Attached files
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| 8-K - 8-K - CABOT OIL & GAS CORP | a12-5187_18k.htm |
Exhibit 99.1
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NEWS RELEASE |
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840 Gessner Rd., Houston, Texas 77024-4152 |
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P. O. Box 4544, Houston, Texas 77210-4544 |
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(281) 589-4600 |
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FOR RELEASE |
FOR MORE INFORMATION CONTACT |
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February 20, 2012 |
Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Corporation
Cabot Oil & Gas Corporation Announces 2011 Results,
Record Production of 187.5 Bcfe
HOUSTON, February 20, 2012 - Cabot Oil & Gas Corporation (NYSE: COG) today announced its 2011 financial results, including net income of $122.4 million, or $0.59 per share, taking into account the recent 2-for-1 stock split. Cash flow from operations for the full year 2011 was $501.8 million and discretionary cash flow was $549.2 million. These results compare to 2010 net income of $103.4 million, or $0.50 per share, cash flow from operations of $484.9 million and discretionary cash flow of $471.9 million. The full year selected items, detailed in an attached table, increase net income to $139.2 million, or $0.67 per share, compared to $102.4 million, or $0.49 per share, as adjusted for 2010.
“In 2011, we continued our focused effort primarily in two basins with outstanding results that were not only recognized in our operating performance, but also in our total shareholder return,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “We exceeded 3.0 Tcfe of total proved reserves, grew production 44 percent and reduced overall leverage at the same time.”
For 2011, equivalent production reached a record 187.5 Bcfe, establishing a new benchmark for both absolute production and for year-over-year growth of 43.5 percent. The price received for natural gas was $4.46 per Mcf in 2011 versus $5.69 per Mcf in 2010, while oil was $90.49 per barrel in 2011 versus $97.91 per barrel in 2010. Gains associated with the hedge portfolio once again added to price realizations and improved overall revenues in 2011 by $86.3 million. “In spite of our hedge book, we still experienced just over a 20 percent decline in gas prices and about an eight percent decline in realized oil prices year-over-year. Fortunately, our significant production growth more than offset the softness in commodity pricing to generate increased net income,” commented Dinges. “Also contributing, our total operating expense per unit fell 27 percent year-over-year. We also reduced leverage year-over-year, even with a significant investment program, lowering our net adjusted capitalization ratio to 30.4 percent.”
Fourth Quarter
The reported 2011 fourth quarter figures include net income of $26.4 million, or $0.13 per share, $126.5 million for cash flow from operations and $121.0 million for discretionary cash flow. These compare to 2010 fourth quarter net income of $49.1 million, or $0.24 per share, cash flow from operations of $117.4 million and discretionary cash flow of $89.8 million. Removing the selected items, which are highlighted in
the following table, net income would be $40.3 million, or $0.20 per share, for the 2011 fourth quarter versus $20.0 million, or $0.10 per share in the comparable 2010 period. Higher production, partially offset by lower realized commodity prices, and flat expenses drove the doubling of net income, excluding selected items.
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s 2011 year-end and fourth quarter financial and operating results discussion with financial analysts on Tuesday, February 21, 2012 at 9:30 a.m. EST (8:30 a.m. CST) at www.cabotog.com. A teleconference replay will also be available at (877) 344-7529, (U.S.) or (412) 317-0088 (International), pass code 10009373. The replay will be available through Thursday, February 23, 2012. 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.
OPERATING DATA
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Quarter Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2011 |
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2010 |
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2011 |
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2010 |
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PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) |
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Natural Gas |
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Appalachia |
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44.3 |
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23.1 |
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138.0 |
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69.8 |
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Other |
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7.3 |
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13.2 |
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40.8 |
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55.7 |
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Total |
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51.6 |
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36.3 |
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178.8 |
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125.5 |
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Crude/Condensate/NGL |
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523 |
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198 |
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1,443 |
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859 |
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Equivalent Production (Bcfe) |
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54.8 |
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37.5 |
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187.5 |
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130.6 |
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PRICES (1) |
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Average Produced Gas Sales Price ($/Mcf) |
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Appalachia |
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$ |
3.89 |
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$ |
4.39 |
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$ |
4.32 |
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$ |
4.87 |
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Other |
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$ |
4.79 |
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$ |
6.54 |
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$ |
4.93 |
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$ |
6.72 |
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Total |
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$ |
4.02 |
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$ |
5.17 |
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$ |
4.46 |
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$ |
5.69 |
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Average Crude/Condensate Price ($/Bbl) |
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$ |
91.90 |
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$ |
99.53 |
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$ |
90.49 |
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$ |
97.91 |
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WELLS DRILLED |
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Gross |
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76 |
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30 |
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161 |
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113 |
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Net |
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29 |
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20 |
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96 |
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87 |
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Gross Success Rate |
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100 |
% |
100 |
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99 |
% |
98 |
% | ||||
(1) These realized prices include the realized impact of derivative instrument settlements.
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Quarter Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2011 |
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2010 |
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2011 |
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2010 |
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Realized Impacts to Gas Pricing |
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$ |
0.71 |
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$ |
1.25 |
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$ |
0.47 |
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$ |
1.23 |
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Realized Impacts to Oil Pricing |
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$ |
1.67 |
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$ |
18.66 |
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$ |
1.01 |
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$ |
22.31 |
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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
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Quarter Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2011 |
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2010 |
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2011 |
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2010 |
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Operating Revenues |
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Natural Gas |
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$ |
207,541 |
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$ |
187,222 |
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$ |
796,517 |
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$ |
713,646 |
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Brokered Natural Gas |
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12,243 |
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15,385 |
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51,190 |
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65,281 |
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Crude Oil and Condensate |
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46,180 |
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18,664 |
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125,972 |
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79,091 |
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Other |
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2,061 |
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1,185 |
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6,185 |
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5,086 |
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268,025 |
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222,456 |
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979,864 |
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863,104 |
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Operating Expenses |
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Brokered Natural Gas Cost |
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10,472 |
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13,124 |
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43,834 |
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56,466 |
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Direct Operations |
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30,531 |
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25,846 |
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107,409 |
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99,642 |
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Transportation and Gathering |
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24,612 |
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5,581 |
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73,322 |
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19,069 |
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Taxes Other Than Income |
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6,506 |
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6,759 |
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27,576 |
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37,894 |
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Exploration |
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5,357 |
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14,401 |
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36,447 |
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42,725 |
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Depreciation, Depletion and Amortization |
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92,499 |
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91,504 |
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343,141 |
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327,083 |
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Impairment of Oil & Gas Properties |
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— |
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5,114 |
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— |
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40,903 |
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General and Administrative (excluding Stock-Based Compensation) |
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16,232 |
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24,018 |
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65,138 |
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64,767 |
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Stock-Based Compensation (1) |
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10,181 |
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5,484 |
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39,529 |
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14,410 |
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196,390 |
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191,831 |
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736,396 |
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702,959 |
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Gain (Loss) on Sale of Assets (2) |
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26,974 |
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100,883 |
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63,382 |
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106,294 |
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Income from Operations |
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98,609 |
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131,508 |
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306,850 |
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266,439 |
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Interest Expense and Other |
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17,735 |
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20,502 |
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71,663 |
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67,941 |
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Income Before Income Taxes |
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80,874 |
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111,006 |
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235,187 |
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198,498 |
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Income Tax Expense (3) |
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54,511 |
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61,897 |
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112,779 |
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95,112 |
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Net Income |
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$ |
26,363 |
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$ |
49,109 |
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$ |
122,408 |
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$ |
103,386 |
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Earnings Per Share - Basic (4) |
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$ |
0.13 |
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$ |
0.24 |
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$ |
0.59 |
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$ |
0.50 |
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Weighted Average Common Shares Outstanding (4) |
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208,601 |
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207,958 |
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208,498 |
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207,823 |
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(1) |
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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. |
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(2) |
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Gain on Sale of Assets in 2011 includes $34.2 million gain from the sale of certain Haynesville and Bossier Shale oil and gas properties and an aggregate gain of $29.2 million from the sale of various other properties during the year. Gain on Sale of Assets in 2010 includes $40.7 million from the sale of the Company’s investment in Tourmaline, $49.3 million from the sale of the Company’s Pennsylvania gathering infrastructure and an aggregate gain of $16.3 million from the sale of various other properties during the year. |
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(3) |
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Income tax expense for the quarter and year ended December 31, 2011 and 2010 includes an unfavorable charge to income tax expense to reflect an increase in state tax rates used in establishing deferred income taxes mainly due to a shift in the Company’s state apportionment factors to higher rate states, primarily in Pennsylvania, as a result of the Company’s continued focus on development of the Marcellus shale properties. |
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(4) |
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All Earnings Per Share and Weighted Average Common Share figures have been retroactively adjusted for the 2-for-1 split of the Company’s common stock effective January 25, 2012. |
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
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December 31, |
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December 31, |
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2011 |
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2010 |
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Assets |
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Current Assets |
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$ |
345,800 |
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$ |
203,008 |
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Properties and Equipment, Net |
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3,934,584 |
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3,762,760 |
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Other Assets |
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51,109 |
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39,263 |
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Total Assets |
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$ |
4,331,493 |
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$ |
4,005,031 |
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Liabilities and Stockholders’ Equity |
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Current Liabilities |
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$ |
343,344 |
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$ |
303,835 |
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Long-Term Debt, excluding Current Maturities |
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950,000 |
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975,000 |
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Deferred Income Taxes |
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802,592 |
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714,953 |
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Other Liabilities |
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130,789 |
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138,543 |
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Stockholders’ Equity |
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2,104,768 |
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1,872,700 |
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Total Liabilities and Stockholders’ Equity |
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$ |
4,331,493 |
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$ |
4,005,031 |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
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Quarter Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2011 |
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2010 |
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2011 |
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2010 |
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Cash Flows From Operating Activities |
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Net Income |
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$ |
26,363 |
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$ |
49,109 |
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$ |
122,408 |
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$ |
103,386 |
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Impairment of Oil & Gas Properties |
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— |
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5,114 |
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— |
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40,903 |
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Deferred Income Tax Expense |
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17,363 |
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31,344 |
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74,744 |
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61,809 |
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Loss (Gain) on Sale of Assets |
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(26,974 |
) |
(100,883 |
) |
(63,382 |
) |
(106,294 |
) | ||||
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Exploration Expense |
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126 |
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1,184 |
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13,977 |
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11,657 |
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Unrealized (Gain) Loss on Derivatives |
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15 |
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388 |
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965 |
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226 |
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Income Charges Not Requiring Cash |
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104,071 |
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103,495 |
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400,462 |
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360,258 |
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Changes in Assets and Liabilities |
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5,509 |
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27,668 |
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(47,335 |
) |
12,966 |
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Net Cash Provided by Operations |
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126,473 |
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117,419 |
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501,839 |
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484,911 |
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Cash Flows From Investing Activities |
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Capital Expenditures |
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(222,290 |
) |
(199,128 |
) |
(891,277 |
) |
(857,251 |
) | ||||
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Proceeds from Sale of Assets |
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321,548 |
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222,477 |
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403,657 |
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243,510 |
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Net Cash Used in Investing |
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99,258 |
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23,349 |
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(487,620 |
) |
(613,741 |
) | ||||
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Cash Flows From Financing Activities |
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Net Increase (Decrease) in Debt |
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(255,000 |
) |
(120,000 |
) |
(25,000 |
) |
170,000 |
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Capitalized Debt Issuance Costs |
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— |
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(125 |
) |
(1,025 |
) |
(13,821 |
) | ||||
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Dividends Paid |
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(3,129 |
) |
(3,119 |
) |
(12,508 |
) |
(12,467 |
) | ||||
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Other |
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(619 |
) |
837 |
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(1,724 |
) |
909 |
| ||||
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Net Cash Provided by Financing |
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(258,748 |
) |
(122,407 |
) |
(40,257 |
) |
144,621 |
| ||||
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|
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|
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Net Increase / (Decrease) in Cash and Cash Equivalents |
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$ |
(33,017 |
) |
$ |
18,361 |
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$ |
(26,038 |
) |
$ |
15,791 |
|
Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
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Quarter Ended |
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Twelve Months Ended |
| ||||||||
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|
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December 31, |
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December 31, |
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|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
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As Reported - Net Income |
|
$ |
26,363 |
|
$ |
49,109 |
|
$ |
122,408 |
|
$ |
103,386 |
|
|
Reversal of Selected Items, Net of Tax: |
|
|
|
|
|
|
|
|
| ||||
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Impairment of Oil & Gas Properties |
|
— |
|
3,171 |
|
— |
|
25,360 |
| ||||
|
(Gain) Loss on Sale of Assets (1) |
|
(16,217 |
) |
(62,547 |
) |
(38,790 |
) |
(65,902 |
) | ||||
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Stock-Based Compensation Expense |
|
5,996 |
|
3,400 |
|
24,192 |
|
8,934 |
| ||||
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Pension Expense (2) |
|
2,161 |
|
4,245 |
|
8,869 |
|
8,083 |
| ||||
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PaDEP Settlement and Related Legal Fees (3) |
|
— |
|
3,409 |
|
— |
|
3,409 |
| ||||
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Unrealized Loss (Gain) on Derivatives (4) |
|
2 |
|
241 |
|
591 |
|
140 |
| ||||
|
Income Tax Expense (5) |
|
21,961 |
|
18,973 |
|
21,961 |
|
18,973 |
| ||||
|
Net Income Excluding Selected Items |
|
$ |
40,266 |
|
$ |
20,001 |
|
$ |
139,231 |
|
$ |
102,383 |
|
|
As Reported - Earnings Per Share (6) |
|
$ |
0.13 |
|
$ |
0.24 |
|
$ |
0.59 |
|
$ |
0.50 |
|
|
Per Share Impact of Reversing Selected Items (6) |
|
0.07 |
|
(0.14 |
) |
0.08 |
|
(0.01 |
) | ||||
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Earnings Per Share Including Reversal of Selected Items (6) |
|
$ |
0.20 |
|
$ |
0.10 |
|
$ |
0.67 |
|
$ |
0.49 |
|
|
Weighted Average Common Shares Outstanding (6) |
|
208,601 |
|
207,958 |
|
208,498 |
|
207,823 |
| ||||
(1) Gain on Sale of Assets in 2011 includes $34.2 million gain from the sale of certain Haynesville and Bossier Shale oil and gas properties and an aggregate gain of $29.2 million from the sale of various other properties during the year. Gain on Sale of Assets in 2010 includes $40.7 million from the sale of the Company’s investment in Tourmaline, $49.3 million from the sale of the Company’s Pennsylvania gathering infrastructure and an aggregate gain of $16.3 million from the sale of various other properties during the year.
(2) On July 28, 2010, the Company notified its employees of its plan to terminate its qualified and non-qualified pension plans, effective September 30, 2010. The quarter and twelve months ended December 31, 2011 and 2010 amounts represent pension expenses related to the plan terminations and expenses related to the acceleration of amortization of prior service costs and actuarial losses over the expected amortization period until final distribution of assets from each plan. Pension expense is included in General and Administrative expense in the Consolidated Statement of Operations.
(3) Represents costs associated with the December 2010 Consent Order and Settlement Agreement and with the PaDEP and associated legal fees.
(4) This unrealized loss (gain) is included in Natural Gas revenues in the Consolidated Statement of Operations and represents the mark to market change related to derivatives not designated as hedging instruments.
(5) Represents an unfavorable charge to income tax expense to reflect an increase in state tax rates used in establishing deferred income taxes mainly due to a shift in the Company’s state apportionment factors to higher rate states, primarily in Pennsylvania, as a result of the Company’s continued focus on development of its Marcellus shale properties.
(6) All Earnings Per Share and Weighted Average Common Share figures have been retroactively adjusted for the 2-for-1 split of the Company’s common stock effective January 25, 2012.
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
|
|
|
Quarter Ended |
|
Twelve Months Ended |
| ||||||||
|
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
Discretionary Cash Flow |
|
|
|
|
|
|
|
|
| ||||
|
As Reported - Net Income |
|
$ |
26,363 |
|
$ |
49,109 |
|
$ |
122,408 |
|
$ |
103,386 |
|
|
Plus / (Less): |
|
|
|
|
|
|
|
|
| ||||
|
Impairment of Oil & Gas Properties |
|
— |
|
5,114 |
|
— |
|
40,903 |
| ||||
|
Deferred Income Tax Expense |
|
17,363 |
|
31,344 |
|
74,744 |
|
61,809 |
| ||||
|
Loss (Gain) on Sale of Assets |
|
(26,974 |
) |
(100,883 |
) |
(63,382 |
) |
(106,294 |
) | ||||
|
Exploration Expense |
|
126 |
|
1,184 |
|
13,977 |
|
11,657 |
| ||||
|
Unrealized Loss (Gain) on Derivatives |
|
15 |
|
388 |
|
965 |
|
226 |
| ||||
|
Income Charges Not Requiring Cash |
|
104,071 |
|
103,495 |
|
400,462 |
|
360,258 |
| ||||
|
Discretionary Cash Flow |
|
120,964 |
|
89,751 |
|
549,174 |
|
471,945 |
| ||||
|
Changes in Assets and Liabilities |
|
5,509 |
|
27,668 |
|
(47,335 |
) |
12,966 |
| ||||
|
Net Cash Provided by Operations |
|
$ |
126,473 |
|
$ |
117,419 |
|
$ |
501,839 |
|
$ |
484,911 |
|
Net Debt Reconciliation
(In thousands)
|
|
|
December 31, |
|
December 31, |
| ||
|
|
|
2011 |
|
2010 |
| ||
|
|
|
|
|
|
| ||
|
Long-Term Debt |
|
$ |
950,000 |
|
$ |
975,000 |
|
|
Stockholders’ Equity |
|
2,104,768 |
|
1,872,700 |
| ||
|
Total Capitalization |
|
$ |
3,054,768 |
|
$ |
2,847,700 |
|
|
|
|
|
|
|
| ||
|
Total Debt |
|
$ |
950,000 |
|
$ |
975,000 |
|
|
Less: Cash and Cash Equivalents |
|
(29,911 |
) |
(55,949 |
) | ||
|
Net Debt |
|
$ |
920,089 |
|
$ |
919,051 |
|
|
|
|
|
|
|
| ||
|
Net Debt |
|
$ |
920,089 |
|
$ |
919,051 |
|
|
Stockholders’ Equity |
|
2,104,768 |
|
1,872,700 |
| ||
|
Total Adjusted Capitalization |
|
$ |
3,024,857 |
|
$ |
2,791,751 |
|
|
|
|
|
|
|
| ||
|
Total Debt to Total Capitalization Ratio |
|
31.1 |
% |
34.2 |
% | ||
|
Less: Impact of Cash and Cash Equivalents |
|
0.7 |
% |
1.3 |
% | ||
|
Net Debt to Adjusted Capitalization Ratio |
|
30.4 |
% |
32.9 |
% | ||