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Cabot Oil & Gas Reports Record First Quarter Results
May 4, 2006

HOUSTON, May 4 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced first quarter 2006 net income of $53.2 million or $1.09 per share, a 156 percent increase over prior year first quarter net income of $20.8 million or $0.43 per share, and 36 percent above the previous first quarter record set in 2001. The cash flow comparisons between periods also provide new first quarter highs with operating cash flow totaling $155 million, and discretionary cash flow totaling $117.9 million, compared to first quarter 2005 results of $108.0 million and $82.7 million, respectively.

The Company's average natural gas sales price for the quarter was $8.22 per Mcf versus $5.71 per Mcf in the comparable quarter last year, while the average price for oil, between comparable first quarters, was $61.11 per barrel versus $42.11 per barrel. Dan O. Dinges, Cabot's Chairman, President and Chief Executive Officer said, "As a result of 2005 hedges expiring and a 2006 hedge position focused on wide collars that allow downside protection and upside participation -- our overall realizations improved dramatically."

"Production for the quarter was slightly higher than the comparable quarter last year (21.3 Bcfe compared to 21.1 Bcfe) as new wells came on line in late March," added Dinges. "Cabot ended the quarter producing 257.5 Mmcfe per day with all regions exceeding their budgeted production targets as we entered the second quarter of 2006."

Contributing to the higher production has been a strong drilling success rate, which for the first quarter was 97 percent, compared to 86 percent in the first quarter of last year. "Encouraged by our recent drilling success and an acreage acquisition focus, Cabot has increased its capital spending program by approximately $40 million for 2006 bringing the total to about $435 million," stated Dinges.

Expenses increased in aggregate due to cost pressures, stock compensation (resulting from the adoption of SFAS 123R) and higher other taxes driven by commodity prices. "Despite the overall increase there was a 40 percent decline in exploration expense driven by the changing risk profile of our drilling program," added Dinges. "I am also pleased to report that Cabot's balance sheet remains strong as the Company repaid $45 million of debt during the first quarter bringing our debt to capitalization ratio to 30 percent."

Conference Call

Listen in live to Cabot Oil & Gas Corporation's 2006 first quarter financial and operating results discussion with financial analysts on Thursday, May 4, at 4:00pm EDT (3:00pm 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 8219265. A replay will be available through Thursday, May 11, 2006. 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 an expansion effort in 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 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,
                                                 2006           2005
    PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
    Natural Gas
      Gulf Coast                                  7.2            7.4
      West                                        5.4            5.7
      East                                        5.8            5.1
      Canada                                      0.5            0.2
      Total                                      18.9           18.4

    Crude/Condensate/Ngl
      Gulf Coast                                  333            406
      West                                         56             37
      East                                          7              5
      Canada                                        4              4
      Total                                       400            452

    Equivalent Production
     (Bcfe)                                      21.3           21.1

    PRICES
    Average Produced Gas Sales Price
     ($/Mcf)
      Gulf Coast                                $8.21          $6.03
      West                                      $7.08          $4.73
      East                                      $9.31          $6.35
      Canada                                    $8.12          $5.57
      Total (1)                                 $8.22          $5.71

    Crude/Condensate Price ($/Bbl)
      Gulf Coast                               $61.36         $41.50
      West                                     $60.64         $48.57
      East                                     $59.15         $48.06
      Canada                                   $48.67         $38.64
      Total (1)                                $61.11         $42.11

    WELLS DRILLED
      Gross                                        71             44
      Net                                          57             28
      Gross Success Rate                           97%            86%

    (1) These realized prices include the realized impact of derivative
        instruments.



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

                                                    Quarter Ended
                                                      March 31,
                                                2006             2005
    Operating Revenues
      Natural Gas Production (1)             $155,167         $104,272
      Brokered Natural Gas                     32,819           26,492
      Crude Oil and Condensate (1)             24,180           11,978
      Other                                     2,602            1,332
                                              214,768          144,074
    Operating Expenses
      Brokered Natural Gas Cost                29,245           23,298
      Direct Operations - Field and
       Pipeline                                17,630           14,618
      Exploration                              11,614           19,369
      Depreciation, Depletion and
       Amortization                            35,515           30,067
      General and Administrative
       (excluding Stock-Based
       Compensation)                            9,366            7,925
      Stock-Based Compensation (2)              4,483            1,035
      Taxes Other Than Income                  15,495            9,718
                                              123,348          106,030
    Gain on Sale of Assets                        207               --
    Income from Operations                     91,627           38,044
    Interest Expense and Other                  6,150            4,988
    Income Before Income Taxes                 85,477           33,056
    Income Tax Expense                         31,909           12,294
    Net Income Before Cumulative
     Effect of Accounting Change               53,568           20,762
    Cumulative Effect of Accounting
     Change, Net of Tax (3)                      (403)              --
    Net Income                                $53,165          $20,762
    Net Earnings Per Share - Basic              $1.09            $0.43
    Weighted Average Common Shares
     Outstanding                               48,680           48,724

    (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.
        In addition, the 2006 figure includes expense related to stock
        options and stock appreciation rights following the
        adoption of SFAS 123R.
    (3) Cumulative effect of accounting change relates to the adoption of
        SFAS No. 123(R), "Share Based Payment (revised 2004)."



               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In thousands)

                                             March 31,       December 31,
                                               2006               2005
    Assets
    Current Assets                           $164,353           $230,312
    Property, Equipment and Other
     Assets                                 1,318,435          1,245,471
    Deferred Income Taxes                      23,843             19,587
       Total Assets                        $1,506,631         $1,495,370

    Liabilities and Stockholders'
     Equity
    Current Liabilities                      $178,807           $218,584
    Long-Term Debt                            275,000            320,000
    Deferred Income Taxes                     306,125            289,381
    Other Liabilities                          70,962             67,194
    Stockholders' Equity                      675,737            600,211
       Total Liabilities and
       Stockholders' Equity                $1,506,631         $1,495,370



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

                                                     Quarter Ended
                                                        March 31,
                                                 2006              2005
    Cash Flows From Operating Activities
    Net Income                                 $53,165           $20,762
    Cumulative Effect of Accounting
     Change                                        403                --
    Unrealized Loss on Derivatives                  --             7,512
    Income Charges Not Requiring
     Cash                                       39,982            31,990
    Gain on Sale of Assets                        (207)               --
    Deferred Income Tax Expense                 12,893             3,022
    Changes in Assets and
     Liabilities                                40,111            25,362
    Stock-Based Compensation Tax
     Benefit                                    (2,952)               --
    Exploration Expense                         11,614            19,369
    Net Cash Provided by Operations            155,009           108,017

    Cash Flows From Investing
     Activities
    Capital Expenditures                      (103,116)          (41,070)
    Proceeds from Sale of Assets                   541               588
    Exploration Expense                        (11,614)          (19,369)
    Net Cash Used by Investing                (114,189)          (59,851)

    Cash Flows From Financing
     Activities
    Sale of Common Stock Proceeds                1,062             2,731
    Net Decrease in Debt                       (45,000)               --
    Stock-Based Compensation Tax
     Benefit                                     2,952                --
    Dividends Paid                              (1,946)           (1,339)
    Net Cash (Used) / Provided by
     Financing                                 (42,932)            1,392

    Net (Decrease) / Increase in
     Cash and Cash Equivalents                 $(2,112)          $49,558



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

                                                   Quarter Ended
                                                      March 31,
                                                2006             2005

    As Reported - Net Income                   $53,165          $20,762
    Reversal of Selected Items, Net
     of Tax:
      Gain on Sale of Assets                      (128)              --
      Unrealized Loss on Derivatives                --            4,647
       Cumulative Effect of
        Accounting Change                          403               --
    Net Income Including Reversal of
     Selected Items                            $53,440          $25,409
    As Reported - Net Earnings Per
     Share                                       $1.09            $0.43
    Per Share Impact of Reversing
     Selected Items                               0.01             0.09
    Net Earnings Per Share Including
     Reversal of Selected Items                  $1.10            $0.52
    Weighted Average Common Shares
     Outstanding                                48,680           48,724



            Discretionary Cash Flow Calculation and Reconciliation
                                (In thousands)

                                                    Quarter Ended
                                                      March 31,
                                                2006             2005
    Discretionary Cash Flow
    As Reported - Net Income                   $53,165          $20,762
    Plus:
    Cumulative Effect of Accounting
     Change                                        403               --
    Unrealized Loss on Derivatives                  --            7,512
    Income Charges Not Requiring Cash           39,982           31,990
    Gain on Sale of Assets                        (207)              --
    Deferred Income Tax Expense                 12,893            3,022
    Exploration Expense                         11,614           19,369
    Discretionary Cash Flow                    117,850           82,655
    Plus:  Changes in Assets and
     Liabilities                                40,111           25,362
    Plus:  Stock-Based Compensation
     Tax Benefit                                (2,952)              --
    Net Cash Provided by Operations           $155,009         $108,017



                           Net Debt Reconciliation
                                (In thousands)

                                              March 31,       December 31,
                                                2006              2005

    Current Portion of Long-Term Debt          $20,000           $20,000
    Long-Term Debt                             275,000           320,000
       Total Debt                             $295,000          $340,000
    Stockholders' Equity                       675,737           600,211
       Total Capitalization                   $970,737          $940,211

    Total Debt                                $295,000          $340,000
    Less: Cash and Cash Equivalents             (8,514)          (10,626)
       Net Debt                               $286,486          $329,374

    Net Debt                                  $286,486          $329,374
    Stockholders' Equity                       675,737           600,211
       Total Adjusted Capitalization          $962,223          $929,585

    Total Debt to Total Capitalization
     Ratio                                        30.4%             36.2%
    Less:  Impact of Cash and Cash
     Equivalents                                   0.6%              0.8%
       Net Debt to Adjusted
        Capitalization Ratio                      29.8%             35.4%



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

                                                      Quarter Ended
                                                        March 31,
                                                  2006             2005
    Unrealized Loss on Derivatives (1)
       Natural Gas                                 $--             $(560)
       Crude Oil                                    --            (6,952)

    Incentive Stock Compensation
     Expense (2)                                (5,132)           (1,035)
    Mark-to-Market Impact, Before
     Income Tax                                $(5,132)          $(8,547)
    Mark-to-Market Impact, Income Tax            1,949             3,260
    Mark-to-Market Impact on Net Income        $(3,183)          $(5,287)

    (1) These amounts represent the unrealized 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 or subtracting the gain from the respective
        Operating Revenues line item and dividing by reported production.

    (2) See Company's Form 10-Q and Form 10-K for descriptions of incentive
        stock compensation awards.

SOURCE Cabot Oil & Gas Corporation
05/04/2006

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

3577 05/04/2006 13:00 EDT http://www.prnewswire.com