|Cabot Oil & Gas Announces First Quarter Results; Production Increases 26% Year-Over-Year|
HOUSTON, April 25 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced first quarter net income of $239,000, or $.01 per share, before taking into account certain non-cash selected items, and discretionary cash flow of $34.4 million, or $1.09 per share. First quarter selected items include the impact of SFAS 133, Accounting for Derivative Instruments and Hedging Activities ($380,000 after tax), and the impairment of two small producing fields ($657,000 after tax). For the comparable quarter in 2001, the Company reported net income of $35.3 million, or $1.20 per share, before the non-cash benefit relating to the adoption of SFAS 133. The first three months of 2001 generated discretionary cash flow totaling $75.6 million, or $2.58 per share. Reported results for the comparable periods include a net loss of $798,000, or $.03 per share, in 2002 versus a reported profit of $39.1 million, or $1.33 per share, in 2001.
A 26% increase in production did not offset a 61% decline in realized gas prices and a 28% decline in realized oil prices between comparable first quarters. For the first quarter of 2002, Cabot's equivalent production totaled 22.5 Bcfe on the strength of production improvements from the Gulf Coast and East. The Cody acquisition, in August 2001, provided 3.4 Bcfe of the incremental production while the drill bit generated 1.2 Bcfe of the increase, giving Cabot a 7% organic production growth rate between comparable first quarters. Sequentially, production was down 3% from the fourth quarter of 2001 due to down time associated with recompletions at the Etouffee field, the timing of the 2002 drilling program and dry holes encountered late in the 2001 drilling program.
Cabot Oil & Gas realized an average natural gas price of $2.53 per Mcf in the first three months of 2002, compared to $6.57 per Mcf for the same period last year. The 2002 natural gas price realization includes a net benefit from the Company's hedge position totaling $2.4 million, or $.13 per Mcf. Cabot's realized oil prices, between comparable first quarters, were down $8.00 per barrel to $20.55, due to general economic conditions and a loss from the Company's hedge position totaling $179,000, or $.27 per barrel.
On the cost side, Cabot experienced lower levels of exploration, taxes other than income and administrative expenses between comparable quarters. However, these declines were more than offset by increases in DD&A and operations expense primarily due to the impact of the Cody acquisition. On a per unit of production basis these five expense categories decreased between the comparable first quarter periods from $2.83 per Mcfe in 2001 to $2.41 per Mcfe for 2002.
"While the comparisons to last year are disappointing in terms of bottom line results, I am pleased with our increasing production profile and the success from our first quarter drilling program that experienced a 95% success rate, including four exploration successes in four attempts," said Dan Dinges, President and Chief Operating Officer. "The outlook for the remainder of the year is encouraging as commodity prices continue to improve. However, because of the uncertainty related to natural gas prices, we have decided to stay with our original capital plans and will evaluate acquisition opportunities to enhance our growth profile."
Second Quarter 2002
In connection with the previously announced retirement of Chairman and Chief Executive Officer Ray Seegmiller in May 2002, the Company will incur an estimated pre-tax charge to earnings in the second quarter of approximately $3.2 million. This estimate relates to a lump sum cash payment totaling $910,000 in recognition of Mr. Seegmiller's current employment agreement, his contributions to the Company and in lieu of a 2002 long-term incentive award. Also included is a charge of approximately $1.3 million (final value to be determined based on the Company's stock price on May 2, 2002) associated with the acceleration of previously awarded stock grants and options. The final component is a charge of $1.0 million to fully accrue for Mr. Seegmiller's supplemental executive retirement plan benefit.
"We truly appreciate Ray's contributions over the last few years that have helped transform Cabot into an exploration oriented company balanced by an extensive inventory of development opportunities," said Dinges. "He has successfully positioned the Company for the future and we will continue to build on his efforts to further enhance shareholder value."
Listen in live to Cabot Oil & Gas Corporation's first quarter earnings discussion with financial analysts on Friday, April 26 at 9:30 AM EDT (8:30 AM CDT) at www.cabotog.com . A teleconference replay is also available at (800) 633-8284, reservation number 20503376. The audio webcast and teleconference replay will be available from April 26 at 11:30 AM EDT until May 3 at 5 PM EDT.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading domestic independent natural gas producer and marketer with substantial interests on the Gulf Coast, including onshore Texas and Louisiana; the West, with the Rocky Mountains and the 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, outlook
for prices, capital budgets 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
OPERATING DATA Quarter Ended March 31, 2002 2001 NATURAL GAS (Bcf) & OIL (MBbl) Produced Natural Gas Gulf Coast 7.5 4.8 West 6.4 6.4 East 4.5 4.1 Total 18.4 15.3 Crude/Condensate Gulf Coast 610 328 West 50 68 East 8 9 Total 668 405 Natural Gas Liquids 15 19 Equivalent Production (Bcfe) 22.5 17.9 PRICES Average Produced Gas Sales Price ($/Mcf) Gulf Coast $2.67 $7.34 West $2.14 $6.10 East $2.85 $6.44 Total $2.53 $6.57 Crude/Condensate Price ($/Bbl) Gulf Coast $20.57 $28.83 West $20.97 $27.36 East $16.41 $27.21 Total $20.55 $28.55 WELLS DRILLED Gross 21 43 Net 12.2 32.5 Gross Success Rate 95% 91% CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In Thousands, Except Per Share Amounts) Quarter Ended March 31, 2002 2001 Operating Revenues Natural Gas Production $46,506 $100,725 Brokered Natural Gas 13,698 35,422 Crude Oil and Condensate 13,718 11,556 Change in Derivative Fair Value (616) 6,198 Other 1,767 990 75,073 154,891 Operating Expenses Brokered Natural Gas Cost 12,267 34,155 Production and Pipeline Operations 12,235 8,220 Exploration 7,056 10,773 Taxes Other Than Income 6,152 9,902 Administrative 5,739 5,946 Depreciation, Depletion and Amortization 25,547 17,373 Impairment of Long-Lived Assets 1,063 0 70,059 86,369 Gain (Loss) on Sale of Assets (18) 4 Income from Operations 4,996 68,526 Interest Expense and Other 6,226 4,706 Income (Loss) Before Income Taxes (1,230) 63,820 Income Tax Expense (Benefit) (432) 24,758 Net Income (Loss) $(798) $39,062 Net Income (Loss) Per Share $(0.03) $1.33 Average Common Shares Outstanding 31,604 29,318 Results Considering Selected Items As Reported - Net Income (Loss) $(798) $39,062 After-Tax Impact for Selected Items: Change in Derivative Fair Value (380) 3,799 Impairment of Long-Lived Assets (657) Net Income Before Selected Items $239 $35,263 Net Income per Share $0.01 $1.20 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (In Thousands) March 31, Dec. 31, 2002 2001 Assets Current Assets $81,416 $84,987 Property, Equipment and Other Assets 984,759 984,044 Total Assets $1,066,175 $1,069,031 Liabilities and Stockholders' Equity Current Liabilities $105,142 $110,240 Long-Term Debt 412,000 393,000 Deferred Income Taxes 194,543 200,859 Other Liabilities 18,798 18,380 Stockholders' Equity 335,692 346,552 Total Liabilities and Stockholders' Equity $1,066,175 $1,069,031 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In Thousands) Quarter Ended March 31, 2002 2001 Cash Flows From Operating Activities Net Income (Loss) $(798) $39,062 Income Charges Not Requiring Cash 28,590 11,952 (Gain) Loss on Sale of Assets 18 (4) Deferred Income Taxes (471) 13,788 Changes in Assets and Liabilities (4,846) 34,027 Exploration Expense 7,056 10,773 Net Cash Provided by Operations 29,549 109,598 Cash Flows From Investing Activities Capital Expenditures (41,062) (34,748) Proceeds from Sale of Assets (2) 438 Exploration Expense (7,056) (10,773) Net Cash Used by Investing (48,120) (45,083) Cash Flows From Financing Activities Sale of Common Stock 105 4,194 Increase (Decrease) in Debt 19,000 (70,000) Common Dividends and Other (1,264) (1,172) Net Cash Provided (Used) by Financing 17,841 (66,978) Net Decrease in Cash and Cash Equivalents $(730) $(2,463) Discretionary Cash Flow (*) $34,395 $75,571 (*) Net income plus non-cash charges and exploration. Excludes net proceeds on property sales. MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X04343430
SOURCE Cabot Oil & Gas Corporation