News Release

Cabot Oil & Gas Announces Second Quarter Results
 

HOUSTON, July 22 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today reported a profit for the second quarter with net income available to common shareholders of $110,000 compared to a profit of $2.3 million, or $.09 per share, in last year's second quarter. Discretionary cash flow in the quarter reached $17.8 million, or $.72 per share, versus $19.8 million, or $.80 per share, in 1998's second quarter.

Production in the second quarter was higher than the first quarter of 1999 and the second quarter last year. During the second quarter of 1999, the Company produced 18.5 Bcfe, an increase of 5% from the 17.6 Bcfe in last year's comparable quarter and a 6% improvement over this year's first quarter. The increase was attributed to production from the Company's Gulf Coast operations, which more than offset production declines in the other regions. Contributing to the Gulf Coast production gains were additional discoveries in the Kacee field and a successful workover program on the recently acquired Oryx properties.

Driving the return to profitability was an increase in production, lower administration and exploration expenses, and a $974,000 pretax gain from the sale of a non-strategic property. However, the second quarter profit contribution, compared to the same quarter last year, was reduced by lower April natural gas prices, higher DD&A expense and increased interest expense related primarily to funding the Oryx acquisition. Debt totaled $350 million at the end of the second quarter, which is a $13 million decrease compared to the end of the first quarter.

"With the potential for continued strengthening in natural gas prices, the Company's Board of Directors approved yesterday a $13 million increase to the 1999 capital budget, bringing the total for the year to $68 million," stated Ray R. Seegmiller, Chairman and CEO. "Our original limited 1999 capital program was front-end loaded to be in a position to expand our drilling effort when prices recovered. These additional capital dollars will be spent in all three regions. Even with these additional capital expenditures, if prices remain strong, we foresee further declines in our long-term debt as the year progresses, ending the year at or below 1998's year-end debt level."

Seegmiller added, "We continue to evaluate our asset base and presently have 32 Bcfe of non-strategic reserves identified for sale this year. Offers are pending on many of these properties."

Year-to-date results for 1999 are a $3.2 million loss, or $.13 per share, as compared to net income available of $5.3 million, or $.21 per share, for 1998's first six months. Discretionary cash flow for the six months of 1999 totaled $30.5 million, or $1.23 per share, versus $39.3 million, or $1.59 per share reported last year. Lower realized prices, higher DD&A expense and higher interest expense related to the Oryx acquisition were the primary contributors to the reduced results.

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, visit the Company'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    Six Months Ended
                                           June 30,             June 30,
                                        1999      1998      1999       1998
    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Appalachia                        5.2       5.6       10.8       10.7
      West                              7.4       7.6       14.8       15.1
      Gulf Coast                        4.4       3.4        7.5        6.3
      Total                            17.0      16.6       33.1       32.1

    Crude/Condensate                    237       141        467        297

    Natural Gas Liquids                   6        29         15         55

    Equivalent Production (Bcfe)       18.5      17.6       36.0       34.2

    PRICES
    Average Produced Gas
     Sales Price ($/Mcf)
      Appalachia                     $ 2.31    $ 2.60     $ 2.28     $ 2.68
      West                           $ 1.86    $ 1.96     $ 1.79     $ 1.95
      Gulf Coast                     $ 2.16    $ 2.29     $ 1.99     $ 2.27
      Total                          $ 2.08    $ 2.24     $ 1.99     $ 2.26

    Crude/Condensate Price ($/Bbl)   $16.20    $13.55     $13.90     $14.30

    WELLS DRILLED
      Gross                              11        51         26         84
      Net                               5.5      36.3       14.9       59.9
      Gross Success Rate                 91%       88%        85%        86%


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

                                      Quarter Ended       Six Months Ended
                                         June 30,              June 30,
                                      1999      1998       1999       1998
    Net Operating Revenues
      Natural Gas Production        $35,339   $37,252    $65,958    $72,423
      Crude Oil and Condensate        3,842     1,911      6,492      4,248
      Brokered Natural Gas Margin     1,056     1,143      1,939      2,536
      Other                             824     1,361      1,952      3,251
                                     41,061    41,667     76,341     82,458
    Operating Expenses
      Operations                      7,762     7,532     15,609     14,497
      Exploration                     2,015     2,978      4,440      6,379
      Taxes Other Than Income         4,165     4,036      7,803      7,834
      Administrative                  4,426     5,824      8,717     11,325
      Depreciation, Depletion
       and Amortization              15,512    11,426     29,748     21,889
                                     33,880    31,796     66,317     61,924
    Gain on Sale of Assets              974         5        975         57
    Income from Operations            8,155     9,876     10,999     20,591
    Interest Expense                  6,450     4,579     13,168      8,834
    Income/(Loss) Before Income Taxes 1,705     5,297     (2,169)    11,757
    Income Tax Expense/(Benefit)        745     2,163       (687)     4,780
    Net Income/(Loss)                   960     3,134     (1,482)     6,977
    Dividend Requirement on
     Preferred Stock                    850       851      1,701      1,701
    Net Income/(Loss) Applicable
     to Common                        $ 110   $ 2,283   $ (3,183)   $ 5,276
    Net Income/(Loss) Per
     Common Share - Basic             $0.00   $  0.09   $  (0.13)   $  0.21
    Average Common
     Shares Outstanding              24,702    24,828     24,684     24,756


                 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                   (In Thousands)

                                           June 30,        Dec. 31,
                                            1999             1998
    Assets
    Current Assets                        $ 57,785         $ 71,116
    Property, Equipment and Other Assets   624,759          633,045
       Total Assets                       $682,544         $704,161
    Liabilities and Stockholders' Equity
    Current Liabilities                   $ 74,559         $ 99,034
    Long-Term Debt                         334,000          327,000
    Deferred Income Taxes                   85,150           85,952
    Other Liabilities                        9,908            9,507
    Stockholders' Equity                   178,927          182,668
       Total Liabilities and
        Stockholders' Equity              $682,544         $704,161

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

                                         Quarter Ended      Six Months Ended
                                           June 30,             June 30,
                                        1999      1998      1999       1998
    Cash Flows From
     Operating Activities
    Net Income/(Loss)                   $ 960   $ 3,134   $(1,482)   $ 6,977
    Income Charges Not Requiring Cash  16,028    12,218    31,004     23,170
    Gain on Sale of Assets               (974)       (5)     (975)       (57)
    Deferred Income Taxes                 670     2,289      (802)     4,577
    Changes in Assets and Liabilities   3,137    (3,088)     (283)     5,432
    Exploration Expense                 2,015     2,978     4,440      6,379
    Net Cash Provided by Operations    21,836    17,526    31,902     46,478

    Cash Flows From Investing Activities
    Capital Expenditures              (14,850)  (36,727)  (41,363)   (68,111)
    Proceeds from Sale of Assets        9,375       159     9,376        669
    Exploration Expense                (2,015)   (2,978)   (4,440)    (6,379)
    Net Cash Used by Investing         (7,490)  (39,546)  (36,427)   (73,821)

    Cash Flows From Financing Activities
    Sale of Common Stock                  729     1,238       916     2,134
    Increase (Decrease) in Debt       (13,000)   23,000     7,000    31,000
    Preferred Dividends                  (850)     (851)   (1,701)   (1,701)
    Common Dividends and Other         (1,000)     (994)   (1,986)   (1,981)
    Net Cash Provided (Used)
     by Financing                     (14,121)   22,393     4,229    29,452

    Net Increase (Decrease) in Cash and
      Cash Equivalents                  $ 225     $ 373    $ (296)  $ 2,109

    Discretionary Cash Flow (A)      $ 17,849  $ 19,763  $ 30,484  $ 39,345

    (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