HOUSTON, April 30 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced results from its first quarter of 2008. "The quarter was marked by positive momentum in production and commodity prices, along with new highs for our stock price," said Dan O. Dinges, Chairman, President and Chief Executive Officer.
For the quarter, the Company reported net income (after removal of stock compensation expense and gain on asset sale), of $57.0 million, or $0.58 per share, compared to $47.7 million, or $0.49 per share last year. The 2008 first quarter selected items related to stock-based compensation expense, while the 2007 first quarter selected items included both stock-based compensation expense and a gain on the sale of assets (see attached table for details). Including the impact of these items, the reported numbers for the quarter were $46.0 million, or $0.47 per share, for the first quarter of 2008 versus $48.5 million, or $0.50 per share in the 2007 first quarter. Discretionary cash flow and cash flow from operations first quarter comparisons were $138.4 million versus $106.7 million and $132.7 million versus $135.9 million for 2008 and 2007, respectively.
Higher produced equivalent volumes, together with stronger prices, increased revenues. The Company reported 22.2 Bcfe of production, which is the highest quarterly level Cabot has reported since its asset sale in 2006. "After a slow start to the year, we experienced increasing production levels throughout the quarter, exiting the quarter with in excess of 255 Mmcfe per day," commented Dinges. "Part of the delay was retooling of the drilling program to focus more on specific objectives than had been identified in the original program. This is evidenced by the lower well activity in the first quarter versus one year ago." Dinges added, "Even with this adjustment, our daily production volumes increased over ten percent between the start and the end of the first quarter."
This higher production was complemented by a seven percent increase in total natural gas price realizations and a 62 percent increase in total oil price realizations between first quarter comparative periods. On the expenses side, the significant move in the share price increased stock compensation expense, while the level of activity and inflation in the industry over recent years increased the DD&A expense. At the same time, the higher commodity prices increased production taxes, and the higher debt levels resulted in higher interest costs.
"Several years ago, we set out to align our compensation plans with shareholder interests," stated Dinges. "The first quarter move in the stock of 26 percent created much of the $17.6 million recorded expense; however, it also resulted in a one billion dollar increase in shareholder value. On the debt side, our book capitalization remains around the mid 20 percent level, affording Cabot extensive flexibility to pursue all of its projects."
Listen in live to Cabot Oil & Gas Corporation's first quarter financial and operating results discussion with financial analysts on Thursday, May 1, 2008 at 9:30 a.m. EDT (8:30 a.m. CDT) 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 42873469. A replay will be available through Saturday, May 3, 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 March 31, 2008 2007 PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) Natural Gas East 6.0 5.8 Gulf Coast 7.4 6.5 West 6.4 6.4 Canada 1.2 1.1 Total 21.0 19.8 Crude/Condensate/Ngl East 6 6 Gulf Coast 144 148 West 36 47 Canada 6 6 Total 192 207 Equivalent Production (Bcfe) 22.2 21.0 PRICES Average Produced Gas Sales Price ($/Mcf) East $8.28 $8.08 Gulf Coast $8.30 $7.75 West $7.26 $6.51 Canada $7.38 $7.46 Total (1) $7.92 $7.42 Average Crude/Condensate Price ($/Bbl) East $90.04 $53.49 Gulf Coast $84.58 $53.07 West $95.66 $54.17 Canada $79.38 $54.44 Total (1) $86.55 $53.36 WELLS DRILLED Gross 85 100 Net 65 92 Gross Success Rate 98% 99% (1) These realized prices include the realized impact of derivative instrument settlements. Quarter Ended March 31, 2008 2007 Realized Impacts to Gas Pricing $0.03 $0.89 Realized Impacts to Oil Pricing $(8.60) $0.89 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Quarter Ended March 31, 2008 2007 Operating Revenues Natural Gas Production $166,559 $146,750 Brokered Natural Gas 35,620 33,177 Crude Oil and Condensate 16,487 10,942 Other 985 704 219,651 191,573 Operating Expenses Brokered Natural Gas Cost 30,290 28,699 Direct Operations - Field and Pipeline 17,491 17,131 Exploration 5,061 5,652 Depreciation, Depletion and Amortization 46,267 37,381 General and Administrative (excluding Stock-Based Compensation) 9,997 11,645 Stock-Based Compensation (1) 17,576 6,635 Taxes Other Than Income 16,897 13,165 143,579 120,308 Gain on Sale of Assets (2) - 7,920 Income from Operations 76,072 79,185 Interest Expense and Other 5,991 3,924 Income Before Income Taxes 70,081 75,261 Income Tax Expense 24,106 26,714 Net Income $45,975 $48,547 Net Earnings Per Share - Basic $0.47 $0.50 Weighted Average Common Shares Outstanding 97,716 96,695 (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 Plan which commenced in January 2008. (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) March 31, December 31, 2008 2007 Assets Current Assets $272,004 $221,413 Property, Equipment and Other Assets 2,004,084 1,939,334 Deferred Income Taxes 53,902 47,847 Total Assets $2,329,990 $2,208,594 Liabilities and Stockholders' Equity Current Liabilities $321,626 $252,266 Long-Term Debt, excluding Current Maturities 350,000 330,000 Deferred Income Taxes 508,138 481,770 Other Liabilities 85,980 74,301 Stockholders' Equity 1,064,246 1,070,257 Total Liabilities and Stockholders' Equity $2,329,990 $2,208,594 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In thousands) Quarter Ended March 31, 2008 2007 Cash Flows From Operating Activities Net Income $45,975 $48,547 Income Charges Not Requiring Cash 63,806 44,551 Gain on Sale of Assets - (7,920) Deferred Income Tax Expense 23,560 15,874 Changes in Assets and Liabilities (1,056) 33,289 Stock-Based Compensation Tax Benefit (4,642) (4,135) Exploration Expense 5,061 5,652 Net Cash Provided by Operations 132,704 135,858 Cash Flows From Investing Activities Capital Expenditures (128,101) (113,748) Proceeds from Sale of Assets - 5,784 Exploration Expense (5,061) (5,652) Net Cash Used in Investing (133,162) (113,616) Cash Flows From Financing Activities Sale of Common Stock Proceeds 2,240 1,144 Net Increase / (Decrease) in Debt 20,000 (10,000) Stock-Based Compensation Tax Benefit 4,642 4,135 Dividends Paid (2,930) (1,933) Net Cash Provided by / (Used in) Financing 23,952 (6,654) Net Increase in Cash and Cash Equivalents $23,494 $15,588 Selected Item Review and Reconciliation of Net Income and Earnings Per Share (In thousands, except per share amounts) Quarter Ended March 31, 2008 2007 As Reported - Net Income $45,975 $48,547 Reversal of Selected Items, Net of Tax: Gain on Sale of Assets - (4,926) Stock-Based Compensation Expense 11,055 4,127 Net Income Excluding Selected Items $57,030 $47,748 As Reported - Net Earnings Per Share $0.47 $0.50 Per Share Impact of Reversing Selected Items 0.11 (0.01) Net Earnings Per Share Including Reversal of Selected Items $0.58 $0.49 Weighted Average Common Shares Outstanding 97,716 96,695 Discretionary Cash Flow Calculation and Reconciliation (In thousands) Quarter Ended March 31, 2008 2007 Discretionary Cash Flow As Reported - Net Income $45,975 $48,547 Plus / (Less): Income Charges Not Requiring Cash 63,806 44,551 Gain on Sale of Assets - (7,920) Deferred Income Tax Expense 23,560 15,874 Exploration Expense 5,061 5,652 Discretionary Cash Flow 138,402 106,704 Changes in Assets and Liabilities (1,056) 33,289 Stock-Based Compensation Tax Benefit (4,642) (4,135) Net Cash Provided by Operations $132,704 $135,858 Net Debt Reconciliation (In thousands) March 31, December 31, 2008 2007 Current Portion of Long-Term Debt $20,000 $20,000 Long-Term Debt 350,000 330,000 Total Debt $370,000 $350,000 Stockholders' Equity 1,064,246 1,070,257 Total Capitalization $1,434,246 $1,420,257 Total Debt $370,000 $350,000 Less: Cash and Cash Equivalents (41,992) (18,498) Net Debt $328,008 $331,502 Net Debt $328,008 $331,502 Stockholders' Equity 1,064,246 1,070,257 Total Adjusted Capitalization $1,392,254 $1,401,759 Total Debt to Total Capitalization Ratio 25.8% 24.6% Less: Impact of Cash and Cash Equivalents 2.2% 1.0% Net Debt to Adjusted Capitalization Ratio 23.6% 23.6%
SOURCE Cabot Oil & Gas Corporation
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation,
Web site: http://www.cabotog.com