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Cabot Oil & Gas Continues Record Pace
Oct 29, 2008

HOUSTON, Oct. 29 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced that for the third consecutive quarter, the Company established new highs versus comparable historical quarters (excluding selected items). For the third quarter ended September 30, 2008, Cabot reported net income of $67.0 million, or $0.65 per share, and $60.1 million, or $0.58 per share after removing gains in the quarter related to stock compensation and unrealized hedge gains. This compares to a reported net income figure last year of $35.5 million, or $0.37 per share, and a selected items figure of $39.5 million, or $0.41 per share, after removing expenses for an impairment and stock compensation.

"While the last three months in the market have felt negative, the fundamentals around Cabot's operation are strong, and we continue to execute our plan," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "That effort has resulted in another extremely successful financial quarter, together with positive operational results."

The Company has created new third quarter benchmarks with cash flow from operations rising to $148.3 million versus $86.8 million in last year's third quarter. Discretionary cash flow totaled $161.0 million versus $121.7 million in last year's third quarter. "At a time in the business cycle when cash is king, we are pleased to be able to generate high levels of cash flow to fund our operating plan," commented Dinges.

Driving these results were higher realized prices and higher natural gas production levels. Realized natural gas prices grew 27 percent between comparable third quarters, reaching $8.66 per Mcf for 2008. Crude oil realizations also increased, moving higher to $99.34 per barrel, or by 40 percent between comparable third quarters. Production levels experienced double digit growth driven by an increase in natural gas production, primarily from the Company's Gulf Coast region. Oil volumes were essentially flat when comparing third quarters.

"We closed our east Texas acquisition in August giving us incremental production volumes above our original expectations, with some of this increment offset by hurricane impacts related to Gustav and Ike," said Dinges.

On the expense side, there was a general increase in levels between comparable quarters, due to continued inflationary pressures, higher prices and the inclusion of the acquired properties (that drove up the DD&A rate). Lower exploration expense, no impairments and lower stock compensation did offset some of the increases.

Year-to-Date

For 2008 and 2007 year-to-date periods, the reported net income figures were $167.6 million, or $1.68 per share, and $125.4 million, or $1.29 per share, respectively. The nine month net income results, after removal of selected items, were $187 million for net income, or $1.87 earnings per share for 2008, which compares favorably with the income reported in the nine months last year of $128.4 million, or $1.33 per share.

Cash flow from operations for the year-to-date period reached $424.7 million versus $328.6 million last year, while the discretionary cash flow comparison year-to-date was $446.5 million versus $341 million for 2008 and 2007, respectively.

Again, the significant up-tick in prices, together with increased volumes brought the better results. Natural gas prices increased 21 percent, while oil prices were up 53 percent between year-to-date 2008 and 2007 periods. Equivalent production volumes were nine percent higher during these same comparable periods.

Balance Sheet

"Clearly a topic on everyone's mind is the balance sheet and the Company's underlying liquidity levels," stated Dinges. Cabot Oil & Gas ended the quarter with approximately $47 million in cash and $165 million of capacity on its revolving credit facility. With debt totaling $820 million, the Company still has a 33 percent debt to capitalization ratio.

Conference Call

Listen in live to Cabot Oil & Gas Corporation's third quarter financial and operating results discussion with financial analysts on Thursday, October 30, 2008 at 9:30 a.m. EDT (8:30 a.m. CDT) at http://www.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 66519033. The replay will be available through Saturday, November 1, 2008. 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 http://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; the East and in Canada. For additional information, visit the Company's Internet homepage at http://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,
                                             2008     2007     2008    2007
    PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)

    Natural Gas
      East                                    6.4      6.2     18.3    18.2
      Gulf Coast                              9.3      6.8     24.4    19.7
      West                                    6.5      6.6     20.0    19.4
      Canada                                  0.8      1.0      3.4     3.0
      Total                                  23.0     20.6     66.1    60.3

    Crude/Condensate/Ngl
      East                                      5        7       17      20
      Gulf Coast                              152      154      432     463
      West                                     44       50      123     140
      Canada                                    6        4       17      14
      Total                                   207      215      589     637

    Equivalent Production (Bcfe)             24.2     21.9     69.6    64.1


    PRICES
    Average Produced Gas Sales Price($/Mcf)
      East                                  $8.44    $7.37    $8.78   $7.76
      Gulf Coast                            $9.82    $7.82    $9.53   $7.95
      West                                  $7.37    $5.47    $7.58   $6.00
      Canada                                $7.60    $4.95    $7.84   $5.63
      Total (1)                             $8.66    $6.80    $8.64   $7.15

    Average Crude/Condensate Price($/Bbl)
      East                                $106.23   $68.12  $104.63  $60.78
      Gulf Coast                           $95.28   $71.16   $90.58  $62.27
      West                                $112.24   $70.85  $109.60  $62.81
      Canada                              $100.46   $63.47   $92.03  $54.97
      Total (1)                            $99.34   $70.85   $94.93  $62.17

    WELLS DRILLED
      Gross                                   132      137      333     359
      Net                                     115      110      277     313
      Gross Success Rate                      99%      98%      99%     98%


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

                                            Quarter Ended    Nine Months Ended
                                             September 30,     September 30,
                                             2008    2007      2008    2007
    Realized Impacts to Gas Pricing        $(0.30)   $1.40   $(0.42)  $0.99
    Realized Impacts to Oil Pricing       $(15.39)    $-    $(15.05)  $0.29


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

                                     Quarter Ended         Nine Months Ended
                                     September 30,           September 30,
                                    2008      2007          2008      2007
    Operating Revenues
      Natural Gas Production      $200,279  $140,300     $569,527   $431,178
      Brokered Natural Gas          23,855    15,179       86,663     66,357
      Crude Oil and Condensate      20,002    15,084       55,089     39,289
      Other                            684       285        2,046      1,429
                                   244,820   170,848      713,325    538,253

    Operating Expenses
      Brokered Natural Gas Cost     20,891    13,223       75,321     57,973
      Direct Operations - Field
       and Pipeline                 24,974    20,996       65,101     57,131
      Exploration                    6,413     8,766       18,764     21,243
      Depreciation, Depletion
       and Amortization             57,407    43,585      152,075    121,551
      Impairment of
       Oil & Gas Properties              -     4,614            -      4,614
      General and Administrative
       (excluding Stock-Based
       Compensation)                 9,486     7,831       31,265     28,380
      Stock-Based Compensation (1)  (9,695)    1,884       29,576     12,580
      Taxes Other Than Income       20,627    14,379       56,749     42,123
                                   130,103   115,278      428,851    345,595
    Gain / (Loss) on Sale of
     Assets (2)                          -       (49)         401     12,293
    Income from Operations         114,717    55,521      284,875    204,951
    Interest Expense and Other      10,486     3,921       22,684     11,464
    Income Before Income Taxes     104,231    51,600      262,191    193,487
    Income Tax Expense              37,241    16,147       94,601     68,111
    Net Income                     $66,990   $35,453     $167,590   $125,376
    Net Earnings Per
     Share - Basic                   $0.65     $0.37        $1.68      $1.29
    Weighted Average Common
     Shares Outstanding            103,351    97,068       99,858     96,899

    (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 Plan which commenced in January 2008.

    (2)  Gain / (Loss) on Sale of Assets is primarily related to post-closing
         transactions associated with the sale in the third quarter of 2006 of
         offshore and certain south Louisiana properties.


               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In thousands)
                                                  September 30,   December 31,
                                                       2008          2007
    Assets
    Current Assets                                  $430,494       $221,413
    Property, Equipment and Other Assets           3,023,400      1,939,334
    Deferred Income Taxes                             84,212         47,847
      Total Assets                                $3,538,106     $2,208,594

    Liabilities and Stockholders' Equity
    Current Liabilities                             $318,034       $252,266
    Long-Term Debt, excluding Current Maturities     800,000        330,000
    Deferred Income Taxes                            674,007        481,770
    Other Liabilities                                 75,047         74,301
    Stockholders' Equity                           1,671,018      1,070,257
      Total Liabilities and Stockholders' Equity  $3,538,106     $2,208,594



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

                                     Quarter Ended          Nine Months Ended
                                      September 30,           September 30,
                                     2008      2007          2008      2007
    Cash Flows From Operating
     Activities
    Net Income                     $66,990    $35,453     $167,590   $125,376
    Unrealized (Gain) /
     Loss on Derivatives            (1,260)         -        1,649          -
    Impairment of Oil &
     Gas Properties                      -      4,614            -      4,614
    Income Charges Not
     Requiring Cash                 47,948     45,511      162,446    135,094
    (Gain) / Loss on Sale
     of Assets                           -         49         (401)   (12,293)
    Deferred Income
     Tax Expense                    40,944     27,318       96,459     66,930
    Changes in Assets
     and Liabilities                (1,707)   (34,148)     (10,768)    (5,548)
    Stock-Based Compensation
     Tax Benefit                   (11,011)      (811)     (11,011)    (6,857)
    Exploration Expense              6,413      8,766       18,764     21,243
    Net Cash Provided
     by Operations                 148,317     86,752      424,728    328,559

    Cash Flows From Investing
     Activities
    Capital Expenditures          (791,728)  (145,032)  (1,164,339)  (416,963)
    Proceeds from Sale
      of Assets                          -          1        1,150      5,826
    Exploration Expense             (6,413)    (8,766)     (18,764)   (21,243)
    Net Cash Used in
     Investing                    (798,141)  (153,797)  (1,181,953)  (432,380)

    Cash Flows From Financing
     Activities
    Sale of Common Stock
     Proceeds                          122          7      316,229      2,314
    Net Increase in Debt           555,000     60,000      470,000     75,000
    Capitalized Debt
     Issuance Costs                 (2,166)         -       (2,166)         -

    Stock-Based Compensation
     Tax Benefit                    11,011        811       11,011      6,857
    Dividends Paid                  (3,100)    (2,913)      (8,973)    (7,753)
    Net Cash Provided by
     Financing                     560,867     57,905      786,101     76,418

    Net Increase / (Decrease)
     in Cash and Cash
     Equivalents                  $(88,957)   $(9,140)     $28,876   $(27,403)

 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,
                                        2008       2007      2008      2007
    As Reported - Net Income          $66,990    $35,453   $167,590  $125,376
    Reversal of Selected Items,
     Net of Tax:
      Impairment of Oil & Gas
       Properties                           -      2,870          -     2,870
      (Gain) / Loss on Sale
       of Assets                            -         30       (253)   (7,647)
      Stock-Based Compensation
       Expense                         (6,098)     1,172     18,625     7,825
      Unrealized (Gain) /
     Loss on Derivatives (1)             (793)         -      1,040         -
    Net Income Excluding
     Selected Items                   $60,099    $39,525   $187,002  $128,424
    As Reported - Net
     Earnings Per Share                 $0.65      $0.37      $1.68     $1.29
    Per Share Impact of
     Reversing Selected Items           (0.07)      0.04       0.19      0.04
    Net Earnings Per Share
     Including Reversal
     of Selected Items                  $0.58      $0.41      $1.87     $1.33
    Weighted Average Common
     Shares Outstanding               103,351     97,068     99,858    96,899

    (1)  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 a portion of a
         derivative not designated as a hedge in the second quarter of 2008.



            Discretionary Cash Flow Calculation and Reconciliation
                                (In thousands)

                                       Quarter Ended        Nine Months Ended
                                        September 30,         September 30,
                                       2008      2007       2008       2007
    Discretionary Cash Flow
    As Reported - Net Income         $66,990    $35,453   $167,590   $125,376
    Plus / (Less):
    Unrealized (Gain) / Loss
     on Derivatives                   (1,260)         -      1,649          -
    Impairment of Oil & Gas
     Properties                            -      4,614          -      4,614
    Income Charges Not Requiring
     Cash                             47,948     45,511    162,446    135,094
    (Gain) / Loss on Sale of Assets        -         49       (401)   (12,293)
    Deferred Income Tax Expense       40,944     27,318     96,459     66,930
    Exploration Expense                6,413      8,766     18,764     21,243
    Discretionary Cash Flow          161,035    121,711    446,507    340,964
    Changes in Assets and
     Liabilities                      (1,707)   (34,148)   (10,768)    (5,548)
    Stock-Based Compensation
     Tax Benefit                     (11,011)      (811)   (11,011)    (6,857)
    Net Cash Provided by
     Operations                     $148,317    $86,752   $424,728   $328,559



                           Net Debt Reconciliation
                                (In thousands)

                                                  September 30,   December 31,
                                                       2008           2007

    Current Portion of Long-Term Debt                $20,000        $20,000
    Long-Term Debt                                   800,000        330,000
      Total Debt                                    $820,000       $350,000
    Stockholders' Equity                           1,671,018      1,070,257
      Total Capitalization                        $2,491,018     $1,420,257

    Total Debt                                      $820,000       $350,000
    Less: Cash and Cash Equivalents                  (47,374)       (18,498)
      Net Debt                                      $772,626       $331,502

    Net Debt                                        $772,626       $331,502
    Stockholders' Equity                           1,671,018      1,070,257
      Total Adjusted Capitalization               $2,443,644     $1,401,759


    Total Debt to Total Capitalization Ratio           32.9%          24.6%
    Less: Impact of Cash and Cash Equivalents           1.3%           1.0%
      Net Debt to Adjusted Capitalization Ratio        31.6%          23.6%

SOURCE Cabot Oil & Gas Corporation

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