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Cabot Oil & Gas Announces Third Quarter Results
Oct 26, 2009

HOUSTON, Oct. 26 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today reported third quarter net income of $38.9 million, or $0.38 per share. Removing the selected items (which are detailed in the Selected Items Table), the quarter's net income was $42.6 million, or $0.41 per share. These figures compare to the 2008 third quarter numbers (for the reported results and after the removal of selected items) of $67.0 million, or $0.65 per share, and $60.1 million, or $0.58 per share, respectively.

Cash flow from operations for the 2009 third quarter totaled $116.7 million, while discretionary cash flow was $158.9 million. Comparatively, 2008 third quarter cash flow from operations was $148.3 million, and discretionary cash flow was $161 million.

"In light of the general market conditions for natural gas, the metrics are very good," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "These results include a five percent increase in third quarter 2009 equivalent production over the third quarter of 2008." The production growth rate was driven by a 24.2 percent increase in the North region production for comparable year over year quarters. Dinges added, "Weighing on the overall growth rate was the sale of our Canadian assets." Pricing, as expected, offset the benefit from increased production. Realized natural gas prices were $7.40 per Mcf in the 2009 third quarter versus $8.66 per Mcf in the 2008 third quarter. Realized oil prices fell 12 percent to $87.49 per barrel. The production and price information have been adjusted to reflect the new North and South regional split for the Company.

Overall costs were up only slightly and were flat on a per unit basis. The largest increases occurred in stock-based compensation and exploration, with the largest declines coming from brokered gas costs and taxes other than income.

Year-to-Date

For the nine months ended September 30, 2009, Cabot reported net income of $112 million, or $1.08 per share, compared to $167.6 million, or $1.68 per share, for the same period last year. The cash flow comparisons for the nine months ended September 30, 2009 and September 30, 2008, respectively, are cash flow from operations of $417.1 million versus $424.7 million and discretionary cash flow of $430.6 million versus $446.5 million. The 2009 nine-month net income figure, after removal of the selected items, was $123.9 million, or $1.20 per share, versus $187.0 million, or $1.87 per share for the nine-month period ended September 30, 2008.

"The same dynamic that drove the quarter results apply to the year-to-date periods - increased production and lower price realizations," stated Dinges. "Production was up approximately ten percent while natural gas and oil prices fell by 14 and 13 percent, respectively."

Conference Call

Listen in live to Cabot Oil & Gas Corporation's third quarter financial and operating results discussion with financial analysts on Tuesday, October 27, 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 33459517. The replay will be available through Thursday, October 29, 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 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

                                           Quarter Ended    Nine Months Ended
                                           September 30,     September 30,
                                           --------------   -----------------
                                            2009     2008    2009     2008
                                            ----     ----    ----     ----
    PRODUCED NATURAL GAS (Bcf) & OIL (Mbbl)
    ---------------------------------------
    Natural Gas
      North                                 12.2      9.8    34.8     29.3
      South                                 12.0     12.4    37.2     33.4
      Canada                                   -      0.8     1.0      3.4
                                            ----     ----    ----     ----
      Total                                 24.2     23.0    73.0     66.1
                                            ====     ====    ====     ====

    Crude/Condensate/Ngl
      North                                   33       32      92       88
      South                                  198      169     526      484
      Canada                                   -        6       7       17
                                            ----     ----    ----     ----
      Total                                  231      207     625      589
                                            ====     ====    ====     ====


    Equivalent Production (Bcfe)            25.5     24.2    76.7     69.6

    PRICES
    Average Produced Gas Sales Price ($/Mcf)
      North                                $6.28    $7.89   $6.56    $8.14
      South                                $8.53    $9.34   $8.25    $9.17
      Canada                               $   -    $7.60   $3.56    $7.84
      Total (1)                            $7.40    $8.66   $7.39    $8.64

    Average Crude/Condensate Price ($/Bbl)
      North                               $58.49  $109.50  $48.22  $107.21
      South                               $92.12   $97.37  $88.75   $92.89
      Canada                              $    -  $100.46  $33.97   $92.03
      Total (1)                           $87.49   $99.34  $82.48   $94.93

    WELLS DRILLED
      Gross                                   37      132     119      333
      Net                                     32      115      97      277
      Gross Success Rate                      97%      99%     98%      99%


    (1)  These realized prices include the realized impact of derivative
     instrument settlements.

                                           Quarter Ended   Nine Months Ended
                                           September 30,    September 30,
                                          --------------   -----------------
                                            2009    2008     2009     2008
                                          ------  -------   ------  -------
         Realized Impacts to Gas Pricing   $4.25   $(0.30)   $3.91   $(0.42)
         Realized Impacts to Oil Pricing  $23.40$(15.39)$30.64$(15.05)



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

                                        Quarter Ended    Nine Months Ended
                                        September 30,      September 30,
                                      ----------------   -----------------
                                       2009     2008      2009      2008
                                      -------  -------   -------   -------
    Operating Revenues
      Natural Gas Production         $177,807 $200,279  $538,542  $569,527
      Brokered Natural Gas              9,032   23,855    54,117    86,663
      Crude Oil and Condensate         19,574   20,002    50,026    55,089
      Other                               608      684     3,099     2,046
                                      -------  -------   -------   -------
                                      207,021  244,820   645,784   713,325
    Operating Expenses
      Brokered Natural Gas Cost         7,786   20,891    48,219    75,321
      Direct Operations - Field and
       Pipeline                        23,012   24,974    71,564    65,101
      Exploration                      14,395    6,413    31,258    18,764
      Depreciation, Depletion and
       Amortization                    62,037   57,407   188,967   152,075
      General and Administrative
       (excluding Stock-Based
       Compensation)                    9,629    9,486    32,511    31,265
      Stock-Based Compensation (1)      5,292   (9,695)   16,592    29,576
      Taxes Other Than Income          10,719   20,627    34,531    56,749
                                      -------  -------   -------   -------
                                      132,870  130,103   423,642   428,851
    Gain / (Loss) on Sale of
     Assets (2)                           572        -    (3,283)      401
                                      -------  -------   -------   -------
    Income from Operations             74,723  114,717   218,859   284,875
    Interest Expense and Other         14,857   10,486    44,129    22,684
                                      -------  -------   -------   -------
    Income Before Income Taxes         59,866  104,231   174,730   262,191
    Income Tax Expense                 20,969   37,241    62,751    94,601
                                      -------  -------   -------   -------
    Net Income                        $38,897  $66,990  $111,979  $167,590
                                      =======  =======  ========  ========
    Net Earnings Per Share - Basic      $0.38    $0.65     $1.08     $1.68
    Weighted-Average Common Shares
     Outstanding                      103,647  103,351   103,603    99,858

    (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 loss on sale of assets in 2009 primarily relates to a loss on our
         April 2009 sale of our Canadian properties, partially offset by a
         gain on sale of assets from the first quarter 2009 sale of the
         Thornwood properties in the East.



                CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                  (In thousands)

                                                 September 30, December 31,
                                                     2009         2008
                                                  ----------   ----------
    Assets
    Current Assets                                  $335,007     $460,551
    Property, Equipment and Other Assets           3,254,047    3,241,113
                                                   ---------    ---------
      Total Assets                                $3,589,054   $3,701,664
                                                  ==========   ==========

    Liabilities and Stockholders' Equity
    Current Liabilities                             $247,172     $378,913
    Long-Term Debt, excluding Current Maturities     790,000      831,143
    Deferred Income Taxes                            623,946      599,106
    Other Liabilities                                104,122      101,940
    Stockholders' Equity                           1,823,814    1,790,562
                                                  ----------   ----------
      Total Liabilities and Stockholders'
       Equity                                     $3,589,054   $3,701,664
                                                  ==========   ==========



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

                                   Quarter Ended      Nine Months Ended
                                   September 30,        September 30,
                                ------------------  --------------------
                                  2009      2008      2009        2008
                                --------  --------  --------  ----------
    Cash Flows From Operating
     Activities
    Net Income                   $38,897   $66,990  $111,979    $167,590
    Unrealized (Gain) / Loss
     on Derivatives                1,233    (1,260)      418       1,649
    Income Charges Not
     Requiring Cash               68,418    47,948   208,861     162,446
    (Gain) / Loss on Sale of
     Assets                         (572)        -     3,283        (401)
    Deferred Income Tax
     Expense                      36,521    40,944    74,773      96,459
    Changes in Assets and
     Liabilities                 (29,062)   (1,707)     (357)    (10,768)
    Stock-Based Compensation
     Tax Benefit                 (13,085)  (11,011)  (13,085)    (11,011)
    Exploration Expense           14,395     6,413    31,258      18,764
                                --------  --------  --------  ----------
    Net Cash Provided by
     Operations                  116,745   148,317   417,130     424,728
                                --------  --------  --------  ----------

    Cash Flows From Investing
     Activities
    Capital Expenditures        (101,949) (791,728) (394,919) (1,164,339)
    Proceeds from Sale of
     Assets                          513         -    80,180       1,150
    Exploration Expense          (14,395)   (6,413)  (31,258)    (18,764)
                                --------  --------  --------  ----------
    Net Cash Used in Investing  (115,831) (798,141) (345,997) (1,181,953)
                                --------  --------  --------  ----------

    Cash Flows From Financing
     Activities
    Sale of Common Stock
     Proceeds                        (67)      122        83     316,229
    Net Increase / (Decrease)
     in Debt                      (5,000)  555,000   (57,000)    470,000
    Capitalized Debt Issuance
     Costs                             -    (2,166)  (10,409)     (2,166)
    Stock-Based Compensation
     Tax Benefit                  13,085    11,011    13,085      11,011
    Dividends Paid                (3,110)   (3,100)   (9,323)     (8,973)
                                --------  --------  --------  ----------
    Net Cash  Provided by /
     (Used in) Financing           4,908   560,867   (63,564)    786,101
                                --------  --------  --------  ----------

    Net Increase / (Decrease)
     in Cash and Cash
     Equivalents                  $5,822  $(88,957)   $7,569     $28,876
                                ========  ========  ========  ==========



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

                                         Quarter Ended    Nine Months Ended
                                         September 30,      September 30,
                                       -----------------  -----------------
                                         2009      2008      2009     2008
                                       -------  --------  -------- --------
    As Reported - Net Income           $38,897   $66,990  $111,979 $167,590
    Reversal of Selected Items,
     Net of Tax:
      (Gain) / Loss on Sale of
       Assets (1)                         (359)        -     1,270     (253)
      Stock-Based Compensation
       Expense                           3,323    (6,098)   10,414   18,625
      Unrealized (Gain) / Loss
       on Derivatives (2)                  774      (793)      263    1,040
                                       -------  --------  -------- --------
    Net Income Excluding Selected
     Items                             $42,635   $60,099  $123,926 $187,002
                                       =======  ========  ======== ========
    As Reported - Net Earnings Per
     Share                               $0.38     $0.65     $1.08    $1.68
    Per Share Impact of Reversing
     Selected Items                       0.03     (0.07)     0.12     0.19
                                       -------  --------  -------- --------
    Net Earnings Per Share Including
     Reversal of Selected Items          $0.41     $0.58     $1.20    $1.87
                                       =======  ========  ======== ========
    Weighted-Average Common Shares
     Outstanding                       103,647   103,351   103,603   99,858

    (1)  The loss on sale of assets in 2009 primarily relates to a loss on our
         April 2009 sale of our Canadian properties, partially offset by a
         gain on sale of assets from the first quarter 2009 sale of the
         Thornwood properties in the East.  The loss on sale of assets for the
         three and nine months ended September 30, 2009 considers a tax
         benefit associated with foreign tax credits.
    (2)  This unrealized (gain) / loss 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.



            Discretionary Cash Flow Calculation and Reconciliation
                                    (In thousands)
                                         Quarter Ended     Nine Months Ended
                                         September 30,       September 30,
                                      ------------------  ------------------
                                        2009      2008      2009      2008
                                      --------  --------  --------  --------
    Discretionary Cash Flow
    As Reported - Net Income           $38,897   $66,990  $111,979  $167,590
    Plus / (Less):
    Unrealized (Gain) / Loss on
    Derivatives                          1,233    (1,260)      418     1,649
    Income Charges Not Requiring Cash   68,418    47,948   208,861   162,446
    (Gain) / Loss on Sale of Assets       (572)        -     3,283      (401)
    Deferred Income Tax Expense         36,521    40,944    74,773    96,459
    Exploration Expense                 14,395     6,413    31,258    18,764
                                      --------  --------  --------  --------
    Discretionary Cash Flow            158,892   161,035   430,572   446,507
    Changes in Assets and Liabilities  (29,062)   (1,707)    (357)   (10,768)
    Stock-Based Compensation Tax
     Benefit                           (13,085)  (11,011)  (13,085)  (11,011)
                                      --------  --------  --------  --------
    Net Cash Provided by Operations   $116,745  $148,317  $417,130  $424,728
                                      ========  ========  ========  ========



                               Net Debt Reconciliation
                                   (In thousands)

                                               September 30,  December 31,
                                                   2009          2008
                                                ----------    ----------

    Current Portion of Long-Term Debt              $20,000       $35,857
    Long-Term Debt                                 790,000       831,143
                                                ----------    ----------
      Total Debt                                  $810,000      $867,000
    Stockholders' Equity                         1,823,814     1,790,562
                                                ----------    ----------
      Total Capitalization                      $2,633,814    $2,657,562

    Total Debt                                    $810,000      $867,000
    Less:  Cash and Cash Equivalents               (35,670)      (28,101)
                                                ----------    ----------
      Net Debt                                    $774,330      $838,899

    Net Debt                                      $774,330      $838,899
    Stockholders' Equity                         1,823,814     1,790,562
                                                ----------    ----------
      Total Adjusted Capitalization             $2,598,144    $2,629,461

    Total Debt to Total Capitalization Ratio          30.8%         32.6%
    Less:  Impact of Cash and Cash Equivalents         1.0%          0.7%
                                                ----------    ----------
      Net Debt to Adjusted Capitalization
       Ratio                                          29.8%         31.9%

SOURCE Cabot Oil & Gas Corporation

Scott Schroeder of Cabot Oil & Gas Corporation, +1-281-589-4993