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Cabot Oil & Gas Announces 2002 Financial and Reserve Results;
Year-Over-Year Double Digit Production Growth
Feb 18, 2003

HOUSTON, Feb. 18 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced 2002 net income of $16.1 million, or $.51 per share, and discretionary cash flow of $178.8 million, or $5.63 per share. These results compare to 2001 net income of $47.1 million, or $1.56 per share, and discretionary cash flow of $230.5 million, or $7.61 per share.

Lower realized commodity prices were the main factor in the decline in reported results. The Company's average realized natural gas price fell more than 30% in 2002 to $3.02 per Mcf compared to an average realization of $4.36 per Mcf in 2001. Oil prices declined from $24.91 to $23.79 per barrel.

The Company experienced a 12% increase in equivalent production year-over- year. For 2002 Cabot reported equivalent production of 91.1 Bcfe, compared to 81.1 Bcfe produced in 2001. This increase was the result of a full year of production from the Cody acquisition (8%), versus a five-month contribution in 2001, and organic drilling results (4%). Cody's full year impact also contributed to increases in both absolute dollars and unit costs for direct operations and depreciation, depletion and amortization, which were more than offset by a $31 million reduction in exploration expense for 2002.

"The year 2002 ended up with strong momentum," stated Dan O. Dinges, Chairman and Chief Executive Officer. "We recorded our second highest level of discretionary cash flow, our second straight year of double-digit production growth and we reduced long-term debt by $28 million."

Fourth Quarter

For the December quarter, Cabot reported net income of $8.7 million, or $0.27 per share, compared to a net loss of $15.6 million, or $.49 per share, in the fourth quarter of 2001. Discretionary cash flow increased to $58.1 million, or $1.82 per share, versus $33.9 million, or $1.07 per share, in the prior year period.

Lower production levels in the fourth quarter of 2002 were more than offset by a 33% increase in realized natural gas prices and a 23% increase in realized oil prices. Lower exploration expense also contributed to the improved results.

Selected Items

For the fourth quarter, the Company's results included two selected items, both of which had the impact of reducing reported results, including a charge associated with SFAS 133, Accounting for Derivatives, and an impairment of long-lived assets under SFAS 144. Excluding these items, net income would have been $11.5 million, or $.36 per share.

For the full year, in addition to the previously mentioned selected items, Cabot incurred costs associated with an executive officer retirement and a revision to acquisition tax basis. Excluding the combination of these items provides Cabot with net income of $20.6 million, or $.65 per share, for 2002.

For a complete comparison of these matters see the table below the Condensed Consolidated Statement of Operations for the after-tax amounts associated with all reported selected items.

The Securities and Exchange Commission (SEC) recently issued a new Item 12 of Form 8-K and Regulation G in response to requirements specified by the Sarbanes-Oxley Act of 2002. The intent is for the SEC to bring press releases under their reporting jurisdiction and to better regulate the use of non-GAAP financial measures. These rules become effective March 28, 2003, and the Company will fully implement them at that time. Presently, Cabot is evaluating the impact of the rules on its practice of identifying selected items and the disclosure of Discretionary Cash Flow in its press releases.

Reserves

Total proved reserves increased slightly to 1,171.3 Bcfe at December 31, 2002, compared to 1,154.1 Bcfe in the prior year. Reserve replacement from all sources (additions, revisions and purchases) for the year was 136% of production and 105% from drilling and revisions, even though a reduced capital program was implemented in 2002. Reserve replacement costs for the year were estimated at $.90 per Mcfe from all sources and $1.07 per Mcfe from additions and revisions. Cabot's reserve to production ratio was reduced to 12.9 years at December 31, 2002, down from 14.2 years at December 31, 2001.

Listed below are reserve-related disclosures that will be part of the 2002 Form 10-K.
Supplemental Oil & Gas Information for the Year Ended December 31, 2002

                                    2002 Proved Reserve Reconciliation
    Proved Reserves         Natural Gas (Mmcf)  Liquids (MBbls)  Total (Mmcfe)
      Beginning of Year         1,036,004          19,684         1,154,109
      Revisions                    14,405           1,871            25,631
      Additions                    64,945             851            70,053
      Production                  (73,670)         (2,909)          (91,126)
      Purchases                    26,262             261            27,828
      Sales                        (6,987)         (1,365)          (15,179)
    End of Year                 1,060,959          18,393         1,171,316

    Developed (% of reserves)        77.2%           72.1%             76.8%


            Estimated Proved Reserves by Area at December 31, 2002
                      Natural Gas (Mmcf)               Liquids (A) (MBbls)
               Developed  Undeveloped   Total  Developed  Undeveloped   Total
    Gulf Coast   137,531    58,203     195,734   10,415       4,541    14,956
    West         341,340    71,141     412,481    2,415         585     3,000
    East         340,541   112,203     452,744      437         ---       437
      Total      819,412   241,547   1,060,959   13,267       5,126    18,393


                                              Total (B) (Mmcfe)
                                  Developed      Undeveloped       Total
    Gulf Coast                      200,022          85,445       285,467
    West                            355,828          74,652       430,480
    East                            343,166         112,203       455,369
      Total                         899,016         272,300     1,171,316

    (A)  Liquids include crude oil, condensate and natural gas liquids.
    (B)  Natural gas equivalents are determined using the ratio of 6 Mcf of
         natural gas to 1 Bbl of crude oil, condensate or natural gas liquids.


     Costs Incurred in Oil and Gas Property Acquisition, Exploration and
                   Development Activities - 2002 (C) ($000)

    Property Acquisition Costs - Proved            $8,799
    Property Acquisition Costs - Unproved           4,869
    Exploration and Extension Well Costs           52,012
    Development Costs                              55,165
      Total Costs                                $120,845

    (C)  Includes administrative exploration costs of $8,942, which are
         excluded from the company's calculation of reserve replacement costs.

    Outlook

"We intend to stay within our $150 million program that includes testing 30 exploration prospects (a three-fold increase over our 2002 program) during the course of 2003," said Dinges. "At the price levels where we are hedged and the existing commodity prices, we believe there should be opportunity for further debt reduction and the opportunity to evaluate, if desired, additional drilling exposures."

Listen in live to Cabot Oil & Gas Corporation's full year and fourth quarter earnings discussion with financial analysts on Wednesday, February 19, 2003, at 9:30 AM EST (8:30 AM CST) at www.cabotog.com . A teleconference replay will also be available at (888) 203-1112 (international (719) 457-0820), reservation number 556856. The audio webcast and teleconference replay will be available from February 19 at 12:30 PM EST until February 26, 2003, at 5 PM EST.

Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid-Continent; and the East. 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         Year Ended
                                             Dec. 31,            Dec. 31,
                                          2002      2001      2002      2001
    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Gulf Coast                           7.2       8.3      30.4      25.6
      West                                 6.4       6.8      25.3      26.2
      East                                 4.5       4.5      18.0      17.4
      Total                               18.1      19.6      73.7      69.2

    Crude/Condensate
      Gulf Coast                           657       535     2,620     1,621
      West                                  52        59       216       252
      East                                   9         7        33        35
      Total                                718       601     2,869     1,908

    Natural Gas Liquids                     10        14        40        88

    Equivalent Production (Bcfe)          22.4      23.3      91.1      81.1

    PRICES
    Average Produced Gas Sales
     Price ($/Mcf)
      Gulf Coast                         $4.28     $2.92     $3.34     $4.44
      West                               $3.02     $2.31     $2.39     $3.88
      East                               $4.32     $3.58     $3.38     $4.96
      Total                              $3.82     $2.87     $3.02     $4.36

    Crude/Condensate Price ($/Bbl)
      Gulf Coast                        $25.02    $20.55    $23.69    $24.78
      West                              $26.89    $20.36    $25.24    $26.01
      East                              $24.06    $15.61    $22.09    $23.03
      Total                             $25.15    $20.47    $23.79    $24.91

    WELLS DRILLED
      Gross                                 23        54       108       208
      Net                                 16.3      33.7      72.2     153.6
      Gross Success Rate                    91%       83%       93%       87%


            CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                     (In Thousands, Except Per Share Amounts)

                                          Quarter Ended       Year Ended
                                            Dec. 31,           Dec. 31,
                                         2002      2001     2002      2001
    Net Operating Revenues
      Natural Gas Production           $68,417   $55,519  $221,101  $301,671
      Crude Oil and Condensate          15,756    12,312    67,548    47,544
      Brokered Natural Gas              18,506     9,568    58,729    90,710
      Other                                871     2,919     6,378     7,117
                                       103,550    80,318   353,756   447,042
    Operating Expenses
      Brokered Natural Gas Cost         16,388     8,834    53,007    87,785
      Direct Operations - Field and
       Pipeline                         14,239    11,602    50,047    41,217
      Exploration                       12,484    31,411    40,167    71,165
      Taxes Other Than Income            5,834     7,177    24,734    28,341
      Administrative                     7,100     7,492    28,377    25,650
      Bad Debt                             ---     2,270       ---     2,270
      Depreciation, Depletion and
       Amortization                     26,766    28,421   105,860    88,422
      Impairment of Long-Lived Assets    1,657     5,131     2,720     6,852
                                        84,468   102,338   304,912   351,702
    Gain on Sale of Assets                  49       284       244        26
    Income (Loss) from Operations       19,131   (21,736)   49,088    95,366
    Interest Expense and Other           6,440     6,268    25,311    20,817
    Income (Loss) Before Income Taxes   12,691   (28,004)   23,777    74,549
    Income Tax Expense (Benefit)         4,036   (12,403)    7,674    27,465
    Net Income (Loss)                   $8,655  $(15,601)  $16,103   $47,084
    Net Income (Loss) Per Share - Basic  $0.27    $(0.49)    $0.51     $1.56
    Average Common Shares Outstanding   31,811    31,602    31,737    30,276

    Results from Operations Excluding
     Selected Items
      Net Income (Loss) Applicable
       to Common                        $8,655  $(15,601)  $16,103   $47,084
      After-Tax Impact for Selected
       Items:
        Retirement of Executive Officer                     (2,205)
        Revision of Tax Basis on
         Acquisition                                           790
        Change in Derivative Fair Value (1,792)     (397)   (1,424)       87
        Impairment of Long-Lived Assets (1,026)   (3,145)   (1,684)   (4,200)
        Bad Debt Expense                          (1,392)             (1,392)
        Severance Tax Refund                                             695

      Net Income (Loss) Excluding
       Selected Items                  $11,473  $(10,667)  $20,626   $51,894
      Net Income (Loss) Per Common
       Share                             $0.36    $(0.34)    $0.65     $1.71


                CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                  (In Thousands)
                                                    Dec. 31         Dec. 31,
                                                      2002            2001
    Assets
    Current Assets                                   $93,121         $84,987
    Property, Equipment and Other Assets             961,750         984,044
       Total Assets                               $1,054,871      $1,069,031

    Liabilities and Stockholders' Equity
    Current Liabilities                             $123,024        $110,240
    Long-Term Debt                                   365,000         393,000
    Deferred Income Taxes                            200,207         200,859
    Other Liabilities                                 15,983          18,380
    Stockholders' Equity                             350,657         346,552
       Total Liabilities and
        Stockholders' Equity                      $1,054,871      $1,069,031


            CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
                                   (In Thousands)

                                          Quarter Ended         Year Ended
                                             Dec. 31             Dec. 31
                                          2002      2001      2002      2001
    Cash Flows From Operating Activities
    Net Income (Loss)                    $8,655  $(15,601)  $16,103   $47,084
    Income Charges Not Requiring Cash    31,526    34,874   114,844    98,127
    Gain on Sale of Assets                  (49)     (284)     (244)      (26)
    Deferred Income Taxes                 5,439   (16,500)    7,882    14,157
    Exploration Expense                  12,484    31,411    40,167    71,165
    Changes in Assets and Liabilities    (1,195)    1,737   (13,611)   19,928
    Net Cash Provided by Operations      56,860    35,637   165,141   250,435

    Cash Flows From Investing Activities
    Capital Expenditures (**)           (16,540)  (38,119) (103,189) (314,914)
    Proceeds from Sale of Assets          1,017       931     4,688     6,829
    Exploration Expense                 (12,484)  (31,411)  (40,167)  (71,165)
    Net Cash Used by Investing          (28,007)  (68,599) (138,668) (379,250)

    Cash Flows From Financing Activities
    Sale of Common Stock                    311       ---     3,461     7,749
    Increase (Decrease) in Debt         (30,000)   26,000   (28,000)  124,000
    Common Dividends                     (1,271)   (1,264)   (5,079)   (4,802)
    Net Cash Provided (Used) by
     Financing                          (30,960)   24,736   (29,618)  126,947

    Net Decrease in Cash and
     Cash Equivalents                   $(2,107)  $(8,226)  $(3,145)  $(1,868)

    Discretionary Cash Flow (*)         $58,055   $33,900  $178,752  $230,507

    (*)  Net income plus non-cash charges and exploration which can also be
         derived by subtracting Changes in Assets and Liabilities from Net
         Cash Provided by Operations.  Excludes net proceeds on property
         sales.
    (**) Excludes the non-cash consideration of $49.9 million in common stock
         issued in connection with the acquisition of Cody Company in August
         2001.

SOURCE Cabot Oil & Gas Corporation