Exhibit 99.1
Cabot Oil & Gas Corporation Announces 2009 Results
Record Production Levels
HOUSTON, February 21, 2010—Cabot Oil & Gas Corporation (NYSE: COG) today announced its 2009 financial results including net income of $148.3 million, or $1.43 per share, cash flow from operations of $614.1 million and discretionary cash flow of $604.6 million. Excluding the selected items (detailed in the attached tables), net income for the full year would have been $177.8 million, or $1.72 per share.
These results compare to 2008 net income of $211.3 million, or $2.10 per share, cash flow from operations of $634.4 million and discretionary cash flow of $608.7 million. Net income, excluding selected items, for 2008 was $232.8 million, or $2.31 per share.
“Although 2008 was a better overall financial year due to the higher level of natural gas pricing in that year, 2009 had its accomplishments and record setting performance” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “What is most important is that we set a new production high for the year and posted an 8.2 percent growth level.”
For 2009 equivalent production surpassed the 100 Bcfe mark for the first time, recording 103 Bcfe for the year. Production from both commodities grew, with natural gas up 8.4 percent and oil up 6.4 percent. The improvement in production was more than offset by lower commodity prices. The price comparison for natural gas realizations was $7.47 per Mcf in 2009 versus $8.39 per Mcf in 2008, while oil declined four percent year-over-year to $85.52 per barrel. Gains associated with the hedge portfolio added significantly to these 2009 realizations and improved overall revenues by $395.0 million. Total operating expenses declined year-over-year.
Fourth Quarter
The reported 2009 fourth quarter figures included net income of $36.4 million, or $0.35 per share, $196.9 million for cash flow from operations and $174.1 million for discretionary cash flow. These compare to net income of $43.7 million, or $0.42 per share, cash flow from operations of $209.7 million and discretionary cash flow of $162.2 million in the previous year. Removing the selected items, net income improved to $53.8 million or $0.52 per share for the 2009 fourth quarter versus
$45.8 million, or $0.44 per share in the comparable 2008 period. Higher commodity prices, higher production and overall lower expenses drove the results. “While results for the first three quarters of 2009 were down in comparison to the prior year due to lower commodity prices, the 2009 fourth quarter comparison shows year-over-year improvement after removing selected items,” stated Dinges.
Balance Sheet
During 2009 the Company reduced its overall debt level, driven primarily by the cash proceeds related to its Canadian asset sale, to $805.0 million. “Financially, we continue to have a solid balance sheet and we retain a significant level of flexibility as evident by our 30.8 percent debt to total capital ratio,” added Dinges.
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s 2009 year-end and fourth quarter financial and operating results discussion with financial analysts on Monday, February 22, 2010 at 9:30 a.m. EST (8:30 a.m. CST) atwww.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 52769718. The replay will be available through Wednesday, February 24, 2010. The latest financial guidance, including the Company’s hedge positions, along with a replay of the web cast, which will be archived for one year, are available in the investor relations section of the Company’s website atwww.cabotog.com.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer, with its entire resource base located in the continental United States. For additional information, visit the Company’s Internet homepage atwww.cabotog.com.
CABOT OIL & GAS RESULTS — Page 3
OPERATING DATA
Quarter Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
PRODUCED NATURAL GAS (Bcf) & OIL (Mbbl) | ||||||||||||||||
Natural Gas | ||||||||||||||||
North | 13.4 | 10.4 | 48.2 | 39.7 | ||||||||||||
South | 11.6 | 13.2 | 48.8 | 46.6 | ||||||||||||
Canada | — | 0.7 | 1.0 | 4.1 | ||||||||||||
Total | 25.0 | 24.3 | 98.0 | 90.4 | ||||||||||||
Crude/Condensate/Ngl | ||||||||||||||||
North | 26 | 30 | 118 | 118 | ||||||||||||
South | 194 | 171 | 720 | 655 | ||||||||||||
Canada | — | 4 | 7 | 21 | ||||||||||||
Total | 220 | 205 | 845 | 794 | ||||||||||||
Equivalent Production (Bcfe) | 26.3 | 25.6 | 103.0 | 95.2 | ||||||||||||
PRICES | ||||||||||||||||
Average Produced Gas Sales Price ($/Mcf) | ||||||||||||||||
North | $ | 6.67 | $ | 7.41 | $ | 6.59 | $ | 7.95 | ||||||||
South | $ | 8.94 | $ | 8.01 | $ | 8.42 | $ | 8.84 | ||||||||
Canada | $ | — | $ | 6.66 | $ | 3.72 | $ | 7.62 | ||||||||
Total(1) | $ | 7.73 | $ | 7.71 | $ | 7.47 | $ | 8.39 | ||||||||
Average Crude/Condensate Price ($/Bbl) | ||||||||||||||||
North | $ | 75.16 | $ | 54.24 | $ | 54.11 | $ | 93.62 | ||||||||
South | $ | 96.64 | $ | 75.97 | $ | 90.86 | $ | 88.46 | ||||||||
Canada | $ | — | $ | 50.04 | $ | 33.97 | $ | 85.08 | ||||||||
Total(1) | $ | 94.23 | $ | 72.41 | $ | 85.52 | $ | 89.11 | ||||||||
WELLS DRILLED | ||||||||||||||||
Gross | 24 | 99 | 143 | 432 | ||||||||||||
Net | 22 | 78 | 119 | 355 | ||||||||||||
Gross Success Rate | 83 | % | 92 | % | 95 | % | 97 | % |
(1) | These realized prices include the realized impact of derivative instrument settlements. |
Quarter Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||
Realized Impacts to Gas Pricing | $ | 3.47 | $ | 1.88 | $ | 3.80 | $ | 0.20 | |||||
Realized Impacts to Oil Pricing | $ | 21.40 | $ | 18.71 | $ | 28.25 | $ | (6.33 | ) |
CABOT OIL & GAS RESULTS — Page 4
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Quarter Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||
Operating Revenues | ||||||||||||||
Natural Gas Production | $ | 191,192 | $ | 189,228 | $ | 729,734 | $ | 758,755 | ||||||
Brokered Natural Gas | 21,166 | 27,557 | 75,283 | 114,220 | ||||||||||
Crude Oil and Condensate | 19,910 | 14,622 | 69,936 | 69,711 | ||||||||||
Other | 1,224 | 1,059 | 4,323 | 3,105 | ||||||||||
233,492 | 232,466 | 879,276 | 945,791 | |||||||||||
Operating Expenses | ||||||||||||||
Brokered Natural Gas Cost | 18,811 | 25,128 | 67,030 | 100,449 | ||||||||||
Direct Operations—Field and Pipeline | 22,421 | 26,738 | 93,985 | 91,839 | ||||||||||
Exploration | 19,526 | 12,436 | 50,784 | 31,200 | ||||||||||
Depreciation, Depletion and Amortization | 62,293 | 74,840 | 251,260 | 226,915 | ||||||||||
Impairment of Oil & Gas Properties | 17,622 | 35,700 | 17,622 | 35,700 | ||||||||||
General and Administrative (excluding Stock-Based Compensation) | 10,725 | 8,350 | 43,236 | 39,615 | ||||||||||
Stock-Based Compensation(1) | 8,546 | 4,994 | 25,138 | 34,570 | ||||||||||
Taxes Other Than Income | 10,118 | 9,791 | 44,649 | 66,540 | ||||||||||
170,062 | 197,977 | 593,704 | 626,828 | |||||||||||
Gain / (Loss) on Sale of Assets and Settlement of Dispute(2) | (20 | ) | 52,648 | (3,303 | ) | 53,049 | ||||||||
Income from Operations | 63,410 | 87,137 | 282,269 | 372,012 | ||||||||||
Interest Expense and Other | 14,850 | 13,705 | 58,979 | 36,389 | ||||||||||
Income Before Income Taxes | 48,560 | 73,432 | 223,290 | 335,623 | ||||||||||
Income Tax Expense | 12,196 | 29,732 | 74,947 | 124,333 | ||||||||||
Net Income | $ | 36,364 | $ | 43,700 | $ | 148,343 | $ | 211,290 | ||||||
Net Earnings Per Share—Basic | $ | 0.35 | $ | 0.42 | $ | 1.43 | $ | 2.10 | ||||||
Weighted-Average Common Shares Outstanding | 103,654 | 103,354 | 103,616 | 100,737 |
(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 North. The gain in 2008 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. |
CABOT OIL & GAS RESULTS — Page 5
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
December 31, 2009 | December 31, 2008 | |||||
Assets | ||||||
Current Assets | $ | 281,502 | $ | 460,551 | ||
Property, Equipment and Other Assets | 3,401,899 | 3,241,113 | ||||
Total Assets | $ | 3,683,401 | $ | 3,701,664 | ||
Liabilities and Stockholders’ Equity | ||||||
Current Liabilities | $ | 308,741 | $ | 378,913 | ||
Long-Term Debt, excluding Current Maturities | 805,000 | 831,143 | ||||
Deferred Income Taxes | 644,801 | 599,106 | ||||
Other Liabilities | 112,345 | 101,940 | ||||
Stockholders’ Equity | 1,812,514 | 1,790,562 | ||||
Total Liabilities and Stockholders’ Equity | $ | 3,683,401 | $ | 3,701,664 | ||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
Quarter Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||||
Net Income | $ | 36,364 | $ | 43,700 | $ | 148,343 | $ | 211,290 | ||||||||||
Unrealized (Gain) / Loss on Derivatives | 1,536 | (1,649 | ) | 1,954 | — | |||||||||||||
Impairment of Oil & Gas Properties | 17,622 | 35,700 | 17,622 | 35,700 | ||||||||||||||
Income Charges Not Requiring Cash | 71,958 | 80,092 | 280,819 | 242,538 | ||||||||||||||
(Gain) / Loss on Sale of Assets and Settlement of Dispute | 20 | (32,448 | ) | 3,303 | (32,849 | ) | ||||||||||||
Deferred Income Tax Expense | 27,042 | 24,392 | 101,815 | 120,851 | ||||||||||||||
Changes in Assets and Liabilities | 23,559 | 47,176 | 23,202 | 36,408 | ||||||||||||||
Stock-Based Compensation Tax Benefit | (705 | ) | 320 | (13,790 | ) | (10,691 | ) | |||||||||||
Exploration Expense | 19,526 | 12,436 | 50,784 | 31,200 | ||||||||||||||
Net Cash Provided by Operations | 196,922 | 209,719 | 614,052 | 634,447 | ||||||||||||||
Cash Flows From Investing Activities | ||||||||||||||||||
Capital Expenditures | (165,504 | ) | (258,849 | ) | (560,423 | ) | (1,423,188 | ) | ||||||||||
Proceeds from Sale of Assets | — | 949 | 80,180 | 2,099 | ||||||||||||||
Exploration Expense | (19,526 | ) | (12,436 | ) | (50,784 | ) | (31,200 | ) | ||||||||||
Net Cash Used in Investing | (185,030 | ) | (270,336 | ) | (531,027 | ) | (1,452,289 | ) | ||||||||||
Cash Flows From Financing Activities | ||||||||||||||||||
Sale of Common Stock Proceeds | — | 1 | 83 | 316,230 | ||||||||||||||
Net Increase / (Decrease) in Debt | (5,000 | ) | 47,000 | (62,000 | ) | 517,000 | ||||||||||||
Capitalized Debt Issuance Costs | — | (2,237 | ) | (10,409 | ) | (4,403 | ) | |||||||||||
Stock-Based Compensation Tax Benefit | 705 | (320 | ) | 13,790 | 10,691 | |||||||||||||
Dividends Paid | (3,109 | ) | (3,100 | ) | (12,432 | ) | (12,073 | ) | ||||||||||
Net Cash Provided by / (Used in) Financing | (7,404 | ) | 41,344 | (70,968 | ) | 827,445 | ||||||||||||
Net Increase / (Decrease) in Cash and Cash Equivalents | $ | 4,488 | $ | (19,273 | ) | $ | 12,057 | $ | 9,603 | |||||||||
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 December 31, | Twelve Months Ended December 31, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||
As Reported—Net Income | $ | 36,364 | $ | 43,700 | $ | 148,343 | $ | 211,290 | ||||||
Reversal of Selected Items, Net of Tax: | ||||||||||||||
Impairment of Oil & Gas Properties and Other Assets | 11,102 | 22,384 | 11,102 | 22,384 | ||||||||||
Impairment of Unproved Properties(1) | — | 10,653 | — | 10,653 | ||||||||||
(Gain) / Loss on Sale of Assets and Settlement of Dispute (2) | 13 | (33,010 | ) | 1,283 | (33,263 | ) | ||||||||
Stock-Based Compensation Expense | 5,384 | 3,131 | 15,798 | 21,756 | ||||||||||
Unrealized (Gain) / Loss on Derivatives(3) | 968 | (1,040 | ) | 1,231 | — | |||||||||
Net Income Excluding Selected Items | $ | 53,831 | $ | 45,818 | $ | 177,757 | $ | 232,820 | ||||||
As Reported—Net Earnings Per Share | $ | 0.35 | $ | 0.42 | $ | 1.43 | $ | 2.10 | ||||||
Per Share Impact of Reversing Selected Items | 0.17 | 0.02 | 0.29 | 0.21 | ||||||||||
Net Earnings Per Share Including Reversal of Selected Items | $ | 0.52 | $ | 0.44 | $ | 1.72 | $ | 2.31 | ||||||
Weighted-Average Common Shares Outstanding | 103,654 | 103,354 | 103,616 | 100,737 |
(1) | The impairment of unproved properties in 2008 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 making the Company abandon its exploration plans. |
(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 North. The gain in 2008 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. |
(3) | 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 December 31, | Twelve Months Ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Discretionary Cash Flow | ||||||||||||||||
As Reported—Net Income | $ | 36,364 | $ | 43,700 | $ | 148,343 | $ | 211,290 | ||||||||
Plus / (Less): | ||||||||||||||||
Unrealized (Gain) / Loss on Derivatives | 1,536 | (1,649 | ) | 1,954 | — | |||||||||||
Impairment of Oil & Gas Properties | 17,622 | 35,700 | 17,622 | 35,700 | ||||||||||||
Income Charges Not Requiring Cash | 71,958 | 80,092 | 280,819 | 242,538 | ||||||||||||
(Gain) / Loss on Sale of Assets and Settlement of Dispute | 20 | (32,448 | ) | 3,303 | (32,849 | ) | ||||||||||
Deferred Income Tax Expense | 27,042 | 24,392 | 101,815 | 120,851 | ||||||||||||
Exploration Expense | 19,526 | 12,436 | 50,784 | 31,200 | ||||||||||||
Discretionary Cash Flow | 174,068 | 162,223 | 604,640 | 608,730 | ||||||||||||
Changes in Assets and Liabilities | 23,559 | 47,176 | 23,202 | 36,408 | ||||||||||||
Stock-Based Compensation Tax Benefit | (705 | ) | 320 | (13,790 | ) | (10,691 | ) | |||||||||
Net Cash Provided by Operations | $ | 196,922 | $ | 209,719 | $ | 614,052 | $ | 634,447 | ||||||||
Net Debt Reconciliation
(In thousands)
December 31, 2009 | December 31, 2008 | |||||||
Current Portion of Long-Term Debt | $ | — | $ | 35,857 | ||||
Long-Term Debt | 805,000 | 831,143 | ||||||
Total Debt | $ | 805,000 | $ | 867,000 | ||||
Stockholders’ Equity | 1,812,514 | 1,790,562 | ||||||
Total Capitalization | $ | 2,617,514 | $ | 2,657,562 | ||||
Total Debt | $ | 805,000 | $ | 867,000 | ||||
Less: Cash and Cash Equivalents | (40,158 | ) | (28,101 | ) | ||||
Net Debt | $ | 764,842 | $ | 838,899 | ||||
Net Debt | $ | 764,842 | $ | 838,899 | ||||
Stockholders’ Equity | 1,812,514 | 1,790,562 | ||||||
Total Adjusted Capitalization | $ | 2,577,356 | $ | 2,629,461 | ||||
Total Debt to Total Capitalization Ratio | 30.8 | % | 32.6 | % | ||||
Less: Impact of Cash and Cash Equivalents | 1.1 | % | 0.7 | % | ||||
Net Debt to Adjusted Capitalization Ratio | 29.7 | % | 31.9 | % |