EX-99.1 2 dex991.htm PRESS RELEASE Press release

Exhibit 99.1

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FOR RELEASE    FOR MORE INFORMATION CONTACT
April 30, 2008    Scott Schroeder (281) 589-4993

Cabot Oil & Gas Reports First Quarter Financial Results

HOUSTON, April 30, 2008 - Cabot Oil & Gas Corporation today announced results from its first quarter of 2008. “The quarter was marked by positive momentum in production and commodity prices, along with new highs for our stock price,” said Dan O. Dinges, Chairman, President and Chief Executive Officer.

For the quarter, the Company reported net income (after removal of stock compensation expense and gain on asset sale), of $57.0 million, or $0.58 per share, compared to $47.7 million, or $0.49 per share last year. The 2008 first quarter selected items related to stock-based compensation expense, while the 2007 first quarter selected items included both stock-based compensation expense and a gain on the sale of assets (see attached table for details). Including the impact of these items, the reported numbers for the quarter were $46.0 million, or $0.47 per share, for the first quarter of 2008 versus $48.5 million, or $0.50 per share in the 2007 first quarter. Discretionary cash flow and cash flow from operations first quarter comparisons were $138.4 million versus $106.7 million and $132.7 million versus $135.9 million for 2008 and 2007, respectively.

Higher produced equivalent volumes, together with stronger prices, increased revenues. The Company reported 22.2 Bcfe of production, which is the highest quarterly level Cabot has reported since its asset sale in 2006. “After a slow start to the year, we experienced increasing production levels throughout the quarter, exiting the quarter with in excess of 255 Mmcfe per day,” commented Dinges. “Part of the delay was retooling of the drilling program to focus more on specific objectives than had been identified in the original program. This is evidenced by the lower well activity in the first quarter versus one year ago.” Dinges added, “Even with this adjustment, our daily production volumes increased over ten percent between the start and the end of the first quarter.”

This higher production was complemented by a seven percent increase in total natural gas price realizations and a 62 percent increase in total oil price realizations between first quarter comparative periods. On the expenses side, the significant move in the share price increased stock compensation expense, while the level of activity and inflation in the industry over recent years increased the DD&A expense. At the same time, the higher commodity prices increased production taxes, and the higher debt levels resulted in higher interest costs.

“Several years ago, we set out to align our compensation plans with shareholder interests,” stated Dinges. “The first quarter move in the stock of 26 percent created much of the $17.6 million recorded expense; however, it also resulted in a one billion dollar increase in shareholder value. On the debt side, our book capitalization remains around the mid 20 percent level, affording Cabot extensive flexibility to pursue all of its projects.”

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s first quarter financial and operating results discussion with financial analysts on Thursday, May 1, 2008 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 42873469. A replay will be available through Saturday, May 3, 2008. 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.

# # #

OPERATING DATA

 

     Quarter Ended
March 31,		  
     2008     2007  

PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)

     

Natural Gas

     

East

      6.0       5.8  

Gulf Coast

      7.4       6.5  

West

      6.4       6.4  

Canada

      1.2       1.1  
                

Total

      21.0       19.8  
                

Crude/Condensate/Ngl

     

East

      6       6  

Gulf Coast

      144       148  

West

      36       47  

Canada

      6       6  
                

Total

      192       207  
                

Equivalent Production (Bcfe)

      22.2       21.0  

PRICES

     

Average Produced Gas Sales Price ($/Mcf)

     

East

    $ 8.28     $ 8.08  

Gulf Coast

    $ 8.30     $ 7.75  

West

    $ 7.26     $ 6.51  

Canada

    $ 7.38     $ 7.46  

Total (1)

    $ 7.92     $ 7.42  

Average Crude/Condensate Price ($/Bbl)

     

East

    $ 90.04     $ 53.49  

Gulf Coast

    $ 84.58     $ 53.07  

West

    $ 95.66     $ 54.17  

Canada

    $ 79.38     $ 54.44  

Total (1)

    $ 86.55     $ 53.36  

WELLS DRILLED

    

Gross

      85       100  

Net

      65       92  

Gross Success Rate

      98 %     99 %

 

(1)

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

 

     Quarter Ended
March 31,
     2008     2007

Realized Impacts to Gas Pricing

    $ 0.03     $ 0.89

Realized Impacts to Oil Pricing

    $ (8.60 )   $ 0.89

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

 

     Quarter Ended
March 31,
     2008    2007

Operating Revenues

      

Natural Gas Production

    $ 166,559    $ 146,750

Brokered Natural Gas

      35,620      33,177

Crude Oil and Condensate

      16,487      10,942

Other

      985      704
             
     219,651      191,573

Operating Expenses

      

Brokered Natural Gas Cost

      30,290      28,699

Direct Operations - Field and Pipeline

      17,491      17,131

Exploration

      5,061      5,652

Depreciation, Depletion and Amortization

      46,267      37,381

General and Administrative (excluding Stock-Based Compensation)

      9,997      11,645

Stock-Based Compensation (1) 

      17,576      6,635

Taxes Other Than Income

      16,897      13,165
             
     143,579      120,308

Gain on Sale of Assets (2)

      —        7,920
             

Income from Operations

      76,072      79,185

Interest Expense and Other

      5,991      3,924
             

Income Before Income Taxes

      70,081      75,261

Income Tax Expense

      24,106      26,714
             

Net Income

    $ 45,975    $ 48,547
             

Net Earnings Per Share - Basic

    $ 0.47    $ 0.50

Weighted Average Common Shares Outstanding

      97,716      96,695

 

(1)

Includes the impact of the Company’s performance share awards and restricted stock amortization as well as expense related to stock options and stock appreciation rights. Also includes expense for the Supplemental Employee Incentive Plan which commenced in January 2008.

(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.

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)

 

     March 31,
2008		    December 31,
2007

Assets

      

Current Assets

    $ 272,004    $ 221,413

Property, Equipment and Other Assets

      2,004,084      1,939,334

Deferred Income Taxes

      53,902      47,847
             

Total Assets

    $ 2,329,990    $ 2,208,594
             

Liabilities and Stockholders’ Equity

      

Current Liabilities

    $ 321,626    $ 252,266

Long-Term Debt, excluding Current Maturities

      350,000      330,000

Deferred Income Taxes

      508,138      481,770

Other Liabilities

      85,980      74,301

Stockholders’ Equity

      1,064,246      1,070,257
             

Total Liabilities and Stockholders’ Equity

    $ 2,329,990    $ 2,208,594
             

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)

 

     Quarter Ended
March 31,		  
     2008     2007  

Cash Flows From Operating Activities

     

Net Income

    $ 45,975     $ 48,547  

Income Charges Not Requiring Cash

      63,806       44,551  

Gain on Sale of Assets

      —         (7,920 )

Deferred Income Tax Expense

      23,560       15,874  

Changes in Assets and Liabilities

      (1,056 )     33,289  

Stock-Based Compensation Tax Benefit

      (4,642 )     (4,135 )

Exploration Expense

      5,061       5,652  
                

Net Cash Provided by Operations

      132,704       135,858  
                

Cash Flows From Investing Activities

     

Capital Expenditures

      (128,101 )     (113,748 )

Proceeds from Sale of Assets

      —         5,784  

Exploration Expense

      (5,061 )     (5,652 )
                

Net Cash Used in Investing

      (133,162 )     (113,616 )
                

Cash Flows From Financing Activities

     

Sale of Common Stock Proceeds

      2,240       1,144  

Net Increase / (Decrease) in Debt

      20,000       (10,000 )

Stock-Based Compensation Tax Benefit

      4,642       4,135  

Dividends Paid

      (2,930 )     (1,933 )
                

Net Cash Provided by / (Used in) Financing

      23,952       (6,654 )
                

Net Increase in Cash and Cash Equivalents

    $ 23,494     $ 15,588  
                

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

(In thousands, except per share amounts)

 

     Quarter Ended
March 31,		  
     2008    2007  

As Reported - Net Income

    $ 45,975    $ 48,547  

Reversal of Selected Items, Net of Tax:

      

Gain on Sale of Assets

      —        (4,926 )

Stock-Based Compensation Expense

      11,055      4,127  
               

Net Income Excluding Selected Items

    $ 57,030    $ 47,748  
               

As Reported - Net Earnings Per Share

    $ 0.47    $ 0.50  

Per Share Impact of Reversing Selected Items

      0.11      (0.01 )
               

Net Earnings Per Share Including Reversal of Selected Items

    $ 0.58    $ 0.49  
               

Weighted Average Common Shares Outstanding

      97,716      96,695  

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)

 

     Quarter Ended
March 31,		  
     2008     2007  

Discretionary Cash Flow

     

As Reported - Net Income

    $ 45,975     $ 48,547  

Plus / (Less):

     

Income Charges Not Requiring Cash

      63,806       44,551  

Gain on Sale of Assets

      —         (7,920 )

Deferred Income Tax Expense

      23,560       15,874  

Exploration Expense

      5,061       5,652  
                

Discretionary Cash Flow

      138,402       106,704  

Changes in Assets and Liabilities

      (1,056 )     33,289  

Stock-Based Compensation Tax Benefit

      (4,642 )     (4,135 )
                

Net Cash Provided by Operations

    $ 132,704     $ 135,858  
                

Net Debt Reconciliation

(In thousands)

     March 31,
2008		     December 31,
2007		  

Current Portion of Long-Term Debt

    $ 20,000     $ 20,000  

Long-Term Debt

      350,000       330,000  
                

Total Debt

    $ 370,000     $ 350,000  

Stockholders’ Equity

      1,064,246       1,070,257  
                

Total Capitalization

    $ 1,434,246     $ 1,420,257  

Total Debt

    $ 370,000     $ 350,000  

Less: Cash and Cash Equivalents

      (41,992 )     (18,498 )
                

Net Debt

    $ 328,008     $ 331,502  

Net Debt

    $ 328,008     $ 331,502  

Stockholders’ Equity

      1,064,246       1,070,257  
                

Total Adjusted Capitalization

    $ 1,392,254     $ 1,401,759  

Total Debt to Total Capitalization Ratio

      25.8 %     24.6 %

Less: Impact of Cash and Cash Equivalents

      2.2 %     1.0 %
                

Net Debt to Adjusted Capitalization Ratio

      23.6 %     23.6 %