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Cabot Oil & Gas Reports Record Second Quarter Profits
Jul 24, 2008

HOUSTON, July 24 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) announced today that on the strength of significantly higher commodity prices and increased production, the Company reported its highest second quarter earnings of $54.6 million, or $0.55 per share. After removing certain selected items related to the gain on sale of assets, stock compensation and unrealized loss on derivatives (see Selected Item Review and Reconciliation of Net Income and Earnings Per Share), the net income figure is $69.9 million, or $0.71 per share, as compared to last year's figures of $41.2 million, or $0.42 per share. The as-reported profit for the second quarter of 2007 was $41.4 million, or $0.43 per share.

During the quarter, the Company recorded cash flow from operations of $143.7 million and discretionary cash flow of $147.1 million, also records for any second quarter period. These results compare to $105.9 million and $112.5 million for cash flow from operations and discretionary cash flow, respectively, in the second quarter of 2007.

"The continued strength in the commodity prices led the significant improvement in results from 2007 to 2008 second quarter," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "This combined with our 9.6 percent increase in production made for the unprecedented quarter." Natural gas price realizations improved 28.5 percent, while oil price realizations grew 59.2 percent between second quarter comparable periods.

Equivalent production of 23.2 Bcfe, or 255 Mmcfe per day, fell within guidance (of 250 to 259 Mmcfe per day), and is comparable to last year's 21.2 Bcfe. "While solidly within guidance, our re-direct of personnel and equipment in the East towards Marcellus activity and new initiatives focused on evaluation of deeper objectives in several of our East Texas fields have limited the acceleration of our growth for the short term," stated Dinges. "We have 22 rigs drilling throughout the company with six rigs focused on new initiatives. We expect to collect new data from several key wells very soon." Expenses in every category grew, with the largest increases occurring in stock compensation expense, as a result of the appreciation in the Company's stock price and DD&A expense in response to industry inflationary pressures.

Year to Date

In the six months ended June 30, 2008, Cabot reported net income of $100.6 million, or $1.03 per share, compared to $89.9 million or $0.93 per share last year. The cash flow comparisons included cash flow from operations of $276.4 million in 2008 versus $241.8 million in 2007, while discretionary cash flow was $285.5 million in 2008, compared to $219.3 million in 2007. "The respective 2008 numbers for the six-month period all created new high water marks for the first half of the year, primarily the result of increased prices and production," added Dinges.

Other News

Cabot has completed its equity offering and the long-term debt portion of the funding for its pending acquisition. "Our expectation remains to close the acquisition in the middle of August," said Dinges.

Conference Call

Listen in live to Cabot Oil & Gas Corporation's second quarter financial and operating results discussion with financial analysts on Friday, July 25, 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 53829875. The replay will be available through Sunday, July 27, 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            Six Months Ended
                                      June 30,                  June 30,
                                  2008         2007         2008         2007
    PRODUCED NATURAL
     GAS (Bcf) & OIL (MBbl)
    Natural Gas
      East                         5.9          6.2         11.9         12.0
      Gulf Coast                   7.7          6.4         15.1         12.9
      West                         7.1          6.4         13.5         12.8
      Canada                       1.4          0.9          2.6          2.0
      Total                       22.1         19.9         43.1         39.7

    Crude/Condensate/Ngl
      East                           6            7           12           13
      Gulf Coast                   136          161          280          309
      West                          43           43           79           90
      Canada                         5            4           11           10
      Total                        190          215          382          422

    Equivalent Production (Bcfe)  23.2         21.2         45.4         42.2


    PRICES
    Average Produced Gas
     Sales Price ($/Mcf)
      East                       $9.64        $7.86        $8.96        $7.97
      Gulf Coast                $10.36        $8.27        $9.35        $8.01
      West                       $8.04        $6.02        $7.67        $6.26
      Canada                     $8.41        $4.25        $7.91        $5.97
      Total (1)                  $9.30        $7.24        $8.63        $7.33

    Average Crude/Condensate
     Price ($/Bbl)
      East                     $118.33       $59.41      $103.89       $56.60
      Gulf Coast                $91.87       $62.28       $88.11       $57.85
      West                     $118.18       $62.76      $108.12       $58.33
      Canada                    $96.89       $48.51       $87.26       $51.77
      Total (1)                 $98.68       $61.98       $92.58       $57.76

    WELLS DRILLED
      Gross                        116          122          201          222
      Net                           97          111          162          203
      Gross Success Rate            99%          98%          99%          98%

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

                                    Quarter Ended            Six Months Ended
                                      June 30,                  June 30,
                                  2008         2007         2008         2007
    Realized Impacts to
     Gas Pricing                $(0.97)       $0.66       $(0.48)       $0.77
    Realized Impacts to
     Oil Pricing               $(21.19)         $-       $(14.88)       $0.43



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

                                          Quarter Ended      Six Months Ended
                                             June 30,            June 30,
                                          2008      2007      2008      2007
       Operating Revenues
         Natural Gas Production        $202,689  $144,128  $369,248  $290,878
         Brokered Natural Gas            27,188    18,001    62,808    51,178
         Crude Oil and Condensate        18,600    13,263    35,087    24,205
         Other                              377       440     1,362     1,144
                                        248,854   175,832   468,505   367,405
       Operating Expenses
         Brokered Natural Gas Cost       24,140    16,051    54,430    44,750
         Direct Operations - Field and
          Pipeline                       22,636    19,004    40,127    36,135
         Exploration                      7,290     6,825    12,351    12,477
         Depreciation, Depletion and
          Amortization                   48,401    40,585    94,668    77,966
         General and Administrative
          (excluding Stock-Based
          Compensation)                  11,782     8,904    21,779    20,549
         Stock-Based Compensation (1)    21,695     4,061    39,271    10,696
         Taxes Other Than Income         19,225    14,579    36,122    27,744
                                        155,169   110,009   298,748   230,317
       Gain on Sale of Assets (2)           401     4,422       401    12,342
       Income from Operations            94,086    70,245   170,158   149,430
       Interest Expense and Other         6,207     3,619    12,198     7,543
       Income Before Income Taxes        87,879    66,626   157,960   141,887
       Income Tax Expense                33,254    25,250    57,360    51,964
       Net Income                       $54,625   $41,376  $100,600   $89,923
       Net Earnings Per Share - Basic     $0.55     $0.43     $1.03     $0.93
       Weighted Average Common Shares
        Outstanding                      98,467    96,929    98,092    96,813

    (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 post-closing
        transactions associated with the sale in the third quarter of 2006 of
        offshore and certain south Louisiana properties.



                  CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                    (In thousands)

                                                 June 30,         December 31,
                                                   2008               2007
        Assets
        Current Assets                           $436,758           $221,413
        Property, Equipment and Other Assets    2,203,088          1,939,334
        Deferred Income Taxes                      78,586             47,847
           Total Assets                        $2,718,432         $2,208,594

        Liabilities and Stockholders' Equity
        Current Liabilities                      $475,254           $252,266
        Long-Term Debt, excluding Current
         Maturities                               245,000            330,000
        Deferred Income Taxes                     542,214            481,770
        Other Liabilities                         156,659             74,301
        Stockholders' Equity                    1,299,305          1,070,257
           Total Liabilities and Stockholders'
            Equity                             $2,718,432         $2,208,594




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

                                          Quarter Ended      Six Months Ended
                                             June 30,            June 30,
                                          2008      2007      2008      2007
    Cash Flows From Operating Activities
    Net Income                          $54,625   $41,376  $100,600   $89,923
    Unrealized Loss on Derivatives        2,909       -       2,909       -
    Income Charges Not Requiring Cash    50,692    45,032   114,498    89,583
    Gain on Sale of Assets                 (401)   (4,422)     (401)  (12,342)
    Deferred Income Tax Expense          31,955    23,738    55,515    39,612
    Changes in Assets and Liabilities    (8,005)   (4,689)   (9,061)   28,600
    Stock-Based Compensation Tax Benefit  4,642    (1,911)      -      (6,046)
    Exploration Expense                   7,290     6,825    12,351    12,477
    Net Cash Provided by Operations     143,707   105,949   276,411   241,807

    Cash Flows From Investing Activities
    Capital Expenditures               (244,510) (158,183) (372,611) (271,931)
    Proceeds from Sale of Assets          1,150        41     1,150     5,825
    Exploration Expense                  (7,290)   (6,825)  (12,351)  (12,477)
    Net Cash Used in Investing         (250,650) (164,967) (383,812) (278,583)

    Cash Flows From Financing Activities
    Sale of Common Stock Proceeds       313,867     1,163   316,107     2,307
    Net Increase / (Decrease) in Debt  (105,000)   25,000   (85,000)   15,000
    Stock-Based Compensation Tax
     Benefit                             (4,642)    1,911       -       6,046
    Dividends Paid                       (2,943)   (2,907)   (5,873)   (4,840)
    Net Cash Provided by Financing      201,282    25,167   225,234    18,513

    Net Increase / (Decrease) in Cash
     and Cash Equivalents               $94,339  $(33,851) $117,833  $(18,263)



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

                                          Quarter Ended    Six Months Ended
                                             June 30,          June 30,
                                          2008     2007      2008     2007
         As Reported - Net Income        $54,625  $41,376  $100,600  $89,923
         Reversal of Selected Items, Net
          of Tax:
              Gain on Sale of Assets        (253)  (2,750)     (253)  (7,677)
              Stock-Based Compensation
               Expense                    13,668    2,526    24,723    6,653
              Unrealized Loss on
               Derivatives (1)             1,833      -       1,833      -
         Net Income Excluding Selected
          Items                          $69,873  $41,152  $126,903  $88,899
         As Reported - Net Earnings Per
          Share                            $0.55    $0.43     $1.03    $0.93
         Per Share Impact of Reversing
          Selected Items                    0.16    (0.01)     0.26    (0.01)
         Net Earnings Per Share Including
           Reversal of Selected Items      $0.71    $0.42     $1.29    $0.92
         Weighted Average Common Shares
          Outstanding                     98,467   96,929    98,092   96,813

        (1) This unrealized loss is included in Natural Gas Production
            Revenues in the Condensed Consolidated Statement of Operations
            and represents the mark to market change related to a portion of a
            derivative not designated as a hedge.



               Discretionary Cash Flow Calculation and Reconciliation
                                   (In thousands)

                                         Quarter Ended      Six Months Ended
                                            June 30,             June 30,
                                        2008        2007      2008      2007
         Discretionary Cash Flow
         As Reported - Net Income     $54,625     $41,376  $100,600   $89,923
         Plus / (Less):
         Unrealized Loss on
          Derivatives                   2,909         -       2,909       -
         Income Charges Not
          Requiring Cash               50,692      45,032   114,498    89,583
         Gain on Sale of Assets          (401)     (4,422)     (401)  (12,342)
         Deferred Income Tax
          Expense                      31,955      23,738    55,515    39,612
         Exploration Expense            7,290       6,825    12,351    12,477
         Discretionary Cash Flow      147,070     112,549   285,472   219,253
         Changes in Assets and
          Liabilities                  (8,005)     (4,689)   (9,061)   28,600
         Stock-Based Compensation
          Tax Benefit                   4,642      (1,911)      -      (6,046)
         Net Cash Provided by
          Operations                 $143,707    $105,949  $276,411  $241,807


                           Net Debt Reconciliation
                                (In thousands)

                                     June 30,  December 31,
                                       2008        2007
         Current Portion of
          Long-Term Debt              $20,000     $20,000
         Long-Term Debt               245,000     330,000
              Total Debt             $265,000    $350,000
         Stockholders' Equity       1,299,305   1,070,257
              Total Capitalization $1,564,305  $1,420,257

         Total Debt                  $265,000    $350,000
         Less:  Cash and Cash
          Equivalents                (136,331)    (18,498)
              Net Debt               $128,669    $331,502

         Net Debt                    $128,669    $331,502
         Stockholders' Equity       1,299,305   1,070,257
              Total Adjusted
               Capitalization      $1,427,974  $1,401,759

        Total Debt to Total
         Capitalization Ratio            16.9%       24.6%
         Less:  Impact of Cash and
          Cash Equivalents                7.9%        1.0%
              Net Debt to Adjusted
               Capitalization Ratio       9.0%       23.6%

SOURCE Cabot Oil & Gas Corporation

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