Exhibit 99.1
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| FOR RELEASE AT 6:00 PM EDT | | FOR MORE INFORMATION CONTACT |
| April 29, 2004 | | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Reports Strong First Quarter 2004 Financial Results;
Drilling Success Prompts Company to Expand Capital Expenditure Program
HOUSTON, April 29, 2004 – 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.
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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 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) atwww.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 atwww.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 atwww.cabotog.com.
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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.
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OPERATING DATA
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| | | Quarter Ended
March 31,
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| | | 2004
| | | 2003
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PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | | | | | | | | |
Natural Gas | | | | | | | | |
Gulf Coast | | | 7.7 | | | | 6.7 | |
West | | | 5.6 | | | | 6.1 | |
East | | | 4.4 | | | | 4.4 | |
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Total | | | 17.7 | | | | 17.2 | |
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Crude/Condensate | | | | | | | | |
Gulf Coast | | | 491 | | | | 696 | |
West | | | 40 | | | | 48 | |
East | | | 7 | | | | 6 | |
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Total | | | 538 | | | | 750 | |
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Natural Gas Liquids | | | 4 | | | | 29 | |
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Equivalent Production (Bcfe) | | | 20.9 | | | | 21.9 | |
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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 | |
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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 | |
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WELLS DRILLED | | | | | | | | |
Gross | | | 38 | | | | 25 | |
Net | | | 29.3 | | | | 18.5 | |
Gross Success Rate | | | 100 | % | | | 88 | % |
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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
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| | | Quarter Ended March 31,
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| | | 2004
| | 2003
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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 | |
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| | | | 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 | |
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| | | | 100,573 | | | 183,167 | |
Gain on Sale of Assets | | | 59 | | | 560 | |
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Income (Loss) from Operations | | | 36,090 | | | (46,691 | ) |
Interest Expense and Other | | | 5,377 | | | 5,625 | |
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Income (Loss) Before Income Taxes | | | 30,713 | | | (52,316 | ) |
Income Tax Expense (Benefit) | | | 11,702 | | | (19,940 | ) |
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Net Income (Loss) Before Cumulative Effect of Accounting Change | | | 19,011 | | | (32,376 | ) |
Cumulative Effect of Accounting Change(1) | | | — | | | (6,847 | ) |
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Net Income (Loss) | | $ | 19,011 | | $ | (39,223 | ) |
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Net Earnings (Loss) Per Share - Basic | | $ | 0.59 | | $ | (1.23 | ) |
Average Common Shares Outstanding | | | 32,398 | | | 31,837 | |
| (1) | Cumulative effect of accounting change relates to the adoption of SFAS 143, “Accounting for Asset Retirement Obligations.” |
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CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
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| | | March 31,
2004
| | Dec. 31, 2003
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Assets | | | | | | |
Current Assets | | $ | 148,539 | | $ | 121,396 |
Property, Equipment and Other Assets | | | 916,702 | | | 902,805 |
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Total Assets | | $ | 1,065,241 | | $ | 1,024,201 |
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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 |
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Total Liabilities and Stockholders’ Equity | | $ | 1,065,241 | | $ | 1,024,201 |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
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| | | Quarter Ended March 31,
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| | | 2004
| | | 2003
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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 | |
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Net Cash Provided by Operations | | | 97,570 | | | | 59,547 | |
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Cash Flows From Investing Activities | | | | | | | | |
Capital Expenditures | | | (35,711 | ) | | | (21,321 | ) |
Proceeds from Sale of Assets | | | — | | | | 1,602 | |
Exploration Expense | | | (16,144 | ) | | | (13,391 | ) |
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Net Cash Used by Investing | | | (51,855 | ) | | | (33,110 | ) |
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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 | ) |
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Net Cash Provided (Used) by Financing | | | 5,360 | | | | (27,775 | ) |
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Net Increase (Decrease) in Cash and Cash Equivalents | | $ | 51,075 | | | $ | (1,338 | ) |
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Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
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| | | Quarter Ended March 31,
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| | | 2004
| | 2003
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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 | |
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Net Income Including Reversal of Selected Items | | $ | 19,011 | | $ | 22,050 | |
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As Reported - Net Earnings (Loss) Per Share | | $ | 0.59 | | $ | (1.23 | ) |
Per Share Impact of Reversing Selected Items | | | — | | | 1.92 | |
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Net Earnings Per Share Including Reversal of Selected Items | | $ | 0.59 | | $ | 0.69 | |
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Average Common Shares Outstanding | | | 32,398 | | | 31,837 | |
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
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| | | Quarter Ended March 31,
| |
| | | 2004
| | | 2003
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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 | |
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Discretionary Cash Flow | | | 72,340 | | | | 67,620 | |
Plus: Changes in Assets and Liabilities | | | 25,230 | | | | (8,073 | ) |
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Net Cash Provided by Operations | | $ | 97,570 | | | $ | 59,547 | |
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