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Cabot Oil & Gas Reports Another Strong Year
Feb 13, 2008

HOUSTON, Feb. 13 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced its results for 2007 that highlight another strong year both operationally and financially.

  • The Company reported total proved reserves of 1,616 Bcfe, the highest ever recorded as a result of 334 percent replacement of production. Reserve life index is now 18 years based on fourth quarter production.

  • Absolute production levels were lower by three percent year over year due to nine months of production from sold properties being included in the 2006 comparison year, but up over 14 percent on a pro forma basis between 2007 and 2006.

  • All-in finding cost of $2.07 per Mcfe.

  • Net income of $167.4 million, or $1.73 per share -- the second highest income level ever.

  • Record cash flow levels, including $462.1 million for cash flow from operations and $472.7 million for discretionary cash flow.

"Our goal when we began restructuring our portfolio several years ago was for consistent double-digit production and reserve growth year after year," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "I am pleased to say our team delivered on that in 2007, with a 14 percent growth in reserves and a 14 percent pro forma growth in production."

Reserves and Production

"Our ability to add reserves is the lifeblood of the Company, and this year's low all-in finding cost of $2.07 per Mcfe highlights the value of Cabot's organic portfolio of opportunities," commented Dinges. "Our year-end 2007 reserves grew to 1,616 Bcfe from 1,416 Bcfe the year before, while our proved undeveloped percentage remained at 27 percent. The depth of our drilling inventory should provide Cabot shareholders with many years of future economic growth."

For the full year, equivalent production totaled 85.5 Bcfe, compared to actual reported production of 88.2 Bcfe and pro forma production of 74.9 Bcfe for 2006.

Full Year Financial Results

Cabot Oil & Gas Corporation reported net income of $167.4 million, or $1.73 per share for the twelve months ended December 31, 2007. This compares to net income of $321.2 million, or $3.32 per share for 2006 full year. Net income in 2006 included a significant gain ($145.1 million after-tax) on the sale of assets. Excluding selected items (related to gain on sale and impairments) in both full year periods, the comparison for net income would become $161.9 million ($1.67 per share) for 2007 versus $178.5 million ($1.84 per share) for 2006. Cash flow from operations and discretionary cash flow for the year set new all time highs with $462.1 million and $472.7 million, respectively, up significantly from the prior year on both accounts.

Realized prices between 2007 and 2006 were relatively stable for both natural gas and oil. This stability was aided by results from the Company's hedge activity that provided a positive pickup for natural gas and a slight reduction for oil prices. The specific levels for natural gas were $7.23 per Mcf for 2007 versus $7.13 per Mcf for 2006, while oil was $67.16 per barrel and $65.03 per barrel for 2007 and 2006, respectively.

Expenses

Expenses for the full year were up about one percent when comparing 2007 to 2006. Each category was close to last year's absolute levels, with the exception of DD&A, which saw a $22.9 million increase that was partially offset by a $9.6 million decrease in exploration expense and a $5.9 million decline in stock-based compensation.

Fourth Quarter

The Company experienced a robust fourth quarter driven by higher year-over-year production volumes and higher commodity price realizations. For the fourth quarter of 2007, Cabot reported net income of $42.0 million, or $0.43 per share, versus $32.1 million, or $0.33 per share in the comparable quarter last year.

Balance Sheet

At year-end, the Company had a net debt to adjusted capital ratio of 23.6 percent. The debt position totaled $350 million. "These metrics highlight Cabot's flexibility and its opportunity to expand its drilling efforts," stated Dinges.

Conference Call

Listen in live to Cabot Oil & Gas Corporation's full year and fourth quarter financial and operating results discussion with financial analysts on Thursday, February 14, at 9:30 a.m. EST (8:30 a.m. CST) 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 31370273. The replay will be available through Saturday, February 16, 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       Twelve Months Ended
                                        December 31,           December 31,
                                      2007       2006        2007        2006
    PRODUCED NATURAL GAS
     (Bcf) & OIL (MBbl)
    Natural Gas
      East                             6.2        6.0        24.4        23.5
      Gulf Coast                       7.1        6.1        26.8        30.0
      West                             6.0        6.3        25.4        23.6
      Canada                           0.9        0.8         3.9         2.6
      Total                           20.2       19.2        80.5        79.7
        Less: Production from
         properties sold in 2006 (1)     -          -           -        (9.0)
      Adjusted Total                  20.2       19.2        80.5        70.7

    Crude/Condensate/Ngl
      East                               6          5          26          24
      Gulf Coast                       143        139         606       1,164
      West                              40         47         180         214
      Canada                             4          5          18          13
      Total                            193        196         830       1,415
        Less: Production from
         properties sold in 2006 (1)     -         (2)          -        (707)
      Adjusted Total                   193        194         830         708

    Equivalent Production (Bcfe)      21.4       20.4        85.5        88.2
        Less: Production from
         properties sold in 2006 (1)     -       (0.1)          -       (13.3)
      Adjusted Equivalent
       Production (Bcfe)              21.4       20.3        85.5        74.9


    PRICES
    Average Produced Gas Sales Price
     ($/Mcf)
      East                           $7.83      $7.69       $7.78       $7.99
      Gulf Coast                     $8.25      $7.24       $8.03       $7.37
      West                           $6.55      $5.68       $6.13       $6.05
      Canada                         $4.95      $6.37       $5.47       $6.18
      Total (2)                      $7.46      $6.83       $7.23       $7.13

    Crude/Condensate Price ($/Bbl)
      East                          $87.93     $56.61      $66.97      $62.03
      Gulf Coast                    $82.95     $56.25      $67.17      $65.44
      West                          $85.96     $57.73      $67.86      $63.36
      Canada                        $82.08     $49.82      $59.96      $60.55
      Total (2)                     $83.69     $56.48      $67.16      $65.03

    WELLS DRILLED
      Gross                            102         86         461         387
      Net                               78         59         391         307
      Gross Success Rate               89%        92%         96%         96%

    (1) These amounts relate to production associated with offshore and
        certain south Louisiana properties sold during the third quarter of
        2006.
    (2) These realized prices include the realized impact of derivative
        instrument settlements.


                                         Quarter Ended     Twelve Months Ended
                                          December 31,         December 31,
                                         2007     2006       2007     2006
    Realized Impacts to Gas Pricing    $ 1.00     $0.58    $ 0.99     $0.35
    Realized Impacts to Oil Pricing    $(5.12)    $   -    $(0.97)    $   -



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

                                          Quarter Ended    Twelve Months Ended
                                           December 31,        December 31,
                                          2007      2006      2007      2006
    Operating Revenues
      Natural Gas Production           $150,462  $131,166  $581,640  $568,097
      Brokered Natural Gas               26,858    26,262    93,215    93,651
      Crude Oil and Condensate           15,954    11,097    55,243    91,380
      Other                                 643     3,157     2,072     8,860
                                        193,917   171,682   732,170   761,988
    Operating Expenses
      Brokered Natural Gas Cost          23,846    23,451    81,819    83,375
      Direct Operations - Field and
       Pipeline                          20,039    19,312    77,170    74,790
      Exploration                        18,529     9,425    39,772    49,397
      Depreciation, Depletion and
       Amortization                      41,442    31,988   162,993   140,092
      Impairment of Oil & Gas Properties      -     3,886     4,614     3,886
      General and Administrative
       (excluding Stock-Based
       Compensation)                      7,093    10,715    35,473    37,010
      Stock-Based Compensation (1)        2,722     8,971    15,302    21,158
      Taxes Other Than Income            11,659    10,912    53,782    55,351
                                        125,330   118,660   470,925   465,059
    Gain on Sale of Assets (2)            1,155     2,073    13,448   232,017
    Income from Operations               69,742    55,095   274,693   528,946
    Interest Expense and Other            5,697      (710)   17,161    18,441
    Income Before Income Taxes           64,045    55,805   257,532   510,505
    Income Tax Expense                   21,998    23,679    90,109   189,330
    Net Income                          $42,047   $32,126  $167,423  $321,175
    Net Earnings Per Share - Basic        $0.43     $0.33     $1.73     $3.32
    Weighted Average Common Shares
     Outstanding                         97,212    95,932    96,978    96,803

    (1) Includes the impact of the Company's performance share and restricted
        stock amortization as well as expense related to stock options and
        stock appreciation rights.
    (2) Gain on Sale of Assets is primarily related to the sale in the third
        quarter of 2006 of offshore and certain south Louisiana properties.



               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In thousands)

                                                    December 31,  December 31,
                                                        2007          2006
    Assets
    Current Assets                                    $221,413      $315,682
    Property, Equipment and Other Assets             1,939,334     1,487,897
    Deferred Income Taxes                               47,847        30,912
      Total Assets                                  $2,208,594    $1,834,491

    Liabilities and Stockholders' Equity
    Current Liabilities                               $252,266      $251,027
    Long-Term Debt, excluding Current Maturities       330,000       220,000
    Deferred Income Taxes                              481,770       347,430
    Other Liabilities                                   74,301        70,836
    Stockholders' Equity                             1,070,257       945,198
      Total Liabilities and Stockholders' Equity    $2,208,594    $1,834,491



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

                                      Quarter Ended       Twelve Months Ended
                                       December 31,           December 31,
                                     2007       2006       2007        2006
    Cash Flows From Operating
     Activities
    Net Income                     $42,047    $32,126    $167,423    $321,175
    Impairment of Oil & Gas
     Properties                          -      3,886       4,614       3,886
    Income Charges Not
     Requiring Cash                 44,140     40,997     179,234     161,363
    Gain on Sale of Assets          (1,155)    (2,073)    (13,448)   (232,017)
    Deferred Income Tax Expense     28,222     21,568      95,152      53,082
    Changes in Assets and
     Liabilities                    (5,062)  (101,146)    (10,610)      9,703
    Stock-Based Compensation
     Tax Benefit                     6,857     (3,729)          -      (9,485)
    Exploration Expense             18,529      9,425      39,772      49,397
    Net Cash Provided by
     Operations                    133,578      1,054     462,137     357,104

    Cash Flows From Investing
     Activities
    Capital Expenditures          (140,248)  (122,810)   (557,211)   (467,430)
    Proceeds from Sale of Assets     1,235      6,487       7,061     329,474
    Exploration Expense            (18,529)    (9,425)    (39,772)    (49,397)
    Net Cash Used in Investing    (157,542)  (125,748)   (589,922)   (187,353)

    Cash Flows From Financing
     Activities
    Sale of Common Stock Proceeds    2,785      2,615       5,099       6,235
    Net Increase / (Decrease)
     in Debt                        35,000   (160,000)    110,000    (100,000)
    Purchase of Treasury Stock           -          -           -     (46,492)
    Stock-Based Compensation
     Tax Benefit                    (6,857)     3,729           -       9,485
    Dividends Paid                  (2,917)    (1,919)    (10,670)     (7,751)
    Net Cash Provided by / (Used in)
     Financing                      28,011   (155,575)    104,429    (138,523)

    Net Increase / (Decrease)
     in Cash and Cash Equivalents   $4,047  $(280,269)   $(23,356)    $31,228



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

                                           Quarter Ended   Twelve Months Ended
                                            December 31,       December 31,
                                           2007     2006      2007      2006
    As Reported - Net Income             $42,047  $32,126  $167,423  $321,175
    Reversal of Selected Items,
     Net of Tax:
        Impairment of Oil & Gas Properties     -    2,429     2,870     2,429
        Gain on Sale of Assets              (723)  (1,296)   (8,369) (145,102)
    Net Income Excluding Selected Items  $41,324  $33,259  $161,924  $178,502
    As Reported - Net Earnings Per Share   $0.43    $0.33     $1.73     $3.32
    Per Share Impact of Reversing
     Selected Items                            -     0.02     (0.06)    (1.48)
    Net Earnings Per Share Including
     Reversal of Selected Items            $0.43    $0.35     $1.67     $1.84
    Weighted Average Common Shares
     Outstanding                          97,212   95,932    96,978    96,803



            Discretionary Cash Flow Calculation and Reconciliation
                                (In thousands)

                                           Quarter Ended   Twelve Months Ended
                                            December 31,       December 31,
                                           2007     2006      2007      2006
    Discretionary Cash Flow
    As Reported - Net Income             $42,047  $32,126  $167,423  $321,175
    Plus / (Less):
    Impairment of Oil & Gas Properties         -    3,886     4,614     3,886
    Income Charges Not Requiring Cash     44,140   40,997   179,234   161,363
    Gain on Sale of Assets                (1,155)  (2,073)  (13,448) (232,017)
    Deferred Income Tax Expense           28,222   21,568    95,152    53,082
    Exploration Expense                   18,529    9,425    39,772    49,397
    Discretionary Cash Flow              131,783  105,929   472,747   356,886
    Changes in Assets and Liabilities     (5,062)(101,146)  (10,610)    9,703
    Stock-Based Compensation Tax Benefit   6,857   (3,729)        -    (9,485)
    Net Cash Provided by Operations     $133,578   $1,054  $462,137  $357,104



                           Net Debt Reconciliation
                                (In thousands)

                                      December 31, December 31,
                                          2007        2006

    Current Portion of Long-Term Debt    $20,000     $20,000
    Long-Term Debt                       330,000     220,000
      Total Debt                        $350,000    $240,000
    Stockholders' Equity               1,070,257     945,198
      Total Capitalization            $1,420,257  $1,185,198

    Total Debt                          $350,000    $240,000
    Less: Cash and Cash Equivalents      (18,498)    (41,854)
      Net Debt                          $331,502    $198,146

    Net Debt                            $331,502    $198,146
    Stockholders' Equity               1,070,257     945,198
      Total Adjusted Capitalization   $1,401,759  $1,143,344

    Total Debt to Total Capitalization
     Ratio                                 24.6%       20.2%
    Less:  Impact of Cash and Cash
     Equivalents                            1.0%        2.9%
      Net Debt to Adjusted
       Capitalization Ratio                23.6%       17.3%

SOURCE Cabot Oil & Gas Corporation

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