[CABOT OIL & GAS CORPORATION LOGO] NEWS RELEASE
1200 Enclave Parkway, Houston, Texas 77077
P.O. Box 4544, Houston, Texas 77210-4544
(281) 589-4600
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
April 29, 2003 Scott Schroeder (281) 589-4993
CABOT OIL & GAS ANNOUNCES FIRST QUARTER RESULTS
HOUSTON, April 29, 2003 - Cabot Oil & Gas Corporation (NYSE:COG) today
announced its first quarter results which included the impact of two previously
disclosed (February 13, 2003) non-cash selected items. For the first three
months of the year, the Company recorded a net loss of $39.2 million, or $1.23
per share, and a near doubling of discretionary cash flow to $67.6 million.
These figures compare to a net loss of $0.8 million, or $.03 per share, and
discretionary cash flow of $34.4 million in the first quarter of 2002. Cash flow
from operations was $59.5 million in the first quarter of 2003 versus $29.5
million in the comparable period for last year.
Selected Items Detail
The 2003 first quarter includes the effects of 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). Excluding the impact of these
selected items Cabot's net income was $22.1 million, or $.69 per share. A
detailed reconciliation between this reporting and the GAAP results can be found
in the attached statements.
Discussion of Results
Higher realized commodity prices drove revenues up 81 percent over last
year's comparable quarter. Realized natural gas prices averaged $2.53 per Mcf in
the first quarter of 2002 and $4.55 per Mcf during this year's first quarter.
Oil prices exhibited strong gains with a $30.88 per barrel realization for the
2003 first quarter versus
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CABOT OIL & GAS / 2
$20.55 per barrel during last year's comparable period.
The Company increased its exploration expense with a $5 million additional
investment in Gulf Coast seismic over last year's level. Additionally, the
significantly higher realized commodity prices resulted in a higher level of
production related taxes.
Consistent with the Company's first quarter guidance, production was 3
percent below the level reported in the first quarter of last year. Comparing
the fourth quarter 2002 to the first quarter of 2003, Cabot's daily production
was 242.9 Mmcfe per day in the first quarter of 2003 versus 243.9 Mmcfe per day
in the fourth quarter of 2002, essentially flat between periods.
Commenting on the quarter, Dan O. Dinges, Chairman, President and Chief
Executive Officer stated, "Operationally we continued to make progress through
our accelerated development drilling program that yielded a 96 percent success
rate and the Hayworth exploration project (Ellender #1, net revenue interest
36.5 percent) that is now producing 13 Mmcfe per day (gross). We have also
positioned the Company for future opportunities in the Gulf Coast with our
success at the recent offshore lease sale and in Canada with the first quarter
opening of our office in Calgary, Alberta." Dinges added, "In terms of our
financial position, we were able to absorb the impairment and not adversely
impact our balance sheet, which still has a debt to total capitalization ratio
of 53 percent."
In response to the nuances of Regulation G and other SEC requirements,
Cabot has posted on its website at www.cabotog.com in the investor relations
section its latest financial guidance for the remaining three quarters of 2003.
Additionally, the replay of the webcast will now be archived for one year.
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CABOT OIL & GAS / 3
Listen in live to Cabot Oil & Gas Corporation's first quarter earnings
discussion with financial analysts on Wednesday, April 30 at 9:30 AM EDT (8:30
AM CDT) at www.cabotog.com. A teleconference replay will also be available at
(888) 203-1112 (international (719) 457-0820), reservation number 405510. The
audio webcast and teleconference replay will be available beginning April 30 at
12:30 PM EDT.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading
domestic 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 the East. For additional information, visit the Company's
Internet homepage at www.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 4
OPERATING DATA
Quarter Ended
March 31,
-------------------
2003 2002
-------- -------
NATURAL GAS (Bcf) & OIL (MBbl)
Produced Natural Gas
Gulf Coast 6.7 7.5
West 6.1 6.4
East 4.4 4.5
------ ------
Total 17.2 18.4
Crude/Condensate
Gulf Coast 696 610
West 48 50
East 6 8
------ ------
Total 750 668
Natural Gas Liquids 29 15
Equivalent Production (Bcfe) 21.9 22.5
PRICES
Average Produced Gas Sales Price ($/Mcf)
Gulf Coast $ 4.88 $ 2.67
West $ 3.61 $ 2.14
East $ 5.35 $ 2.85
Total $ 4.55 $ 2.53
Crude/Condensate Price ($/Bbl)
Gulf Coast $30.84 $20.57
West $32.05 $20.97
East $25.79 $16.41
Total $30.88 $20.55
WELLS DRILLED
Gross 25 21
Net 18.5 12.3
Gross Success Rate 88% 95%
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CABOT OIL & GAS RESULTS -- Page 5
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In Thousands, Except Per Share Amounts)
Quarter Ended March 31,
2003 2002
-------- ---------
Operating Revenues
Natural Gas Production $78,173 $46,506
Brokered Natural Gas 31,850 13,698
Crude Oil and Condensate 23,174 13,718
Change in Derivative Fair Value (544) (616)
Other 3,263 1,767
-------- -------
135,916 75,073
Operating Expenses
Brokered Natural Gas Cost 28,261 12,267
Production and Pipeline Operations 10,926 12,235
Exploration 13,391 7,056
Taxes Other Than Income 10,224 6,152
Administrative 6,595 5,739
Depreciation, Depletion and Amortization 25,844 25,547
Impairment of Long-Lived Assets 87,926 1,063
-------- -------
183,167 70,059
Gain (Loss) on Sale of Assets 560 (18)
-------- -------
Income (Loss) from Operations (46,691) 4,996
Interest Expense and Other 5,625 6,226
-------- -------
Loss Before Income Taxes (52,316) (1,230)
Income Tax Benefit (19,940) (432)
-------- -------
Net Loss Before Cumulative Effect of
Accounting Change (32,376) (798)
Cumulative Effect of Accounting Change (1) (6,847) -
-------- -------
Net Loss $(39,223) $ (798)
======== =======
Net Loss Per Share - Basic $(1.23) $(0.03)
Average Common Shares Outstanding 31,837 31,604
(1) Cumulative effect of accounting change relates to the adoption of SFAS 143,
"Accounting for Asset Retirement Obligations."
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CABOT OIL & GAS RESULTS -- Page 6
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In Thousands)
March 31, Dec. 31,
2003 2002
----------- ------------
Assets
Current Assets $ 124,829 $ 93,121
Property, Equipment and Other Assets 888,997 978,767
------------ ------------
Total Assets $ 1,013,826 $ 1,071,888
============ ============
Liabilities and Stockholders' Equity
Current Liabilities $ 159,695 $ 121,890
Long-Term Debt 338,000 365,000
Deferred Income Taxes 161,641 200,207
Other Liabilities 55,452 34,134
Stockholders' Equity 299,038 350,657
------------ ------------
Total Liabilities and Stockholders' Equity $ 1,013,826 $ 1,071,888
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In Thousands)
Quarter Ended
March 31,
--------------------------
2003 2002
---------- ------------
Cash Flows From Operating Activities
Net Loss $(39,223) $ (798)
Cumulative Effect of Accounting Change 6,847 -
Change in Derivative Fair Value 544 616
Impairment of Long-Lived Assets 87,926 1,063
Income Charges Not Requiring Cash 25,705 26,911
(Gain) Loss on Sale of Assets (560) 18
Deferred Income Taxes (27,010) (471)
Changes in Assets and Liabilities (8,073) (4,846)
Exploration Expense 13,391 7,056
---------- ----------
Net Cash Provided by Operations 59,547 29,549
Cash Flows From Investing Activities
Capital Expenditures (21,321) (41,062)
Proceeds from Sale of Assets 1,602 (2)
Exploration Expense (13,391) (7,056)
---------- ----------
Net Cash Used by Investing (33,110) (48,120)
Cash Flows From Financing Activities
Sale of Common Stock 498 105
Increase (Decrease) in Debt (27,000) 19,000
Common Dividends and Other (1,273) (1,264)
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Net Cash Provided (Used) by Financing (27,775) 17,841
Net Decrease in Cash and
Cash Equivalents $ (1,338) $ (730)
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CABOT OIL & GAS RESULTS -- Page 7
Selected Item Review and Reconciliation of Net Income (Loss)
and Earnings (Loss) Per Share
(In Thousands, Except Per Share Amounts)
Quarter Ended
March 31,
-------------------------
2003 2002
---------- ----------
As Reported - Net Loss $(39,223) $ (798)
Reversal of Selected Items, Net of Tax:
Impairment of Long-Lived Assets 54,426 657
Cumulative Effect of Accounting Change 6,847 -
-------- -------
Net Income Including Reversal of Selected Items $ 22,050 $ (141)
======== =======
As Reported - Net Loss Per Share $ (1.23) $ (0.03)
Per Share Impact of Reversing Selected Items 1.92 0.02
-------- -------
Net Income (Loss) Per Share Including Reversal of Selected Items $ 0.69 $ (0.01)
======== =======
Average Common Shares Outstanding 31,837 31,604
Discretionary Cash Flow Calculation and Reconciliation
(In Thousands)
Quarter Ended
March 31,
-------------------------
2003 2002
---------- ----------
Discretionary Cash Flow
As Reported - Net Loss $ (39,223) $ (798)
Plus:
Cumulative Effect of Accounting Change 6,847 -
Change in Derivative Fair Value 544 616
Impairment of Long-Lived Assets 87,926 1,063
Income Charges Not Requiring Cash 25,705 26,911
(Gain) Loss on Sale of Assets (560) 18
Deferred Income Taxes (27,010) (471)
Exploration Expense 13,391 7,056
---------- ---------
Discretionary Cash Flow 67,620 34,395
Plus: Changes in Assets and Liabilities (8,073) (4,846)
---------- ---------
Net Cash Provided by Operations $ 59,547 $ 29,549
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