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Cabot Oil & Gas Reports Third Quarter Financial Results
Oct 25, 2007

HOUSTON, Oct. 25 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced third quarter net income of $35.5 million, or $0.37 per share, cash flow from operations of $86.8 million and discretionary cash flow of $121.7 million. "These results compare favorably to our historical third quarter outcomes," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "The net income figure is Cabot's second highest for a third quarter period, and the cash flow figures are both records for the quarter."

Last year's third quarter results included the sale of the Company's south Louisiana and offshore properties, which generated a large gain, resulting in $189 million of net income, or $1.96 per share, $86.7 million of cash flow from operations and $21.5 million of discretionary cash flow. This year's third quarter includes a $2.9 million, net of tax, charge for impairment. Removing the results of asset sales and impairments in both quarters, the comparative results for net income is $38.4 million, or $0.40 per share for 2007, versus $45.3 million, or $0.47 per share for 2006, with the cash flow comparisons remaining unchanged.

Realized pricing between the comparative third quarters was essentially flat for both oil and natural gas. While oil has strengthened recently, third quarter prices fell within the Company's collared range. For natural gas, where weaker pricing has persisted, the Company realized $28.9 million from its hedge position for the quarter and $59.6 million year-to-date.

Equivalent production for the quarter totaled 21.9 Bcfe, up 14.7 percent over last year's pro forma comparison level of 19.1 Bcfe. The actual reported figure for last year was 23.0 Bcfe, which included production from the divested south Louisiana and offshore properties. "Equivalent production for the third quarter remained solidly within our guidance," stated Dinges. "We returned to our pre-asset sale daily production levels at the end of September as we predicted; however, along with other industry players, we shut in Rocky Mountain production when prices fell below economic levels for October."

Operating expenses between quarters grew five percent, but are up less than one percent in total when the impairment is removed from the comparison. The only changes from guidance for the quarter were increased direct operations expense due primarily to lease maintenance activity and slightly higher DD&A.

Year-to-Date

For the first nine months of 2007, the Company reported net income of $125.4 million, or $1.29 per share, cash flow from operations of $328.6 million and discretionary cash flow of $341 million. This compares to $289 million, or $2.98 per share, $356.1 million and $251 million, respectively. Removing the impairment and the gain on the sale, the nine- month comparison for net income is $120.6 million, or $1.24 per share for 2007 versus $145.2 million, or $1.50 per share for 2006. Primarily driving this result is lower absolute oil production between periods, due to the 2006 asset sale.

"Through the nine months ended September 30, 2007, we have been actively drilling (359 gross wells, up 19 percent), acquiring acreage and aggressively developing our portfolio," commented Dinges. "Right now, we have a 22 percent net debt to adjusted capitalization ratio and expect to borrow additional dollars to jump start 2008 with extensive fourth quarter activity in east Texas," Dinges added. Capital investment should approach $600 million for 2007.

Conference Call

Listen in live to Cabot Oil & Gas Corporation's third quarter financial and operating results discussion with financial analysts on Friday, October 26, 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 17100993. The replay will be available through Sunday, October 28, 2007. 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    Nine Months Ended
                                            September 30,      September 30,
                                           2007      2006      2007     2006
    PRODUCED NATURAL GAS (Bcf)
     & OIL (MBbl)
    Natural Gas
      East                                  6.2       5.8      18.2    17.5
      Gulf Coast                            6.8       8.0      19.7    23.9
      West                                  6.6       6.2      19.4    17.3
      Canada                                1.0       0.7       3.0     1.8
      Total                                20.6      20.7      60.3    60.5
        Less: Production from
         properties sold in 2006 (1)          -      (2.7)        -    (9.0)
      Adjusted Total                       20.6      18.0      60.3    51.5

    Crude/Condensate/Ngl
      East                                    7         6        20      19
      Gulf Coast                            154       321       463   1,025
      West                                   50        54       140     167
      Canada                                  4         1        14       8
      Total                                 215       382       637   1,219
        Less: Production from
         properties sold in 2006 (1)          -      (213)        -    (705)
      Adjusted Total                        215       169       637     514

    Equivalent Production (Bcfe)           21.9      23.0      64.1    67.8
        Less: Production from
         properties sold in 2006 (1)          -      (3.9)        -   (13.2)
      Adjusted Equivalent
       Production (Bcfe)                   21.9      19.1      64.1    54.6

    PRICES
    Average Produced Gas Sales
     Price ($/Mcf)
      East                               $ 7.37    $ 7.41    $ 7.76  $ 8.09
      Gulf Coast                         $ 7.82    $ 7.13    $ 7.95  $ 7.41
      West                               $ 5.47    $ 5.84    $ 6.00  $ 6.19
      Canada                             $ 4.95    $ 5.09    $ 5.63  $ 6.10
      Total (2)                          $ 6.80    $ 6.76    $ 7.15  $ 7.22

    Crude/Condensate Price ($/Bbl)
      East                               $68.12    $64.67    $60.78  $63.29
      Gulf Coast                         $71.16    $70.10    $62.27  $66.71
      West                               $70.85    $68.53    $62.81  $64.99
      Canada                             $63.47    $69.53    $54.97  $65.90
      Total (2)                          $70.85    $69.80    $62.17  $66.42

    WELLS DRILLED
      Gross                                 137       110       359     301
      Net                                   110        92       313     248
      Gross Success Rate                     98%       96%       98%     97%

    (1)  These amounts relate to production associated with offshore and
         certain south Louisiana properties sold during the third quarter
         of 2006.
    (2)  These realized prices include the realized impact of derivative
         instrument settlements.

                                           Quarter Ended     Nine Months Ended
                                            September 30,       September 30,
                                           2007      2006      2007    2006

    Realized Impacts to Gas Pricing       $1.40     $0.41     $0.99   $0.28
    Realized Impacts to Oil Pricing       $   -     $   -     $0.29   $   -



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

                                           Quarter Ended     Nine Months Ended
                                            September 30,       September 30,
                                           2007      2006      2007      2006
      Operating Revenues
        Natural Gas Production         $140,300  $140,261  $431,178  $436,931
        Brokered Natural Gas             15,179    17,075    66,357    67,389
        Crude Oil and Condensate         15,084    26,435    39,289    80,283
        Other                               285       973     1,429     5,703
                                        170,848   184,744   538,253   590,306

      Operating Expenses
        Brokered Natural Gas Cost        13,223    15,282    57,973    59,924
        Direct Operations - Field and
         Pipeline                        20,996    19,893    57,131    55,478
        Exploration                       8,766    13,561    21,243    39,972
        Depreciation, Depletion and
         Amortization                    43,585    35,914   121,551   108,104
        Impairment of Oil & Gas
         Properties                       4,614         -     4,614         -
        General and Administrative
         (excluding Stock-Based
         Compensation)                    7,831     7,566    28,380    26,295
        Stock-Based Compensation (1)      1,884     3,149    12,580    12,187
        Taxes Other Than Income          14,379    14,366    42,123    44,439
                                        115,278   109,731   345,595   346,399
      Gain / (Loss) on Sale of
       Assets (2)                           (49)  229,733    12,293   229,944
      Income from Operations             55,521   304,746   204,951   473,851
      Interest Expense and Other          3,921     6,978    11,464    19,151
      Income Before Income Taxes         51,600   297,768   193,487   454,700
      Income Tax Expense                 16,147   108,748    68,111   165,651
      Net Income                       $ 35,453  $189,020  $125,376  $289,049
      Net Earnings Per Share - Basic   $   0.37  $   1.96  $   1.29  $   2.98
      Weighted Average Common Shares
       Outstanding                       97,068    96,459    96,899    97,097

    (1)  Includes the impact of the Company's performance share and restricted
         stock amortization as well as expense related to stock options and
         stock appreciation rights.
    (2)  Gain on Sale of Assets is primarily related to the sale in the third
         quarter of 2006 of offshore and certain south Louisiana properties.



                  CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                    (In thousands)
                                           September 30,       December 31,
                                               2007               2006
    Assets
    Current Assets                         $  197,835         $  315,682
    Property, Equipment and Other Assets    1,843,198          1,487,897
    Deferred Income Taxes                      36,213             30,912
      Total Assets                         $2,077,246         $1,834,491

    Liabilities and Stockholders' Equity
    Current Liabilities                    $  223,665         $  251,027
    Long-Term Debt, excluding
     Current Maturities                       295,000            220,000
    Deferred Income Taxes                     424,267            347,430
    Other Liabilities                          82,530             70,836
    Stockholders' Equity                    1,051,784            945,198
      Total Liabilities and
       Stockholders' Equity                $2,077,246         $1,834,491



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

                                           Quarter Ended    Nine Months Ended
                                            September 30,       September 30,
                                           2007      2006      2007     2006
    Cash Flows From Operating
     Activities
    Net Income                          $35,453  $189,020  $125,376  $289,049
    Impairment of Oil & Gas Properties    4,614         -     4,614         -
    Income Charges Not Requiring Cash    45,511    39,141   135,094   120,366
    (Gain) / Loss on Sale of Assets          49  (229,733)  (12,293) (229,944)
    Deferred Income Tax Expense          27,318     9,482    66,930    31,514
    Changes in Assets and Liabilities   (34,148)   66,078    (5,548)  110,849
    Stock-Based Compensation
     Tax Benefit                           (811)     (859)   (6,857)   (5,756)
    Exploration Expense                   8,766    13,561    21,243    39,972
    Net Cash Provided by Operations      86,752    86,690   328,559   356,050

    Cash Flows From Investing
     Activities
    Capital Expenditures               (145,032) (120,157) (416,963) (344,620)
    Proceeds from Sale of Assets              1   322,412     5,826   322,987
    Exploration Expense                  (8,766)  (13,561)  (21,243)  (39,972)
    Net Cash (Used in) /
     Provided by Investing             (153,797)  188,694  (432,380)  (61,605)

    Cash Flows From Financing
     Activities
    Sale of Common Stock Proceeds             7     1,056     2,314     3,620
    Net Increase in Debt                 60,000    50,000    75,000    60,000
    Purchase of Treasury Stock                -   (19,305)        -   (46,492)
    Stock-Based Compensation
     Tax Benefit                            811       859     6,857     5,756
    Dividends Paid                       (2,913)   (1,930)   (7,753)   (5,832)
    Net Cash Provided by Financing       57,905    30,680    76,418    17,052

    Net (Decrease) / Increase in
     Cash and Cash Equivalents          $(9,140) $306,064  $(27,403) $311,497



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

                                          Quarter Ended    Nine Months Ended
                                           September 30,      September 30,
                                          2007      2006      2007      2006
    As Reported - Net Income           $35,453  $189,020  $125,376  $289,049
    Reversal of Selected Items,
     Net of Tax:
        Impairment of Oil & Gas
         Properties                      2,870         -     2,870         -
       (Gain) / Loss on Sale of Assets      30  (143,675)   (7,646) (143,806)
    Net Income Excluding Selected
     Items                             $38,353  $ 45,345  $120,600  $145,243
    As Reported - Net Earnings Per
     Share                             $  0.37  $   1.96  $   1.29  $   2.98
    Per Share Impact of Reversing
     Selected Items                       0.03     (1.49)    (0.05)    (1.48)
    Net Earnings Per Share Including
     Reversal of Selected Items        $  0.40  $   0.47  $   1.24  $   1.50
    Weighted Average Common Shares
     Outstanding                        97,068    96,459    96,899    97,097



               Discretionary Cash Flow Calculation and Reconciliation
                                   (In thousands)

                                          Quarter Ended     Nine Months Ended
                                           September 30,       September 30,
                                          2007      2006      2007      2006
    Discretionary Cash Flow
    As Reported - Net Income           $35,453  $189,020  $125,376  $289,049
    Plus / (Less):
    Impairment of Oil & Gas
     Properties                          4,614         -     4,614         -
    Income Charges Not Requiring
     Cash                               45,511    39,141   135,094   120,366
    (Gain) / Loss on Sale of
     Assets                                 49  (229,733)  (12,293) (229,944)
    Deferred Income Tax Expense         27,318     9,482    66,930    31,514
    Exploration Expense                  8,766    13,561    21,243    39,972
    Discretionary Cash Flow            121,711    21,471   340,964   250,957
    Changes in Assets and
     Liabilities                       (34,148)   66,078    (5,548)  110,849
    Stock-Based Compensation Tax
     Benefit                              (811)     (859)   (6,857)   (5,756)
    Net Cash Provided by
     Operations                        $86,752  $ 86,690  $328,559  $356,050



                              Net Debt Reconciliation
                                   (In thousands)

                                            September 30,      December 31,
                                                2007              2006

    Current Portion of Long-Term Debt       $   20,000        $   20,000
    Long-Term Debt                             295,000           220,000
         Total Debt                         $  315,000        $  240,000
    Stockholders' Equity                     1,051,784           945,198
         Total Capitalization               $1,366,784        $1,185,198

    Total Debt                              $  315,000        $  240,000
    Less:  Cash and Cash Equivalents           (14,451)          (41,854)
         Net Debt                           $  300,549        $  198,146

    Net Debt                                $  300,549        $  198,146
    Stockholders' Equity                     1,051,784           945,198
         Total Adjusted Capitalization      $1,352,333        $1,143,344

    Total Debt to Total Capitalization Ratio      23.0%             20.2%
     Less:  Impact of Cash and Cash
      Equivalents                                  0.8%              2.9%
          Net Debt to Adjusted
           Capitalization Ratio                   22.2%             17.3%

SOURCE Cabot Oil & Gas Corporation

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