Cabot Oil & Gas Corporation Announces Fourth Quarter and Full-Year 2013 Financial and Operating Results

   Cabot Oil & Gas Corporation Announces Fourth Quarter and Full-Year 2013
                       Financial and Operating Results

PR Newswire

HOUSTON, Feb. 20, 2014

HOUSTON, Feb. 20, 2014 /PRNewswire/ --Cabot Oil & Gas Corporation (NYSE: COG)
today reported its financial and operating results for the fourth quarter and
full year ended December 31, 2013. Highlights for the full year include:

  oRecord production of 413.6 billion cubic feet equivalent (Bcfe), an
    increase of 55 percent over 2012
  oRecord cash flow from operations of $1.025 billion, an increase of 57
    percent over 2012
  oRecord discretionary cash flow of $1.098 billion, an increase of 61
    percent over 2012
  oNet income of $279.8 million, or $0.67 per share, an increase of 112
    percent over 2012 net income
  oNet income excluding selected items of $298.1 million, or $0.71 per share,
    an increase of 115 percent over 2012 net income
  oTotal unit costs (including financing) of $3.03 per thousand cubic feet
    equivalent (Mcfe), an 18 percent improvement over 2012
  oTotal cash unit costs (including financing) of $1.28 per Mcfe, a 26
    percent improvement over 2012
  o$165 million of share repurchases funded primarily through non-core asset
    sales

Full-Year 2013 Financial Results

Equivalent production was 413.6 Bcfe in 2013, consisting of 394.2 billion
cubic feet (Bcf) of natural gas and 3.2 million barrels of liquids production.
These figures represent increases of 55 percent, 56 percent, and 34 percent,
respectively, compared to 2012. "Our record production growth in 2013 was
generated 100 percent organically through the drill-bit and results in a
three-year compounded annual production growth rate of 47 percent," stated Dan
O. Dinges, Chairman, President, and Chief Executive Officer.

Cash flow from operations in 2013 was $1.025 billion, compared to $652.1
million in 2012. Discretionary cash flow was $1.098 billion in 2013, compared
to $680.1 million in 2012. Higher equivalent production drove the year's
overall improvement, partially offset by lower realized natural gas and oil
prices and increased absolute operating expenses associated with higher
production. "Despite lower realized commodity prices, our cash flow growth in
2013 outpaced production growth as a result of continued decreases to our cost
structure," explained Dinges.

Net income was $279.8 million in 2013, or $0.67 per share, compared to $131.7
million, or $0.31 per share, in 2012. Excluding the effect of selected items
(detailed in the table below), net income was $298.1 million, or $0.71 per
share, in 2013, compared to $138.9 million, or $0.33 per share, in 2012.

Natural gas price realizations, including the effect of hedges, were $3.56 per
thousand cubic feet (Mcf) in 2013, down 3 percent compared to 2012. Oil price
realizations, including the effect of hedges, were $101.13 per barrel (Bbl),
down 1 percent compared to 2012.

Total per unit costs (including financing) decreased to $3.03 per Mcfe in
2013, down 18 percent from $3.69 per Mcfe in the 2012. All operating expense
categories decreased on a per unit basis relative to last year except for
transportation and gathering expense, which increased from $0.54 per Mcfe in
2012 to $0.55 per Mcfe in 2013, primarily as a result of increased Marcellus
production volumes, slightly higher transportation rates and new
transportation agreements in the Marcellus. Cash unit costs (including
financing) decreased to $1.28 per Mcfe in 2013, down 26 percent from $1.74 per
Mcfe in the 2012.

During 2013, the Company received approximately $324 million of gross proceeds
from previously announced non-core asset sales in the Mid-Continent and West
Texas. These proceeds were used, in conjunction with cash flow from
operations, to fund the Company's $1.195 billion of capital expenditures and
the Company's $165 million of share repurchases.

"This past year was a tale of two halves regarding the outlook for Cabot's
natural gas price realizations, but in the end we met the challenge by
delivering record-setting results for production, cash flow and reserves,"
said Dinges. "The key for 2014 is to continue to maximize operating
efficiencies and manage our price risk, which will allow Cabot to further
improve on the past year's record results."

Fourth Quarter 2013 Financial Results

Production in the fourth quarter of 2013 was 121.9 Bcfe, consisting of 116.7
Bcf of natural gas and 869,000 barrels of liquids. These figures represent
increases of 55 percent, 56 percent, and 34 percent, respectively, compared to
the fourth quarter of 2012. "As a result of an exceptional quarter
operationally by our team that included a record number of completed stages in
the Marcellus, we were able to achieve the high end of our production growth
expectations," stated Dinges.

Cash flow from operations in the fourth quarter of 2013 was $257.9 million,
compared to $197.0 million in the fourth quarter of 2012. Discretionary cash
flow in the fourth quarter of 2013 was $284.5 million, compared to $223.7
million in the fourth quarter of 2012. Discretionary cash flow in the fourth
quarter of 2013 included the impact of $34.2 million of current taxes
associated with tax gains on the Mid-Continent and West Texas divestitures.

Net income in the fourth quarter of 2013 was $77.9 million, or $0.19 per
share, compared to $40.9 million, or $0.10 per share, in the fourth quarter of
2012. Excluding the effect of selected items (detailed in the table below),
net income was $74.4 million, or $0.18 per share, in the fourth quarter of
2013, compared to $57.1 million, or $0.14 per share, in the fourth quarter of
2012.

Natural gas price realizations, including the effect of hedges, were $3.44 per
Mcf in the fourth quarter of 2013, down 12 percent compared to the fourth
quarter of 2012. Oil price realizations, including the effect of hedges, were
$95.57 per Bbl, down 9 percent compared to the fourth quarter of 2012.

Total per unit costs (including financing) decreased to $2.82 per Mcfe in the
fourth quarter of 2013, down 13 percent from $3.25 per Mcfe in the fourth
quarter of 2012. All operating expense categories decreased on a per unit
basis relative to last year's comparable quarter except for depreciation,
depletion and amortization expense, which increased from $1.47 per Mcfe in the
fourth quarter of 2012 to $1.49 per Mcfe in the fourth quarter of 2013, due to
slightly higher amortization on our unproved properties. Cash unit costs
(including financing) decreased to $1.19 per Mcfe in the fourth quarter of
2013, down 23 percent from $1.55 per Mcfe in the fourth quarter of 2012.

Fourth Quarter 2013 Operational Highlights

Marcellus Shale

Cabot continues to produce best-in-class results from its Marcellus Shale
position in Susquehanna County, Pennsylvania. During the fourth quarter of
2013, the Company averaged 1,171 million cubic feet (Mmcf) per day of net
Marcellus production, an increase of 67 percent over the prior year's
comparable quarter. "Our production growth in the Marcellus was quite
remarkable, especially when considering we operated only five rigs in the play
for the majority of the year," commented Dinges. Marcellus cash unit costs in
the fourth quarter of 2013 were $0.76 per Mcf, down 10 percent compared to the
fourth quarter of 2012. A few highlighted well results from the quarter
include:

  oThe previously announced ten-well pad completed with 170 fracture
    stimulation (frac) stages with an initial production (IP) rate of 201 Mmcf
    per day and a 30-day production rate of 168 Mmcf per day
  oA four-well pad completed with 117 frac stages with an IP rate of 114 Mmcf
    per day and a 30-day production rate of 88 Mmcf per day, including two
    wells with an estimated ultimate recovery (EUR) over 25 Bcf
  oA four-well pad completed with 95 frac stages with an IP rate of 100 Mmcf
    per day and a 30-day production rate of 84 Mmcf per day, including three
    wells with EURs over 20 Bcf

"Our increase in EURs from 13.9 Bcf for our 2012 program to 16.9 Bcf for our
2013 program, along with continued cost improvements, results in a before-tax
rate of return in excess of 100 percent at wellhead prices of $3.00," stated
Dinges. "We anticipate drilling longer laterals on average in 2014 and look to
continue to improve on our best-in-class well performance."

Eagle Ford Shale

Cabot's first four-well pad in the Eagle Ford came online during the fourth
quarter and produced an average peak 24-hour rate per well of 885 barrels of
oil equivalent (Boe) per day and an average 30-day rate per well of 582 Boe
per day. Based on the realized cost savings of approximately $500,000 per well
from pad-drilling efficiencies, the before-tax rate of return for the pad is
over 50 percent.

The Company also recently turned-in-line its longest lateral well (8,708') in
the Eagle Ford, which was completed with 31 frac stages. The well has produced
a peak 24-hour rate of 1,344 Boe per day (92% oil) and an average 20-day rate
of 1,010 Boe per day. Currently, the Company is completing its first six-well
pad, which includes four wells with lateral lengths of approximately 8,000'.
The six-well pad is expected to provide approximately $600,000 of cost savings
per well.

Financial Position and Liquidity

As of December 31, 2013, the Company's net debt to adjusted capitalization
ratio was 33.8 percent, compared to 33.2 percent at December 31, 2012
(detailed in the table below). The Company's total debt was $1,147 million, of
which $460 million is outstanding under the Company's credit facility. Total
lender commitments under the Company's credit facility are $1.4 billion, with
$939 million of available credit under its facility at December 31, 2013.

Hedging Update

The Company currently has approximately 1.2 Bcf per day of natural gas volumes
hedged for 2014 at a weighted average floor of $4.11 per Mcf, including
approximately 100 Mmcf per day on Dominion and approximately 100 Mmcf per day
on Columbia. "By adding approximately 200 Mmcf per day of hedges on regional
Marcellus indices for the balance of the year, we have locked in protection
against volatility in regional basis differentials," explained Dinges.
Additionally, the Company recently added hedges to cover 2,000 barrels of oil
per day for the remainder of 2014 at a fixed price of $97.00 per barrel.

2014 Capital Budget and Production Guidance

The Company is maintaining its Marcellus rig count at six rigs for 2014 and
will continue to monitor regional natural gas prices before making a decision
on further acceleration in 2014. Maintaining the Marcellus rig count at six
rigs will reduce the 2014 capital budget from $1.375 to $1.475 billion to $1.3
to $1.4 billion, without affecting the previously announced levels of absolute
production for the year due to the Company's improved well performance and its
current backlog of over 1,000 stages waiting to be placed on production.
Production guidance for 2014 (originally issued on September 26, 2013) remains
unchanged at 519 Bcfe to 598 Bcfe, which was predicated on 30 to 50 percent
production growth on the mid-point of 2013 guidance at the time of issuance.
Due to record production growth in 2013 that exceeded expectations and the
impact of 2013 asset sales, the production guidance for the year now implies
annual growth of 25 to 45 percent.

"We are well-positioned to navigate through this market in 2014 and provide
another year of significant growth in production, cash flow and reserves, due
to our increased hedge position and our increased well performance and
improving cost structure, both of which result in higher rates of return
despite lower realized prices," added Dinges.

First Quarter 2014 Outlook

During the first quarter of 2014, Cabot has seen its daily volumes fluctuate
as a result of unscheduled downtime, which is primarily attributable to severe
winter weather. "Due to these events, as well as our move to pad-drilling
creating longer spud-to-sales durations for larger, multi-well pads, we
anticipate relatively flat production levels for the first half of the year,
similar to 2013," said Dinges. "On the pricing side, while we have experienced
strong NYMEX prices this winter, regional differentials remain wider than
originally expected. Through the first two months of the year, our Marcellus
natural gas price realizations, before the effect of hedges, have been between
$0.60 and $0.65 below NYMEX settlement prices. Despite these wider than
anticipated differentials, based on the current NYMEX strip prices for the
remainder of 2014, our implied rate of return on a typical Marcellus well
would be over 200 percent."

Conference Call

A conference call is scheduled for Friday, February 21, 2014, at 9:30 a.m.
Eastern Time to discuss fourth quarter and full-year 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'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       Twelve Months Ended
                                       December 31,        December 31,
                                       2013     2012       2013        2012
PRODUCED NATURAL GAS (Bcf) & LIQUIDS
(Mbbl)
Natural Gas
 Appalachia                         111.8    68.5       372.9       226.6
 Other                              4.9      6.3        21.3        26.6
 Total                                116.7    74.8       394.2       253.2
Crude/Condensate/NGL                   869      647        3,221       2,407
Equivalent Production (Bcfe)           121.9    78.8       413.6       267.7
PRICES^(1)
Average Produced Gas Sales Price
($/Mcf)
 Appalachia                       $ 3.47   $ 4.03     $ 3.60     $  3.80
 Other                            $ 2.78   $ 2.63     $ 3.00     $  2.61
 Total                             $ 3.44   $ 3.91     $ 3.56     $  3.67
Average Crude/Condensate Price       $ 95.57  $ 105.40   $ 101.13   $  101.65
($/Bbl)
WELLS DRILLED
 Gross                                47       66         181         170
 Net                                  43       36         154         118
 Gross success rate                   100%     99%        98%         98%
^(1) These realized prices include the realized impact of derivative
instrument settlements.
                                       Quarter Ended       Twelve Months Ended
                                       December 31,        December 31,
                                       2013     2012       2013        2012
 Realized Impacts to Gas Pricing   $ 0.16   $ 0.55    $ 0.13     $ 0.89
 Realized Impacts to Oil Pricing   $ 1.63   $ 9.49    $ 1.48     $ 5.00







     CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
     (In thousands, except per share amounts)
                                 Quarter Ended           Twelve Months Ended
                                 December 31,            December 31,
                                 2013       2012         2013       2012
     Operating Revenues
      Natural gas               $          $ 293,911    $          $ 933,640
                                 401,177                 1,405,262
      Crude oil and             71,328     62,616       291,418    227,933
     condensate
      Brokered natural gas      10,148     10,174       36,450     34,005
      Other                     4,810      3,178        13,148     8,968
                                 487,463    369,879      1,746,278  1,204,546
     Operating Expenses
      Direct operations         39,458     33,348       140,856    118,243
      Transportation and        69,817     45,482       229,489    143,309
     gathering
      Brokered natural gas      8,930      8,122        29,936     28,502
      Taxes other than income   8,462      9,001        43,045     48,874
      Exploration               5,721      7,928        18,165     37,476
      Depreciation, depletion   182,030    115,984      651,052    451,405
     and amortization
      General and
     administrative (excluding   11,735     17,919       52,783     87,728
     stock-based
     compensation)
      Stock-based               10,862     10,070       51,823     33,511
     compensation^(1)
                                 337,015    247,854      1,217,149  949,048
     Gain / (loss) on sale of    16,750     (16,407)     21,351     50,635
     assets
     Income from Operations      167,198    105,618      550,480    306,133
     Interest expense and        16,190     16,662       64,942     68,293
     other
     Income before income        151,008    88,956       485,538    237,840
     taxes
     Income tax expense^(2)      73,062     48,089       205,765    106,110
     Net Income                  $         $  40,867   $         $ 131,730
                                 77,946                  279,773
     Earnings per share -        $       $         $      $   
     Basic                       0.19       0.10         0.67      0.31
     Weighted average common     418,774    419,700      420,188    419,075
     shares outstanding
     Includes the impact of the Company's performance share awards,
^(1) restricted stock, stock appreciation rights and expense associated with
     the Supplemental Employee Incentive Plan.
     Includes the impact of incremental income tax expense due to an increase
^(2) in state tax rates used in establishing deferred income taxes. In the
     fourth quarter of 2013 and 2012, the Company recorded incremental income
     tax expense of $15.2 million and $13.6 million, respectively.





CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 (In thousands)
                                             December 31,     December 31,
                                             2013             2012
Assets
Current assets                               $    378,899  $    270,310
Properties and equipment, net                4,546,227        4,310,977
Other assets                                 55,954           35,026
 Total assets                              $  4,981,080   $  4,616,313
Liabilities and Stockholders' Equity
Current liabilities                          $    407,905  $    444,139
Long-term debt                               1,147,000        1,012,000
Deferred income taxes                        1,067,912        882,672
Other liabilities                            153,661          146,055
Stockholders' equity                         2,204,602        2,131,447
 Total liabilities and stockholders'       $  4,981,080   $  4,616,313
equity





CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 (In thousands)
                               Quarter Ended         Twelve Months Ended
                               December 31,          December 31,
                               2013       2012       2013            2012
Cash Flows From Operating
Activities
Net income                     $      $      $  279,773     $ 131,730
                               77,946     40,867
Deferred income tax expense    31,145     38,215     138,380         80,929
(Gain) / loss on sale of      (16,750)   16,407     (21,351)        (50,635)
assets
Exploration expense            1          1,882      808             14,000
Unrealized (gain) / loss on    -          45         -               494
derivative instruments
Income charges not requiring   192,135    126,303    700,608         503,542
cash
Changes in assets and          (26,627)   (26,738)   (73,692)        (27,967)
liabilities
Net cash provided by           257,850    196,981    1,024,526       652,093
operations
Cash Flows From Investing
Activities
Capital expenditures           (351,211)  (258,779)  (1,194,739)     (927,977)
Proceeds from sale of assets   308,327    36,586     323,501         169,326
Restricted cash                (28,094)   -          (28,094)        -
Investment in equity method    (10,251)   (2,375)    (18,875)        (6,863)
investment
Net cash used in investing     (81,229)   (224,568)  (918,207)       (765,514)
Cash Flows From Financing
Activities
Net increase (decrease) in     (15,000)   25,000     60,000          137,000
debt
Treasury stock repurchases     (164,634)  -          (164,634)       -
Dividends paid                 (8,402)    (4,196)    (25,232)        (16,757)
Stock-based compensation tax   9,629      -          18,913          -
benefit
Capitalized debt issuance cost (2,750)    -          (2,750)         (5,005)
Other                          4          18         48              (992)
Net cash provided by (used in) (181,153)  20,822     (113,655)       114,246
financing
Net increase (decrease) in     $      $      $   (7,336)  $   
cash and cash equivalents      (4,532)    (6,765)                    825







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,
                                     2013       2012      2013       2012
 As reported - net income          $      $      $         $ 131,730
                                     77,946      40,867  279,773
 Reversal of selected items, net
of tax:
      (Gain) / loss on sale of       (10,070)   10,090    (12,867)   (30,940)
      assets
      Stock-based compensation       6,530      6,130     31,231     20,476
      expense
      Pension expense^(1)            -          -         -          12,294
      Unrealized (gain) / loss on    -          27        -          302
      derivative instruments
      Pennsylvania impact fee^(2)    -          -         -          5,067
 Net income excluding selected     $      $      $         $ 138,929
items                                74,406      57,114  298,137
                                     $      $      $      $   
 As reported - earnings per share   0.19          0.67      0.31
                                                0.10
 Per share impact of reversing     (0.01)     0.04      0.04       0.02
selected items
 Earnings per share including
reversal
                                     $      $      $      $   
      of selected items                0.18          0.71      0.33
                                                0.14
 Weighted average common shares    418,774    419,700   420,188    419,075
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
      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 Consolidated Statement of Operations.





Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
                               Quarter Ended              Twelve Months Ended
                               December 31,               December 31,
                               2013           2012        2013       2012
 Discretionary Cash
Flow
 As reported - net income    $          $       $         $ 131,730
                               77,946         40,867      279,773
 Plus /
(less):
 Deferred income tax expense 31,145         38,215      138,380    80,929
 (Gain) / loss on sale of    (16,750)       16,407      (21,351)   (50,635)
assets
 Exploration expense         1              1,882       808        14,000
 Unrealized (gain) / loss on -              45          -          494
derivative instruments
 Income charges not          192,135        126,303     700,608    503,542
requiring cash
 Discretionary Cash Flow     284,477        223,719     1,098,218  680,060
 Changes in assets and       (26,627)       (26,738)    (73,692)   (27,967)
liabilities
 Net cash provided by        $           $        $          $ 652,093
operations                     257,850        196,981     1,024,526
Net Debt Reconciliation
(In thousands)
                               December 31,   December
                                              31,
                               2013           2012
 Current portion of          $        $    
long-term debt                   -         75,000
 Long-term debt              $             $ 
                               1,147,000     1,012,000
 Total debt                  $             $ 
                               1,147,000     1,087,000
 Stockholders' equity        2,204,602      2,131,447
 Total Capitalization   $             $ 
                               3,351,602     3,218,447
 Total debt                  $             $ 
                               1,147,000     1,087,000
 Less: Cash and cash        (23,400)       (30,736)
equivalents
 Net Debt               $             $ 
                               1,123,600     1,056,264
 Net debt                    $             $ 
                               1,123,600     1,056,264
 Stockholders' equity        2,204,602      2,131,447
 Total Adjusted         $             $ 
Capitalization                 3,328,202     3,187,711
 Total debt to total          34.2%          33.8%
capitalization ratio
 Less: Impact of cash and   0.4%           0.6%
cash equivalents
 Net Debt to Adjusted   33.8%          33.2%
Capitalization Ratio



SOURCE Cabot Oil & Gas

Website: http://www.cabotog.com
 
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