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Cabot Oil & Gas Reports First Quarter Financial Results; Significant Pro Forma Production Gains
Apr 30, 2007

HOUSTON, April 30 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced first quarter 2007 net income of $48.5 million, or $0.50 per share, which includes $4.9 million, or $0.05 per share, of after- tax gain. This gain relates to the closing on certain consents to assign resulting from the third quarter 2006 asset sale. Last year for the first quarter, the Company set a record with $53.2 million in net income, or $0.55 per share.

"The lack of an early winter and continuing high levels of natural gas storage put downward pressure on natural gas prices. Lower gas prices along with reduced oil production due to the sale of assets in the third quarter of 2006 reduced the comparative revenue," said Dan O. Dinges, Chairman, President and Chief Executive Officer.

The Company's average realized natural gas price for the quarter was $7.42 per Mcf, versus $8.22 per Mcf recorded in the first quarter of 2006. Oil realizations were down by nearly 13 percent in comparable first quarter periods, reporting $53.36 per barrel for the 2007 first quarter.

"Our organic drilling program has been very successful in increasing our production," stated Dinges. "We have almost overcome our loss of production from our third quarter 2006 asset sale; our production in the first quarter of 2007 was 21.0 Bcfe versus 21.3 Bcfe in the first quarter of 2006. When you look at the production for our 'going forward' assets, this year's first quarter equivalent production was 21.0 Bcfe versus last year's pro forma first quarter level of 16.8 Bcfe, or 25 percent higher this year over last." Dinges added, "Our efforts to ramp up our drilling program, which aided in this increased production, benefited from the milder winter, as we drilled 100 wells in the first quarter of 2007 with a 99 percent success rate. This well count was 41 percent above the comparable period last year and more successful."

Lower prices also led to lower cash flow levels, as the Company reported discretionary cash flow of $106.7 million, compared to $117.9 million last year. For operating cash flow, the 2007 first quarter number was $135.9 million, compared to 2006 at $155.0 million.

Expenses in total were lower with improvements in exploration, other taxes and interest expense more than offsetting higher levels for depreciation, depletion and amortization, general and administrative and stock compensation expense.

"While I would like to set earnings records quarter after quarter, clearly this pricing environment, while it is still very good, made it difficult to improve year-over-year," commented Dinges. "My excitement comes not from book earnings, but from the program expansion, increased drilling success and our increase in production."

Conference Call

Listen in live to Cabot Oil & Gas Corporation's first quarter financial and operating results discussion with financial analysts on Tuesday, May 1, at 9:30 a.m. EDT (8:30 a.m. 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 4857770. A replay will be available through Thursday, May 3, 2007. 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, with the Rocky Mountains and Mid- Continent; the East and in Canada. For additional information, visit the Company's Internet homepage at 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,
                                                      2007            2006
    PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
    Natural Gas
      East                                             5.8             5.8
      Gulf Coast                                       6.5             7.2
      West                                             6.4             5.4
      Canada                                           1.1             0.5
      Total                                           19.8            18.9
        Less:  Production from properties sold
         in 2006 (1)                                    --            (3.0)
      Adjusted Total                                  19.8            15.9

    Crude/Condensate/Ngl
      East                                               6               7
      Gulf Coast                                       148             333
      West                                              47              56
      Canada                                             6               4
      Total                                            207             400
        Less:  Production from properties sold
         in 2006 (1)                                    --            (250)
      Adjusted Total                                   207             150


    Equivalent Production (Bcfe)                      21.0            21.3
        Less:  Production from properties
         sold in 2006 (1)                               --            (4.5)
      Adjusted Equivalent Production (Bcfe)           21.0            16.8

    PRICES
    Average Produced Gas Sales
      Price ($/Mcf)
      East                                           $8.08           $9.31
      Gulf Coast                                     $7.75           $8.21
      West                                           $6.51           $7.08
      Canada                                         $7.46           $8.12
      Total (2)                                      $7.42           $8.22

    Crude/Condensate Price ($/Bbl)
      East                                          $53.49          $59.15
      Gulf Coast                                    $53.07          $61.36
      West                                          $54.17          $60.64
      Canada                                        $54.44          $48.67
      Total (2)                                     $53.36          $61.11

    WELLS DRILLED
      Gross                                            100              71
      Net                                               92              57
      Gross Success Rate                                99%             97%


    (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.



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

                                                         Quarter Ended
                                                           March 31,
                                                    2007               2006
    Operating Revenues
       Natural Gas Production                     $146,750           $155,167
       Brokered Natural Gas                         33,177             32,819
       Crude Oil and Condensate                     10,942             24,180
       Other                                           704              2,602
                                                   191,573            214,768
    Operating Expenses
       Brokered Natural Gas Cost                    28,699             29,245
       Direct Operations - Field and
       Pipeline                                     17,131             17,630
       Exploration                                   5,652             11,614
       Depreciation, Depletion and Amortization     37,381             35,515
       General and Administrative
        (excluding Stock-Based Compensation)        11,645              9,366
       Stock-Based Compensation (1)                  6,635              4,886
       Taxes Other Than Income                      13,165             15,495
                                                   120,308            123,751
    Gain on Sale of Assets (2)                       7,920                207
    Income from Operations                          79,185             91,224
    Interest Expense and Other                       3,924              6,150
    Income Before Income Taxes                      75,261             85,074
    Income Tax Expense                              26,714             31,909
    Net Income                                     $48,547            $53,165
    Net Earnings Per Share - Basic                   $0.50              $0.55
    Weighted Average Common Shares Outstanding      96,695             97,360

     (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)

                                                  March 31,       December 31,
                                                    2007              2006
       Assets
       Current Assets                             $219,519           $315,682
       Property, Equipment and Other
        Assets                                   1,589,967          1,487,897
       Deferred Income Taxes                        33,871             30,912
          Total Assets                          $1,843,357         $1,834,491

       Liabilities and Stockholders'
        Equity
       Current Liabilities                        $217,110           $251,027
       Long-Term Debt, excluding Current
        Maturities                                 210,000            220,000
       Deferred Income Taxes                       367,387            347,430
       Other Liabilities                            82,967             70,836
       Stockholders' Equity                        965,893            945,198
          Total Liabilities and
           Stockholders' Equity                 $1,843,357         $1,834,491


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

                                                           Quarter Ended
                                                             March 31,
                                                     2007               2006
    Cash Flows From Operating Activities
      Net Income                                   $48,547            $53,165
      Income Charges Not Requiring Cash             44,551             40,385
      Gain on Sale of Assets                        (7,920)              (207)
      Deferred Income Tax Expense                   15,874             12,893
      Changes in Assets and Liabilities             33,289             40,111
      Stock-Based Compensation Tax Benefit          (4,135)            (2,952)
      Exploration Expense                            5,652             11,614
      Net Cash Provided by Operations              135,858            155,009

    Cash Flows From Investing Activities
      Capital Expenditures                        (113,748)          (103,116)
      Proceeds from Sale of Assets                   5,784                541
      Exploration Expense                           (5,652)           (11,614)
      Net Cash Used in Investing                  (113,616)          (114,189)

    Cash Flows From Financing Activities
      Sale of Common Stock Proceeds                  1,144              1,062
      Net Decrease in Debt                         (10,000)           (45,000)
      Stock-Based Compensation Tax Benefit           4,135              2,952
      Dividends Paid                                (1,933)            (1,946)
      Net Cash Used In Financing                    (6,654)           (42,932)

    Net Increase / (Decrease) in Cash and
     Cash Equivalents                              $15,588            $(2,112)



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

                                                         Quarter Ended
                                                            March 31,
                                                     2007               2006
    As Reported - Net Income                       $48,547            $53,165
    Reversal of Selected Items, Net of Tax:
         Gain on Sale of Assets                     (4,926)              (128)
    Net Income Excluding Selected Items            $43,621            $53,037
    As Reported - Net Earnings Per Share             $0.50              $0.55
    Per Share Impact of Reversing Selected Items     (0.05)             (0.01)
    Net Earnings Per Share Including Reversal
      of Selected Items                              $0.45              $0.54
    Weighted Average Common Shares Outstanding      96,695             97,360


                     Discretionary Cash Flow Calculation
                              and Reconciliation
                                (In thousands)
                                                         Quarter Ended
                                                           March 31,
                                                     2007               2006
    Discretionary Cash Flow
    As Reported - Net Income                       $48,547            $53,165
    Plus / (Less):
    Income Charges Not Requiring Cash               44,551             40,385
    Gain on Sale of Assets                          (7,920)              (207)
    Deferred Income Tax Expense                     15,874             12,893
    Exploration Expense                              5,652             11,614
    Discretionary Cash Flow                        106,704            117,850
    Changes in Assets and Liabilities               33,289             40,111
    Stock-Based Compensation Tax Benefit            (4,135)            (2,952)
    Net Cash Provided by Operations               $135,858           $155,009


                           Net Debt Reconciliation
                                (In thousands)

                                                   March 31,      December 31,
                                                     2007             2006

    Current Portion of Long-Term Debt              $20,000            $20,000
    Long-Term Debt                                 210,000            220,000
       Total Debt                                 $230,000           $240,000
    Stockholders' Equity                           965,893            945,198
       Total Capitalization                     $1,195,893         $1,185,198

    Total Debt                                    $230,000           $240,000
    Less:  Cash and Cash Equivalents               (57,442)           (41,854)
       Net Debt                                   $172,558           $198,146

    Net Debt                                      $172,558           $198,146
    Stockholders' Equity                           965,893            945,198
       Total Adjusted Capitalization            $1,138,451         $1,143,344

    Total Debt to Total Capitalization Ratio          19.2%              20.2%
    Less:  Impact of Cash and Cash Equivalents         4.0%               2.9%
       Net Debt to Adjusted Capitalization Ratio      15.2%              17.3%

CONTACT: Scott Schroeder
281-589-4993
Cabot Oil & Gas Corporation
Web site: http://www.cabotog.com
SOURCE Cabot Oil & Gas Corporation