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Cabot Oil & Gas Sets Many New Highs; 2008 Unprecedented
Feb 12, 2009

HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced its 2008 results that included new record highs for reserves, production, earnings (excluding gain on sales) and cash flow.

    --  Total proved reserves growth of 20 percent year-over-year, reaching
        1,942 Bcfe, as the result of a 443 percent replacement of production.
    --  Production for 2008 of 95.2 Bcfe, an 11 percent increase over 2007.
    --  Net income of $211.3 million and earnings per share of $2.10.
    --  Record cash flow levels, including $634.4 million for cash flow from
        operations, and $608.7 million for discretionary cash flow.

"Our marketplace has changed substantially since the start of 2008, but that does not detract from this level of achievement," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Double-digit growth in reserves and production, along with exceptional financial results, made 2008 an outstanding year for Cabot."

Full Year Financial Results

For 2008, Cabot reported net income of $211.3 million, or $2.10 per share, which compares favorably with the $167.4 million of net income, or $1.73 per share, recorded in 2007. Excluding the selected items in both 2008 and 2007 (detailed in the attached tables), the full year comparisons for net income would have been $232.8 million, or $2.31 per share, for 2008 versus $171.5 million, or $1.77 per share, for 2007. The selected items include impairments, gains and stock compensation charges.

The main drivers of the improved financial results were higher realized commodity prices and increased equivalent production, partially offset by higher operating expenses. Inclusive of realized hedge gains and losses for the year, natural gas prices rose 16 percent to $8.39 per Mcf for the entire Company and oil prices increased 33 percent to $89.11 per barrel.

Expenses in each category other than exploration expense rose year-over-year, as a result of more activity in Cabot's organic drilling program, completion of an acquisition and general market conditions that existed the first eight months of the year. Exploration expense declined between years primarily due to fewer dry holes.

Reserves and Production

"In 2008, Cabot had its largest investment program ever, which included a significant acquisition, extensive drilling and a large lease acquisition effort," commented Dinges. "This program added nearly 500 Bcfe of reserves before taking into account the production for the year of 95.2 Bcfe and negative reserve revisions of 57.3 Bcfe, which was primarily due to lower year-end pricing."

The gross increase was roughly two-thirds organic and one-third acquisition. The Company's proved undeveloped portion of reserves grew slightly, to 30.6 percent (from 27.2 percent in 2007), due almost entirely to the higher PUD component of the acquired reserves. "Our reserves have been 100 percent audited since our inception as a public company," stated Dinges. "Our finding cost for 2008 experienced an increase due to several factors, including an outsized lease acquisition budget primarily focused on the Marcellus, a proved producing property acquisition and inflationary pressures in all aspects of drilling and completions. Our drilling finding cost (additions only) for the year was $2.25 per Mcfe." Details of finding cost are included in attached table.

Fourth Quarter

On the strength of higher levels of production and increased natural gas price realizations offset somewhat by cost increases for comparable fourth quarter periods, the Company reported net income of $43.7 million, or $0.42 per share, versus $42.0 million, or $0.43 per share, between 2008 and 2007, respectively. Excluding the selected items (detailed in the attached table), the comparison would have been $45.8 million in the fourth quarter 2008 versus $43.0 million in the fourth quarter 2007. Earnings per share, excluding the selected items, would have been $0.44 in both periods.

Balance Sheet

During 2008, the Company raised around $800 million through new debt and equity to fund its acquisition effort for both producing property and leases. This increase gave Cabot a year-end net debt to total adjusted capital ratio of 31.9 percent versus 23.6 percent for the 2007 year-end. "While up, this level remains very low by historical standards and affords us financial strength in this very trying environment," said Dinges.

Conference Call

Listen in live to Cabot Oil & Gas Corporation's year-end and fourth quarter financial and operating results discussion with financial analysts on Friday, February 13, 2009 at 9:30 a.m. EST (8:30 a.m. CST) 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 80498112. The replay will be available through Sunday, February 15, 2009. 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 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      Twelve Months
                                                 Ended           Ended
                                              December 31,    December 31,
                                              ------------    ------------
                                              2008    2007    2008    2007
                                              ----    ----    ----    ----
    PRODUCED NATURAL GAS (Bcf)
     & OIL (MBbl)
    --------------------------
    Natural Gas
      East                                     6.9     6.2    25.2    24.4
      Gulf Coast                              10.2     7.1    34.6    26.8
      West                                     6.5     6.0    26.5    25.4
      Canada                                   0.7     0.9     4.1     3.9
                                               ---     ---     ---     ---
      Total                                   24.3    20.2    90.4    80.5
                                              ====    ====    ====    ====

    Crude/Condensate/Ngl
      East                                       6       6      23      26
      Gulf Coast                               153     143     585     606
      West                                      42      40     165     180
      Canada                                     4       4      21      18
                                                 -       -      --      --
      Total                                    205     193     794     830
                                               ===     ===     ===     ===


    Equivalent Production (Bcfe)              25.6    21.4    95.2    85.5

    PRICES
    ------
    Average Produced Gas Sales Price ($/Mcf)
      East                                   $7.90   $7.83   $8.54   $7.78
      Gulf Coast                             $8.53   $8.25   $9.23   $8.03
      West                                   $6.36   $6.55   $7.28   $6.13
      Canada                                 $6.66   $4.95   $7.62   $5.47
      Total (1)                              $7.71   $7.46   $8.39   $7.23

    Average Crude/Condensate Price ($/Bbl)
      East                                  $53.03  $87.93  $92.07  $66.97
      Gulf Coast                            $78.44  $82.95  $87.39  $67.17
      West                                  $54.66  $85.96  $95.48  $67.86
      Canada                                $50.04  $82.08  $85.08  $59.96
      Total (1)                             $72.41  $83.69  $89.11  $67.16

    WELLS DRILLED
    --------------
      Gross                                     99     102     432     461
      Net                                       78      78     355     391
      Gross Success Rate                        92%     89%     97%     96%


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



                                               Quarter      Twelve Months
                                                Ended          Ended
                                             December 31,   December 31,
                                             ------------   ------------
                                              2008   2007    2008    2007
                                              ----   ----    ----    ----
    Realized Impacts to Gas Pricing          $1.88   $1.00   $0.20   $0.99
    Realized Impacts to Oil Pricing         $18.71  $(5.12) $(6.33) $(0.97)



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

                                            Quarter        Twelve Months
                                             Ended              Ended
                                           December 31,      December 31,
                                          ------------      ------------
                                          2008     2007     2008     2007
                                          ----     ----     ----     ----
    Operating Revenues
      Natural Gas Production           $189,228 $150,462 $758,755 $581,640
      Brokered Natural Gas               27,557   26,858  114,220   93,215
      Crude Oil and Condensate           14,622   15,954   69,711   55,243
      Other                               1,059      643    3,105    2,072
                                          -----    -----    -----    -----
                                        232,466  193,917  945,791  732,170
    Operating Expenses
      Brokered Natural Gas Cost          25,128   23,846  100,449   81,819
      Direct Operations - Field
       and Pipeline                      26,738   20,039   91,839   77,170
      Exploration                        12,436   18,529   31,200   39,772
      Depreciation, Depletion and
       Amortization                      74,840   41,442  226,915  162,993
      Impairment of Oil & Gas
       Properties and Other Assets       35,700        -   35,700    4,614
      General and Administrative
       (excluding Stock-Based
       Compensation)                      8,350    7,093   39,615   35,473
      Stock-Based Compensation (1)        4,994    2,722   34,570   15,302
      Taxes Other Than Income             9,791   11,659   66,540   53,782
                                          -----   ------   ------   ------
                                        197,977  125,330  626,828  470,925
    Gain on Sale of Assets and
     Settlement of Dispute (2)           52,648    1,155   53,049   13,448
                                         ------    -----   ------   ------
    Income from Operations               87,137   69,742  372,012  274,693
    Interest Expense and Other           13,705    5,697   36,389   17,161
                                         ------    -----   ------   ------
    Income Before Income Taxes           73,432   64,045  335,623  257,532
    Income Tax Expense                   29,732   21,998  124,333   90,109
                                         ------   ------  -------   ------
    Net Income                          $43,700  $42,047 $211,290 $167,423
                                        =======  ======= ======== ========
    Net Earnings Per Share - Basic        $0.42    $0.43    $2.10    $1.73
    Weighted Average Common Shares
     Outstanding                        103,354   97,212  100,737   96,978


    (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) Includes post-closing transactions associated with the sale in the
        third quarter of 2006 of offshore and certain south Louisiana
        properties and a gain associated with the Company's settlement of a
        dispute in the fourth quarter of 2008.  The dispute settlement
        includes the value of cash and properties received.



                  CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                    (In thousands)
                                                  December 31,  December 31,
                                                      2008          2007
                                                      ----          ----
    Assets
    Current Assets                                  $460,551      $217,483
    Property, Equipment and Other Assets           3,241,113     1,939,334
                                                   ---------     ---------
      Total Assets                                $3,701,664    $2,156,817
                                                  ==========    ==========

    Liabilities and Stockholders' Equity
    Current Liabilities                             $378,913      $248,336
    Long-Term Debt, excluding Current
     Maturities                                      831,143       330,000
    Deferred Income Taxes                            599,106       433,923
    Other Liabilities                                101,940        74,301
    Stockholders' Equity                           1,790,562     1,070,257
                                                   ---------     ---------
      Total Liabilities and Stockholders'
       Equity                                     $3,701,664    $2,156,817
                                                  ==========    ==========




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

                                  Quarter Ended         Twelve Months Ended
                                    December 31,            December 31,
                                    ------------            ------------
                                 2008          2007        2008      2007
                                 ----          ----        ----      ----
    Cash Flows From
     Operating Activities
    Net Income                 $43,700       $42,047    $211,290  $167,423
    Unrealized (Gain)
     / Loss on Derivatives      (1,649)            -           -         -
    Impairment of Oil
     & Gas Properties
     and Other Assets           35,700             -      35,700     4,614
    Income Charges Not
     Requiring Cash             80,092        44,140     242,538   179,234
    Non-Cash Gain on Sale
     of Assets and Settlement
     of Dispute                (32,448)       (1,155)    (32,849)  (13,448)
    Deferred Income Tax
     Expense                    24,392        28,222     120,851    95,152
    Changes in Assets
     and Liabilities            47,176        (5,062)     36,408   (10,610)
    Stock-Based Compensation
     Tax Expense / (Benefit)       320         6,857     (10,691)        -
    Exploration Expense         12,436        18,529      31,200    39,772
                                ------        ------      ------    ------
    Net Cash Provided by
     Operations                209,719       133,578     634,447   462,137
                               -------       -------     -------   -------

    Cash Flows From
     Investing Activities
    Capital Expenditures      (258,849)     (140,248) (1,423,188) (557,211)
    Proceeds from Sale
     of Assets                     949         1,235       2,099     7,061
    Exploration Expense        (12,436)      (18,529)    (31,200)  (39,772)
                               -------       -------     -------   -------
    Net Cash Used in
     Investing                (270,336)     (157,542) (1,452,289) (589,922)
                              --------      --------  ----------  --------

    Cash Flows From
     Financing Activities
    Sale of Common Stock
     Proceeds                        1         2,785     316,230     5,099
    Net Increase in Debt        47,000        35,000     517,000   110,000
    Capitalized Debt
     Issuance Costs             (2,237)            -      (4,403)        -
    Stock-Based Compensation
     Tax Expense / (Benefit)      (320)       (6,857)     10,691         -
    Dividends Paid              (3,100)       (2,917)    (12,073)  (10,670)
                                ------        ------     -------   -------
    Net Cash Provided by
     Financing                  41,344        28,011     827,445   104,429
                                ------        ------     -------   -------

    Net Increase / (Decrease)
     in Cash and Cash
     Equivalents              $(19,273)       $4,047      $9,603  $(23,356)
                              ========        ======      ======  ========



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

                                        Quarter Ended   Twelve Months Ended
                                         December 31,       December 31,
                                         ------------       ------------
                                        2008     2007      2008      2007
                                        ----     ----      ----      ----
    As Reported - Net Income          $43,700  $42,047  $211,290  $167,423
    Reversal of Selected Items,
     Net of Tax:
      Impairment of Oil & Gas
       Properties and Other Assets     22,384        -    22,384     2,870
      Impairment of Unproved
       Properties (2)                  10,653        -    10,653         -
      Gain on Sale of Assets and
       Settlement of Dispute (3)      (33,010)    (723)  (33,263)   (8,369)
      Stock-Based Compensation
       Expense                          3,131    1,704    21,756     9,529
      Unrealized Gain on
       Derivatives (1)                 (1,040)       -         -         -
                                       ------      ---       ---       ---
    Net Income Excluding
     Selected Items                   $45,818  $43,028  $232,820  $171,453
                                      =======  =======  ========  ========
    As Reported - Net Earnings
     Per Share                          $0.42    $0.43     $2.10     $1.73
    Per Share Impact of Reversing
     Selected Items                      0.02     0.01      0.21      0.04
                                         ----     ----      ----      ----
    Net Earnings Per Share
     Including Reversal of Selected
     Items                              $0.44    $0.44     $2.31     $1.77
                                        =====    =====     =====     =====
    Weighted Average Common Shares
     Outstanding                      103,354   97,212   100,737    96,978

    (1) This unrealized gain 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 in the second quarter of 2008.

    (2) This impairment of unproved properties represents a portion of the
        total impairment relating to the accelerated recognition of
        impairments on exploratory prospects in Mississippi, North Dakota
        and Montana that have been recognized due to the unprecedented
        decline in oil price and abandonment of exploration plans.

    (3) Includes post-closing transactions associated with the sale in the
        third quarter of 2006 of offshore and certain south Louisiana
        properties and a gain associated with the Company's settlement of a
        dispute in the fourth quarter of 2008.  The dispute settlement
        includes the value of cash and properties received.


             Discretionary Cash Flow Calculation and Reconciliation
                                 (In thousands)

                                       Quarter Ended    Twelve Months Ended
                                        December 31,        December 31,
                                        ------------        ------------
                                       2008      2007      2008      2007
                                       ----      ----      ----      ----
    Discretionary Cash Flow
    As Reported - Net Income         $43,700   $42,047  $211,290  $167,423
    Plus / (Less):
    Unrealized Gain on Derivatives    (1,649)        -         -         -
    Impairment of Oil & Gas
     Properties and Other Assets      35,700         -    35,700     4,614
    Income Charges Not Requiring
     Cash                             80,092    44,140   242,538   179,234
    Non-Cash Gain on Sale of
     Assets and Settlement of
     Dispute                         (32,448)   (1,155)  (32,849)  (13,448)
    Deferred Income Tax Expense       24,392    28,222   120,851    95,152
    Exploration Expense               12,436    18,529    31,200    39,772
                                      ------    ------    ------    ------
    Discretionary Cash Flow          162,223   131,783   608,730   472,747
    Changes in Assets and
     Liabilities                      47,176    (5,062)   36,408   (10,610)
    Stock-Based Compensation
     Tax Expense / (Benefit)             320     6,857   (10,691)        -
                                         ---     -----   -------       ---
    Net Cash Provided by
     Operations                     $209,719  $133,578  $634,447  $462,137
                                    ========  ========  ========  ========


                                   Net Debt Reconciliation
                                       (In thousands)

                                                   December 31,  December 31,
                                                       2008          2007
                                                       ----          ----

    Current Portion of Long-Term Debt                $35,857       $20,000
    Long-Term Debt                                   831,143       330,000
                                                     -------       -------
      Total Debt                                    $867,000      $350,000
    Stockholders' Equity                           1,790,562     1,070,257
                                                   ---------     ---------
      Total Capitalization                        $2,657,562    $1,420,257

    Total Debt                                      $867,000      $350,000
    Less: Cash and Cash Equivalents                  (28,101)      (18,498)
                                                     -------       -------
      Net Debt                                      $838,899      $331,502

    Net Debt                                        $838,899      $331,502
    Stockholders' Equity                           1,790,562     1,070,257
                                                   ---------     ---------
      Total Adjusted Capitalization               $2,629,461    $1,401,759

    Total Debt to Total Capitalization Ratio            32.6%         24.6%
    Less: Impact of Cash and Cash Equivalents            0.7%          1.0%
                                                         ---           ---
      Net Debt to Adjusted Capitalization Ratio         31.9%         23.6%


                              Finding Costs
                               ($/per Mcfe)

                                                        Twelve Months Ended
                                                             December 31,
                                                             ------------
                                                                 2008
                                                             ------------
    Additions                                                   $2.25
    Additions, Revisions                                         2.77
    Additions, Revisions, Purchases                              3.06
    Additions, Revisions, Purchases and Lease Acquisition        3.42

SOURCE Cabot Oil & Gas Corporation

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