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Cabot Oil & Gas Corporation Announces First Quarter 2014 Financial and Operating Results

    Cabot Oil & Gas Corporation Announces First Quarter 2014 Financial and
                              Operating Results

PR Newswire

HOUSTON, April 24, 2014

HOUSTON, April 24, 2014 /PRNewswire/ --Cabot Oil & Gas Corporation (NYSE:
COG) today reported its financial and operating results for the first quarter
of 2014. Highlights for the quarter include:

  oProduction of 119.9 billion cubic feet equivalent (Bcfe), an increase of
    34 percent over last year's comparable quarter
  oDiscretionary cash flow of $319.5 million, an increase of 36 percent over
    last year's comparable quarter
  oNet income excluding selected items of $109.7 million, an increase of 102
    percent over last year's comparable quarter
  oTotal unit costs (including financing) of $2.66 per thousand cubic feet
    equivalent (Mcfe), a 19 percent improvement over last year's comparable
    quarter

First Quarter 2014 Financial Results

Equivalent production in the first quarter of 2014 was 119.9 Bcfe, consisting
of 115.8 billion cubic feet (Bcf) of natural gas and 686,000 barrels of
liquids (crude oil/condensate/natural gas liquids). Equivalent production for
the quarter represents a 34 percent increase over the first quarter of 2013 on
an absolute basis and a 39 percent increase when adjusting for the
Mid-Continent and West Texas asset sales in 2013. "Our daily production levels
for the quarter posted a slight increase sequentially, in line with our
guidance, despite unscheduled downtime on compressor stations in our Marcellus
operating area resulting from severe winter weather," commented Dan O. Dinges,
Chairman, President, and Chief Executive Officer.

Cash flow from operations in the first quarter of 2014 was $255.4 million,
compared to $212.7 million in the first quarter of 2013. Discretionary cash
flow in the first quarter of 2014 was $319.5 million, compared to $234.4
million in the first quarter of 2013. Net income in the first quarter of 2014
was $107.0 million, or $0.26 per share, compared to $42.8 million, or $0.10
per share, in the first quarter of 2013. Excluding the effect of selected
items (detailed in the table below), net income was $109.7 million, or $0.26
per share, in the first quarter of 2014, compared to $54.2 million, or $0.13
per share, in the first quarter of 2013. 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.

Natural gas price realizations, including the effect of hedges, were $3.74 per
thousand cubic feet (Mcf) in the first quarter of 2014, up 8 percent compared
to the first quarter of 2013. "Cabot's Marcellus natural gas price
realizations for the first quarter, before the effect of hedges, were in line
with our expectations of $0.60 to $0.65 below NYMEX settlement prices," stated
Dinges. Oil price realizations, including the effect of hedges, were $97.76
per barrel (Bbl), down 6 percent compared to the first quarter of 2013.

Total per unit costs (including financing) decreased to $2.66 per Mcfe in the
first quarter of 2014, down 19 percent from $3.29 per Mcfe in the first
quarter of 2013. All operating expense categories decreased on a per unit
basis relative to last year's comparable quarter except for exploration
expense, which was flat relative to the first quarter of 2013, and
transportation and gathering expense, which increased as a result of slightly
higher transportation rates and new transportation agreements in the
Marcellus.

Operational Highlights

Marcellus Shale

During the first quarter of 2014, the Company averaged 1,209 million cubic
feet (Mmcf) per day of net Marcellus production, an increase of 44 percent
over the prior year's comparable quarter. Subsequent to the end of the first
quarter, Cabot reached a milestone of one trillion cubic feet (Tcf) of
cumulative production from its Marcellus Shale asset in less than six years.
"This is a tremendous accomplishment, especially considering the Company's
maximum rig count in the Marcellus during this period was six rigs, with no
more than 290 horizontal wells producing, highlighting the productivity of
this asset," said Dinges.

Cabot has averaged approximately 1,480 Mmcf per day of gross Marcellus
production during the month of April, which includes a new gross Marcellus
production record of 1,538 Mmcf per day. These levels compare to an average of
approximately 1,410 Mmcf per day during the first quarter of 2014. "Second
quarter production in the Marcellus has started out strong thanks to the
continued efforts by our team in the field in tandem with our midstream
provider to maximize our deliverability into the interstate pipelines,"
commented Dinges. "As a result, we expectsequential growth in the second
quarter versus our prior expectation of flat production."

Eagle Ford Shale

Cabot's net production in the Eagle Ford during the first quarter of 2014 was
7,271 barrels of oil equivalent (Boe) per day, an increase of 42 percent over
the prior year's comparable quarter. This included 6,839 barrels of liquids
per day, an increase of 49 percent over the prior year's comparable quarter. 

Subsequent to the quarter end, Cabot placed its first six-well pad in the
Eagle Ford on production. The six wells had an average completed lateral
length of 6,658' and were completed with an average of 25 stages. The wells
achieved an average peak 24-hour initial production (IP) rate of 1,045 Boe per
day per well (89% oil) during the first ten days on production and the rates
continue to improve. As a result of pad-drilling efficiencies, including a new
record of ten stages completed in a 24-hour period, the Company realized
approximately $600,000 of cost savings per well on this six-well pad.

"We have been very pleased with the strides our Eagle Ford team has made over
the last six months. Based on the continued improvement in production rates
and realized cost savings, which have resulted in higher rates of return, we
are adding a third rig to our Eagle Ford program beginning in the third
quarter," explained Dinges. "This additional rig will be focused on multi-well
pads and is expected to have minimal impact on 2014 production but will
materially impact our estimated 2015 oil production volumes."

During the first quarter, Cabot added approximately 4,000 net acres to its
Eagle Ford position through organic leasing efforts and is actively pursuing
additional acreage.

Financial Position and Liquidity

As of March 31, 2014, the Company's net debt to adjusted capitalization ratio
was 34.5 percent, compared to 33.8 percent at December 31, 2013 (detailed in
the table below). The Company's total debt was $1,222 million, of which $535
million is outstanding under the Company's revolving credit facility.

Effective April 15, 2014, the lenders under the Company's revolving credit
facility approved an increase in the Company's borrowing base from $2.3
billion to $3.1 billion as part of the annual redetermination process. Total
lender commitments under the revolving credit facility remain unchanged at
$1.4 billion, with $864 million of available credit under the facility at
March 31, 2014.

2014 Guidance Update

As a result of positive momentum in the Company's Eagle Ford program and the
corresponding increase in rig count from two to three rigs beginning in the
third quarter, Cabot's 2014 capital budget guidance has increased to $1.375 -
$1.475 billion. The Company has also tightened its production guidance range
for 2014 from 519 - 598 Bcfe to 530 - 585 Bcfe and initiated 2015 production
growth guidance at 20 - 30 percent.

Cabot's Marcellus natural gas price realizations for the month of April,
before the effect of hedges, have averaged between $0.75 and $0.80 below the
NYMEX settlement price, which is in line with the Company's expectations. For
further disclosure on price realization guidance for 2014, please see the
current investor presentation in the Investor Relations section of the
Company's website.

Conference Call

A conference call is scheduled for Thursday, April 24, 2014, at 9:30 a.m.
Eastern Time to discuss first quarter 2014 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
                                                   Three Months Ended
                                                   March 31,
                                                   2014             2013
PRODUCED NATURAL GAS (Bcf) & LIQUIDS (Mbbl)
Natural Gas
Appalachia                                         112.8            79.9
Other                                              3.0              5.3
Total                                             115.8            85.2
Crude/Condensate/NGL                               686              691
Equivalent Production (Bcfe)                       119.9            89.3
PRICES^(1)
Average Produced Gas Sales Price ($/Mcf)
Appalachia                                    $    3.71        $    3.49
Other                                         $    4.97        $    2.79
Total                                      $    3.74        $    3.45
Average Crude/Condensate Price ($/Bbl)        $    97.76       $    104.03
WELLS DRILLED
 Gross                                            27               32
 Net                                              27               26
 Gross success rate                               100%             97%
^(1) These realized prices include the realized impact of derivative
instrument settlements.
                                                   Three Months Ended
                                                   March 31,
                                                   2014             2013
 Realized Impacts to Gas Pricing               $ (0.61)         $ 0.16
 Realized Impacts to Oil Pricing               $ (0.36)         $ 3.24







CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
                                                    Three Months Ended
                                                    March 31,
                                                    2014          2013
Operating Revenues
 Natural gas                                       $ 432,809     $ 293,793
 Crude oil and condensate                          59,144        65,655
 Brokered natural gas                              13,153        10,893
 Other                                             4,697         2,944
                                                    509,803       373,285
Operating Expenses
 Direct operations                                 35,834        31,497
 Transportation and gathering                      77,765        46,221
 Brokered natural gas                              11,860        8,389
 Taxes other than income                           13,044        11,687
 Exploration                                       6,474         4,024
 Depreciation, depletion and amortization          147,418       148,653
 General and administrative (excluding stock-based 18,465        17,035
compensation)
 Stock-based compensation^(1)                      3,171         18,669
                                                    314,031       286,175
Gain / (loss) on sale of assets                     (1,285)       (96)
Income from Operations                              194,487       87,014
Interest expense and other                         16,557        16,255
Income before income taxes                          177,930       70,759
Income tax expense                                  70,899        27,935
Net Income                                          $ 107,031     $  42,824
Earnings per share - Basic                          $    0.26  $    0.10
Weighted average common shares outstanding          416,900       420,300

      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.







CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 (In thousands)
                                              March 31,       December 31,
                                              2014            2013
Assets
Current assets                                $  373,830    $    378,899
Properties and equipment, net                 4,710,569       4,546,227
Other assets                                  61,376          55,954
 Total assets                               $ 5,145,775     $  4,981,080
Liabilities and Stockholders' Equity
Current liabilities                           $  432,628    $    407,905
Long-term debt                                1,222,000       1,147,000
Deferred income taxes                         1,074,497       1,067,912
Other liabilities                             147,859         153,661
Stockholders' equity                          2,268,791       2,204,602
 Total liabilities and stockholders' equity $ 5,145,775     $  4,981,080
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 (In thousands)
                                              Three Months Ended
                                              March 31,
                                              2014            2013
Cash Flows From Operating Activities
Net income                                    $  107,031    $     42,824
Deferred income tax expense                   57,603          23,574
(Gain) / loss on sale of assets              1,285           96
Exploration expense                           2,040           666
Income charges not requiring cash             151,573         167,205
Changes in assets and liabilities             (64,154)        (21,680)
Net cash provided by operations               255,378         212,685
Cash Flows From Investing Activities
Capital expenditures                          (338,701)       (260,169)
Proceeds from sale of assets                  108             486
Restricted cash                               8,382           -
Investment in equity method investment        (5,937)         (1,250)
Net cash used in investing                    (336,148)       (260,933)
Cash Flows From Financing Activities
Net increase (decrease) in debt               75,000          40,000
Dividends paid                                (8,332)         (4,201)
Stock-based compensation tax benefit          16,043          2,138
Other                                         90              32
Net cash provided by (used in) financing      82,801          37,969
Net increase (decrease) in cash and cash      $    2,031  $    (10,279)
equivalents







Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
                                       Three Months Ended
                                       March 31,
                                       2014                2013
 As reported - net income            $    107,031     $     42,824
 Reversal of selected items, net of
tax:
 (Gain) / loss on sale of     775                 58
assets
 Stock-based compensation    1,913               11,337
expense
 Net income excluding selected items $    109,719     $     54,219
 As reported - earnings per share   $       0.26  $       0.10
 Per share impact of reversing       -                   0.03
selected items
 Earnings per share including        $       0.26  $       0.13
reversal of selected items
 Weighted average common shares      416,900             420,300
outstanding
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
                                       Three Months Ended
                                       March 31,
                                       2014                2013
 Discretionary Cash Flow
 As reported - net income            $    107,031     $     42,824
 Plus / (less):
 Deferred income tax expense         57,603              23,574
 (Gain) / loss on sale of assets     1,285               96
 Exploration expense                 2,040               666
 Income charges not requiring cash   151,573             167,205
 Discretionary Cash Flow             319,532             234,365
 Changes in assets and liabilities   (64,154)            (21,680)
 Net cash provided by operations     $    255,378     $    212,685
Net Debt Reconciliation
(In thousands)
                                       March 31,           December 31,
                                       2014                2013
 Long-term debt                      $  1,222,000      $   1,147,000
 Stockholders' equity                2,268,791           2,204,602
 Total Capitalization           $  3,490,791       $   3,351,602
 Total debt                          $  1,222,000      $   1,147,000
 Less: Cash and cash equivalents    (25,431)            (23,400)
 Net Debt                       $  1,196,569       $  1,123,600
 Net debt                            $  1,196,569      $  1,123,600
 Stockholders' equity                2,268,791           2,204,602
 Total Adjusted Capitalization  $  3,465,360       $  3,328,202
 Total debt to total capitalization   35.0%               34.2%
ratio
 Less: Impact of cash and cash      0.5%                0.4%
equivalents
 Net Debt to Adjusted           34.5%               33.8%
Capitalization Ratio

SOURCE Cabot Oil & Gas Corporation

Website: http://www.cabotog.com
 
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