News Release

Cabot Oil & Gas Produces Record Second Quarter Performance
 

HOUSTON, July 24 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced the best second quarter and six month results ever reported in its history as a public company. Second quarter net income available to common shareholders reached $2.0 million, or $.09 per share while discretionary cash flow was $17.7 million, or $.77 per share. The earnings figure more than doubled last year's record second quarter of $.9 million, or $.04 per share for net income available to common shareholders, while discretionary cash flow was also higher than last year's $16.9 million, or $.74 per share.

For the six month results, the Company's net income available to common shareholders grew 91% over the prior year period, reaching $11.6 million, or $.51 per share. Discretionary cash flow increased nearly 30% to $48.7 million, or $2.13 per share, compared to $37.8 million, or $1.66 per share, for the first half of last year.

"This quarter's performance marks the 6th consecutive quarter of profits and quarter over comparable quarter improvement," commented Charles P. Siess Jr., Chairman and Chief Executive Officer. "Contributing to the record quarter performance was higher production and improved drilling success which more than offset declining prices. For both the quarter and the six month periods, Cabot Oil & Gas realized a 7% increase in equivalent production over the same periods in 1996 primarily as a result of its successful drilling program. A near 90% success rate for the first half drilling program also contributed to the results."

Higher first quarter prices buoyed first half realizations, which translated into a net company price 16% ahead of last year. However, for the second quarter, increases in western gas prices over last year were offset by softness in Appalachia, resulting in a realized price for the Company of $2.08 per Mcf versus $2.10 per Mcf for the same quarter in 1996.

During the quarter, Cabot Oil & Gas also held its debt constant at $223 million, $25 million below year-end. The debt is composed of $16 million in current and $207 million in long-term.

Mr. Siess stated, "We have held fast to the plan developed in 1995 to grow through the drill bit while holding unit costs in check, reducing debt and increasing the portion of revenue reinvested in our business. As a result, since the second quarter of 1996 our shareholders' equity has increased nearly $19 million; debt has declined $20 million; and, production has increased 7%. Simultaneously, earnings and cash flow have achieved all time records, continually out performing prior year comparisons. Cabot Oil & Gas anticipates a continuation of these trends as a result of its exploration and drilling programs."

Commenting on this upside from the drill bit, Mr. Siess added, "We shall soon report a number of new wells including the performance of the Beaurline #14 well in Hidalgo County, Texas, which is drilling, the Broussard Middleton #1 well in Chambers County, Texas, the Texaco Fee well in the Hostetter field and the Schuh well in Acadia Parish, Louisiana, all of which are being completed. These wells support our growth expectations."

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 http:// 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,

1997 1996 1997 1996 NATURAL GAS (Bcf) & OIL (MBbl) Produced Natural Gas Appalachia 6.7 6.5 13.4 13.2 West 9.3 8.4 17.7 15.8 Total 16.0 14.9 31.1 29.0
Crude/Condensate 153 143 295 279
Natural Gas Liquids 13 20 26 40
Equivalent Production (Bcfe) 17.0 15.9 33.0 30.9
PRICES Average Produced Gas Sales Price ($/Mcf) Appalachia $ 2.38 $ 2.51 $ 3.04 $ 2.76 West $ 1.87 $ 1.79 $ 2.25 $ 1.80 Total $ 2.08 $ 2.10 $ 2.59 $ 2.23
Crude/Condensate Price ($/Bbl) $19.24 $20.53 $20.85 $20.05
WELLS DRILLED Gross 71 43 102 85 Net 55.9 35.1 73.5 70.9 Net Success Rate 89% 71% 87% 81%

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


                                    Quarter Ended             Six Months Ended
                                       June 30,                   June 30,
                                   1997        1996          1997        1996
    Net Operating Revenues
     Natural Gas Production     $33,301      $31,258      $80,486     $64,864
     Crude Oil and Condensate     2,946        2,939        6,150       5,598
     Brokered Natural Gas
      Margin                        932        1,123        1,429       3,214
     Other                        2,228        2,026        4,134       4,868
                                 39,407       37,346       92,199      78,544
    Operating Expenses
     Operations                   7,364        6,603       14,433      13,425
     Exploration                  3,281        3,695        6,907       6,048
     Taxes Other Than Income      3,485        3,113        7,567       6,518
     Administrative               4,700        4,322        8,856       8,060
     Depreciation, Depletion
      and Amortization           10,831       10,966       22,058      21,424
                                 29,661       28,699       59,821      55,475
    Other Income (Loss)             267          (32)         350       1,474
    Income from Operations       10,013        8,615       32,728      24,543
    Interest Expense              4,358        4,780        8,919       9,628
    Income Before Income
     Taxes                        5,655        3,835       23,809      14,915
    Income Tax Expense            2,309        1,591        9,378       6,022
    Net Income                    3,346        2,244       14,431       8,893
    Dividend Requirement
     on Preferred Stock           1,391        1,391        2,783       2,783
    Net Income Applicable
     to Common                   $1,955        $ 853     $ 11,648     $ 6,110
    Net Income Per Common
     Share                       $ 0.09        $0.04       $ 0.51      $ 0.27
    Average Common Shares
     Outstanding                 22,870       22,798       22,863      22,795

               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In Thousands)

                                             June 30,    Dec. 31,
                                                1997       1996
    Assets
    Current Assets                           $42,535      $79,637
    Property, Equipment and
     Other Assets                            490,696      481,704
       Total Assets                         $533,231     $561,341

    Liabilities and Stockholders' Equity
    Current Liabilities                      $67,767      $72,617
    Long-Term Debt                           207,000      248,000
    Deferred Income Taxes                     77,609       69,427
    Other Liabilities                          9,365       10,593
    Stockholders' Equity                     171,490      160,704
       Total Liabilities and
        Stockholders' Equity                $533,231     $561,341

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

                                       Quarter Ended        Six Months Ended
                                          June 30,              June 30,
                                       1997    1996         1997       1996

    Cash Flows From Operating Activities

    Net Income                       $3,346   $2,244      $14,431     $8,893
    Income Charges Net
     Requiring Cash                  12,442   12,308       30,174     25,601
    Changes in Assets
     and Liabilities, Net              (284)   1,874       14,694     (4,338)
    Exploration Expense               3,281    3,695        6,907      6,048
    Net Cash Provided by
     Operations                      18,785   20,121       66,206     36,204

    Cash Flows From Investing Activities

    Capital Expenditures            (20,223)  (9,577)     (31,805)   (23,914)
    Proceeds from Sale of
     Assets                             480      (60)         783      4,408
    Exploration Expense              (3,281)  (3,695)      (6,907)    (6,048)
    Net Cash Provided (Used)
     by Investing                   (23,024) (13,332)     (37,929)   (25,554)

    Cash Flows From Financing Activities
    Sale of Common Stock                165       63          410        228
    Increase (Decrease)
     in Debt                          1,000   (5,000)     (25,000)    (6,000)
    Preferred Dividends              (1,391)  (1,391)      (2,783)    (2,783)
    Common Dividends and
     Other, Net                        (915)    (913)      (1,829)    (1,824)
    Net Cash Used By
     Financing                       (1,141)  (7,241)     (29,202)   (10,379)

    Net Increase (Decrease)
     In Cash and Cash
     Equivalents                    $(5,380)   $(452)       $(925)      $271

    Discretionary Cash
     Flow(*)                        $17,678  $16,856      $48,729    $37,759

    (*) Net income plus non-cash charges and exploration less preferred
        dividends.

SOURCE Cabot Oil & Gas Corporation
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, 281-589-4993