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Cabot Oil & Gas Reports Highest Second Quarter
Jul 22, 1998

HOUSTON, July 22 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced second quarter results which exceeded last year's record level, marking the tenth consecutive quarter of profits. Net income available to common shareholders rose 17% to $2.3 million compared to $2.0 million last year. Earnings per share for both periods totaled $.09. Discretionary cash flow increased to $19.8 million, or $.80 per share, from $17.7 million, or $.77 per share, in last year's second quarter.

Driving the increase in results versus last year was a 4% increase in quarterly production plus an 8% increase in realized natural gas prices and the reduction in preferred dividends. These were partially offset by lower oil revenue due to the depressed price environment and higher general & administrative expenses. G&A increases were primarily the result of one-time charges associated with the CEO's retirement, the CFO's resignation and a Vice President's untimely death, along with compensation programs instituted in 1997 (mostly non-cash), designed to retain key employees.

Ray R. Seegmiller, President and CEO stated, "Contrary to the market's popular belief, the natural gas segment of the energy business experienced very good fundamentals during the quarter and remember, our reserves are 96% natural gas with a 13.9 year reserve life. Specifically, realized prices were higher than the last four second quarters (1994 - 1997); summer heat hit early and has stayed while concerns over supply have remained. As a result, we have just experienced the best second quarter in our history as a public company." Seegmiller added, "These fundamentals still exist as we start the third quarter."

Drilling activity for the quarter totaled 51 gross wells with an 88% success rate bringing the year-to-date levels to 84 wells at an 86% success rate. Seegmiller commented, "Because of the outlook for gas prices, our continuing high success rates and the potential for acquisitions in our core areas, we have not made significant changes to our level of 1998 capital spending. We will take advantage of opportunities like the UPR joint venture in South Louisiana (announced in March) and a recent purchase of 9.3 Bcfe of proved reserves in the Mid-Continent." Seegmiller went on to point out that, "as a result of the decline in oil prices, we will also benefit from lower prices being quoted for drilling and service equipment."

Six Month Results

While the second quarter marked the 10th consecutive quarter of profits and compared favorably to 1997, the year-to-date figures fell short of last year due to the strong natural gas prices that occurred in the first quarter of 1997. Net income available to common shareholders for the six months ended June 30 totaled $5.3 million, or $.21 per share, compared to $11.6 million, or $.51 per share, in last year's first six months. Discretionary cash flow was $39.3 million, or $1.59 per share, in the current year versus $48.7 million, or $2.13 per share, for the first half of 1997.

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 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          Six Months Ended
                                         June 30,                 June 30,
                                    1998        1997        1998         1997

    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
     Appalachia                      5.6         6.7        10.7         13.4
     West                            7.6         7.0        15.1         13.8
     Gulf Coast                      3.4         2.3         6.3          3.9
     Total                          16.6        16.0        32.1         31.1

    Crude/Condensate                 141         153         297          295

    Natural Gas Liquids               29          13          55           26

    Equivalent Production (Bcfe)    17.6        17.0        34.2         33.0

    PRICES
    Average Produced Gas Sales
     Price ($/Mcf)
      Appalachia                  $ 2.60      $ 2.38      $ 2.68       $ 3.04
      West                        $ 1.96      $ 1.81      $ 1.95       $ 2.21
      Gulf Coast                  $ 2.29      $ 2.05      $ 2.27       $ 2.37
      Total                       $ 2.24      $ 2.08      $ 2.26       $ 2.59

    Crude/Condensate
     Price ($/Bbl)                $13.55      $19.24      $14.30       $20.85

    WELLS DRILLED
     Gross                            51          71          84          102
     Net                            36.3        55.9        59.9         73.5
     Gross Success Rate               88%         89%         86%          88%

          CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                   (In Thousands, Except Per Share Amounts)

                                      Quarter Ended          Six Months Ended
                                         June 30,                 June 30,
                                    1998        1997        1998          1997

    Net Operating Revenues
     Natural Gas Production      $37,252     $33,301     $72,423       $80,486
     Crude Oil and Condensate      1,911       2,946       4,248         6,150
     Brokered Natural Gas Margin   1,143         932       2,536         1,429
     Other                         1,361       2,228       3,251         4,134
                                  41,667      39,407      82,458        92,199
    Operating Expenses
     Operations                    7,532       7,364      14,497        14,433
     Exploration                   2,978       3,281       6,379         6,907
     Taxes Other Than Income       4,036       3,485       7,834         7,567
     Administrative (A)            5,824       4,700      11,325         8,856
     Depreciation, Depletion
      and Amortization            11,426      10,831      21,889        22,058
                                  31,796      29,661      61,924        59,821

    Gain on Sale of Assets             5         267          57           350
    Income from Operations         9,876      10,013      20,591        32,728
    Interest Expense               4,579       4,358       8,834         8,919
    Income Before Income Taxes     5,297       5,655      11,757        23,809
    Income Tax Expense             2,163       2,309       4,780         9,378
    Net Income                     3,134       3,346       6,977        14,431
    Dividend Requirement on
     Preferred Stock                 851       1,391       1,701         2,783
    Net Income Applicable
     to Common                    $2,283      $1,955      $5,276       $11,648
    Net Income Per Common
     Share - Basic (B)            $ 0.09      $ 0.09      $ 0.21       $  0.51
    Average Common Shares
     Outstanding                  24,828      22,870      24,756        22,863

    (A) Increase over 1997 Administrative expense is largely due to:
        (1) staffing increases in the third and fourth quarters of 1997
            ($0.1 million in quarter, $0.4 million YTD),
        (2) non-cash stock compensation from stock awards in the second
            quarter of 1997 ($0.1 million in quarter, $0.4 million YTD),
        (3) certain executive retirement and severence packages accrued in
            1998 ($0.5 million in quarter, $0.9 million YTD) and
        (4) relocation and other travel expenses ($0.1 million in quarter,
            $0.3 million YTD).

    (B) Basic earnings per share as defined in Statement of Financial
        Accounting Standards No. 128.


               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In Thousands)

                                                June 30,          Dec. 31,
                                                  1998              1997
    Assets
    Current Assets                             $ 60,363          $ 70,533
    Property, Equipment and Other Assets        517,959           471,272
     Total Assets                              $578,322          $541,805
    Liabilities and Stockholders' Equity
    Current Liabilities                        $ 80,986          $ 85,872
    Long-Term Debt                              214,000           183,000
    Deferred Income Taxes                        84,685            80,108
    Other Liabilities                             7,886             8,763
    Stockholders' Equity                        190,765           184,062
     Total Liabilities and
      Stockholders' Equity                     $578,322          $541,805


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

                                      Quarter Ended           Six Months Ended
                                         June 30,                  June 30,
                                     1998        1997        1998        1997

    Cash Flows From Operating Activities
    Net Income                     $3,134      $3,346      $6,977     $14,431
    Income Charges Not
     Requiring Cash                12,213      10,814      23,113      21,991
    Deferred Income Taxes           2,289       1,628       4,577       8,183
    Changes in Assets and
     Liabilities, Net              (3,088)       (284)      5,432      14,694
    Exploration Expense             2,978       3,281       6,379       6,907
    Net Cash Provided by
     Operations                    17,526      18,785      46,478      66,206

    Cash Flows From Investing Activities
    Capital Expenditures          (36,727)    (20,223)    (68,111)    (31,805)
    Proceeds from Sale of Assets      159         480         669         783
    Exploration Expense            (2,978)     (3,281)     (6,379)     (6,907)
    Net Cash Used by Investing    (39,546)    (23,024)    (73,821)    (37,929)

    Cash Flows From Financing Activities
    Sale of Common Stock            1,238         165       2,134         410
    Increase (Decrease) in Debt    23,000       1,000      31,000     (25,000)
    Preferred Dividends              (851)     (1,391)     (1,701)     (2,783)
    Common Dividends and Other, Net  (994)       (915)     (1,981)     (1,829)
    Net Cash Provided (Used)
     by Financing                  22,393      (1,141)     29,452     (29,202)

    Net Increase (Decrease) in Cash and
     Cash Equivalents             $   373     $(5,380)    $ 2,109     $  (925)

    Discretionary Cash Flow (B)   $19,763     $17,678     $39,345     $48,729

    (B) Net income plus non-cash charges and exploration less preferred
        dividends.  Excludes net proceeds on property sales.

SOURCE Cabot Oil & Gas Corporation
Web site: http: //www.cabotog.com
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993
Company News On-Call: http: //www.prnewswire.com or fax, 800-758-5804, ext. 129660