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Cabot Oil & Gas Corporation Continues Record 1997 Performance
Oct 27, 1997

(Highest Nine Month Results Ever Reported)

HOUSTON, Oct. 27 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced its seventh consecutive profitable quarter. The company posted third quarter net income available to common shareholders of $2.3 million, or $.10 per share, and discretionary cash flow of $20.0 million or $.87 per share. On a recurring basis, the earnings figure increased six- fold over last year's $377,000 or $.02 per share, while discretionary cash flow increased 29% from $15.5 million or $.68 per share. Driving the improved performance was a 17% growth in production between comparable quarterly periods.

For the nine months of 1997, the Company reported net income available to common shareholders of $13.9 million, or $.61 per share, more than double the recurring earnings realized of $6.5 million, or $.29 per share, in the 1996 comparable period. Discretionary cash flow for the year reached $68.7 million or $3.00 per share versus $53.3 million or $2.33 per share in last year's nine month recurring results. With the strong third quarter results adding to the Company's record first half results, Cabot Oil & Gas Corporation continues to perform at record levels.

The comparisons to 1996 for both the quarter and year-to-date results exclude the 1996 impact of a one-time benefit from an income tax refund that contributed $2.6 million and $3.1 million to earnings and discretionary cash flow, respectively. There are no special non-recurring items in the 1997 reported results.

Charles P. Siess, Jr., Chairman and Chief Executive Officer stated, "It is rewarding to see the positive momentum generated from our strategic programs. Since 1995, we have held constant to our strategy of growth through the drill bit coupled with synergistic acquisitions, all the while improving our balance sheet. These strategies have proven successful with (1) the production improvements through drilling, (2) the recently completed acquisition in the Rockies, which opened up more drilling opportunities, and (3) the completed asset sale of low performing assets in the East, that provided the funding for the acquisition and other opportunities such as further debt reduction."

To further highlight, the 17% production increase for the quarter over last year's third quarter, brings the year-to-date production levels to 10% above last year's first nine months. This year's drilling program is approximately 70% complete and 90% successful. Siess commented, "Our focused drilling program is producing outstanding results. In our expanded exploration efforts, we have drilled 36 exploratory wells at a 72% success rate."

Price realizations for the quarter also buoyed results with a $.04 per Mcf increase in total company realizations over the prior year's third quarter. Year-to-date, Western gas prices have shown the most improvement with a $.30 per Mcf increase over the prior year while Appalachia prices are up $.27 per Mcf. For the year, this translates into a realized price for the company 11% above the same period in 1996. In October 1997, Cabot Oil & Gas Corporation marketed its equity gas at a price 50% above last year's October pricing. NYMEX prices for November continue to show a trend of improved pricing compared to last November.

In addition, total operating expenses (as summarized in the attached statement of operations), when presented on a per unit basis, yielded $1.70 per Mcfe for the 1997 third quarter compared to $1.85 per Mcfe for the comparable quarter last year. Lower DD&A and direct operating expenses per Mcfe were the primary contributors to the improvement.

Other recent developments subsequent to quarter end include the completion of the preferred stock conversion announced in September that eliminated an annual preferred dividend of nearly $2.2 million and added approximately 1,649,000 shares to total common shares outstanding. Also, in October, the Company received a commitment from six insurance companies for a $100 million private placement of Senior Notes with a twelve year final maturity and a coupon rate of 7.19%. Closing on the transaction is scheduled for November 14, 1997 after the satisfactory execution of a definitive Note Purchase Agreement. This debt will replace existing borrowings on the Company's revolving credit facility. The Company's existing $80 million, 10.18% private placement amortizes over five years commencing in 1998.

Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the Appalachia, Anadarko, Rocky Mountain and Gulf Coast regions. For additional information about the Company, visit COG's internet home page 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 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,
                                  1997    1996   1997     1996
    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Appalachia                  6.5     6.6    19.9     19.8
      West                       10.2     7.6    27.9     23.5
      Total                      16.7    14.2    47.8     43.3

    Crude/Condensate              139     124     434      403

    Natural Gas Liquid             14      23      40       62

    Equivalent Production (Bcfe) 17.6    15.1    50.6     46.1

    PRICES
    Average Produced Gas Sales
     Price ($/Mcf)
      Appalachia               $ 2.57  $ 2.31  $ 2.88  $  2.61
      West                     $ 1.90  $ 1.89  $ 2.13  $  1.83
      Total                    $ 2.12  $ 2.08  $ 2.42  $  2.18

    Crude/Condensate Price
     ($/Bbl)                   $19.57  $20.92  $20.45  $ 20.32

    WELLS DRILLED
      Gross                        66      60     168      145
      Net                        47.7    44.8   120.8    115.7
      Net Success Rate             93%     91%     90%      85%

            CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                     (In Thousands, Except Per Share Amounts)

                                Quarter Ended    Nine Months Ended
                                 September 30,     September 30,
                                1997     1996      1997      1996
    Net Operating Revenues
      Natural Gas Production $ 35,416  $ 29,656  $115,901  $94,521
      Crude Oil and Condensate  2,676     2,598     8,826    8,196
      Brokered Natural Gas
       Margin                   1,053       971     2,484    4,185
      Other                     1,628     2,272     5,761    7,139
                               40,773    35,497   132,972  114,041

    Operating Expenses
      Operations                7,154     6,960    21,587   20,386
      Exploration               2,966     2,926     9,873    8,974
      Taxes Other Than Income   3,450     2,889    11,017    9,407
      Administrative            5,011     3,975    13,867   12,033
      Depreciation, Depletion
       and Amortization        11,361    11,153    33,419   32,577
                               29,942    27,903    89,763   83,377
    Other Income                   (1)      (17)      349    1,456
    Income from Operations     10,830     7,577    43,558   32,120
    Interest Expense            4,614     3,241    13,533   12,869
    Income Before Income Taxes  6,216     4,336    30,025   19,251
    Income Tax Expense          2,536       (29)   11,914    5,993
    Net Income                  3,680     4,365    18,111   13,258
    Dividend Requirement
     on Preferred Stock         1,391     1,391     4,175    4,174
    Net Income Applicable
     to Common               $  2,289  $  2,974  $ 13,936  $ 9,084
    Net Income Per Common
     Share                   $   0.10  $   0.13  $   0.61  $  0.40
    Average Common Shares
     Outstanding               22,909    22,808    22,878   22,800

    Results from Recurring
     Operations (A)
      Net Income Applicable
       to Common             $  2,289   $   377  $ 13,936  $ 6,487
      Net Income Per Common
       Share                 $   0.10   $  0.02  $   0.61  $  0.29
      Discretionary Cash
       Flow (DCF)            $ 20,016   $15,515  $ 68,745  $53,274
      DCF per Common Share   $   0.87   $  0.68  $   3.00  $  2.33

    (A) Excludes the impact of a $3.1 million benefit ($2.6 million net of
    tax) in September 1996, including $1.3 million of interest income, related
    to a tax refund for percentage depletion claimed for certain periods prior
    to 1990.


                 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                   (In Thousands)

                                             Sept. 30,   Dec. 31,
                                              1997        1996
    Assets
    Current Assets                         $  50,126    $ 79,637
    Property, Equipment and Other Assets     511,087     481,704
       Total Assets                        $ 561,213    $561,341

    Liabilities and Stockholders' Equity
    Current Liabilities                    $  79,965    $ 72,617
    Long-Term Debt                           217,000     248,000
    Deferred Income Taxes                     80,610      69,427
    Other Liabilities                          9,261      10,593
    Stockholders' Equity                     174,377     160,704
       Total Liabilities and Stockholders
        Equity                             $ 561,213    $561,341


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

                                  Quarter Ended    Nine Months Ended
                                    Sept. 30,          Sept. 30,
                                 1997      1996      1997      1996
    Cash Flows From Operating
     Activities
    Net Income               $   3,680   $ 4,365  $  18,111  $13,258
    Income Charges Not
     Requiring Cash             14,761    12,740     44,936   38,341
    Changes in Assets and
     Liabilities, Net            5,833    (3,499)    20,526   (7,838)
    Exploration Expense          2,966     2,926      9,873    8,974
    Net Cash Provided by
     Operations                 27,240    16,532     93,446   52,735

    Cash Flows From Investing
     Activities
    Capital Expenditures       (32,018)  (14,654)   (63,823) (38,569)
    Proceeds from Sale
     of Assets                     468       340      1,251    4,749
    Exploration Expense         (2,966)   (2,926)    (9,873)  (8,974)
    Net Cash Used
     by Investing              (34,516)  (17,240)   (72,445) (42,794)

    Cash Flows From Financing
     Activities
    Sale of Common Stock           936       145      1,347      373
    Increase (Decrease) in Debt 10,000     1,000    (15,000)  (5,000)
    Preferred Dividends         (1,391)   (1,391)    (4,175)  (4,174)
    Common Dividends and
     Other, Net                   (917)     (913)    (2,745)  (2,736)
    Net Cash Provided (Used)
     By Financing                8,628    (1,159)   (20,573) (11,537)

    Net Increase (Decrease)
     in Cash and
     Cash Equivalents          $ 1,352  $ (1,867)   $   428  $(1,596)

    Discretionary Cash Flow (B)$20,016  $ 18,640    $68,745  $56,399

    (B) Net income (loss) plus non-cash charges and exploration less
        preferred dividends.

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