News Release

Cabot Oil & Gas Announces Third Quarter Results
 

HOUSTON, Oct. 21 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced a third quarter net loss applicable to common shareholders of $2.5 million, or $.10 per share compared to net income available to common shareholders of $2.3 million, or $.10 per share, in the third quarter of last year. Third quarter discretionary cash flow totaled $17.9 million, or $.72 per share, versus $20.0 million, or $.87 per share, in the comparable quarter last year.

Contributing to lower third quarter results was a 7% decline in realized gas prices and a 37% drop in oil prices versus last year's comparable third quarter figures. Increased exploration expenses and higher depreciation, depletion and amortization also contributed to lower current third quarter results. The Company experienced an overall drilling success rate of 91% on a total of 67 development and exploration wells drilled during the quarter. Production totaled 17.7 Bcfe for the quarter, up slightly over last year's third quarter. Last year's comparable production figure included production from the divested Meadville properties totaling .9 Bcfe.

"The third quarter is historically our most challenging in terms of financial performance," said Ray R. Seegmiller, President and CEO. "We normally realize the lowest price levels during the third quarter of each year, while having the highest level of pipeline curtailments, maintenance expenses and exploration exposure to dry holes. This quarter was no exception with realized natural gas and oil prices reaching their lowest levels in several years." Seegmiller added, "Year-to-date, we continue to experience a high drilling success rate of 88% while drilling 151 wells. This includes 31 wells that are being completed or waiting to be turned in line. From this activity, we anticipate further advances in production during the fourth quarter."

For the nine months, net income available to common shareholders is $2.8 million, or $.11 per share, with discretionary cash flow of $57.3 million, or $2.31 per share. Last year's nine month results included net income available to common shareholders of $13.9 million, or $.61 per share, and discretionary cash flow of $68.7 million, or $3.00 per share. The difference is primarily the result of lower commodity prices, along with higher exploration and general and administrative expenses. G & A includes one-time expenses associated with officers' retirement and resignation, along with non-cash charges for retention programs initiated in 1997 designed to retain key employees.

To date under the stock buyback program announced during the third quarter, approximately 300,000 shares have been purchased at an average cost of $14.50 per share. "We have continued repurchasing stock at market prices which are well below our implied net asset value while pursuing our normal drilling and acquisition activities," explained Seegmiller.

Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the Appalachia, Anadarko, Rocky Mountain and Gulf Coast regions. For additional information about the Company, visit COG's internet home page 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 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.

                                OPERATING DATA

                                      Quarter Ended    Nine Months Ended
                                       September 30,     September 30,
                                       1998    1997      1998    1997
    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
     Appalachia                         5.9     6.5      16.6    19.9
     West                               7.9     8.1      23.0    21.9
     Gulf Coast                         2.7     2.1       9.0     6.0
     Total                             16.5    16.7      48.6    47.8

    Crude/Condensate                    174     139       471     434

    Natural Gas Liquids                  16      14        71      40

    Equivalent Production (Bcfe)       17.7    17.6      51.9    50.6

    PRICES
    Average Produced Gas Sales Price ($/Mcf)
     Appalachia                      $ 2.19   $ 2.57   $ 2.51  $ 2.88
     West                            $ 1.79   $ 1.77   $ 1.90  $ 2.06
     Gulf Coast                      $ 2.07   $ 2.34   $ 2.21  $ 2.36
     Total                           $ 1.98   $ 2.12   $ 2.16  $ 2.42

    Crude/Condensate Price ($/Bbl)  $ 12.35  $ 19.57  $ 13.58  $ 20.45

    WELLS DRILLED
    Gross                                67       66      151      168
    Net                                48.2     47.7    108.1    120.8
    Gross Success Rate                   91%      93%      88%      90%

          CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                   (In Thousands, Except Per Share Amounts)

                                 Quarter Ended    Nine Months Ended
                                  September 30,      September 30,
                                 1998      1997      1998     1997
    Net Operating Revenues
     Natural Gas Production   $ 32,740  $ 35,416  $105,214  $115,901
     Crude Oil and Condensate    2,146     2,676     6,394     8,826
     Brokered Natural
      Gas Margin                 1,095     1,053     3,580     2,484
     Other                       1,405     1,628     4,656     5,761
                                37,386    40,773   119,844   132,972
    Operating Expenses
     Operations                  7,529     7,154    22,026    21,587
     Exploration                 7,195     2,966    13,574     9,873
     Taxes Other Than Income     3,776     3,450    11,610    11,017
     Administrative (A)          4,919     5,011    16,244    13,867
     Depreciation, Depletion
      and Amortization          12,343    11,361    34,233    33,419
                                35,762    29,942    97,687    89,763
    Gain/(Loss) on Sale
     of Assets                      77        (1)      133       349
    Income from Operations       1,701    10,830    22,290    43,558
    Interest Expense             4,423     4,614    13,256    13,533
    Income/(Loss) Before
     Income Taxes               (2,722)    6,216     9,034    30,025
    Income Tax Expense/
     (Benefit)                  (1,049)    2,536     3,730    11,914
    Net Income/(Loss)           (1,673)    3,680     5,304    18,111
    Dividend Requirement
     on Preferred Stock            851     1,391     2,551     4,175
    Net Income/(Loss)
     Applicable to Common     $ (2,524)  $ 2,289   $ 2,753  $ 13,936
    Net Income/(Loss)
     Per Common Share -
     Basic (B)                $ (0.10)   $ 0.10    $ 0.11    $ 0.61
    Average Common Shares
     Outstanding                24,780    22,909    24,764    22,878

    (A) Year-to-date increase over 1997 Administrative expense is largely due
        to:
        (1) staffing increases in the third and fourth quarters of 1997 ($0.4
            million YTD),
        (2) non-cash stock compensation from stock awards ($0.8 million YTD),
        (3) certain executive retirement and severance packages accrued in
            1998 ($0.5 million YTD) and
        (4) relocation and other travel expenses ($0.4 million YTD).

    (B) Basic earnings per share as defined in Statement of Financial
        Accounting Standards No. 128.

               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                 (In Thousands)
                                                  Sept. 30,      Dec. 31,
                                                      1998         1997
    Assets
    Current Assets                                $  62,354     $  70,533
    Property, Equipment and Other Assets            534,578       471,272
     Total Assets                                 $ 596,932     $ 541,805
    Liabilities and Stockholders' Equity
    Current Liabilities                           $  86,634     $  85,872
    Long-Term Debt                                  233,000       183,000
    Deferred Income Taxes                            85,550        80,108
    Other Liabilities                                 7,673         8,763
    Stockholders' Equity                            184,075       184,062
     Total Liabilities and Stockholders' Equity   $ 596,932     $ 541,805

          CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
                                 (In Thousands)

                                            Quarter Ended   Nine Months Ended
                                              Sept. 30,         Sept. 30,
                                            1998     1997     1998      1997
    Cash Flows From Operating Activities
    Net Income/(Loss)                    $ (1,673) $ 3,680  $ 5,305  $ 18,111
    Income Charges Not Requiring Cash      12,371   11,761   35,481    33,753
    Deferred Income Taxes                     864    3,000    5,442    11,183
    Changes in Assets and Liabilities, Net (1,330)   5,833    4,103    20,526
    Exploration Expense                     7,195    2,966   13,574     9,873
    Net Cash Provided by Operations        17,427   27,240   63,905    93,446

    Cash Flows From Investing Activities
    Capital Expenditures                  (25,921) (32,025) (94,032)  (63,823)
    Proceeds from Sale of Assets              283      468      953     1,251
    Exploration Expense                    (7,195)  (2,966) (13,574)   (9,873)
    Net Cash Used by Investing            (32,833) (34,523)(106,653)  (72,445)

    Cash Flows From Financing Activities
    Sale of Common Stock                      762      936    2,896     1,347
    Treasury Stock Transactions            (4,309)       0   (4,309)        0
    Increase (Decrease) in Debt            19,000   10,000   50,000   (15,000)
    Preferred Dividends                      (851)  (1,391)  (2,551)   (4,175)
    Common Dividends and Other, Net          (994)    (917)  (2,976)   (2,745)
    Net Cash Provided (Used) by Financing  13,608    8,628   43,060   (20,573)

    Net Increase (Decrease) in Cash and
     Cash Equivalents                    $ (1,798) $ 1,345    $ 312     $ 428

    Discretionary Cash Flow (A)          $ 17,906 $ 20,016 $ 57,251  $ 68,745

    (A) Net income plus non-cash charges and exploration less preferred
        dividends.  Excludes net proceeds on property sales.

SOURCE Cabot Oil & Gas Corporation
Web site: http: //www.cabotog.com
Company News On-Call: http: //www.prnewswire.com/comp/129660.html or fax, 800-758-5804, ext. 129660
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993