Exhibit 99.1
| NEWS RELEASE | ||||
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1200 Enclave Parkway, Houston, Texas 77077 P. O. Box 4544, Houston, Texas 77210-4544 (281) 589-4600 | ||||
| FOR RELEASE | FOR MORE INFORMATION CONTACT | |
| July 24, 2008 | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Reports Record Second Quarter Profits
HOUSTON, July 24, 2008—Cabot Oil & Gas Corporation announced today that on the strength of significantly higher commodity prices and increased production, the Company reported its highest second quarter earnings of $54.6 million, or $0.55 per share. After removing certain selected items related to the gain on sale of assets, stock compensation and unrealized loss on derivatives (see Selected Item Review and Reconciliation of Net Income and Earnings Per Share), the net income figure is $69.9 million, or $0.71 per share, as compared to last year’s figures of $41.2 million, or $0.42 per share. The as-reported profit for the second quarter of 2007 was $41.4 million, or $0.43 per share.
During the quarter, the Company recorded cash flow from operations of $143.7 million and discretionary cash flow of $147.1 million, also records for any second quarter period. These results compare to $105.9 million and $112.5 million for cash flow from operations and discretionary cash flow, respectively, in the second quarter of 2007.
“The continued strength in the commodity prices led the significant improvement in results from 2007 to 2008 second quarter,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “This combined with our 9.6 percent increase in production made for the unprecedented quarter.” Natural gas price realizations improved 28.5 percent, while oil price realizations grew 59.2 percent between second quarter comparable periods.
Equivalent production of 23.2 Bcfe, or 255 Mmcfe per day, fell within guidance (of 250 to 259 Mmcfe per day), and is comparable to last year’s 21.2 Bcfe. “While solidly within guidance, our re-direct of personnel and equipment in the East towards Marcellus activity and new initiatives focused on evaluation of deeper objectives in several of our East Texas fields have limited the acceleration of our growth for the short term,” stated Dinges. “We have 22 rigs drilling throughout the company with six rigs focused on new initiatives. We expect to collect new data from several key wells very soon.” Expenses in every category grew, with the largest increases occurring in stock compensation expense, as a result of the appreciation in the Company’s stock price and DD&A expense in response to industry inflationary pressures.
Year to Date
In the six months ended June 30, 2008, Cabot reported net income of $100.6 million, or $1.03 per share, compared to $89.9 million or $0.93 per share last year. The cash flow comparisons included cash flow from operations of $276.4 million in 2008 versus $241.8 million in 2007, while discretionary cash flow was $285.5 million in 2008, compared to $219.3 million in 2007. “The respective 2008 numbers for the six-month period all created new high water marks for the first half of the year, primarily the result of increased prices and production,” added Dinges.
Other News
Cabot has completed its equity offering and the long-term debt portion of the funding for its pending acquisition. “Our expectation remains to close the acquisition in the middle of August,” said Dinges.
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s second quarter financial and operating results discussion with financial analysts on Friday, July 25, 2008 at 9:30 a.m. EDT (8:30 a.m. CDT) atwww.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 53829875. The replay will be available through Sunday, July 27, 2008. 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 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 in Canada. For additional information, visit the Company’s Internet homepage atwww.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.
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CABOT OIL & GAS RESULTS — Page 3
OPERATING DATA
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | ||||||||||||||||
Natural Gas | ||||||||||||||||
East | 5.9 | 6.2 | 11.9 | 12.0 | ||||||||||||
Gulf Coast | 7.7 | 6.4 | 15.1 | 12.9 | ||||||||||||
West | 7.1 | 6.4 | 13.5 | 12.8 | ||||||||||||
Canada | 1.4 | 0.9 | 2.6 | 2.0 | ||||||||||||
Total | 22.1 | 19.9 | 43.1 | 39.7 | ||||||||||||
Crude/Condensate/Ngl | ||||||||||||||||
East | 6 | 7 | 12 | 13 | ||||||||||||
Gulf Coast | 136 | 161 | 280 | 309 | ||||||||||||
West | 43 | 43 | 79 | 90 | ||||||||||||
Canada | 5 | 4 | 11 | 10 | ||||||||||||
Total | 190 | 215 | 382 | 422 | ||||||||||||
Equivalent Production (Bcfe) | 23.2 | 21.2 | 45.4 | 42.2 | ||||||||||||
PRICES | ||||||||||||||||
Average Produced Gas Sales Price ($/Mcf) | ||||||||||||||||
East | $ | 9.64 | $ | 7.86 | $ | 8.96 | $ | 7.97 | ||||||||
Gulf Coast | $ | 10.36 | $ | 8.27 | $ | 9.35 | $ | 8.01 | ||||||||
West | $ | 8.04 | $ | 6.02 | $ | 7.67 | $ | 6.26 | ||||||||
Canada | $ | 8.41 | $ | 4.25 | $ | 7.91 | $ | 5.97 | ||||||||
Total(1) | $ | 9.30 | $ | 7.24 | $ | 8.63 | $ | 7.33 | ||||||||
Average Crude/Condensate Price ($/Bbl) | ||||||||||||||||
East | $ | 118.33 | $ | 59.41 | $ | 103.89 | $ | 56.60 | ||||||||
Gulf Coast | $ | 91.87 | $ | 62.28 | $ | 88.11 | $ | 57.85 | ||||||||
West | $ | 118.18 | $ | 62.76 | $ | 108.12 | $ | 58.33 | ||||||||
Canada | $ | 96.89 | $ | 48.51 | $ | 87.26 | $ | 51.77 | ||||||||
Total(1) | $ | 98.68 | $ | 61.98 | $ | 92.58 | $ | 57.76 | ||||||||
WELLS DRILLED | ||||||||||||||||
Gross | 116 | 122 | 201 | 222 | ||||||||||||
Net | 97 | 111 | 162 | 203 | ||||||||||||
Gross Success Rate | 99 | % | 98 | % | 99 | % | 98 | % | ||||||||
(1) These realized prices include the realized impact of derivative instrument settlements. |
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| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Realized Impacts to Gas Pricing | $ | (0.97 | ) | $ | 0.66 | $ | (0.48 | ) | $ | 0.77 | ||||||
Realized Impacts to Oil Pricing | $ | (21.19 | ) | $ | — | $ | (14.88 | ) | $ | 0.43 | ||||||
CABOT OIL & GAS RESULTS — Page 4
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
Operating Revenues | ||||||||||||
Natural Gas Production | $ | 202,689 | $ | 144,128 | $ | 369,248 | $ | 290,878 | ||||
Brokered Natural Gas | 27,188 | 18,001 | 62,808 | 51,178 | ||||||||
Crude Oil and Condensate | 18,600 | 13,263 | 35,087 | 24,205 | ||||||||
Other | 377 | 440 | 1,362 | 1,144 | ||||||||
| 248,854 | 175,832 | 468,505 | 367,405 | |||||||||
Operating Expenses | ||||||||||||
Brokered Natural Gas Cost | 24,140 | 16,051 | 54,430 | 44,750 | ||||||||
Direct Operations—Field and Pipeline | 22,636 | 19,004 | 40,127 | 36,135 | ||||||||
Exploration | 7,290 | 6,825 | 12,351 | 12,477 | ||||||||
Depreciation, Depletion and Amortization | 48,401 | 40,585 | 94,668 | 77,966 | ||||||||
General and Administrative (excluding Stock-Based Compensation) | 11,782 | 8,904 | 21,779 | 20,549 | ||||||||
Stock-Based Compensation(1) | 21,695 | 4,061 | 39,271 | 10,696 | ||||||||
Taxes Other Than Income | 19,225 | 14,579 | 36,122 | 27,744 | ||||||||
| 155,169 | 110,009 | 298,748 | 230,317 | |||||||||
Gain on Sale of Assets(2) | 401 | 4,422 | 401 | 12,342 | ||||||||
Income from Operations | 94,086 | 70,245 | 170,158 | 149,430 | ||||||||
Interest Expense and Other | 6,207 | 3,619 | 12,198 | 7,543 | ||||||||
Income Before Income Taxes | 87,879 | 66,626 | 157,960 | 141,887 | ||||||||
Income Tax Expense | 33,254 | 25,250 | 57,360 | 51,964 | ||||||||
Net Income | $ | 54,625 | $ | 41,376 | $ | 100,600 | $ | 89,923 | ||||
Net Earnings Per Share—Basic | $ | 0.55 | $ | 0.43 | $ | 1.03 | $ | 0.93 | ||||
Weighted Average Common Shares Outstanding | 98,467 | 96,929 | 98,092 | 96,813 | ||||||||
(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) | Gain on Sale of Assets is primarily related to post-closing transactions associated with the sale in the third quarter of 2006 of offshore and certain south Louisiana properties. |
CABOT OIL & GAS RESULTS — Page 5
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
| June 30, 2008 | December 31, 2007 | |||||||||||||||
Assets | ||||||||||||||||
Current Assets | $ | 436,758 | $ | 221,413 | ||||||||||||
Property, Equipment and Other Assets | 2,203,088 | 1,939,334 | ||||||||||||||
Deferred Income Taxes | 78,586 | 47,847 | ||||||||||||||
Total Assets | $ | 2,718,432 | $ | 2,208,594 | ||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Current Liabilities | $ | 475,254 | $ | 252,266 | ||||||||||||
Long-Term Debt, excluding Current Maturities | 245,000 | 330,000 | ||||||||||||||
Deferred Income Taxes | 542,214 | 481,770 | ||||||||||||||
Other Liabilities | 156,659 | 74,301 | ||||||||||||||
Stockholders’ Equity | 1,299,305 | 1,070,257 | ||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,718,432 | $ | 2,208,594 | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||
Net Income | $ | 54,625 | $ | 41,376 | $ | 100,600 | $ | 89,923 | ||||||||
Unrealized Loss on Derivatives | 2,909 | — | 2,909 | — | ||||||||||||
Income Charges Not Requiring Cash | 50,692 | 45,032 | 114,498 | 89,583 | ||||||||||||
Gain on Sale of Assets | (401 | ) | (4,422 | ) | (401 | ) | (12,342 | ) | ||||||||
Deferred Income Tax Expense | 31,955 | 23,738 | 55,515 | 39,612 | ||||||||||||
Changes in Assets and Liabilities | (8,005 | ) | (4,689 | ) | (9,061 | ) | 28,600 | |||||||||
Stock-Based Compensation Tax Benefit | 4,642 | (1,911 | ) | — | (6,046 | ) | ||||||||||
Exploration Expense | 7,290 | 6,825 | 12,351 | 12,477 | ||||||||||||
Net Cash Provided by Operations | 143,707 | 105,949 | 276,411 | 241,807 | ||||||||||||
Cash Flows From Investing Activities | ||||||||||||||||
Capital Expenditures | (244,510 | ) | (158,183 | ) | (372,611 | ) | (271,931 | ) | ||||||||
Proceeds from Sale of Assets | 1,150 | 41 | 1,150 | 5,825 | ||||||||||||
Exploration Expense | (7,290 | ) | (6,825 | ) | (12,351 | ) | (12,477 | ) | ||||||||
Net Cash Used in Investing | (250,650 | ) | (164,967 | ) | (383,812 | ) | (278,583 | ) | ||||||||
Cash Flows From Financing Activities | ||||||||||||||||
Sale of Common Stock Proceeds | 313,867 | 1,163 | 316,107 | 2,307 | ||||||||||||
Net Increase / (Decrease) in Debt | (105,000 | ) | 25,000 | (85,000 | ) | 15,000 | ||||||||||
Stock-Based Compensation Tax Benefit | (4,642 | ) | 1,911 | — | 6,046 | |||||||||||
Dividends Paid | (2,943 | ) | (2,907 | ) | (5,873 | ) | (4,840 | ) | ||||||||
Net Cash Provided by Financing | 201,282 | 25,167 | 225,234 | 18,513 | ||||||||||||
Net Increase / (Decrease) in Cash and Cash Equivalents | $ | 94,339 | $ | (33,851 | ) | $ | 117,833 | $ | (18,263 | ) | ||||||
CABOT OIL & GAS RESULTS — Page 6
Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
As Reported—Net Income | $ | 54,625 | $ | 41,376 | $ | 100,600 | $ | 89,923 | ||||||||
Reversal of Selected Items, Net of Tax: | ||||||||||||||||
Gain on Sale of Assets | (253 | ) | (2,750 | ) | (253 | ) | (7,677 | ) | ||||||||
Stock-Based Compensation Expense | 13,668 | 2,526 | 24,723 | 6,653 | ||||||||||||
Unrealized Loss on Derivatives(1) | 1,833 | — | 1,833 | — | ||||||||||||
Net Income Excluding Selected Items | $ | 69,873 | $ | 41,152 | $ | 126,903 | $ | 88,899 | ||||||||
As Reported—Net Earnings Per Share | $ | 0.55 | $ | 0.43 | $ | 1.03 | $ | 0.93 | ||||||||
Per Share Impact of Reversing Selected Items | 0.16 | (0.01 | ) | 0.26 | (0.01 | ) | ||||||||||
Net Earnings Per Share Including Reversal of Selected Items | $ | 0.71 | $ | 0.42 | $ | 1.29 | $ | 0.92 | ||||||||
Weighted Average Common Shares Outstanding | 98,467 | 96,929 | 98,092 | 96,813 | ||||||||||||
(1) This unrealized loss 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. |
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Discretionary Cash Flow Calculation and Reconciliation (In thousands) |
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| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Discretionary Cash Flow | ||||||||||||||||
As Reported—Net Income | $ | 54,625 | $ | 41,376 | $ | 100,600 | $ | 89,923 | ||||||||
Plus / (Less): | ||||||||||||||||
Unrealized Loss on Derivatives | 2,909 | — | 2,909 | — | ||||||||||||
Income Charges Not Requiring Cash | 50,692 | 45,032 | 114,498 | 89,583 | ||||||||||||
Gain on Sale of Assets | (401 | ) | (4,422 | ) | (401 | ) | (12,342 | ) | ||||||||
Deferred Income Tax Expense | 31,955 | 23,738 | 55,515 | 39,612 | ||||||||||||
Exploration Expense | 7,290 | 6,825 | 12,351 | 12,477 | ||||||||||||
Discretionary Cash Flow | 147,070 | 112,549 | 285,472 | 219,253 | ||||||||||||
Changes in Assets and Liabilities | (8,005 | ) | (4,689 | ) | (9,061 | ) | 28,600 | |||||||||
Stock-Based Compensation Tax Benefit | 4,642 | (1,911 | ) | — | (6,046 | ) | ||||||||||
Net Cash Provided by Operations | $ | 143,707 | $ | 105,949 | $ | 276,411 | $ | 241,807 | ||||||||
Net Debt Reconciliation (In thousands) |
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| June 30, 2008 | December 31, 2007 | |||||||||||||||
Current Portion of Long-Term Debt | $ | 20,000 | $ | 20,000 | ||||||||||||
Long-Term Debt | 245,000 | 330,000 | ||||||||||||||
Total Debt | $ | 265,000 | $ | 350,000 | ||||||||||||
Stockholders’ Equity | 1,299,305 | 1,070,257 | ||||||||||||||
Total Capitalization | $ | 1,564,305 | $ | 1,420,257 | ||||||||||||
Total Debt | $ | 265,000 | $ | 350,000 | ||||||||||||
Less: Cash and Cash Equivalents | (136,331 | ) | (18,498 | ) | ||||||||||||
Net Debt | $ | 128,669 | $ | 331,502 | ||||||||||||
Net Debt | $ | 128,669 | $ | 331,502 | ||||||||||||
Stockholders’ Equity | 1,299,305 | 1,070,257 | ||||||||||||||
Total Adjusted Capitalization | $ | 1,427,974 | $ | 1,401,759 | ||||||||||||
Total Debt to Total Capitalization Ratio | 16.9 | % | 24.6 | % | ||||||||||||
Less: Impact of Cash and Cash Equivalents | 7.9 | % | 1.0 | % | ||||||||||||
Net Debt to Adjusted Capitalization Ratio | 9.0 | % | 23.6 | % | ||||||||||||