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Cabot Oil & Gas Reports Financial Results
Oct 27, 2005

Key highlights include:

Record third quarter and nine-month net income and discretionary cash flows, along with increased natural gas production in year-to-date comparable periods.

HOUSTON, Oct. 27 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced third quarter net income of $33.8 million, or $0.69 per share, nearly double the $17.8 million, or $0.37 per share, reported in last year's third quarter. At the same time, discretionary cash flows also reached new highs, rising to $92.9 million this year versus $77.0 million last year (see attached reconciliation for details). "Unprecedented commodity prices drove these record level financial results for the quarter," said Dan O. Dinges, Chairman, President and CEO. Cash flow from operations for the quarter declined to $59.0 million, compared to $70.1 million in the comparable quarter last year, due to changes in working capital.

Compared to last year's third quarter, the Company experienced a 34 percent increase in realized natural gas prices and a 44 percent increase in oil prices. Natural gas price realizations were $6.77 per Mcf for the quarter compared to $5.07 per Mcf last year. The quarterly oil price comparison was $46.05 per barrel in 2005 versus $32.03 per barrel in 2004. "In addition to the increase in price realizations, I am very pleased with the improved production profiles coming from our East, West and Canadian portfolios. The progress with the drill bit in those regions somewhat offset the production deferrals we have experienced in the Gulf Coast region as a result of the recent hurricanes," added Dinges. Production for the quarter was 20.5 Bcfe versus the 21.9 Bcfe recorded from the third quarter of 2004. "The quarterly shortfall includes the hurricane impacts that deferred nearly 1.0 Bcfe of production in the Gulf Coast region," commented Dinges.

In terms of quarterly expense comparison, operating expenses grew about 20% with the largest increase coming from an increase in dry hole expense. Also contributing were higher "Taxes Other Than Income" due to the increased price realizations and brokered natural gas cost. "Additionally, stock compensation expense has grown as we have become more aggressive in our retention efforts at all levels in the organization to attract and retain talented individuals," stated Dinges. "The industry experienced many years of lackluster performance and many people left the industry. Talented people are critical for future success."

Year-to-Date

For the nine months ended September 2005, Cabot reported net income of $89.9 million, or $1.84 per share, versus $56.2 million, or $1.15 per share, for the first nine months of 2004. "This level of net income exceeds the full-year net income figure reported for 2004," commented Dinges. Also setting new benchmarks for the nine months were cash flow from operations of $247.1 million and discretionary cash flow of $255.2 million. Last year's nine-month figures were $215.9 million and $211.3 million, respectively.

Higher realized commodity prices provided the improvement in revenues, assisted by increased natural gas production year-to-date. The overall production profile, however, was down less than one percent, with the decline entirely attributable to the hurricane deferrals. Increased expenses offset part of the revenue pickup, with the largest increases occurring in exploration, DD&A, direct operations, and other taxes.

In terms of the balance sheet, the Company ended the quarter with a $10 million increase in debt, which together with existing cash was used to fund approximately $60 million in property acquisitions that were discussed in the October 12, 2005 operational press release. Also the current liability level grew primarily due to the mark-to-market for outstanding derivative instruments.

For both 2005 reporting periods (the quarter and year-to-date) there were no material selected items. However, the comparable 2004 periods were impacted by certain items, which are highlighted in the Selected Item Review and Reconciliation of Net Income and Earnings Per Share table included with this release.

"The strength of the production growth coming from the East, West and to a lesser extent Canada, highlights the impact of our transition toward resource type plays within our portfolio," explained Dinges. "With a plan for 2006 that includes further expansion of these efforts and more resource drilling in our Gulf Coast operation, look for 5 to 10 percent organic production growth in 2006."

Conference Call

Listen in live to Cabot Oil & Gas Corporation's 2005 third quarter financial and operating results discussion with financial analysts on Friday, October 28, at 9:30am EDT (8:30am CDT) 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 #1308115. A replay will be available from Friday, October 28 through Friday, November 4, 2005. 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 substantial interests in the Gulf Coast, including Texas and Louisiana; the West, including the Rocky Mountains and Mid-Continent; the East, and Canada. For additional information, visit the Company's Internet homepage at www.cabotog.com.

Forward-Looking Statements

The statements regarding future financial performance and results, production growth, 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,
                                           2005     2004      2005     2004

     PRODUCED NATURAL GAS (Bcf)
      & OIL (MBbl)
     Natural Gas
       Gulf Coast                           6.3     8.4       21.0    23.6
       West                                 5.9     5.5       17.3    16.3
       East                                 5.5     5.0       15.7    14.3
       Canada                               0.3      --        0.8      --
       Total                               18.0    18.9       54.8    54.2

     Crude/Condensate/Ngl
       Gulf Coast                           364     450      1,191   1,399
       West                                  45      38        127     122
       East                                   7       7         20      20
       Canada                                 5       1         14       1
       Total                                421     496      1,352   1,542


     Equivalent Production (Bcfe)          20.5    21.9       62.9    63.5


     PRICES
     Average Produced Gas Sales Price
      ($/Mcf)
       Gulf Coast                         $6.67   $5.26      $6.26   $5.17
       West                               $5.91   $4.68      $5.38   $4.72
       East                               $7.75   $5.19      $6.90   $5.41
       Canada                             $8.04   $4.39      $5.95   $4.39
       Total                              $6.77   $5.07      $6.16   $5.10

     Crude/Condensate Price ($/Bbl)
       Gulf Coast                        $43.93  $31.01     $42.72  $30.71
       West                              $60.77  $42.85     $54.21  $38.06
       East                              $59.22  $39.64     $52.98  $35.99
       Canada                            $52.94  $36.63     $42.23  $36.63
       Total                             $46.05  $32.03     $43.92  $31.36

     WELLS DRILLED
       Gross                                 88      75        229     205
       Net                                   72      66        177     179
       Gross Success Rate                   97%     95%        95%     97%



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

                                       Quarter Ended     Nine Months Ended
                                        September 30,      September 30,
                                       2005      2004     2005      2004
     Operating Revenues
        Natural Gas Production(1)    $121,477  $96,111  $337,566  $276,518
        Brokered Natural Gas           18,756   13,224    60,768    60,411
        Crude Oil and Condensate(1)    21,336    8,514    57,250    34,833
        Other                             188    1,574     2,131     4,007
                                      161,757  119,423   457,715   375,769
     Operating Expenses
        Brokered Natural Gas Cost      16,550   11,627    53,549    53,944
        Direct Operations - Field
         and Pipeline                  14,246   13,297    43,171    38,489
        Exploration                    16,665    6,979    47,396    32,691
        Depreciation, Depletion and
         Amortization                  30,670   30,788    90,492    84,950
        Impairment of Oil & Gas
         Properties                        --    3,458        --     3,458
        General and Administrative
         (excluding Stock-based
          Compensation)                 5,417    6,506    20,510    19,686
        Stock-based Compensation(2)     4,262    2,495     6,829     5,613
        Taxes Other Than Income        14,939   10,115    37,053    30,138
                                      102,749   85,265   299,000   268,969
     Gain on Sale of Assets                15      120        74         7
     Income from Operations            59,023   34,278   158,789   106,807
     Interest Expense and Other         5,339    5,577    15,461    16,399
     Income Before Income Taxes        53,684   28,701   143,328    90,408
     Income Tax Expense                19,928   10,879    53,388    34,257
     Net Income                       $33,756  $17,822   $89,940   $56,151
     Net Earnings Per Share
      - Basic(3)                        $0.69    $0.37     $1.84     $1.15
     Average Common Shares
      Outstanding(3)                   48,951   48,822    48,865    48,736


     (1)  See the "Impact of Mark-to-Market Accounting Requirements" table for
          additional information.
     (2)  Includes the impact of the Company's performance share
          mark-to-market requirement and restricted stock amortization.
     (3)  Reflects the 3-for-2 split of the Company's Common Stock on
          March 31, 2005.



               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In thousands)

                                                  September 30,   December 31,
                                                       2005           2004
     Assets
     Current Assets                                  $232,180      $194,679
     Property, Equipment and Other Assets           1,164,143     1,001,422
     Deferred Income Taxes                             19,601        14,855
     Total Assets                                  $1,415,924    $1,210,956

     Liabilities and Stockholders' Equity
     Current Liabilities                             $309,628      $196,889
     Long-Term Debt                                   260,000       250,000
     Deferred Income Taxes                            269,410       247,376
     Other Liabilities                                 74,629        61,029
     Stockholders' Equity                             502,257       455,662
     Total Liabilities and Stockholders' Equity    $1,415,924    $1,210,956



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

                                      Quarter Ended        Nine Months Ended
                                       September 30,         September 30,
                                      2005      2004        2005       2004

     Cash Flows From Operating
      Activities
     Net Income                     $33,756   $17,822     $89,940   $56,151
     Change in Derivative Fair
      Value                          (1,630)    7,023       2,051    13,295
     Impairment of Oil & Gas
      Properties                         --     3,458          --     3,458
     Income Charges Not Requiring
      Cash                           34,977    33,553      97,646    90,216
     Gain on Sale of Assets             (15)     (120)        (74)       (7)
     Deferred Income Tax Expense      9,147     8,268      18,225    15,449
     Changes in Assets and
      Liabilities                   (33,865)   (6,900)     (8,073)    4,676
     Exploration Expense             16,665     6,979      47,396    32,691
     Net Cash Provided by
      Operations                     59,035    70,083     247,111   215,929

     Cash Flows From Investing
      Activities
     Capital Expenditures          (125,656)  (55,317)   (241,504) (157,747)
     Proceeds from Sale of
      Assets                            286       164         996       186
     Exploration Expense            (16,665)   (6,979)    (47,396)  (32,691)
     Net Cash Used by Investing    (142,035)  (62,132)   (287,904) (190,252)

     Cash Flows From Financing
      Activities
     Sale of Common Stock
      Proceeds                          508       200       4,088    11,123
     Net Increase in Debt            10,000        --      10,000        --

     Increase in Book Overdrafts     25,691        --      25,691        --

     Purchase of Treasury Stock          --    (3,390)       (571)   (8,732)
     Dividends Paid                  (1,958)   (1,304)     (5,254)   (3,906)
     Net Cash Provided / (Used)
      by Financing                   34,241    (4,494)     33,954    (1,515)

     Net (Decrease) / Increase
      in Cash and
        Cash Equivalents           $(48,759)   $3,457     $(6,839)  $24,162


 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,
                                          2005     2004       2005     2004

     As Reported - Net Income           $33,756  $17,822    $89,940  $56,151
     Reversal of Selected Items,
      Net of Tax:
          Impairment of Oil & Gas
           Properties                        --    2,141         --    2,141
          Gain on Sale of Assets            (10)     (74)       (46)      (4)
          Change in Derivative Fair
           Value                         (1,012)   4,347      1,265    8,230
     Net Income Including Reversal
      of Selected Items                 $32,734  $24,236    $91,159  $66,518
     As Reported - Net Earnings Per
      Share                               $0.69    $0.37      $1.84    $1.15
     Per Share Impact of Reversing
      Selected Items                      (0.02)    0.13       0.03     0.21
     Net Earnings Per Share Including
      Reversal of Selected Items          $0.67    $0.50      $1.87    $1.36
     Average Common Shares Outstanding   48,951   48,822     48,865   48,736



            Discretionary Cash Flow Calculation and Reconciliation
                                (In thousands)

                                          Quarter Ended     Nine Months Ended
                                          September 30,       September 30,
                                          2005     2004       2005     2004

     Discretionary Cash Flow
     As Reported - Net Income           $33,756  $17,822   $89,940    $56,151
     Plus:
     Change in Derivative Fair Value     (1,630)   7,023     2,051     13,295
     Impairment of Oil & Gas Properties      --    3,458        --      3,458
     Income Charges Not Requiring Cash   34,977   33,553    97,646     90,216
     Gain on Sale of Assets                 (15)    (120)       (74)       (7)
     Deferred Income Tax Expense          9,147    8,268     18,225    15,449
     Exploration Expense                 16,665    6,979     47,396    32,691
     Discretionary Cash Flow             92,900   76,983    255,184   211,253
     Plus: Changes in Assets and
      Liabilities                       (33,865)  (6,900)    (8,073)    4,676
     Net Cash Provided by Operations    $59,035  $70,083   $247,111  $215,929



                           Net Debt Reconciliation
                                (In thousands)

                                                 September 30,   December 31,
                                                      2005           2004

     Current Portion of Long-Term Debt               $20,000        $20,000
     Long-Term Debt                                  260,000        250,000
        Total Debt                                  $280,000       $270,000
     Stockholders' Equity                            502,257        455,662
        Total Capitalization                        $782,257       $725,662

     Total Debt                                     $280,000       $270,000
     Less: Cash and Cash Equivalents                  (3,187)       (10,026)
        Net Debt                                    $276,813       $259,974

     Net Debt                                       $276,813       $259,974
     Stockholders' Equity                            502,257        455,662
        Total Adjusted Capitalization               $779,070       $715,636


     Total Debt to Total Capital Ratio                 35.8%          37.2%
     Less: Impact of Cash and Cash Equivalents          0.3%           0.9%
        Net Debt to Adjusted Capitalization Ratio      35.5%          36.3%



               Impact of Mark-to-Market Accounting Requirements
                                (In thousands)

                                         Quarter Ended      Nine Months Ended
                                          September 30,       September 30,
                                         2005      2004      2005      2004
     Unrealized Gain / (Loss) on
      Derivatives(1)
        Natural Gas                      $(408)     $349     $(186)      $(69)
        Crude Oil                        2,038    (7,372)   (1,865)   (13,225)

     Incentive Stock Compensation
      Expense(2)
        Performance Shares              (2,458)   (1,378)   (2,572)    (3,158)
     Mark-to-Market Impact, Before
      Income Tax                         $(828)  $(8,401)  $(4,623)  $(16,452)
     Mark-to-Market Impact, Income Tax     316     3,201     1,771      6,268
     Mark-to-Market Impact on Net
      Income                             $(512)  $(5,200)  $(2,852)  $(10,184)


     (1)  These amounts represent the unrealized gain / (loss) associated with
          the mark-to-market valuation of open positions which do not qualify
          for hedge accounting or are ineffective. These amounts are reflected
          in the respective line items of Operating Revenues.  Therefore, the
          computation of our reported realized commodity prices can be
          obtained by adding the loss from the respective Operating Revenues
          line item and dividing by reported production.

     (2)  This amount relates to the mark-to-market valuation of the Company's
          performance share incentive stock compensation awards that is
          reflected in general and administrative expense.  At September 30,
          2005 the Company recognized stock compensation expense based on
          Cabot's ranking against a predetermined peer group based on total
          shareholder return.  Cabot must calculate its liability at the
          balance sheet date under the assumption that its relative ranking
          remains constant throughout the measurement period, creating an
          assumed ultimate liability which is then amortized over the
          measurement period (percent payout multiplied by shares multiplied
          by stock price at reported balance sheet date multiplied by the
          pro-rata time expired in the measurement period).  Expense
          recognition will fluctuate between reporting periods due to the
          valuation of the performance shares at the reported balance sheet
          date.

SOURCE Cabot Oil & Gas Corporation
10/27/2005

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

7766 10/27/2005 19:00 EDT http://www.prnewswire.com