Exhibit 99.1
| FOR RELEASE | FOR MORE INFORMATION CONTACT | |
| July 23, 2009 | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Announces Second Quarter Results
HOUSTON, July 23, 2009 - Cabot Oil & Gas Corporation (NYSE: COG) today reported second quarter net income of $25.5 million, or $0.25 per share. Removing the selected items, (which are detailed in the Selected Items Table and include the loss related to the sale of the Company’s Canadian operations), the quarter’s net income was $39.1 million, or $0.38 per share. These figures compare to the 2008 second quarter numbers (for both the reported results and after the removal of selected items) of $54.6 million, or $0.55 per share, and $69.9 million, or $0.71 per share, for net income respectively.
Cash flow from operations for the 2009 second quarter totaled $147.9 million, while discretionary cash flow was $133.6 million. Comparatively, 2008 second quarter cash flow from operations was $143.7 million, and discretionary cash flow was $147.1 million.
“This marks our 25th consecutive quarter of profitability,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “These results include a ten percent increase in second quarter 2009 equivalent production over the second quarter of 2008 but also reflect a reduced commodity price realization.” The production growth rate was driven by a 42 percent increase in the East region and a 20 percent increase in the Gulf Coast region for comparable year over year quarters. On the pricing front, even with the hedge benefit, the price realization fell short of last year. Realized natural gas prices were $7.25 per Mcf in the 2009 second quarter versus $9.30 per Mcf in the 2008 second quarter. Realized oil prices fell 15 percent to $83.76 per barrel.”
In terms of cost comparisons, overall reported expenses were higher, but per unit levels were lower in this second quarter versus last year’s second quarter. The higher components of DD&A, interest and exploration expense are related to the impact of the August 2008 east Texas acquisition.
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Year-to-Date
In the six months ended June 30, 2009, Cabot reported net income of $73.1 million, or $0.71 per share, compared to $100.6 million, or $1.03 per share, for the same period last year. The cash flow comparisons for the six months ended June 30, 2009 and June 30, 2008, respectively, are cash flow from operations of $300.4 million versus $276.4 million and discretionary cash flow of $271.7 million versus $285.5 million. The 2009 six-month net income figure, after removal of the selected items, was $81.3 million, or $0.78 per share, versus $126.9 million, or $1.29 per share for the six-month period ended June 30, 2008.
“The same dynamic that drove the quarter results apply to the year-to-date periods – increased production and lower price realizations,” stated Dinges. “Production was up approximately 13 percent while natural gas and oil prices each fell 14 percent.” Expenses including financing costs were up three percent between the six-month year-to-date comparable periods.
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s second quarter financial and operating results discussion with financial analysts on Friday, July 24, 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 18590704. The replay will be available through Sunday, July 26, 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 its entire resource base located in the continental United States. 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, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | ||||||||||||||||
Natural Gas | ||||||||||||||||
East | 8.4 | 5.9 | 15.7 | 11.9 | ||||||||||||
Gulf Coast | 9.3 | 7.7 | 19.7 | 15.1 | ||||||||||||
West | 6.2 | 7.1 | 12.4 | 13.5 | ||||||||||||
Canada | 0.4 | 1.4 | 1.0 | 2.6 | ||||||||||||
Total | 24.3 | 22.1 | 48.8 | 43.1 | ||||||||||||
Crude/Condensate/Ngl | ||||||||||||||||
East | 5 | 6 | 9 | 12 | ||||||||||||
Gulf Coast | 147 | 136 | 300 | 280 | ||||||||||||
West | 44 | 43 | 79 | 79 | ||||||||||||
Canada | 2 | 5 | 6 | 11 | ||||||||||||
Total | 198 | 190 | 394 | 382 | ||||||||||||
Equivalent Production (Bcfe) | 25.6 | 23.2 | 51.2 | 45.4 | ||||||||||||
PRICES | ||||||||||||||||
Average Produced Gas Sales Price ($/Mcf) | ||||||||||||||||
East | $ | 7.09 | $ | 9.64 | $ | 7.67 | $ | 8.96 | ||||||||
Gulf Coast | $ | 8.79 | $ | 10.36 | $ | 8.55 | $ | 9.35 | ||||||||
West | $ | 5.36 | $ | 8.04 | $ | 5.45 | $ | 7.67 | ||||||||
Canada | $ | 3.22 | $ | 8.41 | $ | 3.40 | $ | 7.91 | ||||||||
Total(1) | $ | 7.25 | $ | 9.30 | $ | 7.38 | $ | 8.63 | ||||||||
Average Crude/Condensate Price ($/Bbl) | ||||||||||||||||
East | $ | 54.24 | $ | 118.33 | $ | 46.90 | $ | 103.89 | ||||||||
Gulf Coast | $ | 94.51 | $ | 91.87 | $ | 90.72 | $ | 88.11 | ||||||||
West | $ | 52.15 | $ | 118.18 | $ | 43.37 | $ | 108.12 | ||||||||
Canada | $ | 45.14 | $ | 96.89 | $ | 36.46 | $ | 87.26 | ||||||||
Total(1) | $ | 83.76 | $ | 98.68 | $ | 79.55 | $ | 92.58 | ||||||||
WELLS DRILLED | ||||||||||||||||
Gross | 33 | 116 | 82 | 201 | ||||||||||||
Net | 28 | 97 | 65 | 162 | ||||||||||||
Gross Success Rate | 100 | % | 99 | % | 98 | % | 99 | % | ||||||||
| (1) | These realized prices include the realized impact of derivative instrument settlements. |
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||
Realized Impacts to Gas Pricing | $ | 4.15 | $ | (0.97 | ) | $ | 3.74 | $ | (0.48 | ) | ||||
Realized Impacts to Oil Pricing | $ | 30.78 | $ | (21.19 | ) | $ | 34.87 | $ | (14.88 | ) | ||||
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, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||
Operating Revenues | ||||||||||||||
Natural Gas Production | $ | 176,213 | $ | 202,689 | $ | 360,735 | $ | 369,248 | ||||||
Brokered Natural Gas | 11,704 | 27,188 | 45,085 | 62,808 | ||||||||||
Crude Oil and Condensate | 16,210 | 18,600 | 30,452 | 35,087 | ||||||||||
Other | 697 | 377 | 2,491 | 1,362 | ||||||||||
| 204,824 | 248,854 | 438,763 | 468,505 | |||||||||||
Operating Expenses | ||||||||||||||
Brokered Natural Gas Cost | 10,684 | 24,140 | 40,433 | 54,430 | ||||||||||
Direct Operations - Field and Pipeline | 23,073 | 22,636 | 48,552 | 40,127 | ||||||||||
Exploration | 10,397 | 7,290 | 16,863 | 12,351 | ||||||||||
Depreciation, Depletion and Amortization | 61,838 | 48,401 | 126,930 | 94,668 | ||||||||||
General and Administrative (excluding Stock-Based Compensation) | 10,946 | 11,782 | 22,882 | 21,779 | ||||||||||
Stock-Based Compensation(1) | 6,171 | 21,695 | 11,300 | 39,271 | ||||||||||
Taxes Other Than Income | 10,914 | 19,225 | 23,812 | 36,122 | ||||||||||
| 134,023 | 155,169 | 290,772 | 298,748 | |||||||||||
Gain / (Loss) on Sale of Assets(2) | (16,562 | ) | 401 | (3,855 | ) | 401 | ||||||||
Income from Operations | 54,239 | 94,086 | 144,136 | 170,158 | ||||||||||
Interest Expense and Other | 15,046 | 6,207 | 29,272 | 12,198 | ||||||||||
Income Before Income Taxes | 39,193 | 87,879 | 114,864 | 157,960 | ||||||||||
Income Tax Expense | 13,691 | 33,254 | 41,782 | 57,360 | ||||||||||
Net Income | $ | 25,502 | $ | 54,625 | $ | 73,082 | $ | 100,600 | ||||||
Net Earnings Per Share – Basic | $ | 0.25 | $ | 0.55 | $ | 0.71 | $ | 1.03 | ||||||
Weighted Average Common Shares Outstanding | 103,640 | 98,467 | 103,581 | 98,092 | ||||||||||
| (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 loss on sale of assets in 2009 primarily relates to a loss on our April 2009 sale of our Canadian properties, partially offset by a gain on sale of assets from the first quarter 2009 sale of the Thornwood properties in the East. |
CABOT OIL & GAS RESULTS — Page 5
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
| June 30, 2009 | December 31, 2008 | |||||
Assets | ||||||
Current Assets | $ | 370,822 | $ | 460,551 | ||
Property, Equipment and Other Assets | 3,252,862 | 3,241,113 | ||||
Total Assets | $ | 3,623,684 | $ | 3,701,664 | ||
Liabilities and Stockholders’ Equity | ||||||
Current Liabilities | $ | 265,127 | $ | 378,913 | ||
Long-Term Debt, excluding Current Maturities | 795,000 | 831,143 | ||||
Deferred Income Taxes | 628,234 | 599,106 | ||||
Other Liabilities | 98,851 | 101,940 | ||||
Stockholders’ Equity | 1,836,472 | 1,790,562 | ||||
Total Liabilities and Stockholders’ Equity | $ | 3,623,684 | $ | 3,701,664 | ||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||
Net Income | $ | 25,502 | $ | 54,625 | $ | 73,082 | $ | 100,600 | ||||||||
Unrealized (Gain) / Loss on Derivatives | 126 | 2,909 | (815 | ) | 2,909 | |||||||||||
Income Charges Not Requiring Cash | 69,151 | 50,692 | 140,443 | 114,498 | ||||||||||||
(Gain) / Loss on Sale of Assets | 16,562 | (401 | ) | 3,855 | (401 | ) | ||||||||||
Deferred Income Tax Expense | 11,903 | 31,955 | 38,252 | 55,515 | ||||||||||||
Changes in Assets and Liabilities | 14,210 | (8,005 | ) | 28,705 | (9,061 | ) | ||||||||||
Stock-Based Compensation Tax Benefit | — | 4,642 | — | — | ||||||||||||
Exploration Expense | 10,397 | 7,290 | 16,863 | 12,351 | ||||||||||||
Net Cash Provided by Operations | 147,851 | 143,707 | 300,385 | 276,411 | ||||||||||||
Cash Flows From Investing Activities | ||||||||||||||||
Capital Expenditures | (121,941 | ) | (244,510 | ) | (292,970 | ) | (372,611 | ) | ||||||||
Proceeds from Sale of Assets | 64,604 | 1,150 | 79,667 | 1,150 | ||||||||||||
Exploration Expense | (10,397 | ) | (7,290 | ) | (16,863 | ) | (12,351 | ) | ||||||||
Net Cash Used in Investing | (67,734 | ) | (250,650 | ) | (230,166 | ) | (383,812 | ) | ||||||||
Cash Flows From Financing Activities | ||||||||||||||||
Sale of Common Stock Proceeds | 1 | 313,867 | 150 | 316,107 | ||||||||||||
Net Increase / (Decrease) in Debt | (62,000 | ) | (105,000 | ) | (52,000 | ) | (85,000 | ) | ||||||||
Capitalized Debt Issuance Costs | (10,409 | ) | — | (10,409 | ) | — | ||||||||||
Stock-Based Compensation Tax Benefit | — | (4,642 | ) | — | — | |||||||||||
Dividends Paid | (3,110 | ) | (2,943 | ) | (6,213 | ) | (5,873 | ) | ||||||||
Net Cash (Used in) / Provided by Financing | (75,518 | ) | 201,282 | (68,472 | ) | 225,234 | ||||||||||
Net Increase in Cash and Cash Equivalents | $ | 4,599 | $ | 94,339 | $ | 1,747 | $ | 117,833 | ||||||||
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, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
As Reported - Net Income | $ | 25,502 | $ | 54,625 | $ | 73,082 | $ | 100,600 | |||||||
Reversal of Selected Items, Net of Tax: | |||||||||||||||
(Gain) / Loss on Sale of Assets(1) | 9,596 | (253 | ) | 1,629 | (253 | ) | |||||||||
Stock-Based Compensation Expense | 3,875 | 13,668 | 7,091 | 24,723 | |||||||||||
Unrealized (Gain) / Loss on Derivatives(2) | 79 | 1,833 | (511 | ) | 1,833 | ||||||||||
Net Income Excluding Selected Items | $ | 39,052 | $ | 69,873 | $ | 81,291 | $ | 126,903 | |||||||
As Reported - Net Earnings Per Share | $ | 0.25 | $ | 0.55 | $ | 0.71 | $ | 1.03 | |||||||
Per Share Impact of Reversing Selected Items | 0.13 | 0.16 | 0.07 | 0.26 | |||||||||||
Net Earnings Per Share Including Reversal of Selected Items | $ | 0.38 | $ | 0.71 | $ | 0.78 | $ | 1.29 | |||||||
Weighted Average Common Shares Outstanding | 103,640 | 98,467 | 103,581 | 98,092 | |||||||||||
| (1) | The loss on sale of assets in 2009 primarily relates to a loss on our April 2009 sale of our Canadian properties, partially offset by a gain on sale of assets from the first quarter 2009 sale of the Thornwood properties in the East. The loss on sale of assets for the three and six months ended June 30, 2009 considers a tax benefit associated with foreign tax credits. |
| (2) | This unrealized (gain) / loss 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. |
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
| Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
Discretionary Cash Flow | |||||||||||||||
As Reported - Net Income | $ | 25,502 | $ | 54,625 | $ | 73,082 | $ | 100,600 | |||||||
Plus / (Less): | |||||||||||||||
Unrealized (Gain) / Loss on Derivatives | 126 | 2,909 | (815 | ) | 2,909 | ||||||||||
Income Charges Not Requiring Cash | 69,151 | 50,692 | 140,443 | 114,498 | |||||||||||
(Gain) / Loss on Sale of Assets | 16,562 | (401 | ) | 3,855 | (401 | ) | |||||||||
Deferred Income Tax Expense | 11,903 | 31,955 | 38,252 | 55,515 | |||||||||||
Exploration Expense | 10,397 | 7,290 | 16,863 | 12,351 | |||||||||||
Discretionary Cash Flow | 133,641 | 147,070 | 271,680 | 285,472 | |||||||||||
Changes in Assets and Liabilities | 14,210 | (8,005 | ) | 28,705 | (9,061 | ) | |||||||||
Stock-Based Compensation Tax Benefit | — | 4,642 | — | — | |||||||||||
Net Cash Provided by Operations | $ | 147,851 | $ | 143,707 | $ | 300,385 | $ | 276,411 | |||||||
Net Debt Reconciliation
(In thousands)
| June 30, 2009 | December 31, 2008 | |||||||
Current Portion of Long-Term Debt | $ | 20,000 | $ | 35,857 | ||||
Long-Term Debt | 795,000 | 831,143 | ||||||
Total Debt | $ | 815,000 | $ | 867,000 | ||||
Stockholders’ Equity | 1,836,472 | 1,790,562 | ||||||
Total Capitalization | $ | 2,651,472 | $ | 2,657,562 | ||||
Total Debt | $ | 815,000 | $ | 867,000 | ||||
Less: Cash and Cash Equivalents | (29,848 | ) | (28,101 | ) | ||||
Net Debt | $ | 785,152 | $ | 838,899 | ||||
Net Debt | $ | 785,152 | $ | 838,899 | ||||
Stockholders’ Equity | 1,836,472 | 1,790,562 | ||||||
Total Adjusted Capitalization | $ | 2,621,624 | $ | 2,629,461 | ||||
Total Debt to Total Capitalization Ratio | 30.7 | % | 32.6 | % | ||||
Less: Impact of Cash and Cash Equivalents | 0.8 | % | 0.7 | % | ||||
Net Debt to Adjusted Capitalization Ratio | 29.9 | % | 31.9 | % | ||||