Drilling Success Prompts Company to Expand Capital Expenditure Program
HOUSTON, April 29 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced results for the first quarter of 2004 including net income of $19.0 million, or $0.59 per share, cash flow from operations of $97.6 million and discretionary cash flow of $72.3 million. These results compare favorably with the first quarter results of 2003 when the Company reported a net loss of $39.2 million, or $1.23 per share, cash flow from operations of $59.5 million and discretionary cash flow of $67.6 million. Last year's first quarter loss was driven by the Kurten field impairment ($54.4 million after tax) and the adoption of SFAS No. 143 "Accounting for Asset Retirement Obligations" ($6.8 million after tax). When analyzed another way, 2004's first quarter net income per share of $0.59 compares very favorably to the full-year 2003 net income figure of $0.66 per share.
Higher realized commodity prices (after the impact of commodity hedges) offset the slight decline in equivalent production providing Cabot with a slight increase in quarterly revenue as in the comparable 2003 quarter. Specifically, the Company realized $5.21 per Mcf, a 15 percent increase over the comparable period in 2003. Oil prices were comparable with last year's first quarter with a $30.99 per barrel realization in 2004 versus $30.88 per barrel for the first quarter of 2003.
Natural gas production rose between comparable periods, driven by a 1 Bcf Gulf Coast increase. In total, equivalent production for the quarter was 20.9 Bcfe (consistent with the Company's published guidance) down slightly from the 21.9 Bcfe in the first quarter of last year. Overall production was lower due to reduced capital investment in our West Region for 2002 and 2003 and the previously disclosed decline in production (predominately oil) from the CL&F properties in south Louisiana.
Dan O. Dinges, Chairman, President and Chief Executive Officer said: "With our drilling success in the first quarter, we anticipate a positive impact on our production expectations for the remainder of the year. Presently we have nine successful wells waiting for completion and/or facilities in our Gulf Coast region. Because of this success, we increased our 2004 capital program $10 million to $217 million for investments in facilities related to the recent discoveries and for the increasing cost of steel."
Dinges added: "With our improved balance sheet, Cabot re-initiated its stock buyback program. In early April the Company repurchased 46,200 shares at a weighted average cost of $30.79 per share. In light of the recent reserve valuations surrounding asset acquisition opportunities, we believe our own stock is a better investment."
Overall for the quarter, expenses were in line with expectations. The largest increase occurred in exploration expense where the Company made a sizeable investment in seismic for its Gulf Coast region. This data covers South Louisiana and offshore. Additionally, direct operations and DD&A expense increased $1.2 million and $1.0 million respectively.
Listen in live to Cabot Oil & Gas Corporation's 2004 first quarter financial and operating results discussion with financial analysts on April 30, 2004, at 9:30 AM EDT (8:30 AM CDT) at www.cabotog.com . A teleconference replay will also be available at (800) 642-1687 (international (706) 645-9291), passcode 6683448. A replay will be available from Friday, April 30 through Friday, May 7, 2004.
The latest financial guidance, including the Company's hedge positions, along with a replay of the webcast, which will be archived for one year, are available in the investor relations section of the Company's website at www.cabotog.com .
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid- Continent; the East and an expansion effort in Canada. For additional information, visit the Company's Internet homepage at www.cabotog.com .
The statements regarding future financial performance and results and the
other statements which are not historical facts contained in this release are
forward-looking statements that involve risks and uncertainties, including,
but not limited to, market factors, the market price (including regional basis
differentials) of natural gas and oil, results of future drilling and
marketing activity, future production and costs, and other factors detailed in
the Company's Securities and Exchange Commission filings.
OPERATING DATA Quarter Ended March 31, 2004 2003 PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) Natural Gas Gulf Coast 7.7 6.7 West 5.6 6.1 East 4.4 4.4 Total 17.7 17.2 Crude/Condensate Gulf Coast 491 696 West 40 48 East 7 6 Total 538 750 Natural Gas Liquids 4 29 Equivalent Production (Bcfe) 20.9 21.9 PRICES Average Produced Gas Sales Price ($/Mcf) Gulf Coast $5.14 $4.88 West $4.83 $3.61 East $5.80 $5.35 Total $5.21 $4.55 Crude/Condensate Price ($/Bbl) Gulf Coast $30.70 $30.84 West $34.34 $32.05 East $31.86 $25.79 Total $30.99 $30.88 WELLS DRILLED Gross 38 25 Net 29.3 18.5 Gross Success Rate 100% 88% CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Quarter Ended March 31, 2004 2003 Operating Revenues Natural Gas Production $90,379 $77,710 Brokered Natural Gas 31,559 31,850 Crude Oil and Condensate 12,767 23,093 Other 1,899 3,263 136,604 135,916 Operating Expenses Brokered Natural Gas Cost 28,721 28,261 Direct Operations - Field and Pipeline 12,078 10,926 Exploration 16,144 13,391 Depreciation, Depletion and Amortization 26,812 25,844 Impairment of Long-Lived Assets --- 87,926 General and Administrative 6,716 6,595 Taxes Other Than Income 10,102 10,224 100,573 183,167 Gain on Sale of Assets 59 560 Income (Loss) from Operations 36,090 (46,691) Interest Expense and Other 5,377 5,625 Income (Loss) Before Income Taxes 30,713 (52,316) Income Tax Expense (Benefit) 11,702 (19,940) Net Income (Loss) Before Cumulative Effect of Accounting Change 19,011 (32,376) Cumulative Effect of Accounting Change (A) --- (6,847) Net Income (Loss) $19,011 $(39,223) Net Earnings (Loss) Per Share - Basic $0.59 $(1.23) Average Common Shares Outstanding 32,398 31,837 (A) Cumulative effect of accounting change relates to the adoption of SFAS 143, "Accounting for Asset Retirement Obligations." CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (In thousands) March 31, Dec. 31, 2004 2003 Assets Current Assets $148,539 $121,396 Property, Equipment and Other Assets 916,702 902,805 Total Assets $1,065,241 $1,024,201 Liabilities and Stockholders' Equity Current Liabilities $184,581 $154,701 Long-Term Debt 270,000 270,000 Deferred Income Taxes 175,685 179,926 Other Liabilities 59,212 54,377 Stockholders' Equity 375,763 365,197 Total Liabilities and Stockholders' Equity $1,065,241 $1,024,201 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In thousands) Quarter Ended March 31, 2004 2003 Cash Flows From Operating Activities Net Income (Loss) $19,011 $(39,223) Cumulative Effect of Accounting Change --- 6,847 Change in Derivative Fair Value 5,619 544 Impairment of Long-Lived Assets --- 87,926 Income Charges Not Requiring Cash 27,076 25,705 Gain on Sale of Assets (59) (560) Deferred Income Taxes 4,549 (27,010) Changes in Assets and Liabilities 25,230 (8,073) Exploration Expense 16,144 13,391 Net Cash Provided by Operations 97,570 59,547 Cash Flows From Investing Activities Capital Expenditures (35,711) (21,321) Proceeds from Sale of Assets --- 1,602 Exploration Expense (16,144) (13,391) Net Cash Used by Investing (51,855) (33,110) Cash Flows From Financing Activities Sale of Common Stock Proceeds 6,656 498 Increase (Decrease) in Debt --- (27,000) Dividends Paid (1,296) (1,273) Net Cash Provided (Used) by Financing 5,360 (27,775) Net Increase (Decrease) in Cash and Cash Equivalents $51,075 $(1,338)
Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts) Quarter Ended March 31, 2004 2003 As Reported - Net Income (Loss) $19,011 $(39,223) Reversal of Selected Items, Net of Tax: Impairment of Long-Lived Assets --- 54,426 Cumulative Effect of Accounting Change --- 6,847 Net Income Including Reversal of Selected Items $19,011 $22,050 As Reported - Net Earnings (Loss) Per Share $0.59 $(1.23) Per Share Impact of Reversing Selected Items --- 1.92 Net Earnings Per Share Including Reversal of Selected Items $0.59 $0.69 Average Common Shares Outstanding 32,398 31,837 Discretionary Cash Flow Calculation and Reconciliation (In thousands) Quarter Ended March 31, 2004 2003 Discretionary Cash Flow As Reported - Net Income (Loss) $19,011 $(39,223) Plus: Cumulative Effect of Accounting Change --- 6,847 Change in Derivative Fair Value 5,619 544 Impairment of Long-Lived Assets --- 87,926 Income Charges Not Requiring Cash 27,076 25,705 Gain on Sale of Assets (59) (560) Deferred Income Taxes 4,549 (27,010) Exploration Expense 16,144 13,391 Discretionary Cash Flow 72,340 67,620 Plus: Changes in Assets and Liabilities 25,230 (8,073) Net Cash Provided by Operations $97,570 $59,547
SOURCE Cabot Oil & Gas Corporation