Exhibit 99.1
FOR RELEASE | FOR MORE INFORMATION CONTACT | |
April 28, 2009 | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Announces First Quarter Profits
HOUSTON, April 28, 2009—Cabot Oil & Gas Corporation (NYSE: COG) today reported that for the first quarter of 2009 the Company had net income of $47.6 million, or $0.46 per share, compared to $46.0 million, or $0.47 per share, for last year’s first quarter. The 2009 earnings figure benefited from a gain on the sale of assets and a gain on derivatives in 2009, while both periods were negatively impacted by charges related to stock compensation. Removing these selected items for both first quarter periods, the comparison for net income is $42.2 million, or $0.41 per share, for 2009 versus $57.0 million, or $0.58 per share, in 2008.
The Company also reported cash flow from operations for the quarter of $152.5 million, up almost $20 million from the $132.7 million recorded in last year’s first quarter. Discretionary cash flow was relatively flat between comparable periods at $138.0 million for 2009, compared to $138.4 million for 2008.
“The key drivers for the quarter’s results were a 16 percent increase in equivalent production and solid price realizations aided by our hedge position,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “For the quarter, Cabot reported 25.6 Bcfe of production, compared to last year’s first quarter figure of 22.2 Bcfe. This increase represents a combination of growth in our organic program and from production related to last summer’s acquisition,” commented Dinges. “Roughly half was the result of acquired wells and half from our drilling effort.”
Natural gas price realizations were $7.51 per Mcf in 2009 versus $7.92 per Mcf in 2008 for the quarter comparisons. This year’s quarter experienced a $3.34 per Mcf pick-up from the Company’s hedge position, where last year’s impact was only a positive $0.03 per Mcf. While oil comprises a small portion of Cabot’s production, the hedge per unit impact was much more dramatic, moving realized oil prices up $39.07 per barrel for the first quarter 2009 versus a decline of $8.60 per barrel in the first quarter 2008.
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“Expenses between comparable quarters trended higher but within expectations,” added Dinges. “DD&A increased due to higher production, costs related to the acquisition and leasehold amortizations.”
“In light of the business environment, I am pleased with the quarter results, the areas we have to allocate our capital and the stronger financial position we possess,” said Dinges. “Even with the current economic conditions, I believe 2009 will be another growth year for Cabot.”
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s first quarter financial and operating results discussion with financial analysts on Wednesday, April 29, 2009 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 93093519. The replay will be available through Friday, May 1, 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 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; and in the East. 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 March 31, | ||||||||
2009 | 2008 | |||||||
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | ||||||||
Natural Gas | ||||||||
East | 7.3 | 6.0 | ||||||
Gulf Coast | 10.4 | 7.4 | ||||||
West | 6.2 | 6.4 | ||||||
Canada | 0.6 | 1.2 | ||||||
Total | 24.5 | 21.0 | ||||||
Crude/Condensate/Ngl | ||||||||
East | 4 | 6 | ||||||
Gulf Coast | 153 | 144 | ||||||
West | 35 | 36 | ||||||
Canada | 4 | 6 | ||||||
Total | 196 | 192 | ||||||
Equivalent Production (Bcfe) | 25.6 | 22.2 | ||||||
PRICES | ||||||||
Average Produced Gas Sales Price ($/Mcf) | ||||||||
East | $ | 8.34 | $ | 8.28 | ||||
Gulf Coast | $ | 8.34 | $ | 8.30 | ||||
West | $ | 5.54 | $ | 7.26 | ||||
Canada | $ | 3.51 | $ | 7.38 | ||||
Total(1) | $ | 7.51 | $ | 7.92 | ||||
Average Crude/Condensate Price ($/Bbl) | ||||||||
East | $ | 37.25 | $ | 90.04 | ||||
Gulf Coast | $ | 87.02 | $ | 84.58 | ||||
West | $ | 32.22 | $ | 95.66 | ||||
Canada | $ | 32.01 | $ | 79.38 | ||||
Total(1) | $ | 75.25 | $ | 86.55 | ||||
WELLS DRILLED | ||||||||
Gross | 49 | 85 | ||||||
Net | 37 | 65 | ||||||
Gross Success Rate | 96 | % | 98 | % |
(1) | These realized prices include the realized impact of derivative instrument settlements. |
Quarter Ended March 31, | |||||||
2009 | 2008 | ||||||
Realized Impacts to Gas Pricing | $ | 3.34 | $ | 0.03 | |||
Realized Impacts to Oil Pricing | $ | 39.07 | $ | (8.60 | ) |
CABOT OIL & GAS RESULTS - Page 4
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Quarter Ended March 31, | ||||||
2009 | 2008 | |||||
Operating Revenues | ||||||
Natural Gas Production | $ | 184,522 | $ | 166,559 | ||
Brokered Natural Gas | 33,381 | 35,620 | ||||
Crude Oil and Condensate | 14,242 | 16,487 | ||||
Other | 1,794 | 985 | ||||
233,939 | 219,651 | |||||
Operating Expenses | ||||||
Brokered Natural Gas Cost | 29,749 | 30,290 | ||||
Direct Operations - Field and Pipeline | 25,479 | 17,491 | ||||
Exploration | 6,466 | 5,061 | ||||
Depreciation, Depletion and Amortization | 65,092 | 46,267 | ||||
General and Administrative (excluding Stock-Based Compensation) | 11,936 | 9,997 | ||||
Stock-Based Compensation(1) | 5,129 | 17,576 | ||||
Taxes Other Than Income | 12,898 | 16,897 | ||||
156,749 | 143,579 | |||||
Gain on Sale of Assets(2) | 12,707 | — | ||||
Income from Operations | 89,897 | 76,072 | ||||
Interest Expense and Other | 14,226 | 5,991 | ||||
Income Before Income Taxes | 75,671 | 70,081 | ||||
Income Tax Expense | 28,091 | 24,106 | ||||
Net Income | $ | 47,580 | $ | 45,975 | ||
Net Earnings Per Share - Basic | $ | 0.46 | $ | 0.47 | ||
Weighted Average Common Shares Outstanding | 103,521 | 97,716 |
(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 Plans which commenced in 2008. |
(2) | The gain on sale of assets primarily relates to the sale of the Thornwood properties in the East. |
CABOT OIL & GAS RESULTS - Page 5
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
March 31, 2009 | December 31, 2008 | |||||
Assets | ||||||
Current Assets | $ | 457,074 | $ | 460,551 | ||
Property, Equipment and Other Assets | 3,291,697 | 3,241,113 | ||||
Total Assets | $ | 3,748,771 | $ | 3,701,664 | ||
Liabilities and Stockholders’ Equity | ||||||
Current Liabilities | $ | 312,314 | $ | 378,913 | ||
Long-Term Debt, excluding Current Maturities | 840,286 | 831,143 | ||||
Deferred Income Taxes | 623,340 | 599,106 | ||||
Other Liabilities | 103,937 | 101,940 | ||||
Stockholders’ Equity | 1,868,894 | 1,790,562 | ||||
Total Liabilities and Stockholders’ Equity | $ | 3,748,771 | $ | 3,701,664 | ||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
Quarter Ended March 31, | ||||||||
2009 | 2008 | |||||||
Cash Flows From Operating Activities | ||||||||
Net Income | $ | 47,580 | $ | 45,975 | ||||
Unrealized Gain on Derivatives | (941 | ) | — | |||||
Income Charges Not Requiring Cash | 71,292 | 63,806 | ||||||
Gain on Sale of Assets | (12,707 | ) | — | |||||
Deferred Income Tax Expense | 26,349 | 23,560 | ||||||
Changes in Assets and Liabilities | 14,495 | (1,056 | ) | |||||
Stock-Based Compensation Tax Benefit | — | (4,642 | ) | |||||
Exploration Expense | 6,466 | 5,061 | ||||||
Net Cash Provided by Operations | 152,534 | 132,704 | ||||||
Cash Flows From Investing Activities | ||||||||
Capital Expenditures | (171,029 | ) | (128,101 | ) | ||||
Proceeds from Sale of Assets | 15,063 | — | ||||||
Exploration Expense | (6,466 | ) | (5,061 | ) | ||||
Net Cash Used in Investing | (162,432 | ) | (133,162 | ) | ||||
Cash Flows From Financing Activities | ||||||||
Sale of Common Stock Proceeds | 149 | 2,240 | ||||||
Net Increase in Debt | 10,000 | 20,000 | ||||||
Stock-Based Compensation Tax Benefit | — | 4,642 | ||||||
Dividends Paid | (3,103 | ) | (2,930 | ) | ||||
Net Cash Provided by Financing | 7,046 | 23,952 | ||||||
Net Increase / (Decrease) in Cash and Cash Equivalents | $ | (2,852 | ) | $ | 23,494 | |||
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 March 31, | |||||||
2009 | 2008 | ||||||
As Reported - Net Income | $ | 47,580 | $ | 45,975 | |||
Reversal of Selected Items, Net of Tax: | |||||||
Gain on Sale of Assets(2) | (7,967 | ) | — | ||||
Stock-Based Compensation Expense | 3,216 | 11,055 | |||||
Unrealized Gain on Derivatives(1) | (590 | ) | — | ||||
Net Income Excluding Selected Items | $ | 42,239 | $ | 57,030 | |||
As Reported - Net Earnings Per Share | $ | 0.46 | $ | 0.47 | |||
Per Share Impact of Reversing Selected Items | (0.05 | ) | 0.11 | ||||
Net Earnings Per Share Including Reversal of Selected Items | $ | 0.41 | $ | 0.58 | |||
Weighted Average Common Shares Outstanding | 103,521 | 97,716 |
(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 the Company’s natural gas basis swaps. |
(2) | The gain on sale of assets primarily relates to the sale of the Thornwood properties in the East. |
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
Quarter Ended March 31, | ||||||||
2009 | 2008 | |||||||
Discretionary Cash Flow | ||||||||
As Reported - Net Income | $ | 47,580 | $ | 45,975 | ||||
Plus / (Less): | ||||||||
Unrealized Gain on Derivatives | (941 | ) | — | |||||
Income Charges Not Requiring Cash | 71,292 | 63,806 | ||||||
Gain on Sale of Assets | (12,707 | ) | — | |||||
Deferred Income Tax Expense | 26,349 | 23,560 | ||||||
Exploration Expense | 6,466 | 5,061 | ||||||
Discretionary Cash Flow | 138,039 | 138,402 | ||||||
Changes in Assets and Liabilities | 14,495 | (1,056 | ) | |||||
Stock-Based Compensation Tax Benefit | — | (4,642 | ) | |||||
Net Cash Provided by Operations | $ | 152,534 | $ | 132,704 | ||||
Net Debt Reconciliation
(In thousands)
March 31, 2009 | December 31, 2008 | |||||||
Current Portion of Long-Term Debt | $ | 36,714 | $ | 35,857 | ||||
Long-Term Debt | 840,286 | 831,143 | ||||||
Total Debt | $ | 877,000 | $ | 867,000 | ||||
Stockholders’ Equity | 1,868,894 | 1,790,562 | ||||||
Total Capitalization | $ | 2,745,894 | $ | 2,657,562 | ||||
Total Debt | $ | 877,000 | $ | 867,000 | ||||
Less: Cash and Cash Equivalents | (25,249 | ) | (28,101 | ) | ||||
Net Debt | $ | 851,751 | $ | 838,899 | ||||
Net Debt | $ | 851,751 | $ | 838,899 | ||||
Stockholders’ Equity | 1,868,894 | 1,790,562 | ||||||
Total Adjusted Capitalization | $ | 2,720,645 | $ | 2,629,461 | ||||
Total Debt to Total Capitalization Ratio | 31.9 | % | 32.6 | % | ||||
Less: Impact of Cash and Cash Equivalents | 0.6 | % | 0.7 | % | ||||
Net Debt to Adjusted Capitalization Ratio | 31.3 | % | 31.9 | % |