News Release

Cabot Oil & Gas Corporation Announces 1999 Fourth Quarter and Full Year Results; Year-End Reserves
 

HOUSTON, Jan. 25 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced fourth quarter net income available to common shareholders of $3.0 million, or $.12 per share, before taking into account the net benefit from selected items that added $1.6 million, or $.07 per share, to the quarter's results. The selected items included the benefit from a monetized gas sales contract which was partially offset by an impairment of long-lived assets under FAS 121, post closing adjustments from asset sales, and a provision for certain wells that were deemed ineligible to receive the Section 29 tax credit in a recent industry tax court ruling. Discretionary cash flow for the quarter, before the special items, totaled $22.7 million, or $.92 per share.

Including the selected items, the Company reported fourth quarter net income available to common shareholders of $4.6 million, or $.19 per share, and discretionary cash flow of $33.3 million, or $1.35 per share. Last year's fourth quarter experienced a net loss of $851,000, or $.03 per share, with discretionary cash flow of $16.3 million, or $.66 per share.

Contributing to the improved quarterly results were higher realized prices for both natural gas and oil. Natural gas prices improved 21% between comparable periods increasing to $2.61 per Mcf from $2.16 per Mcf in last year's fourth quarter. Crude oil prices made a stronger recovery increasing 79% between fourth quarters. Production of 16.8 Bcfe for the quarter was up slightly over last year even after asset sales at the end of the 1999 third quarter that removed 11 Mmcfe of daily production. In spite of these asset sales, Cabot Oil & Gas experienced the highest quarterly results from recurring operations since the first quarter of 1998.

Cabot Oil & Gas reported 1999 net income available to common shareholders of $385,000, or $.02 per share, before the impact of the selected items. (Selected items for the full year include the benefit from a monetized gas sales contract, the impairment of long-lived assets, the gain from the sale of assets and the provision for certain Section 29 tax credit wells.) This compares to net income of $1.9 million, or $.08 per share, for 1998. The Company also reported discretionary cash flow of $73.4 million, or $2.97 per share, in 1999 versus $74.3 million, or $3.00 per share, in 1998. Including the net benefit from the selected items, Cabot's 1999 net income available was $5.1 million, or $.21 per share, and discretionary cash flow was $84.0 million, or $3.40 per share. Long-term debt at year-end totaled $277 million, a $50 million reduction from the end of 1998.

"I am pleased with our ability to show positive results in 1999 especially in light of the depressed commodity prices the industry endured during the first quarter," stated Ray Seegmiller, Chairman and CEO. "We were also able to increase production to 71.3 Bcfe, or 4% over the prior year, even with a drilling program that was 60% less than the prior year and the sale of nearly 2 Bcfe of production during the year." Seegmiller commented, "The year was also a success strategically with a significant exploration discovery in south Louisiana along with the development and corresponding production growth from the Kacee field in south Texas. Additionally, the Company continued to reposition its asset base with the acquisition of properties in the Rocky Mountains with considerable upside potential and sale of marginal assets that removed 5% of our daily production at the time of the sale and approximately 25% of our well count."

Seegmiller continued, "The $50 million reduction in long-term debt, which resulted primarily from the asset sales and the long-term gas sales contract monetization, improves our financial flexibility in that we are now better positioned to capitalize on any acquisition opportunities that may arise in 2000."

Reserves

Total proved reserves were 979 Bcfe at the end of 1999, down 6% from the prior year. This decline resulted primarily from the sale of 81 Bcfe of reserves during the year. Reserve replacement for the year, as measured against production, was 124% from all sources (additions, revisions and purchases) and 84% from drilling and revisions. Finding cost was $.85 per Mcfe for the year from all sources and $.95 per Mcfe from additions and revisions. Cabot's reserve to production ratio was reduced to 13.7 years, from last year's 15.2, moving the Company closer to its targeted 9 to 11 year level.

Outlook

"As we enter 2000, natural gas prices are substantially above last year at this time (even with the early mild winter weather) giving credence to the belief that supply and demand fundamentals are changing," said Seegmiller.

To capitalize on a potentially stronger natural gas market, Cabot Oil & Gas will continue to focus its capital program on several prospects in the Gulf Coast Region that have significant upside potential. The capital budget for the year totals $89 million, with 56% of the budget dedicated to the Gulf Coast for drilling 14 development and 10 exploration wells.

Seegmiller added, "In our other Regions we will continue to drill fewer wells that will afford us the potential for improved overall rates of return."

Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the Gulf Coast, Rocky Mountains, Appalachian and Mid-Continent basins. 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       Year Ended
                                             December 31,      December 31,
                                           1999      1998      1999     1998

    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Appalachia                            4.6       6.1     20.7     22.7
      West                                  7.0       7.8     29.3     30.9
      Gulf Coast                            3.8       1.7     15.5     10.6
      Total                                15.4      15.6     65.5     64.2

    Crude/Condensate                        225       179      929      650

    Natural Gas Liquids                      15        15       34       86

    Equivalent Production (Bcfe)           16.8      16.7     71.3     68.6

    PRICES
    Average Produced Gas Sales Price ($/Mcf)
      Appalachia                         $ 3.26    $ 2.57   $ 2.53   $ 2.53
      West                               $ 2.15    $ 1.92   $ 1.96   $ 1.90
      Gulf Coast                         $ 2.66    $ 1.82   $ 2.29   $ 2.15
      Total                              $ 2.61    $ 2.16   $ 2.22   $ 2.16

    Crude/Condensate Price ($/Bbl)       $20.92    $11.69   $17.22   $13.06

    WELLS DRILLED
      Gross                                  24        54       73      205
      Net                                  14.5      35.6     45.4    143.7
      Gross Success Rate                     79%       91%      84%      89%


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

                                        Quarter Ended           Year Ended
                                         December 31,          December 31,
                                       1999      1998        1999      1998

    Net Operating Revenues
     Natural Gas Production          $ 40,029  $ 33,662   $145,495   $138,903
     Crude Oil and Condensate           4,612     2,092     15,909      8,486
     Brokered Natural Gas Margin        1,546     1,991      4,390      5,547
     Other                             13,655     2,017     16,079      6,670
                                       59,842    39,762    181,873    159,606

    Operating Expenses
     Operations                         9,246     8,224     33,357     30,250
     Exploration                        4,057     5,989     11,490     19,564
     Taxes Other Than Income            4,418     3,714     16,988     15,324
     Administrative                     6,501     5,707     20,136     21,950
     Depreciation, Depletion and
      Amortization                     13,066    11,355     57,307     45,588
     Impairment of Long-Lived Assets    7,047         0      7,047          0
                                       44,335    34,989    146,325    132,676
    Gain on Sale of Assets             (1,069)      340      3,950        473
    Income from Operations             14,438     5,113     39,498     27,403
    Interest Expense                    6,144     5,343     25,818     18,598
    Income/(Loss) Before Income Taxes   8,294      (230)    13,680      8,805
    Income Tax Expense/(Benefit)        2,823      (229)     5,161      3,501
    Net Income/(Loss)                   5,471        (1)     8,519      5,304
    Dividend Requirement on Preferred
      Stock                               850       850      3,402      3,402
    Net Income/(Loss) Applicable to
     Common                          $  4,621  $   (851)  $  5,117   $  1,902
    Net Income/(Loss) Per Common
     Share - Basic                   $   0.19  $  (0.03)  $   0.21   $   0.08
    Average Common Shares Outstanding  24,770    24,642     24,726     24,733


               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In Thousands)

                                                    Dec. 31,       Dec. 31,
                                                      1999           1998
    Assets
    Current Assets                                 $  66,640      $  71,116
    Property, Equipment and Other Assets             592,840        633,045
      Total Assets                                 $ 659,480      $ 704,161

    Liabilities and Stockholders' Equity
    Current Liabilities                            $  89,938      $  99,034
    Long-Term Debt                                   277,000        327,000
    Deferred Income Taxes                             95,012         85,952
    Other Liabilities                                 11,034          9,507
    Stockholders' Equity                             186,496        182,668
      Total Liabilities and Stockholders' Equity   $ 659,480      $ 704,161


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

                                       Quarter Ended          Year Ended
                                          Dec. 31,             Dec. 31,
                                     1999       1998       1999        1998

    Cash Flows From Operating Activities
    Net Income/(Loss)             $  5,471   $     (1)   $  8,519  $  5,304
    Income Charges Not Requiring
     Cash                           20,880     11,126      66,793    47,420
    Gain on Sale of Assets           1,069       (340)     (3,950)     (473)
    Deferred Income Taxes            2,629        403       9,060     5,844
    Changes in Assets and
     Liabilities                    (1,292)     6,154         576     9,577
    Exploration Expense              4,057      5,989      11,490    19,564
    Net Cash Provided by Operations 32,814     23,331      92,488    87,236

    Cash Flows From Investing Activities
    Capital Expenditures           (21,211)  (109,601)    (82,191) (203,632)
    Proceeds from Sale of Assets      (645)       102      56,328     1,054
    Restricted Cash                 36,812          0           0         0
    Exploration Expense             (4,057)    (5,989)    (11,490)  (19,564)
    Net Cash Provided (Used) by
     Investing                      10,899   (115,488)    (37,353) (222,142)

    Cash Flows From Financing Activities
    Sale of Common Stock               354        185       1,738     3,082
    Treasury Stock Transactions          0        (75)          0    (4,384)
    Increase (Decrease) in Debt    (42,000)    94,000     (50,000)  144,000
    Preferred Dividends               (850)      (850)     (3,402)   (3,402)
    Common Dividends and Other      (1,004)      (998)     (3,992)   (3,975)
    Net Cash Provided (Used) by
     Financing                     (43,500)    92,262     (55,656)  135,321
    Net Increase (Decrease) in Cash
     and Cash Equivalents         $    213   $    105    $   (521) $    415

    Discretionary Cash Flow (*)   $ 33,257   $ 16,326    $ 84,018  $ 74,258

    (*)  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