News Release

Cabot Oil & Gas Announces Third Quarter Results
 

HOUSTON, Oct. 25 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced third quarter results including net income available to common shareholders of $6.1 million, or $.21 per share, and discretionary cash flow of $29.4 million, or $1.01 per share. These results are a substantial improvement over the third quarter of 1999 when the Company posted net income available to common shareholders of $1.2 million, or $.05 per share, and discretionary cash flow of $20.3 million, or $.82 per share, excluding the net benefit from certain nonrecurring items. These are the best third quarter results in the Company's 10-year history as a public company.

Contributing to the improved results were higher prices, and to a lesser extent, reduced financing costs. Realized natural gas prices in the quarter improved by 25%, while oil price realizations increased 47% from the comparable period last year.

"This latest quarter saw a 7% increase in production over the second quarter of 2000 (17.1 Bcfe versus 15.9 Bcfe) which also added to the results," commented Ray Seegmiller, Chairman and CEO. "Production averaged 175 Mmcfe per day in the second quarter and increased to 186 Mmcfe per day during the third quarter. The higher production rate for the quarter was driven by Gulf Coast well performance where two recent exploration discoveries (Augen and Bon Ton in south Louisiana) reached full production."

Seegmiller added, "With certain of our hedges expiring in September and nearly all of the remaining positions ending in October, 90% of our natural gas production will be exposed to market prices starting in November. Also, with the modifications to the production facilities at Etouffee nearing completion, which allows for increased production from the first three wells, we expect to see some additional improvement in production during the fourth quarter."

Additionally, with the retirement of the preferred stock in May, combined with a $59 million reduction in total debt ($335 million to $276 million) year over year, Cabot reduced its financing cost by $1.6 million between the third quarter of 2000 and the same period in 1999.

For the nine months ended September 30, 2000, Cabot Oil & Gas reported net income available to common shareholders of $11.5 million, or $.43 per share, before certain nonrecurring items. Last year's first nine months results, on a similar basis, reflected a net loss applicable to common shareholders of $2.6 million, or $.10 per share. Discretionary cash flow for the first nine months of 2000 was $72.5 million, or $2.70 per share, versus $50.8 million, or $2.05 per share, for the comparable 1999 period, after taking into account certain nonrecurring items. Higher commodity prices were the primary driver of the improved results, along with a $3.8 million reduction in financing costs.

Listen in live to Cabot Oil & Gas Corporation's third quarter 2000 earnings discussion with financial analysts on Thursday, October 26, 2000, at 9:30 AM EDT at www.cabotog.com.

A post view replay is also available at (800) 633-8284, reservation number 15644046 from October 26 to November 2, 2000.

Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests in the onshore Texas and Louisiana Gulf Coast, Rocky Mountains, Appalachia and Mid-Continent. 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.

                                  OPERATING DATA

                                          Quarter Ended      Nine Months Ended
                                          September 30,        September 30,
                                         2000      1999       2000       1999

    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Appalachia                          4.6       5.3       13.5       16.1
      West                                7.4       7.6       22.0       22.3
      Gulf Coast                          3.5       4.2        9.9       11.7
      Total                              15.5      17.1       45.4       50.1

    Crude/Condensate                      255       237        656        705

    Natural Gas Liquids                     5         5         18         19

    Equivalent Production (Bcfe)         17.1      18.5       49.5       54.5

    PRICES
    Average Produced Gas Sales Price ($/Mcf)
      Appalachia                        $2.73     $2.43      $2.81      $2.33
      West                              $2.62     $2.14      $2.46      $1.91
      Gulf Coast                        $3.72     $2.49      $3.12      $2.17
      Total                             $2.90     $2.32      $2.71      $2.10

    Crude/Condensate Price ($/Bbl)     $29.72    $20.23     $25.26     $16.04

    WELLS DRILLED
      Gross                                25        23         85         49
      Net                                17.9      16.0       61.3       30.9
      Gross Success Rate                   80%       87%        88%        86%

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

                                         Quarter Ended     Nine Months Ended
                                         September 30,       September 30,
                                        2000      1999      2000       1999

    Net Operating Revenues
      Natural Gas Production          $45,099   $39,508   $123,088   $105,466
      Crude Oil and Condensate          7,593     4,805     16,567     11,297
      Brokered Natural Gas Margin       1,230       905      3,782      2,844
      Other                               773       472      7,417      2,424
                                       54,695    45,690    150,854    122,031
    Operating Expenses
      Operations - Field & Pipeline     8,718     8,502     26,292     24,111
      Exploration                       4,691     2,993     12,086      7,433
      Taxes Other Than Income           6,016     4,767     15,570     12,570
      Administrative                    5,318     4,918     15,536     13,635
      Depreciation, Depletion
       and Amortization                14,179    14,493     41,215     44,241
      Impairment of Long-Lived Assets       0         0      9,143          0
                                       38,922    35,673    119,842    101,990
    Gain (Loss) on Sale of Assets          26     4,044        (21)     5,019
    Income from Operations             15,799    14,061     30,991     25,060
    Interest Expense                    5,709     6,506     17,044     19,674
    Income Before Income Taxes         10,090     7,555     13,947      5,386
    Income Tax Expense                  3,953     3,025      5,546      2,338
    Net Income                          6,137     4,530      8,401      3,048
    Dividend Requirement on
     Preferred Stock                        0       851     (3,749)     2,552
    Net Income Applicable to Common    $6,137    $3,679    $12,150       $496
    Net Income Per Common
     Share - Basic                      $0.21     $0.15      $0.45      $0.02
    Average Common Shares Outstanding  28,976    24,757     26,830     24,709

    Results from Recurring Operations (*)
      Net Income (Loss) Applicable
       to Common                       $6,137    $1,212    $11,499    $(2,565)
      Net Income (Loss) per
       Common Share                     $0.21     $0.05      $0.43     $(0.10)
      Discretionary Cash Flow (DCF)   $29,371   $20,277    $72,501    $50,761
      DCF per Common Share              $1.01     $0.82      $2.70      $2.05

    (*)  For the nine months ended September 30, 2000, excludes the impact of
         the $9.1 million impairment of long-lived assets, a $5.1 million
         negative dividend that resulted from the buy back of the preferred
         stock, the $2.8 million benefit resulting primarily from a contract
         settlement, and $1.0 million in severance costs.  For the three and
         nine months ended September 30, 1999, excludes the gain on asset
         sales.


                 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                  (In Thousands)
                                              Sept. 30,      Dec. 31,
                                                2000           1999
    Assets
    Current Assets                            $83,474        $66,640
    Property, Equipment and Other Assets      613,895        592,840
       Total Assets                          $697,369       $659,480

    Liabilities and Stockholders' Equity
    Current Liabilities                      $104,251        $89,938
    Long-Term Debt                            260,000        277,000
    Deferred Income Taxes                      99,187         95,012
    Other Liabilities                          12,865         11,034
    Stockholders' Equity                      221,066        186,496
       Total Liabilities and
        Stockholders' Equity                 $697,369       $659,480

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

                                        Quarter Ended       Nine Months Ended
                                          Sept. 30,              Sept. 30,
                                       2000       1999       2000       1999
    Cash Flows From Operating Activities
    Net Income                        $6,137     $4,530     $8,401     $3,048
    Income Charges Not Requiring Cash 15,002     14,909     51,435     48,064
    (Gain) Loss on Sale of Assets        (26)    (4,044)        21     (5,019)
    Deferred Income Taxes              3,567      7,233      4,175      6,431
    Changes in Assets and Liabilities (6,744)     2,151     (2,284)      (283)
    Exploration Expense                4,691      2,993     12,086      7,433
    Net Cash Provided by Operations   22,627     27,772     73,834     59,674

    Cash Flows From Investing Activities
    Capital Expenditures             (29,614)   (19,617)   (71,674)   (60,980)
    Proceeds from Sale of Assets         882     47,597      2,663     56,973
    Restricted Cash                        0    (36,812)         0    (36,812)
    Exploration Expense               (4,691)    (2,993)   (12,086)    (7,433)
    Net Cash Used by Investing       (33,423)   (11,825)   (81,097)   (48,252)

    Cash Flows From Financing Activities
    Sale of Common Stock               1,549        467     81,597      1,384
    Retirement of Preferred Stock          0          0    (51,600)         0
    Increase (Decrease) in Debt       11,000    (15,000)   (17,000)    (8,000)
    Preferred Dividends                    0       (851)    (2,202)    (2,553)
    Common Dividends                  (1,160)    (1,002)    (3,189)    (2,988)
    Net Cash Provided (Used)
     by Financing                     11,389    (16,386)     7,606    (12,157)

    Net Increase (Decrease) in Cash and
      Cash Equivalents                  $593      $(439)      $343      $(735)

    Discretionary Cash Flow (*)      $29,371    $20,277    $73,916    $50,761

    (*)  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