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Cabot Oil & Gas Reports Strong First Quarter 2004 Financial Results;
Drilling Success Prompts Company to Expand Capital Expenditure Program
Apr 29, 2004

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.

Management Comments

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.

Conference Call

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 .

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,
                                                      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