Cabot Oil & Gas Corporation Announces Third Quarter 2013 Financial and Operating Results, Provides 2014 Operating and Financial

    Cabot Oil & Gas Corporation Announces Third Quarter 2013 Financial and
      Operating Results, Provides 2014 Operating and Financial Guidance

PR Newswire

HOUSTON, Oct. 24, 2013

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

  oProduction of 107.1 billion cubic feet equivalent (Bcfe), an increase of
    61 percent over last year's comparable quarter.
  oCash flow from operations of $276.7 million and discretionary cash flow of
    $282.3 million.
  oNet income of $69.9 million, or $0.17 per share.
  oNet income excluding selected items of $74.6 million, or $0.18 per share.
  oTotal per unit costs (including financing) of $2.97 per thousand cubic
    feet equivalent (Mcfe), a 15 percent decline over last year's comparable
    quarter.

Third Quarter 2013 Financial Results

Production in the third quarter of 2013 was 107.1 Bcfe, consisting of 101.7
billion cubic feet (Bcf) of natural gas and 898,000 barrels of liquids. These
figures represent increases of 61 percent, 62 percent, and 43 percent,
respectively, compared to the third quarter of 2012. "Despite recent concerns
over pricing in the Marcellus and the potential impact on Cabot's production
growth, the Company grew equivalent production 13 percent sequentially
compared to the second quarter of this year," said Dan O. Dinges, Chairman,
President, and Chief Executive Officer.

Cash flow from operations in the third quarter of 2013 was $276.7 million,
compared to $164.0 million in the third quarter of 2012. Discretionary cash
flow in the third quarter of 2013 was $282.3 million, compared to $175.7
million in the third quarter of 2012. Higher equivalent production and, to a
lesser extent, higher realized 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 third quarter of 2013 was $69.9 million, or $0.17 per share,
compared to $36.6 million, or $0.09 per share, in the third quarter of 2012.
Excluding the effect of selected items (detailed in the table below), net
income was $74.6 million, or $0.18 per share, in the third quarter of 2013,
compared to $43.1 million, or $0.11 per share, in the third quarter of 2012.

Natural gas price realizations, including the effect of hedges, were $3.36 per
thousand cubic feet (Mcf) in the third quarter of 2013, down 9 percent
compared to the third quarter of 2012. "Our third quarter natural gas price
realizations came in on the high-end of our expectations based on the guidance
range we provided in early September," stated Dinges. "It is our belief that a
combination of seasonal demand increases during the winter months and new
pipeline takeaway capacity additions in Northeast Pennsylvania will positively
impact Marcellus basis differentials over the coming months." Oil price
realizations, including the effect of hedges, were $103.76 per barrel (Bbl),
up 2 percent compared to the third quarter of 2012.

Total per unit costs (including financing) decreased to $2.97 per Mcfe in the
third quarter of 2013, down 15 percent from $3.50 per Mcfe in the third
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 from $0.52 per Mcfe in the third quarter of
2012 to $0.57 per Mcfe in the third quarter of 2013, primarily as a result of
increased Marcellus production volumes, slightly higher transportation rates
and new transportation agreements in the Marcellus.

Year-to-Date 2013 Financial Results

Production during the nine-month period ended September 30, 2013 was 291.7
Bcfe, consisting of 277.5 Bcf of natural gas and 2.4 million barrels of
liquids. These figures represent increases of 54 percent, 56 percent, and 34
percent, respectively, compared to the nine-month period ended September 30,
2012.

For the nine-month period ended September 30, 2013, cash flow from operations
was $766.7 million, compared to $455.1 million for the nine-month period ended
September 30, 2012. Discretionary cash flow was $813.7 million for the
nine-month period ended September 30, 2013, compared to $456.3 million for the
nine-month period ended September 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 nine-month period ended September 30, 2013, net income was $201.8
million, or $0.48 per share, compared to $90.9 million, or $0.22 per share,
for the nine-month period ended September 30, 2012. Excluding the effect of
selected items (detailed in the table below), net income was $223.8 million,
or $0.53 per share, compared to $81.8 million, or $0.20 per share, for the
nine-month period ended September 30, 2012.

Operational Highlights

Marcellus Shale

Cabot's Marcellus Shale position in the core of the dry gas window in
Susquehanna County continues to produce peer-leading well results as evidenced
by the recent noteworthy wells included below:

  oA four-well pad completed with 109 fracture stimulation (frac) stages with
    an initial production (IP) rate of 110 Mmcf per day and a 30-day
    production rate of 90 Mmcf per day.
  oA three-well pad completed with 68 frac stages with an IP rate of 98 Mmcf
    per day (still within the 30-day window).
  oA three-well pad completed with 50 frac stages with an IP rate of 59 Mmcf
    per day and a 30-day production rate of 57 Mmcf per day.
  oA three-well pad completed with 45 frac stages with an IP rate of 56 Mmcf
    per day and a 30-day production rate of 52 Mmcf per day.

"To date, our 2013 program has averaged three to four additional frac stages
per well compared to our 2012 program due to longer lateral lengths and
tighter frac stage spacing, resulting in higher production rates and higher
estimated ultimate recoveries (EURs)," explained Dinges. "Our Marcellus wells
continue to provide peer-leading production rates and EURs per 1,000' of
lateral. We continue to see improvements in our rate-of-return profile as a
result of our increased well performance, even if one assumes wider basis
differentials to reflect the recent short-term softness in Marcellus pricing."

While certain Marcellus volumes were held back for a brief period of time
during the end of the third quarter due to a combination of softness in
Marcellus spot market pricing and scheduled infrastructure maintenance
projects, the Company's gross Marcellus production volumes have since
surpassed previous highs and recently achieved a record gross production rate
of 1,295 Mmcf per day.

Eagle Ford Shale

During the third quarter, Cabot's Eagle Ford program experienced strong
sequential growth with liquids production volumes increasing by approximately
28 percent over the second quarter. This was on the strength of new wells from
Cabot's operated and non-operated positions. The Company's first four-well pad
in the Eagle Ford was drilled during the third quarter in 58 days (spud to rig
release) with a combined measured depth of approximately 58,000'. Completion
is scheduled to begin at the end of October with lateral lengths ranging from
5,200' to 8,000'. The Company is currently drilling a six-well pad with a
planned average lateral length of 9,000' per well. Estimated cost savings
from the use of a walking rig in the Company's multi-well pad drilling
operations is $500,000 to $600,000 per well. In addition to the cost savings
from its drilling operations, Cabot continues to see significant reductions in
its stimulation costs per stage, further enhancing the return profile of its
Eagle Ford wells. "We are in the process of further refining our well design
in the Eagle Ford including drilling longer laterals, decreasing the spacing
between frac stages and increasing the amount of proppant per stage,"
commented Dinges. "Based on our work to date, we anticipate a significant
uptick in returns as we begin implementing these new initiatives across the
program."

Financial Position

As of September 30, 2013, the Company's net debt to adjusted capitalization
ratio was 32.8 percent, compared to 33.2 percent at December 31, 2012
(detailed in the table below). The Company's total debt was $1,162 million, of
which $475 million is outstanding under the Company's credit facility.

2014 Capital Budget and Guidance

The Company has reaffirmed its 2014 production growth guidance range of 30 to
50 percent, based on a capital program of $1.375 to $1.475 billion.
Approximately 85 percent of the capital budget will be spent on drilling and
completion activities, with over 75 percent of the drilling and completion
capital focused on its Marcellus Shale operations. The capital budget assumes
seven operated rigs in the Marcellus Shale and two operated rigs in the Eagle
Ford Shale. The Company expects to drill 170 to 190 net wells in 2014,
including 130 to 140 net wells in the Marcellus Shale and 40 to 50 net wells
in the Eagle Ford Shale. The mid-point of guidance for 2014 unit costs
(including financing) of $2.65 per Mcfe implies over a 10 percent decrease
relative to the mid-point of 2013 unit cost guidance.

Conference Call

A conference call is scheduled for Friday, October 25, 2013, at 9:30 a.m.
Eastern Time to discuss third quarter 2013 financial and operating results. To
access the live audio webcast, please visit the Investor Relations section of
the Company's website at www.cabotog.com.A replay of the call will also be
available on the Company's website. The latest financial guidance, including
the Company's hedge positions, is also available in the Investor Relations
section of the Company's website.

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'swebsite 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             Nine Months Ended
                                  September 30,             September 30,
                                  2013        2012          2013       2012
PRODUCED NATURAL GAS (Bcf) &
LIQUIDS (MBbl)
Natural Gas
Appalachia                        95.9        56.1          261.1      158.1
Other                             5.8         6.6           16.4       20.3
 Total                           101.7       62.7          277.5      178.4
Crude/Condensate/NGL              898         629           2,352      1,760
Equivalent Production (Bcfe)      107.1       66.5          291.7      188.9
PRICES^(1)
Average Produced Gas Sales
Price ($/Mcf)
Appalachia                     $  3.38     $  3.80       $  3.65     $ 3.70
Other                          $  3.09     $  2.65       $  3.06     $ 2.60
 Total                       $  3.36     $  3.68       $  3.62     $ 3.57
Average Crude/Condensate Price $  103.76   $  101.34     $  103.07   $ 100.30
($/Bbl)
WELLS DRILLED
 Gross                           51          38            134        104
 Net                             41          30            110.7      81
 Gross success rate              100%        95%           98%        97%
^(1) These realized prices include the realized impact of derivative
instrument settlements.
                                  Quarter Ended             Nine Months Ended
                                  September 30,             September 30,
                                  2013        2012          2013       2012
 Realized Impacts to Gas      $  0.20    $ 0.91       $ 0.12    $ 1.03
Pricing
 Realized Impacts to Oil      $ (1.33)    $ 6.65       $ 1.43    $ 3.39
Pricing





CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
                                Quarter Ended           Nine Months Ended
                                September 30,           September 30,
                                2013         2012       2013         2012
Operating Revenues
 Natural gas                   $         $ 231,896  $ 1,004,085  $ 639,729
                                341,901
 Crude oil and condensate      84,209       57,870     220,090      165,317
 Brokered natural gas          7,165        5,238      26,302       23,831
 Other                         2,575        1,870      8,338        5,790
                                435,850      296,874    1,258,815    834,667
Operating Expenses
 Direct operations             32,923       28,269     101,398      84,895
 Transportation and gathering  60,803       34,430     159,672      97,827
 Brokered natural gas          5,913        4,258      21,006       20,380
 Taxes other than income       11,532       10,436     34,583       39,873
 Exploration                   3,891        9,303      12,444       29,548
 Depreciation, depletion and   168,980      110,448    469,022      335,421
amortization
 General and administrative
(excluding stock-based          12,448       13,440     41,048       69,808
compensation)
 Stock-based compensation^(1)  12,249       10,389     40,961       23,441
                                308,739      220,973    880,134      701,193
Gain / (loss) on sale of        4,421        (126)      4,601        67,042
assets
Income from Operations          131,532      75,775     383,282      200,516
Interest expense and other     15,796       16,219     48,752       51,631
Income before income taxes      115,736      59,556     334,530      148,885
Income tax expense              45,847       22,948     132,703      58,021
Net Income                      $        $         $           $ 
                                69,889      36,608     201,827     90,864
Earnings per share - Basic      $       $       $       $   
                                 0.17      0.09      0.48         0.22
Weighted average common shares  420,986      419,312    420,664      418,866
outstanding

     Includes the impact of the Company's performance share awards, restricted
^(1) stock, stock appreciation rights and expense associated with the
     Supplemental Employee Incentive Plan.





CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 (In thousands)
                                            September 30,     December 31,
                                            2013              2012
Assets
Current assets                              $             $     
                                            289,756          270,310
Properties and equipment, net               4,690,176         4,310,977
Other assets                                51,460            35,026
 Total assets                             $              $   
                                            5,031,392         4,616,313
Liabilities and Stockholders' Equity
Current liabilities                         $             $     
                                            399,273          444,139
Long-term debt                              1,162,000         1,012,000
Deferred income taxes                       986,943           882,672
Other liabilities                           154,442           146,055
Stockholders' equity                        2,328,734         2,131,447
 Total liabilities and stockholders'      $              $   
equity                                      5,031,392         4,616,313

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 (In thousands)
                            Quarter Ended                 Nine Months Ended
                            September 30,                 September 30,
                            2013         2012             2013       2012
Cash Flows From Operating
Activities
Net income                  $       $          $        $   
                            69,889      36,608           201,827   90,864
Deferred income tax expense 37,573       15,641           107,235    42,714
(Gain) / loss on sale of   (4,421)      126              (4,601)    (67,042)
assets
Exploration expense         1            1,193            807        12,118
Unrealized (gain) / loss on -            149              -          449
derivative instruments
Income charges not          179,234      121,942          508,473    377,239
requiring cash
Changes in assets and       (5,567)      (11,692)         (47,065)   (1,230)
liabilities
Net cash provided by        276,709      163,967          766,676    455,112
operations
Cash Flows From Investing
Activities
Capital expenditures        (319,472)    (257,871)        (843,528)  (669,198)
Proceeds from sale of       14,268       25               15,174     132,740
assets
Investment in equity method (4,374)      (2,400)          (8,624)    (4,488)
investment
Net cash used in investing  (309,578)    (260,246)        (836,978)  (540,946)
Cash Flows From Financing
Activities
Net increase (decrease) in  20,000       90,000           75,000     112,000
debt
Stock-based compensation    1,936        -                9,284      -
tax benefit
Capitalized debt issuance   -            -                -          (5,005)
cost
Dividends paid              (8,423)      (4,193)          (16,830)   (12,561)
Other                       11           (671)            44         (1,010)
Net cash provided by (used  13,524       85,136           67,498     93,424
in) financing
Net increase (decrease) in  $        $           $       $    
cash and cash equivalents   (19,345)    (11,143)         (2,804)   7,590





Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
                                Quarter Ended            Nine Months Ended
                                September 30,            September 30,
                                2013          2012       2013       2012
As reported - net income        $         $      $ 201,827  $  90,864
                                69,889       36,608
Reversal of selected items, net
of tax:
 (Gain) / loss on sale  (2,670)       77         (2,776)    (41,030)
of assets
 Stock-based            7,397         6,358      24,712     14,346
compensation expense
 Pension expense^(1)    -             -          -          12,294
 Unrealized (gain) /    -             91         -          275
loss on derivative instruments
 Pennsylvania impact    -             -          -          5,067
fee^(2)
Net income excluding selected   $         $      $ 223,763  $  81,816
items                           74,616       43,134
As reported - earnings per      $        $      $       $   
share                            0.17        0.09  0.48      0.22
Per share impact of reversing   0.01          0.02       0.05       (0.02)
selected items
Earnings per share including    $        $      $       $   
reversal of selected items        0.18        0.11  0.53      0.20
Weighted average common shares  420,986       419,312    420,664    418,866
outstanding

     On July 28, 2010, the Company notified its employees of its plan to
     terminate its qualified pension plan effective September 30, 2010. This
     amount represents pension expense related to the plan termination,
^(1) including settlement costs and related expenses. Final distribution of
     the qualified pension plan occurred in 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             Nine Months Ended
                               September 30,             September 30,
                               2013           2012       2013       2012
 Discretionary Cash Flow
 As reported - net income    $          $      $ 201,827  $  90,864
                               69,889        36,608
 Plus / (less):
 Deferred income tax expense 37,573         15,641     107,235    42,714
 (Gain) / loss on sale of    (4,421)        126        (4,601)    (67,042)
assets
 Exploration expense         1              1,193      807        12,118
 Unrealized (gain) / loss on -              149        -          449
derivative instruments
 Income charges not          179,234        121,942    508,473    377,239
requiring cash
 Discretionary Cash Flow     282,276        175,659    813,741    456,342
 Changes in assets and       (5,567)        (11,692)   (47,065)   (1,230)
liabilities
 Net cash provided by        $           $       $ 766,676  $ 455,112
operations                     276,709       163,967





Net Debt Reconciliation
(In thousands)
                                            September 30,      December 31,
                                            2013               2012
 Current portion of long-term debt        $          $    
                                              -             75,000
 Long-term debt                           $   1,162,000    $  1,012,000
 Total debt                               $   1,162,000    $  1,087,000
 Stockholders' equity                     2,328,734          2,131,447
 Total Capitalization                $   3,490,734    $  3,218,447
 Total debt                               $   1,162,000    $   1,087,000
 Less: Cash and cash equivalents         (27,932)           (30,736)
 Net Debt                            $   1,134,068    $  1,056,264
 Net debt                                 $   1,134,068    $  1,056,264
 Stockholders' equity                     2,328,734          2,131,447
 Total Adjusted Capitalization       $   3,462,802    $  3,187,711
 Total debt to total capitalization ratio  33.3%              33.8%
 Less: Impact of cash and cash           0.5%               0.6%
equivalents
 Net Debt to Adjusted Capitalization 32.8%              33.2%
Ratio





SOURCE Cabot Oil & Gas Corporation

Website: http://www.cabotog.com
 
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