Cabot Oil & Gas Corporation Announces Second Quarter 2013 Results, Equivalent Production Increases 52 Percent Year-Over-Year

Cabot Oil & Gas Corporation Announces Second Quarter 2013 Results, Equivalent
                Production Increases 52 Percent Year-Over-Year

PR Newswire

HOUSTON, July 24, 2013

HOUSTON, July 24, 2013 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG)
today reported its financial results for the second quarter of 2013.
Highlights for the quarter include:

  oProduction of 95.2 billion cubic feet equivalent (Bcfe), an increase of 52
    percent over last year's comparable quarter.
  oCash flow from operations of $277.3 million and discretionary cash flow of
    $297.1 million.
  oNet income of $89.1 million, or $0.42 per share.
  oNet income excluding selected items of $95.0 million, or $0.45 per share.
  oTotal unit costs were $3.10 per thousand cubic feet equivalent (Mcfe), a
    28 percent decline over last year's comparable quarter.

"During the second quarter, Cabot continued to deliver strong financial
performance as evidenced by increases in net income and discretionary cash
flow of 148 percent and 109 percent, respectively, over last year's comparable
quarter," said Dan O. Dinges, Chairman, President and Chief Executive Officer.
"Our success for the quarter was primarily attributable to the Company's
Marcellus Shale drilling program, where operating efficiencies continue to
reduce our already low cost structure. Our ability to fund the Company's
peer-leading production growth within cash flow, as we did in the second
quarter, differentiates Cabot."

Second Quarter 2013

Production in the second quarter of 2013 was 95.2 Bcfe, consisting of 90.7
billion cubic feet (Bcf) of natural gas and 763,000 barrels of liquids. These
figures represent a 52 percent increase in equivalent production compared to
the second quarter of 2012 and an increase of 7 percent sequentially over the
first quarter of 2013. "Marcellus production during the second quarter
outperformed our expectations, due in large part to strong well performance
and the coordinated effort between our team and our infrastructure partner to
manage line pressure across the field," stated Dinges.

Cash flow from operations in the second quarter of 2013 was $277.3 million,
compared to $159.4 million in the second quarter of 2012. Discretionary cash
flow in the second quarter of 2013 was $297.1 million, compared to $142.1
million in the second quarter of 2012. Higher equivalent production and
realized natural gas prices drove the quarter's overall improvement, partially
offset by lower realized oil prices and increased operating expenses
associated with higher production.

Net income in the second quarter of 2013 was $89.1 million, or $0.42 per
share, compared to $35.9 million, or $0.17 per share, in the second quarter of
2012. Excluding the effect of selected items (detailed in the table below),
net income was $95.0 million, or $0.45 per share, in the second quarter of
2013, compared to $10.2 million, or $0.05 per share, in the second quarter of
2012.

Natural gas price realizations, including the effect of hedges, were $4.06 per
thousand cubic feet (Mcf) in the second quarter of 2013, up 20 percent
compared to the second quarter of 2012. "Although certain basis locations in
the Marcellus play experienced some pricing weakness during the second
quarter, the net effect on Cabot's realized price was negligible," commented
Dinges. "Looking ahead, we believe gas price differentials will remain soft
for the short term throughout the entire Marcellus area. However, new
takeaway projects slated for this fall should bring differentials closer to
their historical averages. We anticipate that this weakness will have a
minimal effect on our realized prices in the third quarter." Oil price
realizations, including the effect of hedges, were $101.39 per barrel (Bbl),
down 1 percent compared to the second quarter of 2012.

Total unit costs (including financing) decreased to $3.10 per Mcfe in the
second quarter of 2013, down 28 percent from $4.29 per Mcfe in the second
quarter of 2012. All operating expense categories decreased on a per unit
basis relative to last year's comparable quarter except for transportation and
gathering expense, which increased 4 percent from $0.53 per Mcfe in the second
quarter of 2012 to $0.55 per Mcfe in the second quarter of 2013, primarily as
a result of increased natural gas production volumes in the Marcellus Shale.

Year-to-Date 2013

Production during the six-month period ended June 30, 2013, was 184.5 Bcfe,
consisting of 175.8 Bcf of natural gas and 1.5 million barrels of liquids.
These figures represent increases of 51 percent, 52 percent, and 29 percent,
respectively, compared to the six-month period ended June 30, 2012.

For the six-month period ended June 30, 2013, cash flow from operations was
$490.0 million, compared to $291.1 million for the six-month period ended June
30, 2012. Discretionary cash flow was $531.5 million for the six-month period
ended June 30, 2013, compared to $280.7 million for the six-month period ended
June 30, 2012. Higher equivalent production and, to a lesser extent, higher
realized natural gas and oil prices drove the period's overall improvement,
partially offset by increased operating expenses associated with higher
production.

For the six-month period ended June 30, 2013, net income was $131.9 million,
or $0.63 per share, compared to $54.3 million, or $0.26 per share, for the
six-month period ended June 30, 2012. Excluding the effect of selected items
(detailed in the table below), net income was $149.1 million, or $0.71 per
share, compared to $38.7 million, or $0.19 per share, for the six-month period
ended June 30, 2012. 

Financial Position and Liquidity

At June 30, 2013, the Company's total debt was $1.1 billion, of which $380
million is outstanding under the Company's credit facility. Total lender
commitments under the Company's credit facility remained at $900 million,
resulting in $519 million of available credit under its facility at June 30,
2013.

As of June 30, 2013, the Company's net debt to adjusted capitalization ratio
was 32.4 percent, compared to 33.2 percent at December 31, 2012 (detailed in
the table below).

Conference Call

Listen in live to Cabot Oil & Gas Corporation's second quarter financial and
operating results discussion with financial analysts on Thursday, July 25,
2013, at 9:30 a.m. EDT (8:30 a.m. CDT) at www.cabotog.com. To aid in the
discussion on the conference call, the Company has posted a presentation
entitled "Marcellus Marketing Supplementary Materials", which provides an
overview of the Company's marketing strategy in the Marcellus Shale as well as
commentary on infrastructure and pricing. This can be found in the
Presentations section of the website under the Investor Info tab.
Additionally, 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 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
Matt Kerin (281) 589-4642

 OPERATING DATA
                                        Quarter Ended         Six Months Ended
                                        June 30,              June 30,
                                        2013       2012       2013      2012
PRODUCED NATURAL GAS (Bcf) & LIQUIDS
(MBbl)
Natural Gas
Appalachia                              85.4       52.4       165.2     102.0
Other                                   5.3        6.8        10.6      13.7
 Total                                 90.7       59.2       175.8     115.7
Crude/Condensate/NGL                    763        593        1,454     1,131
Equivalent Production (Bcfe)            95.2       62.8       184.5     122.4
PRICES^(1)
Average Produced Gas Sales Price
($/Mcf)
Appalachia                           $  4.09     $ 3.52     $ 3.81    $ 3.64
Other                                $  3.63     $ 2.34     $ 3.05    $ 2.58
 Total                             $  4.06     $ 3.39     $ 3.77    $ 3.52
Average Crude/Condensate Price       $  101.39   $ 102.61   $ 102.65  $ 99.76
($/Bbl)
WELLS DRILLED
 Gross                                 51         35         83        66
 Net                                   43.8       28         69.7      51
 Gross success rate                    96%        97%        96%       99%
^(1) These realized prices include the realized
impact of derivative instrument settlements.
                                        Quarter Ended         Six Months Ended
                                        June 30,              June 30,
                                        2013       2012       2013      2012
Realized Impacts to Gas Pricing         $   -    $ 1.18    $ 0.07   $ 1.10
Realized Impacts to Oil Pricing         $ 3.02    $ 5.55    $ 3.12   $ 1.66



CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
                                 Quarter Ended           Six Months Ended
                                 June 30,                June 30,
                                 2013        2012        2013       2012
Operating Revenues
 Natural gas                    $ 368,391   $ 201,051   $ 662,184  $ 407,833
 Crude oil and condensate       70,226      57,466      135,881    107,447
 Brokered natural gas           8,244       5,149       19,137     18,593
 Other                          2,819       1,991       5,763      3,920
                                 449,680     265,657     822,965    537,793
Operating Expenses
 Direct operations              36,978      29,306      68,475     56,626
 Transportation and gathering   52,648      33,139      98,869     63,397
 Brokered natural gas           6,704       4,250       15,093     16,122
 Taxes other than income        11,364      10,854      23,051     29,437
 Exploration                    4,529       16,244      8,553      20,245
 Depreciation, depletion and    151,389     114,616     300,042    224,973
amortization
 General and administrative
(excluding stock-based           11,565      35,475      28,600     56,369
compensation)
 Stock-based compensation^(1)   10,043      11,397      28,712     13,052
                                 285,220     255,281     571,395    480,221
Gain (loss) on sale of assets    276         67,703      180        67,168
Income from Operations           164,736     78,079      251,750    124,740
Interest expense and other      16,701      18,495      32,956     35,412
Income before income taxes       148,035     59,584      218,794    89,328
Income tax expense               58,921      23,647      86,856     35,073
Net Income                       $  89,114  $  35,937  $ 131,938  $  54,255
Earnings per share - Basic       $        $        $       $   
                                 0.42        0.17        0.63       0.26
Weighted average common shares   210,349     209,512     210,250    209,320
outstanding

     Includes the impact of the Company's performance share awards, restricted
     stock, stock appreciation rights and expense associated with the
^(1) Supplemental Employee Incentive Plan. The increase in expense for the
     first six months of 2013 compared to the first six months of 2012 is due
     to the Company's higher stock price and the resulting mark-to-market for
     liability awards.

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 (In thousands)
                                           June 30,         December 31,
                                           2013             2012
Assets
Current assets                             $            $     
                                           403,193         270,310
Properties and equipment, net              4,558,207        4,310,977
Other assets                               56,536           35,026
 Total assets                            $             $   
                                           5,017,936        4,616,313
Liabilities and Stockholders' Equity
Current liabilities                        $            $     
                                           494,391         444,139
Long-term debt, excluding current          1,067,000        1,012,000
maturities
Deferred income taxes                      1,015,493        882,672
Other liabilities                          154,811          146,055
Stockholders' equity                       2,286,241        2,131,447
 Total liabilities and stockholders'     $             $   
equity                                     5,017,936        4,616,313



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 (In thousands)
                            Quarter Ended                 Six Months Ended
                            June 30,                      June 30,
                            2013         2012             2013       2012
Cash Flows From
Operating Activities
Net income                  $       $          $        $   
                            89,114      35,937           131,938   54,255
Deferred income tax expense 46,088       17,349           69,662     27,073
(Gain) / loss on sale of    (276)        (67,703)         (180)      (67,168)
assets
Exploration expense         140          10,876           806        10,925
Unrealized (gain) / loss on -            342              -          300
derivatives
Income charges not          162,034      145,343          329,239    255,294
requiring cash
Changes in assets and       (19,818)     17,218           (41,498)   10,463
liabilities
Net cash provided by        277,282      159,362          489,967    291,142
operations
Cash Flows From
Investing Activities
Capital expenditures        (263,887)    (222,780)        (524,056)  (411,327)
Proceeds from sale of       420          131,435          906        132,715
assets
Investment in equity method (3,000)      (2,088)          (4,250)    (2,088)
investment
Net cash used in investing  (266,467)    (93,433)         (527,400)  (280,700)
Cash Flows From
Financing Activities
Net increase (decrease) in  15,000       (40,000)         55,000     22,000
debt
Stock-based compensation    5,210        -                7,348      -
tax benefit
Dividends paid              (4,206)      (4,191)          (8,407)    (8,368)
Capitalized debt issuance   -            (5,005)          -          (5,005)
cost
Other                       1            (420)            33         (339)
Net cash provided by (used  16,005       (49,616)         53,974     8,288
in) financing
Net increase (decrease) in  $       $          $       $   
cash and cash equivalents   26,820      16,313           16,541    18,730



Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
                               Quarter Ended             Six Months Ended
                               June 30,                  June 30,
                               2013         2012         2013       2012
 As reported - net income    $        $        $ 131,938  $  54,255
                               89,114       35,937
 Reversal of selected
items, net of tax:
      (Gain) / loss on sale of (166)        (41,434)     (109)      (41,107)
      assets
      Stock-based compensation 6,046        6,975        17,314     7,988
      expense
      Pension expense ^(1)     -            8,470        -          12,294
      Unrealized (gain) /      -            210          -          184
      loss on derivatives
      Pennsylvania impact fee  -            -            -          5,067
      ^(2)
Net income excluding selected  $        $        $ 149,143  $  38,681
items                          94,994       10,158
As reported - earnings         $       $       $       $   
per share                      0.42        0.17       0.63       0.26
Per share impact of            0.03         (0.12)       0.08       (0.07)
reversing selected items
Earnings per share
including reversal
      of selected items        $       $       $       $   
                                0.45        0.05       0.71       0.19
Weighted average common shares 210,349      209,512      210,250    209,320
outstanding

     On July 28, 2010, the Company notified its employees of its plan to
     terminate its qualified pension plan, effective September 30, 2010. These
     amounts represent pension expenses related to the plan termination,
     including settlement costs and expenses related to the acceleration of
^(1) amortization of prior service costs and actuarial losses over the period.
     Final distribution of the qualified 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.
     In February 2012, the Pennsylvania state legislature authorized the
     assessment of an impact fee on Marcellus Shale production. This amount
^(2) represents the initial year accrual related to our 2011 and prior wells.
     Expenses associated with the impact fee are included in Taxes other than
     income in the Condensed Consolidated Statement of Operations.



Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
                                Quarter Ended             Six Months Ended
                                June 30,                  June 30,
                                2013           2012       2013       2012
 Discretionary Cash
Flow
 As reported - net income     $          $      $ 131,938  $ 
                                89,114         35,937                54,255
 Plus / (less):
 Deferred income tax expense  46,088         17,349     69,662     27,073
 (Gain) / loss on sale of     (276)          (67,703)   (180)      (67,168)
assets
 Exploration expense          140            10,876     806        10,925
 Unrealized (gain) / loss on  -              342        -          300
derivatives
 Income charges not requiring 162,034        145,343    329,239    255,294
cash
 Discretionary Cash Flow      297,100        142,144    531,465    280,679
 Changes in assets and        (19,818)       17,218     (41,498)   10,463
liabilities
 Net cash provided by         $           $       $ 489,967  $ 291,142
operations                      277,282        159,362



Net Debt Reconciliation
(In thousands)
                                            June 30,          December 31,
                                            2013              2012
 Current portion of long-term debt        $     75,000  $     75,000
 Long-term debt                           $  1,067,000    $  1,012,000
 Total debt                               $  1,142,000    $  1,087,000
 Stockholders' equity                     2,286,241         2,131,447
 Total Capitalization                $ 3,428,241       $ 3,218,447
 Total debt                               $  1,142,000    $  1,087,000
 Less: Cash and cash equivalents         (47,277)          (30,736)
 Net Debt                            $ 1,094,723       $ 1,056,264
 Net debt                                 $  1,094,723    $  1,056,264
 Stockholders' equity                     2,286,241         2,131,447
 Total Adjusted Capitalization       $ 3,380,964       $ 3,187,711
 Total debt to total capitalization ratio  33.3%             33.8%
 Less: Impact of cash and cash           0.9%              0.6%
equivalents
 Net Debt to Adjusted Capitalization 32.4%             33.2%
Ratio

SOURCE Cabot Oil & Gas Corporation

Website: http://www.cabotog.com
 
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