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Cabot Oil & Gas Corporation Announces 2009 Results Record Production Levels
Feb 21, 2010
HOUSTON, Feb 21, 2010 /PRNewswire via COMTEX/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced its 2009 financial results including net income of $148.3 million, or $1.43 per share, cash flow from operations of $614.1 million and discretionary cash flow of $604.6 million. Excluding the selected items (detailed in the attached tables), net income for the full year would have been $177.8 million, or $1.72 per share.

These results compare to 2008 net income of $211.3 million, or $2.10 per share, cash flow from operations of $634.4 million and discretionary cash flow of $608.7 million. Net income, excluding selected items, for 2008 was $232.8 million, or $2.31 per share.

"Although 2008 was a better overall financial year due to the higher level of natural gas pricing in that year, 2009 had its accomplishments and record setting performance," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "What is most important is that we set a new production high for the year and posted an 8.2 percent growth level."

For 2009 equivalent production surpassed the 100 Bcfe mark for the first time, recording 103 Bcfe for the year. Production from both commodities grew, with natural gas up 8.4 percent and oil up 6.4 percent. The improvement in production was more than offset by lower commodity prices. The price comparison for natural gas realizations was $7.47 per Mcf in 2009 versus $8.39 per Mcf in 2008, while oil declined four percent year-over-year to $85.52 per barrel. Gains associated with the hedge portfolio added significantly to these 2009 realizations and improved overall revenues by $395.0 million. Total operating expenses declined year-over-year.

Fourth Quarter

The reported 2009 fourth quarter figures included net income of $36.4 million, or $0.35 per share, $196.9 million for cash flow from operations and $174.1 million for discretionary cash flow. These compare to net income of $43.7 million, or $0.42 per share, cash flow from operations of $209.7 million and discretionary cash flow of $162.2 million in the previous year. Removing the selected items, net income improved to $53.8 million or $0.52 per share for the 2009 fourth quarter versus $45.8 million, or $0.44 per share in the comparable 2008 period. Higher commodity prices, higher production and overall lower expenses drove the results. "While results for the first three quarters of 2009 were down in comparison to the prior year due to lower commodity prices, the 2009 fourth quarter comparison shows year-over-year improvement after removing selected items," stated Dinges.

Balance Sheet

During 2009 the Company reduced its overall debt level, driven primarily by the cash proceeds related to its Canadian asset sale, to $805.0 million. "Financially, we continue to have a solid balance sheet and we retain a significant level of flexibility as evident by our 30.8 percent debt to total capital ratio," added Dinges.

Conference Call

Listen in live to Cabot Oil & Gas Corporation's 2009 year-end and fourth quarter financial and operating results discussion with financial analysts on Monday, February 22, 2010 at 9:30 a.m. EST (8:30 a.m. CST) 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 52769718. The replay will be available through Wednesday, February 24, 2010. 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.



                               OPERATING DATA

                                                        Twelve Months
                                        Quarter Ended       Ended
                                         December 31,    December 31,
                                        -------------   -------------
                                         2009    2008    2009    2008
                                         ----    ----    ----    ----
      PRODUCED NATURAL GAS
      (Bcf) & OIL (Mbbl)
      --------------------
      Natural Gas
        North                             13.4    10.4    48.2    39.7
        South                             11.6    13.2    48.8    46.6
        Canada                               -     0.7     1.0     4.1
                                           ---     ---     ---     ---
        Total                             25.0    24.3    98.0    90.4
                                          ====    ====    ====    ====

      Crude/Condensate/Ngl
        North                               26      30     118     118
        South                              194     171     720     655
        Canada                               -       4       7      21
                                           ---     ---     ---     ---
        Total                              220     205     845     794
                                           ===     ===     ===     ===


      Equivalent Production (Bcfe)        26.3    25.6   103.0    95.2

      PRICES
      ------
      Average Produced Gas Sales
       Price ($/Mcf)
        North                            $6.67   $7.41   $6.59   $7.95
        South                            $8.94   $8.01   $8.42   $8.84
        Canada                              $-   $6.66   $3.72   $7.62
        Total (1)                        $7.73   $7.71   $7.47   $8.39

      Average Crude/Condensate
       Price ($/Bbl)
        North                           $75.16  $54.24  $54.11  $93.62
        South                           $96.64  $75.97  $90.86  $88.46
        Canada                              $-  $50.04  $33.97  $85.08
        Total (1)                       $94.23  $72.41  $85.52  $89.11

      WELLS DRILLED
      --------------
        Gross                               24      99     143     432
        Net                                 22      78     119     355
        Gross Success Rate                  83%     92%     95%     97%

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

                                                         Twelve Months
                                          Quarter Ended      Ended
                                           December 31,   December 31,
                                          -------------  -------------
                                          2009    2008    2009    2008
                                          ----    ----    ----    ----

    Realized Impacts to Gas Pricing      $3.47   $1.88   $3.80   $0.20
    Realized Impacts to Oil Pricing     $21.40  $18.71   $28.25 $(6.33)



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


                                                        Twelve Months
                                     Quarter Ended          Ended
                                      December 31,       December 31,
                                     --------------     --------------
                                     2009      2008     2009      2008
                                     ----      ----     ----      ----
    Operating Revenues
      Natural Gas  Production     $191,192  $189,228 $729,734  $758,755
      Brokered Natural Gas          21,166    27,557   75,283   114,220
      Crude Oil and Condensate      19,910    14,622   69,936    69,711
      Other                          1,224     1,059    4,323     3,105
                                     -----     -----    -----     -----
                                   233,492   232,466  879,276   945,791
    Operating Expenses
      Brokered Natural Gas Cost     18,811    25,128   67,030   100,449
      Direct Operations - Field
       and Pipeline                 22,421    26,738   93,985    91,839
      Exploration                   19,526    12,436   50,784    31,200
      Depreciation, Depletion
       and Amortization             62,293    74,840  251,260   226,915
      Impairment of Oil & Gas
       Properties                   17,622    35,700   17,622    35,700
      General and Administrative
       (excluding Stock-Based
       Compensation)                10,725     8,350   43,236    39,615
      Stock-Based Compensation(1)    8,546     4,994   25,138    34,570
      Taxes Other Than Income       10,118     9,791   44,649    66,540
                                    ------     -----   ------    ------
                                   170,062   197,977  593,704   626,828
    Gain / (Loss) on Sale of
     Assets and Settlement
     of Dispute (2)                    (20)   52,648   (3,303)   53,049
                                       ---    ------   ------    ------
    Income from Operations          63,410    87,137  282,269   372,012
    Interest Expense and Other      14,850    13,705   58,979    36,389
                                    ------    ------   ------    ------
    Income Before Income Taxes      48,560    73,432  223,290   335,623
    Income Tax Expense              12,196    29,732   74,947   124,333
                                    ------    ------   ------   -------
    Net Income                     $36,364   $43,700 $148,343  $211,290
                                   =======   ======= ========  ========
    Net Earnings Per Share
     - Basic                         $0.35     $0.42    $1.43     $2.10
    Weighted-Average Common
     Shares Outstanding            103,654   103,354  103,616   100,737


    (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 North.  The gain in 2008 includes
         post-closing transactions associated with the sale in the third
         quarter of 2006 of offshore and certain south Louisiana properties
         and a gain associated with the Company's settlement of a dispute
         in the fourth quarter of 2008.  The dispute settlement includes
         the value of cash and properties received.


              CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                              (In thousands)

                                                  December 31, December 31,
                                                      2009         2008
                                                  ------------ ------------
      Assets
      Current Assets                               $281,502      $460,551
      Property, Equipment and Other Assets        3,401,899     3,241,113
                                                 ----------    ----------
         Total Assets                            $3,683,401    $3,701,664
                                                 ==========    ==========

      Liabilities and Stockholders' Equity
      Current Liabilities                          $308,741      $378,913
      Long-Term Debt, excluding
       Current Maturities                           805,000       831,143
      Deferred Income Taxes                         644,801       599,106
      Other Liabilities                             112,345       101,940
      Stockholders' Equity                        1,812,514     1,790,562
                                                  ---------     ---------
         Total Liabilities and
          Stockholders' Equity                   $3,683,401    $3,701,664
                                                 ==========    ==========



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


                                       Quarter Ended     Twelve Months Ended
                                        December 31,         December 31,
                                       -------------     -------------------
                                       2009      2008      2009        2008
                                       ----      ----      ----        ----
    Cash Flows From Operating
     Activities
    Net Income                       $36,364   $43,700  $148,343    $211,290
    Unrealized (Gain) /
     Loss on Derivatives               1,536    (1,649)    1,954           -
    Impairment of Oil & Gas
     Properties                       17,622    35,700    17,622      35,700
    Income Charges Not Requiring
     Cash                             71,958    80,092   280,819     242,538
    (Gain) / Loss on Sale of
     Assets and Settlement
     of Dispute                           20   (32,448)    3,303     (32,849)
    Deferred Income Tax Expense       27,042    24,392   101,815     120,851
    Changes in Assets and
      Liabilities                     23,559    47,176    23,202      36,408
    Stock-Based Compensation Tax
     Benefit                            (705)      320   (13,790)    (10,691)
    Exploration Expense               19,526    12,436    50,784      31,200
                                      ------    ------    ------      ------
    Net Cash Provided by Operations  196,922   209,719   614,052     634,447
                                     -------   -------   -------     -------

    Cash Flows From Investing
     Activities
    Capital Expenditures            (165,504) (258,849) (560,423) (1,423,188)
    Proceeds from Sale of Assets           -       949    80,180       2,099
    Exploration Expense              (19,526)  (12,436)  (50,784)    (31,200)
                                     -------   -------   -------     -------
    Net Cash Used in Investing      (185,030) (270,336) (531,027) (1,452,289)
                                    --------  --------  --------  ----------

    Cash Flows From Financing
     Activities
    Sale of Common Stock Proceeds          -         1        83     316,230
    Net Increase / (Decrease) in
     Debt                             (5,000)   47,000   (62,000)    517,000
    Capitalized Debt Issuance Costs        -    (2,237)  (10,409)     (4,403)
    Stock-Based Compensation Tax
     Benefit                             705      (320)   13,790      10,691
    Dividends Paid                    (3,109)   (3,100)  (12,432)    (12,073)
                                      ------    ------   -------     -------
    Net Cash Provided by /
     (Used in) Financing              (7,404)   41,344   (70,968)    827,445
                                      ------    ------   -------     -------

    Net Increase / (Decrease) in
     Cash and Cash Equivalents        $4,488  $(19,273)  $12,057      $9,603
                                      ======  ========   =======      ======


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

                                                               Twelve Months
                                             Quarter Ended         Ended
                                              December 31,      December 31,
                                             -------------     --------------
                                             2009    2008      2009     2008
                                             ----    ----      ----     ----

    As Reported - Net Income               $36,364 $43,700  $148,343 $211,290
    Reversal of Selected Items,
     Net of Tax:
      Impairment of Oil & Gas
       Properties and Other Assets          11,102  22,384    11,102   22,384
      Impairment of Unproved
       Properties (1)                            -  10,653         -   10,653
      (Gain) / Loss on Sale of Assets and
        Settlement of Dispute (2)               13 (33,010)    1,283  (33,263)
      Stock-Based Compensation Expense       5,384   3,131    15,798   21,756
      Unrealized (Gain) / Loss  on
       Derivatives (3)                         968  (1,040)    1,231        -
                                               ---  ------     -----      ---
    Net Income Excluding Selected Items    $53,831 $45,818  $177,757 $232,820
                                           ======= =======  ======== ========
    As Reported - Net Earnings Per Share     $0.35   $0.42     $1.43    $2.10
    Per Share Impact of Reversing
     Selected Items                           0.17    0.02      0.29     0.21
                                              ----    ----      ----     ----
    Net Earnings Per Share Including
     Reversal of Selected Items              $0.52   $0.44     $1.72    $2.31
                                             =====   =====     =====    =====
    Weighted-Average Common
     Shares Outstanding                    103,654 103,354   103,616  100,737

    (1)  The impairment of unproved properties in 2008 represents a portion
         of the total impairment relating to the accelerated recognition
         of impairments on exploratory prospects in Mississippi, North Dakota
         and Montana that have been recognized due to the unprecedented
         decline in oil price making the Company abandon its exploration
         plans.

    (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 North.  The gain in 2008 includes
         post-closing transactions associated with the sale in the third
         quarter of 2006 of offshore and certain south Louisiana properties
         and a gain associated with the Company's settlement of a dispute in
         the fourth quarter of 2008.  The dispute settlement includes the
         value of cash and properties received.

    (3)  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    Twelve Months Ended
                                           December 31,        December 31,
                                          -------------    -------------------
                                          2009      2008     2009      2008
                                          ----      ----     ----      ----
    Discretionary Cash Flow
    As Reported - Net Income            $36,364   $43,700  $148,343  $211,290
    Plus / (Less):
    Unrealized (Gain) / Loss on
     Derivatives                          1,536    (1,649)    1,954         -
    Impairment of Oil & Gas Properties   17,622    35,700    17,622    35,700
    Income Charges Not Requiring Cash    71,958    80,092   280,819   242,538
    (Gain) / Loss on Sale of Assets
     and Settlement of Dispute               20   (32,448)    3,303   (32,849)
    Deferred Income Tax Expense          27,042    24,392   101,815   120,851
    Exploration Expense                  19,526    12,436    50,784    31,200
                                         ------    ------    ------    ------
    Discretionary Cash Flow             174,068   162,223   604,640   608,730
    Changes in Assets and Liabilities    23,559    47,176    23,202    36,408
    Stock-Based Compensation Tax Benefit   (705)      320   (13,790)  (10,691)
                                           ----       ---   -------   -------
    Net Cash Provided by Operations    $196,922  $209,719  $614,052  $634,447
                                       ========  ========  ========  ========



                               Net Debt Reconciliation
                                    (In thousands)

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

    Current Portion of Long-Term Debt                      $-       $35,857
    Long-Term Debt                                    805,000       831,143
                                                      -------       -------
        Total Debt                                   $805,000      $867,000
    Stockholders' Equity                            1,812,514     1,790,562
                                                    ---------     ---------
        Total Capitalization                       $2,617,514    $2,657,562

    Total Debt                                       $805,000      $867,000
    Less:  Cash and Cash Equivalents                  (40,158)      (28,101)
                                                      -------       -------
        Net Debt                                     $764,842      $838,899

    Net Debt                                         $764,842      $838,899
    Stockholders' Equity                            1,812,514     1,790,562
                                                    ---------     ---------
        Total Adjusted Capitalization              $2,577,356    $2,629,461

    Total Debt to Total Capitalization Ratio             30.8%         32.6%
    Less:  Impact of Cash and Cash Equivalents            1.1%          0.7%
                                                          ---           ---
        Net Debt to Adjusted Capitalization Ratio        29.7%         31.9%




SOURCE Cabot Oil & Gas Corporation