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Cabot Oil & Gas Announces First Quarter Profits
Apr 28, 2009
HOUSTON, April 28, 2009 /PRNewswire via COMTEX/ -- HOUSTON, April 28 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today reported that for the first quarter of 2009 the Company had net income of $47.6 million, or $0.46 per share, compared to $46.0 million, or $0.47 per share, for last year's first quarter. The 2009 earnings figure benefited from a gain on the sale of assets and a gain on derivatives in 2009, while both periods were negatively impacted by charges related to stock compensation. Removing these selected items for both first quarter periods, the comparison for net income is $42.2 million, or $0.41 per share, for 2009 versus $57.0 million, or $0.58 per share, in 2008.

The Company also reported cash flow from operations for the quarter of $152.5 million, up almost $20 million from the $132.7 million recorded in last year's first quarter. Discretionary cash flow was relatively flat between comparable periods at $138.0 million for 2009, compared to $138.4 million for 2008.

"The key drivers for the quarter's results were a 16 percent increase in equivalent production and solid price realizations aided by our hedge position," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "For the quarter, Cabot reported 25.6 Bcfe of production, compared to last year's first quarter figure of 22.2 Bcfe. This increase represents a combination of growth in our organic program and from production related to last summer's acquisition," commented Dinges. "Roughly half was the result of acquired wells and half from our drilling effort."

Natural gas price realizations were $7.51 per Mcf in 2009 versus $7.92 per Mcf in 2008 for the quarter comparisons. This year's quarter experienced a $3.34 per Mcf pick-up from the Company's hedge position, where last year's impact was only a positive $0.03 per Mcf. While oil comprises a small portion of Cabot's production, the hedge per unit impact was much more dramatic, moving realized oil prices up $39.07 per barrel for the first quarter 2009 versus a decline of $8.60 per barrel in the first quarter 2008.

"Expenses between comparable quarters trended higher but within expectations," added Dinges. "DD&A increased due to higher production, costs related to the acquisition and leasehold amortizations.

"In light of the business environment, I am pleased with the quarter results, the areas we have to allocate our capital and the stronger financial position we possess," said Dinges. "Even with the current economic conditions, I believe 2009 will be another growth year for Cabot."

Conference Call

Listen in live to Cabot Oil & Gas Corporation's first quarter financial and operating results discussion with financial analysts on Wednesday, April 29, 2009 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 93093519. The replay will be available through Friday, May 1, 2009. 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; and in 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
                                                 March 31,
                                               -------------
                                                2009    2008
                                               -----   -----
    PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
    Natural Gas
      East                                       7.3     6.0
      Gulf Coast                                10.4     7.4
      West                                       6.2     6.4
      Canada                                     0.6     1.2
                                               -----   -----
      Total                                     24.5    21.0
                                               =====   =====

    Crude/Condensate/Ngl
      East                                         4       6
      Gulf Coast                                 153     144
      West                                        35      36
      Canada                                       4       6
                                               -----   -----
      Total                                      196     192
                                               =====   =====

    Equivalent Production (Bcfe)                25.6    22.2

    PRICES
    Average Produced Gas Sales Price ($/Mcf)
      East                                     $8.34   $8.28
      Gulf Coast                               $8.34   $8.30
      West                                     $5.54   $7.26
      Canada                                   $3.51   $7.38
      Total (1)                                $7.51   $7.92

    Average Crude/Condensate Price ($/Bbl)
      East                                    $37.25  $90.04
      Gulf Coast                              $87.02  $84.58
      West                                    $32.22  $95.66
      Canada                                  $32.01  $79.38
      Total (1)                               $75.25  $86.55

    WELLS DRILLED
      Gross                                       49      85
      Net                                         37      65
      Gross Success Rate                          96%     98%


    (1)  These realized prices include the realized impact of derivative
         instrument settlements.
                                                Quarter Ended
                                                  March 31,
                                                -------------
                                                 2009    2008
                                                ------  ------
           Realized Impacts to Gas Pricing       $3.34   $0.03
           Realized Impacts to Oil Pricing      $39.07  $(8.60)



           CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                    (In thousands, except per share amounts)

                                                            Quarter Ended
                                                              March 31,
                                                          -----------------
                                                            2009     2008
                                                          -------- --------
    Operating Revenues
      Natural Gas Production                              $184,522 $166,559
      Brokered Natural Gas                                  33,381   35,620
      Crude Oil and Condensate                              14,242   16,487
      Other                                                  1,794      985
                                                          -------- --------
                                                           233,939  219,651
    Operating Expenses
      Brokered Natural Gas Cost                             29,749   30,290
      Direct Operations - Field and Pipeline                25,479   17,491
      Exploration                                            6,466    5,061
      Depreciation, Depletion and Amortization              65,092   46,267
      General and Administrative (excluding Stock-Based
       Compensation)                                        11,936    9,997
      Stock-Based Compensation (1)                           5,129   17,576
      Taxes Other Than Income                               12,898   16,897
                                                          -------- --------
                                                           156,749  143,579
    Gain on Sale of Assets (2)                              12,707        -
                                                          -------- --------
    Income from Operations                                  89,897   76,072
    Interest Expense and Other                              14,226    5,991
                                                          -------- --------
    Income Before Income Taxes                              75,671   70,081
    Income Tax Expense                                      28,091   24,106
                                                          -------- --------
    Net Income                                             $47,580  $45,975
                                                          ======== ========
    Net Earnings Per Share - Basic                           $0.46    $0.47
    Weighted Average Common Shares Outstanding             103,521   97,716

    (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 primarily relates to the sale of the
        Thornwood properties in the East.



                CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                  (In thousands)

                                                     March 31, December 31,
                                                        2009         2008
                                                    ----------   ----------
    Assets
    Current Assets                                    $457,074     $460,551
    Property, Equipment and Other Assets             3,291,697    3,241,113
                                                    ----------   ----------
       Total Assets                                 $3,748,771   $3,701,664
                                                    ==========   ==========

    Liabilities and Stockholders' Equity
    Current Liabilities                               $312,314     $378,913
    Long-Term Debt, excluding Current Maturities       840,286      831,143
    Deferred Income Taxes                              623,340      599,106
    Other Liabilities                                  103,937      101,940
    Stockholders' Equity                             1,868,894    1,790,562
                                                    ----------   ----------
       Total Liabilities and Stockholders' Equity   $3,748,771   $3,701,664
                                                    ==========   ==========



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

                                                         Quarter Ended
                                                           March 31,
                                                       ------------------
                                                         2009      2008
                                                       --------  --------
    Cash Flows From Operating Activities
    Net Income                                          $47,580   $45,975
    Unrealized Gain on Derivatives                         (941)        -
    Income Charges Not Requiring Cash                    71,292    63,806
    Gain on Sale of Assets                              (12,707)        -
    Deferred Income Tax Expense                          26,349    23,560
    Changes in Assets and Liabilities                    14,495    (1,056)
    Stock-Based Compensation Tax Benefit                      -    (4,642)
    Exploration Expense                                   6,466     5,061
                                                       --------  --------
    Net Cash Provided by Operations                     152,534   132,704
                                                       --------  --------

    Cash Flows From Investing Activities
    Capital Expenditures                               (171,029) (128,101)
    Proceeds from Sale of Assets                         15,063         -
    Exploration Expense                                  (6,466)   (5,061)
                                                       --------  --------
    Net Cash Used in Investing                         (162,432) (133,162)
                                                       --------  --------

    Cash Flows From Financing Activities
    Sale of Common Stock Proceeds                           149     2,240
    Net Increase in Debt                                 10,000    20,000
    Stock-Based Compensation Tax Benefit                      -     4,642
    Dividends Paid                                       (3,103)   (2,930)
                                                       --------  --------
    Net Cash Provided by Financing                        7,046    23,952
                                                       --------  --------

    Net Increase / (Decrease) in Cash and Cash
     Equivalents                                        $(2,852)  $23,494
                                                       ========  ========



       Selected Item Review and Reconciliation of Net Income and Earnings
                                  Per Share
                 (In thousands, except per share amounts)

                                                   Quarter Ended
                                                     March 31,
                                                 ----------------
                                                   2009     2008
                                                 -------  -------

    As Reported - Net Income                     $47,580  $45,975
    Reversal of Selected Items, Net of Tax:
      Gain on Sale of Assets (2)                  (7,967)       -
      Stock-Based Compensation Expense             3,216   11,055
      Unrealized Gain on Derivatives (1)            (590)       -
                                                 -------  -------
    Net Income Excluding Selected Items          $42,239  $57,030
                                                 =======  =======
    As Reported - Net Earnings Per Share           $0.46    $0.47
    Per Share Impact of Reversing Selected
     Items                                         (0.05)    0.11
                                                 -------  -------
    Net Earnings Per Share Including Reversal
     of Selected Items                             $0.41    $0.58
                                                 =======  =======
    Weighted Average Common Shares Outstanding   103,521   97,716

    (1) This unrealized 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.
    (2) The gain on sale of assets primarily relates to the sale of the
        Thornwood properties in the East.



                 Discretionary Cash Flow Calculation and Reconciliation
                                    (In thousands)

                                           Quarter Ended
                                              March 31,
                                         -----------------
                                          2009      2008
                                        --------  --------
    Discretionary Cash Flow
    As Reported - Net Income             $47,580   $45,975
    Plus / (Less):
    Unrealized Gain on Derivatives          (941)        -
    Income Charges Not Requiring Cash     71,292    63,806
    Gain on Sale of Assets               (12,707)        -
    Deferred Income Tax Expense           26,349    23,560
    Exploration Expense                    6,466     5,061
                                        --------  --------
    Discretionary Cash Flow              138,039   138,402
    Changes in Assets and Liabilities     14,495    (1,056)
    Stock-Based Compensation Tax Benefit       -    (4,642)
                                        --------  --------
    Net Cash Provided by Operations     $152,534  $132,704
                                        ========  ========



                     Net Debt Reconciliation
                          (In thousands)

                                           March 31,   December 31,
                                              2009         2008
                                          ----------    ----------

    Current Portion of Long-Term Debt        $36,714       $35,857
    Long-Term Debt                           840,286       831,143
                                          ----------    ----------
          Total Debt                        $877,000      $867,000
    Stockholders' Equity                   1,868,894     1,790,562
                                          ----------    ----------
          Total Capitalization            $2,745,894    $2,657,562

    Total Debt                              $877,000      $867,000
    Less:  Cash and Cash Equivalents         (25,249)      (28,101)
                                          ----------    ----------
          Net Debt                          $851,751      $838,899

    Net Debt                                $851,751      $838,899
    Stockholders' Equity                   1,868,894     1,790,562
                                          ----------    ----------
          Total Adjusted Capitalization   $2,720,645    $2,629,461

    Total Debt to Total Capitalization
     Ratio                                      31.9%         32.6%
    Less:  Impact of Cash and Cash
     Equivalents                                 0.6%          0.7%
                                          ----------    ----------
          Net Debt to Adjusted
           Capitalization Ratio                 31.3%         31.9%

SOURCE Cabot Oil & Gas Corporation