Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CABOT OIL & GAS CORP | d8k.htm |
Exhibit 99.1
| FOR RELEASE | FOR MORE INFORMATION CONTACT | |
| April 28, 2010 | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Announces First Quarter Profits
HOUSTON, April 28, 2010 - Cabot Oil & Gas Corporation (NYSE: COG) today reported that for the first quarter of 2010 the Company had net income of $28.7 million, or $0.28 per share, compared to $47.6 million, or $0.46 per share, for last year’s first quarter. The 2010 earnings figure, along with 2009 comparison, were impacted by gains on sales of properties, charges related to stock compensation and derivative related movements, which are detailed in the attached Selected Items table. Net income excluding these selected items for both first quarter periods is $30.6 million, or $0.30 per share, for 2010 versus $42.2 million, or $0.41 per share, in 2009.
The Company also reported cash flow from operations for the quarter of $116.1 million, versus the $152.5 million recorded in last year’s first quarter. Discretionary cash flow was down slightly between comparable periods at $131.4 million for 2010, compared to $138.0 million for 2009.
“The key drivers for the lower quarterly results were lower natural gas price realizations, partially offset by increased production,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “For the quarter, Cabot reported 26.7 Bcfe of production, compared to last year’s first quarter figure of 25.6 Bcfe, which includes 0.6 Bcfe of production from the Canadian properties sold in 2009. Based on 25.0 Bcfe of pro forma production the growth rate for the comparable first quarter periods is 6.8 percent.” Dinges added, “We had a significant up-tick in production half-way through the first quarter, generating a production exit rate of 325 Mmcfe per day.”
Natural gas price realizations were $6.56 per Mcf in 2010 versus $7.51 per Mcf in 2009 for the quarter comparison. This year’s quarter experienced a $1.12 per Mcf pick-up from the Company’s hedge position, where last year’s impact was $3.34 per Mcf. While oil comprises a small portion of Cabot’s production, the hedge per unit impact was very positive, moving realized oil prices up $22.36 per barrel for the first quarter 2010 versus $39.07 per barrel in the first quarter 2009. Even with the smaller hedge benefit in 2010, the realized price of $97.40 per barrel was 29 percent above last year’s first quarter.
“Expenses between comparable quarters fell slightly and were within expectations,” added Dinges. “DD&A increased due to higher production and costs related to leasehold amortizations.”
“During the quarter, Cabot used its balance sheet to continue its leasing efforts in the Marcellus and in establishing a new oil position in the Eagle Ford,” said Dinges. “So far during 2010 we have accumulated 28,400 net acres in these two areas. This, combined with carryover investments from 2009, moved our overall debt level by $110 million, but still well within our comfort level at 33 percent debt to total capital.”
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s first quarter financial and operating results discussion with financial analysts on Thursday, April 29, 2010 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 64482901. The replay will be available through Saturday, May 1, 2010. 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 its entire resource base located in the continental United States. 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 3
OPERATING DATA
| Quarter Ended March 31, |
||||||||
| 2010 | 2009 | |||||||
| PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) |
||||||||
| Natural Gas |
||||||||
| North |
14.4 | 10.7 | ||||||
| South |
11.0 | 13.2 | ||||||
| Canada |
— | 0.6 | ||||||
| Total |
25.4 | 24.5 | ||||||
| Crude/Condensate/Ngl |
||||||||
| North |
23.0 | 26.0 | ||||||
| South |
194.0 | 166.0 | ||||||
| Canada |
— | 4.0 | ||||||
| Total |
217.0 | 196.0 | ||||||
| Equivalent Production (Bcfe) |
26.7 | 25.6 | ||||||
| PRICES |
||||||||
| Average Produced Gas Sales Price ($/Mcf) |
||||||||
| North |
$ | 5.59 | $ | 7.19 | ||||
| South |
$ | 7.84 | $ | 7.95 | ||||
| Canada |
$ | — | $ | 3.51 | ||||
|
Total(1) |
$ | 6.56 | $ | 7.51 | ||||
| Average Crude/Condensate Price ($/Bbl) |
||||||||
| North |
$ | 68.04 | $ | 30.63 | ||||
| South |
$ | 100.86 | $ | 83.24 | ||||
| Canada |
— | $ | 32.01 | |||||
|
Total(1) |
$ | 97.40 | $ | 75.25 | ||||
| WELLS DRILLED |
||||||||
| Gross |
24 | 49 | ||||||
| Net |
20 | 37 | ||||||
| Gross Success Rate |
96 | % | 96 | % | ||||
| (1) | These realized prices include the realized impact of derivative instrument settlements. |
| Quarter Ended March 31, | ||||||
| 2010 | 2009 | |||||
| Realized Impacts to Gas Pricing |
$ | 1.12 | $ | 3.34 | ||
| Realized Impacts to Oil Pricing |
$ | 22.36 | $ | 39.07 | ||
CABOT OIL & GAS RESULTS — Page 4
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| Quarter Ended March 31, | ||||||
| 2010 | 2009 | |||||
| Operating Revenues |
||||||
| Natural Gas Production |
$ | 166,081 | $ | 184,522 | ||
| Brokered Natural Gas |
24,873 | 33,381 | ||||
| Crude Oil and Condensate |
19,982 | 14,242 | ||||
| Other |
1,620 | 1,794 | ||||
| 212,556 | 233,939 | |||||
| Operating Expenses |
||||||
| Brokered Natural Gas Cost |
21,268 | 29,749 | ||||
| Direct Operations—Field and Pipeline |
22,983 | 25,479 | ||||
| Exploration |
8,426 | 6,466 | ||||
| Depreciation, Depletion and Amortization |
73,498 | 65,092 | ||||
| General and Administrative (excluding Stock-Based Compensation) |
12,522 | 11,936 | ||||
| Stock-Based Compensation(1) |
3,224 | 5,129 | ||||
| Taxes Other Than Income |
10,805 | 12,898 | ||||
| 152,726 | 156,749 | |||||
| Gain on Sale of Assets(2) |
759 | 12,707 | ||||
| Income from Operations |
60,589 | 89,897 | ||||
| Interest Expense and Other |
14,912 | 14,226 | ||||
| Income Before Income Taxes |
45,677 | 75,671 | ||||
| Income Tax Expense |
16,981 | 28,091 | ||||
| Net Incomes |
$ | 28,696 | $ | 47,580 | ||
| Net Earnings Per Share—Basic |
$ | 0.28 | $ | 0.46 | ||
| Weighted Average Common Shares Outstanding |
103,794 | 103,521 | ||||
| (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 Plans which commenced in 2008. |
| (2) | The gain on sale of assets for the period ending March 31, 2009 primarily relates to the sale of the Thornwood properties in the East. |
CABOT OIL & GAS RESULTS — Page 5
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
| March 31, 2010 |
December 31, 2009 | |||||
| Assets |
||||||
| Current Assets |
$ | 293,897 | $ | 281,502 | ||
| Property, Equipment and Other Assets |
3,518,020 | 3,401,899 | ||||
| Total Assets |
$ | 3,811,917 | $ | 3,683,401 | ||
| Liabilities and Stockholders’ Equity |
||||||
| Current Liabilities |
$ | 265,302 | $ | 308,741 | ||
| Long-Term Debt, excluding Current Maturities |
915,000 | 805,000 | ||||
| Deferred Income Taxes |
663,579 | 644,801 | ||||
| Other Liabilities |
113,906 | 112,345 | ||||
| Stockholders’ Equity |
1,854,130 | 1,812,514 | ||||
| Total Liabilities and Stockholders’ Equity |
$ | 3,811,917 | $ | 3,683,401 | ||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
| Quarter Ended March 31, |
||||||||
| 2010 | 2009 | |||||||
| Cash Flows From Operating Activities |
||||||||
| Net Income |
$ | 28,696 | $ | 47,580 | ||||
| Unrealized (Gain) Loss on Derivatives |
587 | (941 | ) | |||||
| Income Charges Not Requiring Cash |
78,776 | 71,292 | ||||||
| Gain on Sale of Assets |
(759 | ) | (12,707 | ) | ||||
| Deferred Income Tax Expense |
15,716 | 26,349 | ||||||
| Changes in Assets and Liabilities |
(15,345 | ) | 14,495 | |||||
| Exploration Expense |
8,426 | 6,466 | ||||||
| Net Cash Provided by Operations |
116,097 | 152,534 | ||||||
| Cash Flows From Investing Activities |
||||||||
| Capital Expenditures |
(226,977 | ) | (171,029 | ) | ||||
| Proceeds from Sale of Assets |
803 | 15,063 | ||||||
| Exploration Expense |
(8,426 | ) | (6,466 | ) | ||||
| Net Cash Used in Investing |
(234,600 | ) | (162,432 | ) | ||||
| Cash Flows From Financing Activities |
||||||||
| Net Increase in Debt |
110,000 | 10,000 | ||||||
| Dividends Paid |
(3,112 | ) | (3,103 | ) | ||||
| Other |
(38 | ) | 149 | |||||
| Net Cash Provided by Financing |
106,850 | 7,046 | ||||||
| Net Increase / (Decrease) in Cash and Cash Equivalents |
$ | (11,653 | ) | $ | (2,852 | ) | ||
CABOT OIL & GAS RESULTS — Page 6
Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
| Quarter Ended March 31, |
||||||||
| 2010 | 2009 | |||||||
| As Reported—Net Income |
$ | 28,696 | $ | 47,580 | ||||
| Reversal of Selected Items, Net of Tax: |
||||||||
| Gain on Sale of Assets(1) |
(474 | ) | (7,967 | ) | ||||
| Stock-Based Compensation Expense |
2,015 | 3,216 | ||||||
| Unrealized Loss (Gain) on Derivatives(2) |
367 | (590 | ) | |||||
| Net Income Excluding Selected Items |
$ | 30,604 | $ | 42,239 | ||||
| As Reported—Net Earnings Per Share |
$ | 0.28 | $ | 0.46 | ||||
| Per Share Impact of Reversing Selected Items |
0.02 | (0.05 | ) | |||||
| Net Earnings Per Share Including Reversal of Selected Items |
$ | 0.30 | $ | 0.41 | ||||
| Weighted Average Common Shares Outstanding |
103,794 | 103,521 | ||||||
| (1) | The gain on sale of assets in 2009 primarily relates to the sale of the Thornwood properties in the East. |
| (2) | This unrealized loss (gain) is included in Natural Gas Production Revenues in the Condensed Consolidated Statement of Operations and represents the mark to market change related to the Company’s natural gas basis swaps. |
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
| Quarter Ended March 31, |
||||||||
| 2010 | 2009 | |||||||
| Discretionary Cash Flow |
||||||||
| As Reported—Net Income |
$ | 28,696 | $ | 47,580 | ||||
| Plus / (Less): |
||||||||
| Unrealized Loss (Gain) on Derivatives |
587 | (941 | ) | |||||
| Income Charges Not Requiring Cash |
78,776 | 71,292 | ||||||
| Gain on Sale of Assets |
(759 | ) | (12,707 | ) | ||||
| Deferred Income Tax Expense |
15,716 | 26,349 | ||||||
| Exploration Expense |
8,426 | 6,466 | ||||||
| Discretionary Cash Flow |
131,442 | 138,039 | ||||||
| Changes in Assets and Liabilities |
(15,345 | ) | 14,495 | |||||
| Stock-Based Compensation Tax Benefit |
— | — | ||||||
| Net Cash Provided by Operations |
$ | 116,097 | $ | 152,534 | ||||
Net Debt Reconciliation
(In thousands)
| March 31, 2010 |
December 31, 2009 |
|||||||
| Long-Term Debt |
$ | 915,000 | $ | 805,000 | ||||
| Stockholders’ Equity |
1,854,130 | 1,812,514 | ||||||
| Total Capitalization |
$ | 2,769,130 | $ | 2,617,514 | ||||
| Total Debt |
$ | 915,000 | $ | 805,000 | ||||
| Less: Cash and Cash Equivalents |
(28,505 | ) | (40,158 | ) | ||||
| Net Debt |
$ | 886,495 | $ | 764,842 | ||||
| Net Debt |
$ | 886,495 | $ | 764,842 | ||||
| Stockholders’ Equity |
1,854,130 | 1,812,514 | ||||||
| Total Adjusted Capitalization |
$ | 2,740,625 | $ | 2,577,356 | ||||
| Total Debt to Total Capitalization Ratio |
33.0 | % | 30.8 | % | ||||
| Less: Impact of Cash and Cash Equivalents |
0.7 | % | 1.1 | % | ||||
| Net Debt to Adjusted Capitalization Ratio |
32.3 | % | 29.7 | % | ||||