HOUSTON, May 18 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) announced today that it agreed to issue 3.4 million shares of its Class A common stock in a block trade through Jefferies & Company, Inc. The gross proceeds from the offering of $73.1 million will be used primarily to repurchase all of the Company's outstanding preferred shares. The shares are being sold under the Company's shelf registration statement.
Cabot Oil & Gas had previously negotiated with the holder of the preferred stock the right to repurchase the preferred shares at a 9% discount from par value, or for $51.6 million, up until November 1, 2000. The remaining proceeds from the stock offering will be used for general corporate purposes including the reduction of debt.
"The retirement of the preferred stock allows us to reinvest the $3.4 million spent annually on preferred dividends into the further development of our prospect inventory," stated Ray Seegmiller, Chairman and Chief Executive Officer. "The elimination of this dividend will also increase annual net income and discretionary cash flow by a like amount." Seegmiller added, "With many analysts viewing the preferred stock as a debt instrument, this action significantly improves our capital structure and corresponding leverage ratios."
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the onshore Texas and Louisiana Gulf Coast, Rocky Mountains, Appalachia, and in the Mid-Continent. 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 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
SOURCE Cabot Oil & Gas Corporation
Web site: http: //www.cabotog.com
Company News On-Call: http: //www.prnewswire.com/comp/129660.html or fax, 800-758-5804, ext. 129660
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993