HOUSTON, April 23 /PRNewswire Interactive News Release/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that significantly higher natural gas price realizations drove first quarter profits above the record results reported for the entire year of 2000. The Company recorded net income for the quarter of $35.3 million, or $1.20 per share, before the non-cash benefit from a selected item. The first quarter selected item relates to the adoption of SFAS 133, Accounting for Derivative Instruments and Hedging Activities (see discussion below). For the comparable quarter in 2000, the Company had net income available to common shareholders of $2.8 million, or $.11 per share, before the benefit from a gas contract settlement totaling $1.7 million after- tax.
The first three months in 2001 generated discretionary cash flow totaling $75.6 million, or $2.58 per share, versus $24.5 million, or $.99 per share, in the comparable quarter in 2000. The first quarter last year includes $2.3 million, or $.09 per share, related to the gas contract settlement.
Natural gas prices in the quarter improved 157% over the comparable period last year, with Cabot Oil & Gas realizing an average of $6.57 per Mcf in 2001, compared to $2.56 per Mcf for the same period last year. Oil prices increased 29% between comparable first quarters.
Total production of 17.9 Bcfe during the first three months of 2001 was 8.5% higher than in the first quarter of 2000 and up slightly over the fourth quarter of 2000. The increase is attributed to gas and oil production in the Gulf Coast region, driven mainly by drilling success in south Louisiana on the Etouffee prospect, along with the Augen, Bon Ton and Krescent wells.
"We are extremely pleased with the quarter's financial and operational results," said Ray Seegmiller, Chairman and Chief Executive Officer. "With the forward curve still showing strong fundamentals for the domestic natural gas market, combined with our costless collar (with approximately a $5.00 floor and $9.00 ceiling per Mmbtu) covering 51% of the Company's estimated gas production through October, we believe Cabot is well positioned for strong financial performance in 2001."
As of March 31, 2001, Cabot Oil & Gas had reduced its total debt to $199 million, down from $269 million at year end, on the strength of commodity prices and the timing of the capital program. "This decrease in leverage combined with the continuing strong gas market outlook enables Cabot Oil & Gas to pursue other strategic exploration and development opportunities in the Gulf Coast and Rocky Mountains areas," stated Seegmiller.
As a result of the new accounting standards for derivative instruments established by SFAS 133, the Company recognized a non-cash gain of $6.2 million pre-tax ($3.8 million after-tax) in the first quarter. Including the impact of this selected item, net income for the quarter was $39.1 million, or $1.33 per share.
The non-cash gain primarily related to the increase in the market value of the Company's costless collar arrangements. This gain will reverse by year end as the costless collar contracts settle. Other aspects of SFAS 133 related to the Company's derivatives did not have a material impact on earnings.
Seegmiller added, "The accounting profession is continuing its analysis of this pronouncement and we are expecting new interpretations to be issued by the FASB in the upcoming months. The FASB's actions may prospectively clarify the income statement and balance sheet treatment for recording the changes in market value of certain derivatives."
Listen in live to Cabot Oil & Gas Corporation's first quarter earnings discussion with financial analysts on Tuesday, April 24, 2001, at 9:30 AM EDT at www.cabotog.com. A teleconference replay is also available at (800) 633-8284, reservation number 18467626. The audio webcast and teleconference replay will be available from April 24 to May 1, 2001.
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 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 (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, 2001 2000 NATURAL GAS (Bcf) & OIL (MBbl) Produced Natural Gas Gulf Coast 4.8 3.4 West 6.4 7.3 Appalachia 4.1 4.5 Total 15.3 15.2 Crude/Condensate 405 195 Natural Gas Liquids 19 7 Equivalent Production (Bcfe) 17.9 16.5 PRICES Average Produced Gas Sales Price ($/Mcf) Gulf Coast $7.34 $2.55 West $6.10 $2.26 Appalachia $6.44 $3.07 Total $6.57 $2.56 Crude/Condensate Price ($/Bbl) $28.55 $22.19 WELLS DRILLED Gross 43 25 Net 32.5 14.7 Gross Success Rate 91% 88% CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In Thousands, Except Per Share Amounts) Quarter Ended March 31, 2001 2000 Operating Revenues Natural Gas Production $100,725 $39,086 Brokered Natural Gas 35,422 36,937 Crude Oil and Condensate 11,556 4,325 Change in Derivative Fair Value 6,198 --- Other 990 4,772 154,891 85,120 Operating Expenses Brokered Natural Gas Cost 34,155 35,486 Production and Pipeline Operations 8,220 8,511 Exploration 10,773 3,233 Taxes Other Than Income 9,902 4,601 Administrative 5,946 4,887 Depreciation, Depletion and Amortization 17,373 13,608 86,369 70,326 Gain (Loss) on Sale of Assets 4 (21) Income from Operations 68,526 14,773 Interest Expense 4,706 5,971 Income Before Income Taxes 63,820 8,802 Income Tax Expense 24,758 3,457 Net Income 39,062 5,345 Dividend Requirement on Preferred Stock --- 851 Net Income Applicable to Common $39,062 $4,494 Net Income Per Common Share - Basic $1.33 $0.18 Average Common Shares Outstanding 29,318 24,798 Results from Recurring Operations As Reported - Net Income Applicable to Common $39,062 $4,494 After-Tax Impact for Selected Items: Change in Derivative Fair Value 3,799 Benefit from contract settlement 1,738 Net Income from Recurring Operations $35,263 $2,756 Net Income per Common Share $1.20 $0.11 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (In Thousands) March 31, Dec. 31, 2001 2000 Assets Current Assets $94,921 $110,269 Property, Equipment and Other Assets 650,170 625,365 Total Assets $745,091 $735,634 Liabilities and Stockholders' Equity Current Liabilities $142,151 $118,108 Long-Term Debt 183,000 253,000 Deferred Income Taxes 121,962 108,174 Other Liabilities 14,867 13,847 Stockholders' Equity 283,111 242,505 Total Liabilities and Stockholders' Equity $745,091 $735,634 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In Thousands) Quarter Ended March 31, 2001 2000 Cash Flows From Operating Activities Net Income $39,062 $5,345 Income Charges Not Requiring Cash 11,952 14,125 (Gain) Loss on Sale of Assets (4) 21 Deferred Income Taxes 13,788 2,601 Changes in Assets and Liabilities 34,027 10,110 Exploration Expense 10,773 3,233 Net Cash Provided by Operations 109,598 35,435 Cash Flows From Investing Activities Capital Expenditures (34,748) (18,945) Proceeds from Sale of Assets 438 1,523 Exploration Expense (10,773) (3,233) Net Cash Used by Investing (45,083) (20,655) Cash Flows From Financing Activities Sale of Common Stock 4,194 1,231 Decrease in Debt (70,000) (15,000) Preferred Dividends --- (851) Common Dividends and Other (1,172) (1,003) Net Cash Used by Financing (66,978) (15,623) Net Decrease in Cash and Cash Equivalents $(2,463) $(843) Discretionary Cash Flow (*) $75,571 $24,475 (*) Net income plus non-cash charges and exploration less preferred dividends. Excludes net proceeds on property sales. MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X86847384
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