        169,326      403,657
assets
Investment in equity      (2,375)        -              (6,863)      -
method investment
Net cash (used in)        (224,568)      99,258         (765,514)    (487,620)
provided by investing
Cash Flows From Financing
Activities
Net increase (decrease)   25,000         (255,000)      137,000      (25,000)
in debt
Capitalized debt issuance -              -              (5,005)      (1,025)
costs
Dividends paid            (4,196)        (3,129)        (16,757)     (12,508)
Other                     18             (619)          (992)        (1,724)
Net cash (used in)        20,822         (258,748)      114,246      (40,257)
provided by financing
Net increase (decrease)   $        $         $       $  
in cash and cash          (6,765)        (33,017)        825        (26,038)
equivalents

Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
                               Quarter Ended             Twelve Months
                                                         Ended
                               December 31,              December 31,
                               2012         2011         2012      2011
 As reported - net income    $        $        $         $
                               40,867       26,363       131,730   122,408
 Reversal of selected items,
net of tax:
      (Gain) loss on sale of   10,090       (16,217)     (30,940)  (38,790)
      assets^(1)
      Stock-based compensation 6,130        5,996        20,476    24,192
      expense
      Pension expense^(2)      -            2,161        12,294    8,869
      Unrealized loss (gain)   27           2            302       591
      on derivatives^(3)
      Pennsylvania impact      -            -            5,067     -
      fee^(4)
      Income tax expense^(5)   -            21,961       -         21,961
 Net income excluding        $        $        $         $
selected items                 57,114       40,266       138,929   139,231
 As reported - earnings per  $       $       $      $   
share^(6)                       0.19        0.13       0.63      0.59
 Per share impact of         0.08         0.07         0.03      0.08
reversing selected items^(6)
 Earnings per share
including reversal
      of selected items^(6)    $       $       $      $   
                                0.27        0.20       0.66      0.67
 Weighted average common     209,850      208,601      209,538   208,498
shares outstanding^(6)
      The gain on sale in 2012 primarily relates to a $67.0 million gain on
^(1)  the sale of certain of our Pearsall shale undeveloped leaseholds in
      south Texas in
      the second quarter of 2012, partially offset by an $18.2 million loss
      on sale of certain of our south Texas proved oil and gas properties in
      the fourth
      quarter. The gain on sale of assets in 2011 primarily relates to a
      $34.2 million gain from the sale of certain assets in east Texas in the
      second quarter
      and an aggregate remaining gain of $29.2 million from the sale of
      various other properties during the year.
      On July 28, 2010, the Company notified its employees of its plan to
^(2)  terminate its qualified and non-qualified pension plans, effective
      September 30,
      2010. These amounts represent pension expenses related to the plan
      termination, including settlement costs and expenses related to the
      acceleration
      of amortization of prior service costs and actuarial losses over the
      period. Final settlement of the pension plan occurred as of the end of
      the second
      quarter 2012. 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
^(3)  Condensed Consolidated Statement of Operations and represents the change
      in
      fair value related to derivatives not designated as hedging
      instruments.
      In February 2012, the Pennsylvania state legislature authorized the
^(4)  assessment of an impact fee on Marcellus shale production. This amount
      represents
      the initial year accrual related to our 2011 and prior wells. Expense
      associated with the impact fee are included in Taxes other than income
      in the
      Condensed Consolidated Statement of Operations.
      Represents an unfavorable charge to income tax expense to reflect an
^(5)  increase in state tax rates used in establishing deferred income taxes
      mainly due
      to a shift in the Company's state apportionment factors to higher rate
      states, primarily in Pennsylvania, as a result of the Company's
      continued focus on
      development of its Marcellus shale properties. This item was not
      included as a selected item in 2012.
      All earnings per share and weighted average common share figures have
^(6)  been 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             Twelve Months
                                                         Ended
                               December 31,              December 31,
                               2012         2011         2012      2011
 Discretionary Cash Flow
 As reported - net income    $        $        $         $
                               40,867       26,363       131,730   122,408
 Plus / (less):
 Deferred income tax expense 38,215       17,363       80,929    74,744
 Loss (gain) on sale of      16,407       (26,974)     (50,635)  (63,382)
assets
 Exploration expense         1,882        126          14,000    13,977
 Unrealized loss (gain) on   45           15           494       965
derivatives
 Income charges not          126,303      104,071      503,542   400,462
requiring cash
 Discretionary Cash Flow     223,719      120,964      680,060   549,174
 Changes in assets and       (26,738)     5,509        (27,967)  (47,335)
liabilities
 Net cash provided by        $         $         $         $
operations                     196,981      126,473      652,093   501,839
Net Debt Reconciliation
(In thousands)
                               December     December
                               31,          31,
                               2012         2011
 Current portion of          $        $     
long-term debt                 75,000           -
 Long-term debt              $           $   
                               1,012,000   950,000
 Total debt                  $           $   
                               1,087,000   950,000
 Stockholders' equity        2,131,447    2,104,768
 Total Capitalization   $           $ 
                               3,218,447   3,054,768
 Total debt                  $           $   
                               1,087,000   950,000
 Less: Cash and cash        (30,736)     (29,911)
equivalents
 Net Debt               $           $   
                               1,056,264   920,089
 Net debt                    $           $   
                               1,056,264   920,089
 Stockholders' equity        2,131,447    2,104,768
 Total Adjusted         $           $ 
Capitalization                 3,187,711   3,024,857
 Total debt to total          33.8%        31.1%
capitalization ratio
 Less: Impact of cash and   0.6%         0.7%
cash equivalents
 Net Debt to Adjusted   33.2%        30.4%
Capitalization Ratio





SOURCE Cabot Oil & Gas Corporation

Website: http://www.cabotog.com