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Cabot Oil & Gas Finalizes Year-End Reserves; Provides Exploration Drilling Results
Feb 14, 2002

HOUSTON, Feb. 14 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced the final results of its year-end reserve audit. Total proved reserves increased 13% to 1,154.1 Bcfe at December 31, 2001, compared to 1,018.7 Bcfe in the prior year. Driving this increase was 113.5 Bcfe from drilling additions and 146.8 Bcfe from acquisitions. The drilled additions and the acquired reserves were added at a cost of $1.68 per Mcfe. Revisions, caused primarily by lower pricing ($2.65 per Mcf on the last day of 2001 versus $9.63 per Mcf on the last day of 2000), removed 42.7 Bcfe from reserves and added $.33 to the overall finding cost level. The Company replaced 268% of production during the year.

"While Cabot maintains a conservative approach to adding reserves, a 72% reduction in gas price from the previous year is obviously going to have an impact on the economic life of certain wells," said Ray Seegmiller, Chairman and Chief Executive Officer. "This is very evident in the Company's discounted future net cash flow (pre-tax PV10) that went from $3.5 billion at the end of 2000 to $951 million in 2001."

The 2001 capital program included $144.3 million (versus $75.2 million in 2000) for drilling and dry hole, along with $32.5 million (versus $16.2 million in 2000) for lease acquisition and seismic that will benefit future years. "With the decline in natural gas prices over the latter part of the year, we were able to add significantly to our seismic database and acreage position at very attractive rates," said Seegmiller. "Today we have access to nearly 10,000 square miles of 3-D seismic data versus only about 2,000 square miles one year ago. These incremental investments added $.17 to our drilling addition finding costs."

Listed below are reserve-related disclosures that will be part of the 2001 Form 10-K.

       Supplemental Oil & Gas Information Year Ended December 31, 2001

                            2001 Proved Reserve Reconciliation
    Proved Reserves       Natural Gas (Mmcf)   Liquids (MBbls)  Total (Mmcfe)
      Beginning of Year          959,222              9,914       1,018,703
      Revisions                  (44,266)               254         (42,737)
      Additions                   99,911              2,257         113,456
      Production                 (69,162)            (1,996)        (81,139)
      Purchases                   91,290              9,255         146,819
      Sales                         (991)               ---            (993)
    End of Year                1,036,004             19,684       1,154,109

    Developed (% of reserves)      77.7%              77.9%           77.7%

            Estimated Proved Reserves by Area at December 31, 2001

                        Natural Gas (Mmcf)           Liquids (A) (MBbl)
                Developed  Undeveloped   Total   Developed  Undeveloped  Total
    Gulf Coast   148,692     53,734      202,426   12,567     3,744     16,311
    West         333,265     74,953      408,218    2,435       612      3,047
    East         322,689    102,671      425,360      326       ---        326
      Total      804,646    231,358    1,036,004   15,328     4,356     19,684

                                              Total (B) (Mmcfe)
                                   Developed      Undeveloped      Total
    Gulf Coast                      224,096          76,198       300,294
    West                            347,872          78,628       426,500
    East                            324,644         102,671       427,315
      Total                         896,612         257,497     1,154,109

    (A)  Liquids include crude oil, condensate and natural gas liquids.
    (B)  Natural gas equivalents are determined using the ratio of 6 Mcf of
         natural gas to 1 Bbl of crude oil, condensate or natural gas

             Costs Incurred in Oil and Gas Property Acquisition,
            Exploration and Development Activities - 2001* ($000)

    Property Acquisitions Costs - Proved                $245,079
    Property Acquisition Costs - Unproved                 21,116
    Exploration and Extension Well Costs                  91,261
    Development Costs                                     90,246
      Total Costs                                       $447,702

    *    Note: These costs include administrative exploration costs of
         $9.8 million that the Company does not consider in its finding cost

    Exploration Well Results

After a thorough evaluation of the Impac well in south Louisiana and the first Trenton well in Appalachia, both were determined to be non-commercial and will be abandoned by Cabot Oil & Gas. "The Impac well did find tight sandstone that was gas charged in the objective section. Our structural expectation and timing history held up, but unfortunately we did not find a producible reservoir," commented Seegmiller. "From this and other recent information gathered in the area, we have learned that deep sands are present in this sub-basin and the additional knowledge gained will help us identify and evaluate other deep prospects in the adjacent areas." Seegmiller added, "The results of the Trenton dry hole lead to a re-evaluation of our geological model and drilling procedures. The well encountered a substantial gas flow from the Trenton-Black River while drilling, but quickly depleted. Subsequent testing showed we had limited reservoir extent." While disappointing, Cabot still considers this a viable play and plans to drill two Trenton exploration wells this year.

As discussed in the January 22, 2002, press release, accounting guidelines require that costs incurred as of year-end on any exploration well determined to be dry before filing the Company's Form 10-K must be included in the results of operations for the reported period.

Consequently, for these dry holes Cabot will record the previously announced $7.7 million (pre-tax) of exploration expense which was incurred on the wells through December 31, 2001. The following tables highlight the specific impact.

    Year Ended December 31, 2001               As Reported       As Revised
    Net Income (000)                             $51,847          $47,084
      Per Share                                    $1.71            $1.56
    Discretionary Cash Flow (000)               $230,507         $230,507
      Per Share                                   $ 7.61           $ 7.61
    Debt (000)                                  $393,000         $393,000
      Equity (000)                              $351,315         $346,552
    Debt to Total Capital                          52.8%            53.1%
    Deferred Income Taxes (000)                 $203,808         $200,859

                    2001 Wells Drilled
    Gross                                    208
    Net                                    153.6
    Gross Success Rate                       87%

In addition, the Company will record in 2002 additional pre-tax expenditures of approximately $2.5 million, which were incurred during the first quarter, associated with drilling and abandoning these wells.

"While we are disappointed with the results of these two wells, we remain committed to our exploration program," said Seegmiller. "In the last three years, exploration has added 111 Bcfe to our reserve base and currently accounts for 28% of our daily production."

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 .

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.

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