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News Release

Cabot Oil & Gas Corporation Announces First Quarter Profits, Record Quarterly Production Volumes
 

HOUSTON, April 25, 2012 /PRNewswire via COMTEX/ --Cabot Oil & Gas Corporation (NYSE: COG) today announced an improvement in first quarter profits over last year, driven primarily from continued expansion of the Company's production base, with both oil and natural gas volumes setting new Company production records.

The Company posted net income of $18.3 million, or $0.09 per share, cash flow from operations of $131.8 million and discretionary cash flow of $138.5 million for the first quarter of 2012. This compares to the first quarter of 2011 when the Company reported net income of $12.9 million, or $0.06 per share, cash flow from operations of $91.2 million and discretionary cash flow of $112.3 million. Excluding the effect of certain selected items detailed in the tables below, first quarter 2012 net income was $28.5 million, or $0.14 per share, compared to $20.7 million, or $0.10 per share, in first quarter 2011.

Production during the first quarter 2012 was 59.7 Bcfe, with 56.4 Bcf of natural gas production and 538 thousand barrels of liquids production. These figures represent increases of 58 percent, 55 percent, and 138 percent respectively, compared to the first quarter 2011. Production was the strongest ever reported; however, realized pricing was mixed. Natural gas price realizations were down 22 percent to $3.65 per Mcf in first quarter 2012, while oil price realizations were up 11 percent to $96.67 per barrel. "Even with the significant reduction in realized natural gas prices between first quarters, we were able to grow oil and gas revenues by 36 percent as a result of our record production growth," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "These results highlight how efforts in each of our areas of focus continue to generate positive momentum. Fortunately, we have the assets, the balance sheet, and the operational ability to weather this cycle and still be opportunistic in order to generate value over the long-term." Total expenses trended higher between the comparable first quarters, with DD&A, transportation and gathering and taxes other than income increasing the most. However, total per unit costs continued their downward trend due to the ramp up in production.

Conference Call Listen in live to Cabot Oil & Gas Corporation's first quarter financial and operating results discussion with financial analysts on Thursday, April 26, 2012 at 9:30 a.m. EDT (8:30 a.m. CDT) at www.cabotog.com. The latest financial guidance, including the Company's hedge positions, along with a replay of the web cast, which will be archived for one year, are available in the investor relations section of the Company's website at www.cabotog.com.

Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer, with its entire resource base located in the continental United States. 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.

FOR MORE INFORMATION CONTACT Scott Schroeder (281) 589-4993

CABOT OIL & GAS RESULTS -- Page 3















OPERATING DATA









Quarter Ended



March 31,



2012


2011

PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)





Natural Gas





Appalachia


49.6


27.1

Other


6.8


9.3

Total


56.4


36.4






Crude/Condensate/NGL


538


226






Equivalent Production (Bcfe)


59.7


37.7






PRICES (1)





Average Produced Gas Sales Price ($/Mcf)





Appalachia

$

3.77

$

4.62

Other

$

2.82

$

4.85

Total

$

3.65

$

4.68






Average Crude/Condensate Price ($/Bbl)

$

96.67

$

87.15






WELLS DRILLED





Gross


31


24

Net


23


17

Gross Success Rate


100%


100%






(1) These realized prices include the realized impact of derivative instrument settlements.







Quarter Ended



March 31,



2012


2011

Realized Impacts to Gas Pricing


$ 1.00


$ 0.37

Realized Impacts to Oil Pricing


$ (2.57)


$ (1.42)







CABOT OIL & GAS RESULTS -- Page 4




CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)


(In thousands, except per share amounts)













Quarter Ended



March 31,



2012


2011


Operating Revenues





Natural Gas

$ 206,782


$ 170,098


Brokered Natural Gas

13,444


18,408


Crude Oil and Condensate

49,981


18,592


Other

1,929


1,928



272,136


209,026


Operating Expenses





Brokered Natural Gas Cost

11,872


15,362


Direct Operations

27,320


27,007


Transportation and Gathering

30,258


12,868


Taxes Other Than Income

18,583


8,151


Exploration

4,001


6,308


Depreciation, Depletion and Amortization

110,357


77,124


General and Administrative (excluding Stock-Based Compensation)

20,894


16,161


Stock-Based Compensation(1)

1,655


8,138



224,940


171,119


Gain (Loss) on Sale of Assets

(535)


(1,517)


Income from Operations

46,661


36,390


Interest Expense and Other

16,917


17,367


Income Before Income Taxes

29,744


19,023


Income Tax Expense

11,426


6,137


Net Income

$ 18,318


$ 12,886


Earnings Per Share - Basic(2)

$ 0.09


$ 0.06


Weighted Average Common Shares Outstanding(2)

209,128


208,288






(1)

Includes the impact of the Company's performance share awards and restricted stock amortization as well as expense related to stock appreciation rights. Also includes expense for the Supplemental Employee Incentive Plan.

(2)

All Earning Per Share and Weighted Average Common Share figures have been retroactively adjusted for the 2-for-1 split of the Company's common stock effective January 25, 2012.



CABOT OIL & GAS RESULTS -- Page 5
















CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)






March 31,


December 31,


2012


2011

Assets




Current Assets

$ 339,727


$ 345,800

Properties and Equipment, Net

4,011,203


3,934,584

Other Assets

51,864


51,109

Total Assets

$ 4,402,794


$ 4,331,493





Liabilities and Stockholders' Equity




Current Liabilities

$ 322,154


$ 343,344

Long-Term Debt, excluding Current Maturities

1,012,000


950,000

Deferred Income Taxes

814,189


802,592

Other Liabilities

129,495


130,789

Stockholders' Equity

2,124,956


2,104,768

Total Liabilities and Stockholders' Equity

$ 4,402,794


$ 4,331,493









CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)










Quarter Ended


March 31,


2012


2011

Cash Flows From Operating Activities




Net Income

$ 18,318


$ 12,886

Deferred Income Tax Expense

9,724


6,543

Loss (Gain) on Sale of Assets

535


1,517

Exploration Expense

49


493

Unrealized (Gain) Loss on Derivatives

(42)


(17)

Income Charges Not Requiring Cash

109,951


90,858

Changes in Assets and Liabilities

(6,755)


(21,067)

Net Cash Provided by Operations

131,780


91,213





Cash Flows From Investing Activities




Capital Expenditures

(188,547)


(203,169)

Proceeds from Sale of Assets

1,280


5,043

Net Cash Used in Investing

(187,267)


(198,126)





Cash Flows From Financing Activities




Net Increase (Decrease) in Debt

62,000


80,000

Dividends Paid

(4,177)


(3,122)

Other

81


(1,018)

Net Cash Provided by Financing

57,904


75,860





Net Increase / (Decrease) in Cash and Cash Equivalents

$ 2,417


$ (31,053)





CABOT OIL & GAS RESULTS -- Page 6































Selected Item Review and Reconciliation of Net Income and Earnings Per Share

(In thousands, except per share amounts)
























Quarter Ended











March 31,











2012


2011

As Reported - Net Income

$ 18,318


$ 12,886

Reversal of Selected Items, Net of Tax:









(Gain) Loss on Sale of Assets



327


941


Stock-Based Compensation Expense

1,013


5,046


Pension Expense (1)



3,824


1,872


Unrealized Loss (Gain) on Derivatives(2)


(26)


(11)


Pennsylvania Impact Fee(3)


5,067


-

Net Income Excluding Selected Items

$ 28,523


$ 20,734

As Reported - Earnings Per Share(4)


$ 0.09


$ 0.06

Per Share Impact of Reversing Selected Items (4)



0.05


0.04

Earnings Per Share Including Reversal









of Selected Items(4)

$ 0.14


$ 0.10

Weighted Average Common Shares Outstanding(4)

209,128


208,288

(1)

On July 28, 2010, the Company notified its employees of its plan to terminate its qualified and non-qualified pension

plans, effective September 30, 2010. The quarter ended March 31, 2012 and 2011 amounts represent pension expenses

related to the plan terminations and expenses related to the acceleration of amortization of prior service costs and

actuarial losses over the expected amortization period until final distribution of assets from each plan. Final distribution

is expected to occur at the end of the second quarter 2012, at which time the accounting for the costs associated with

the pension termination will be complete. Pension expense is included in General and Administrative expense in the

Condensed Consolidated Statement of Operations.

(2)

This unrealized loss (gain) is included in Natural Gas Revenues in the Condensed Consolidated Statement of Operations

and represents the change in fair value related to derivatives not designated as hedging instruments.

(3)

In February 2012, the Pennsylvania state legislature authorized the assessment of an impact fee on Marcellus shale

production. This amount represents the adjustment related to our 2011 and prior wells. Expense associated with the impact fee

is included in Taxes Other Than Income in the Condensed Consolidated Statement of Operations.

(4)

All Earning Per Share and Weighted Average Common Share figures have been retroactively adjusted for the 2-for-1 split

of the Company's common stock effective January 25, 2012.

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)











Quarter Ended











March 31,











2012


2011

Discretionary Cash Flow











As Reported - Net Income

$ 18,318


$ 12,886

Plus / (Less):












Deferred Income Tax Expense

9,724


6,543

Loss (Gain) on Sale of Assets

535


1,517

Exploration Expense

49


493

Unrealized Loss (Gain) on Derivatives

(42)


(17)

Income Charges Not Requiring Cash

109,951


90,858

Discretionary Cash Flow

138,535


112,280

Changes in Assets and Liabilities

(6,755)


(21,067)

Net Cash Provided by Operations

$ 131,780


$ 91,213



























Net Debt Reconciliation

(In thousands)
























March 31,


December 31,











2012


2011














Total Debt

$ 1,012,000


$ 950,000

Stockholders' Equity

2,124,956


2,104,768

Total Capitalization

$ 3,136,956


$ 3,054,768














Total Debt

$ 1,012,000


$ 950,000

Less: Cash and Cash Equivalents

(32,328)


(29,911)

Net Debt

$ 979,672


$ 920,089














Net Debt

$ 979,672


$ 920,089

Stockholders' Equity

2,124,956


2,104,768

Total Adjusted Capitalization

$ 3,104,628


$ 3,024,857














Total Debt to Total Capitalization Ratio

32.3%


31.1%

Less: Impact of Cash and Cash Equivalents

0.7%


0.7%

Net Debt to Adjusted Capitalization Ratio

31.6%


30.4%














SOURCE Cabot Oil & Gas Corporation