EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

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FOR RELEASE      FOR MORE INFORMATION CONTACT
July 25, 2007      Scott Schroeder (281) 589-4993

Cabot Oil & Gas Reports Second Quarter Financial Results and

Double-digit Pro-forma Production Growth

HOUSTON, July 25, 2007 - Cabot Oil & Gas Corporation today announced second quarter net income of $41.4 million, or $0.43 per share, along with cash flow from operations of $105.9 million and discretionary cash flow of $112.5 million. “These results compare to last year’s record second quarter that included higher commodity prices and flush production from several new wells related to the south Louisiana and offshore assets that were sold in the third quarter of 2006,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. Net income in the 2006 second quarter was $46.9 million, or $0.48 per share, while cash flow from operations totaled $114.4 million and discretionary cash flow was $111.6 million.

Equivalent production levels in the second quarter grew 13 percent from last year’s second quarter with all regions making advances, excluding the benefit of the south Louisiana and offshore production in 2006. “The Company produced 21.2 Bcfe in the 2007 second quarter on the strength of a very successful (98% success rate) organic drilling program,” stated Dinges. “When including the sold production for 2006, the Company produced 23.5 Bcfe in last year’s second quarter.”

The Company’s second quarter natural gas price realization benefited from its hedges, adding $0.66 per Mcf, resulting in a $7.24 per Mcf realization for the quarter. This price realization was 7 percent above the comparable 2006 level. Realized oil prices were $61.98 per barrel, 9 percent below the comparable period last year.


Expense levels were generally in line with guidance levels with a slight increase in operating cost and an increase in DD&A, which included a $2.4 million pre-tax increase in amortization of unproved property related to the Company’s leasehold. “The DD&A guidance has been adjusted to reflect this increase going forward,” commented Dinges. The balance sheet remains strong with an 18.5 percent net debt to total adjusted capitalization rate at quarter’s end.

Year-to-date

In the six months ended June 30, 2007, Cabot reported net income of $89.9 million, or $0.93 per share compared to $100.0 million or $1.03 per share last year. The cash flow comparisons included cash flow from operations of $241.8 million in 2007 versus $269.4 million in 2006, while discretionary cash flow was $219.3 million in 2007, compared to $229.5 million in 2006.

Lower realized commodity prices and lower production volumes were the drivers of the results. “Clearly asset sales are going to affect comparisons,” commented Dinges. “However, the equivalent pro-forma (or production from the ongoing reserve portfolio) volume comparisons highlight a 19 percent year-over-year increase and solidify our guidance of 12 to 18 percent for the year.” The absolute comparison for year-to-date production is 42.2 Bcfe in 2007 versus 44.8 Bcfe in 2006.

Selected Items

Both the 2007 second quarter and the year-to-date figures were positively impacted by a non-cash gain on sale of assets. The non-cash gain on sale of assets, shown in detail in an attached table, had a $0.03 per share positive impact to net income for the second quarter and, combined with a first quarter gain on sale, an $0.08 per share pickup for the six-month year-to-date period. “These all related to small asset packages, which were yet to be closed from last year’s south Louisiana and offshore sale,” said Dinges.

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s second quarter financial and operating results discussion with financial analysts on Thursday, July 26, at 9:30 a.m. EDT (8:30 a.m. CDT) at www.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 4159414. The replay will be available through Saturday, July 28, 2007. 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 relations 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 substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid-Continent; the East and in Canada. For additional information, visit the Company’s Internet 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.

# # #


CABOT OIL & GAS RESULTS — Page 4

 

OPERATING DATA

 

     Quarter Ended
June 30,
    Six Months Ended
June 30,
 
     2007     2006     2007     2006  
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)         

Natural Gas

        

East

     6.2       5.9       12.0       11.7  

Gulf Coast

     6.4       8.7       12.9       15.9  

West

     6.4       5.7       12.8       11.1  

Canada

     0.9       0.6       2.0       1.1  
                                

Total

     19.9       20.9       39.7       39.8  

Less: Production from properties sold in 2006 (1)

     —         (3.3 )     —         (6.3 )
                                

Adjusted Total

     19.9       17.6       39.7       33.5  
                                

Crude/Condensate/Ngl

        

East

     7       6       13       13  

Gulf Coast

     161       371       309       704  

West

     43       57       90       113  

Canada

     4       3       10       7  
                                

Total

     215       437       422       837  

Less: Production from properties sold in 2006 (1)

     —         (242 )     —         (492 )
                                

Adjusted Total

     215       195       422       345  
                                

Equivalent Production (Bcfe)

     21.2       23.5       42.2       44.8  

Less: Production from properties sold in 2006 (1)

     —         (4.8 )     —         (9.3 )
                                

Adjusted Equivalent Production (Bcfe)

     21.2       18.7       42.2       35.5  
                                

PRICES

        

Average Produced Gas Sales Price ($/Mcf)

        

East

   $ 7.86     $ 7.58     $ 7.97     $ 8.44  

Gulf Coast

   $ 8.27     $ 7.00     $ 8.01     $ 7.55  

West

   $ 6.02     $ 5.73     $ 6.26     $ 6.38  

Canada

   $ 4.25     $ 5.63     $ 5.97     $ 6.68  

Total (2)

   $ 7.24     $ 6.77     $ 7.33     $ 7.46  

Crude/Condensate Price ($/Bbl)

        

East

   $ 59.41     $ 66.51     $ 56.60     $ 62.68  

Gulf Coast

   $ 62.28     $ 68.58     $ 57.85     $ 65.17  

West

   $ 62.76     $ 65.92     $ 58.33     $ 63.31  

Canada

   $ 48.51     $ 84.24     $ 51.77     $ 65.15  

Total (2)

   $ 61.98     $ 68.32     $ 57.76     $ 64.88  

WELLS DRILLED

        

Gross

     122       120       222       191  

Net

     111       99       203       156  

Gross Success Rate

     98 %     97 %     98 %     97 %

(1)

These amounts relate to production associated with offshore and certain south Louisiana properties sold during the third quarter of 2006.

(2)

These realized prices include the realized impact of derivative instrument settlements.

 

     Quarter Ended
June 30,
   Six Months Ended
June 30,
     2007    2006    2007    2006

Realized Impacts to Gas Pricing

   $ 0.66    $ 0.34    $ 0.77    $ 0.22

Realized Impacts to Oil Pricing

   $ —      $ —      $ 0.43    $ —  


CABOT OIL & GAS RESULTS — Page 5

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

 

    

Quarter Ended

June 30,

   Six Months Ended
June 30,
     2007    2006    2007    2006

Operating Revenues

           

Natural Gas Production

   $ 144,128    $ 141,503    $ 290,878    $ 296,670

Brokered Natural Gas

     18,001      17,495      51,178      50,314

Crude Oil and Condensate

     13,263      29,668      24,205      53,848

Other

     440      2,128      1,144      4,730
                           
     175,832      190,794      367,405      405,562

Operating Expenses

           

Brokered Natural Gas Cost

     16,051      15,397      44,750      44,642

Direct Operations-Field and Pipeline

     19,004      17,955      36,135      35,585

Exploration

     6,825      14,797      12,477      26,411

Depreciation, Depletion and Amortization

     40,585      36,675      77,966      72,190

General and Administrative (excluding Stock-Based Compensation)

     8,904      9,363      20,549      18,729

Stock-Based Compensation (1)

     4,061      4,152      10,696      9,038

Taxes Other Than Income

     14,579      14,578      27,744      30,073
                           
     110,009      112,917      230,317      236,668

Gain on Sale of Assets (2)

     4,422      4      12,342      211
                           

Income from Operations

     70,245      77,881      149,430      169,105

Interest Expense and Other

     3,619      6,023      7,543      12,173
                           

Income Before Income Taxes

     66,626      71,858      141,887      156,932

Income Tax Expense

     25,250      24,994      51,964      56,903
                           

Net Income

   $ 41,376    $ 46,864    $ 89,923    $ 100,029
                           

Net Earnings Per Share - Basic

   $ 0.43    $ 0.48    $ 0.93    $ 1.03

Weighted Average Common Shares Outstanding

     96,929      97,482      96,813      97,421

(1)

Includes the impact of the Company's performance share and restricted stock amortization as well as expense related to stock options and stock appreciation rights.

(2)

Gain on Sale of Assets is primarily related to the sale in the third quarter of 2006 of offshore and certain south Louisiana properties.


CABOT OIL & GAS RESULTS — Page 6

 

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)

 

     June 30,
2007
   December 31,
2006

Assets

     

Current Assets

   $ 213,662    $ 315,682

Property, Equipment and Other Assets

     1,721,258      1,487,897

Deferred Income Taxes

     34,341      30,912
             

Total Assets

   $ 1,969,261    $ 1,834,491
             

Liabilities and Stockholders' Equity

     

Current Liabilities

   $ 236,111    $ 251,027

Long-Term Debt, excluding Current Maturities

     235,000      220,000

Deferred Income Taxes

     394,569      347,430

Other Liabilities

     84,718      70,836

Stockholders' Equity

     1,018,863      945,198
             

Total Liabilities and Stockholders' Equity

   $ 1,969,261    $ 1,834,491
             

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)

 

    

Quarter Ended

June 30,

    Six Months Ended
June 30,
 
     2007     2006     2007     2006  

Cash Flows From Operating Activities

        

Net Income

   $ 41,376     $ 46,864     $ 89,923     $ 100,029  

Income Charges Not Requiring Cash

     45,032       40,840       89,583       81,225  

Gain on Sale of Assets

     (4,422 )     (4 )     (12,342 )     (211 )

Deferred Income Tax Expense

     23,738       9,139       39,612       22,032  

Changes in Assets and Liabilities

     (4,689 )     4,660       28,600       44,771  

Stock-Based Compensation Tax Benefit

     (1,911 )     (1,945 )     (6,046 )     (4,897 )

Exploration Expense

     6,825       14,797       12,477       26,411  
                                

Net Cash Provided by Operations

     105,949       114,351       241,807       269,360  
                                

Cash Flows From Investing Activities

        

Capital Expenditures

     (158,183 )     (121,347 )     (271,931 )     (224,463 )

Proceeds from Sale of Assets

     41       34       5,825       575  

Exploration Expense

     (6,825 )     (14,797 )     (12,477 )     (26,411 )
                                

Net Cash Used in Investing

     (164,967 )     (136,110 )     (278,583 )     (250,299 )
                                

Cash Flows From Financing Activities

        

Sale of Common Stock Proceeds

     1,163       1,502       2,307       2,564  

Net Increase in Debt

     25,000       55,000       15,000       10,000  

Purchase of Treasury Stock

     —         (27,187 )     —         (27,187 )

Stock-Based Compensation Tax Benefit

     1,911       1,945       6,046       4,897  

Dividends Paid

     (2,907 )     (1,956 )     (4,840 )     (3,902 )
                                

Net Cash Provided by / (Used in) Financing

     25,167       29,304       18,513       (13,628 )
                                

Net (Decrease) / Increase in Cash and

        

Cash Equivalents

   $ (33,851 )   $ 7,545     $ (18,263 )   $ 5,433  
                                


CABOT OIL & GAS RESULTS — Page 7

 

Selected Item Review and Reconciliation of Net Income and Earnings Per Share

(In thousands, except per share amounts)

 

     Quarter Ended
June 30,
    Six Months Ended
June 30,
 
     2007     2006     2007     2006  

As Reported - Net Income

   $ 41,376     $ 46,864     $ 89,923     $ 100,029  

Reversal of Selected Items, Net of Tax:

        

Gain on Sale of Assets

     (2,750 )     (2 )     (7,677 )     (131 )
                                

Net Income Excluding Selected Items

   $ 38,626     $ 46,862     $ 82,246     $ 99,898  
                                

As Reported - Net Earnings Per Share

   $ 0.43     $ 0.48     $ 0.93     $ 1.03  

Per Share Impact of Reversing Selected Items

     (0.03 )     —         (0.08 )     (0.01 )
                                

Net Earnings Per Share Including Reversal of Selected Items

   $ 0.40     $ 0.48     $ 0.85     $ 1.02  
                                

Weighted Average Common Shares Outstanding

     96,929       97,482       96,813       97,421  

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)

 

 

    

Quarter Ended

June 30,

    Six Months Ended
June 30,
 
     2007     2006     2007     2006  

Discretionary Cash Flow

        

As Reported - Net Income

   $ 41,376     $ 46,864     $ 89,923     $ 100,029  

Plus / (Less):

        

Income Charges Not Requiring Cash

     45,032       40,840       89,583       81,225  

Gain on Sale of Assets

     (4,422 )     (4 )     (12,342 )     (211 )

Deferred Income Tax Expense

     23,738       9,139       39,612       22,032  

Exploration Expense

     6,825       14,797       12,477       26,411  
                                

Discretionary Cash Flow

     112,549       111,636       219,253       229,486  

Changes in Assets and Liabilities

     (4,689 )     4,660       28,600       44,771  

Stock-Based Compensation Tax Benefit

     (1,911 )     (1,945 )     (6,046 )     (4,897 )
                                

Net Cash Provided by Operations

   $ 105,949     $ 114,351     $ 241,807     $ 269,360  
                                

Net Debt Reconciliation

(In thousands)

 

     June 30,
2007
    December 31,
2006
 

Current Portion of Long-Term Debt

   $ 20,000     $ 20,000  

Long-Term Debt

     235,000       220,000  
                

Total Debt

   $ 255,000     $ 240,000  

Stockholders' Equity

     1,018,863       945,198  
                

Total Capitalization

   $ 1,273,863     $ 1,185,198  

Total Debt

   $ 255,000     $ 240,000  

Less: Cash and Cash Equivalents

     (23,591 )     (41,854 )
                

Net Debt

   $ 231,409     $ 198,146  

Net Debt

   $ 231,409     $ 198,146  

Stockholders' Equity

     1,018,863       945,198  
                

Total Adjusted Capitalization

   $ 1,250,272     $ 1,143,344  

Total Debt to Total Capitalization Ratio

     20.0 %     20.2 %

Less: Impact of Cash and Cash Equivalents

     1.5 %     2.9 %
                

Net Debt to Adjusted Capitalization Ratio

     18.5 %     17.3 %