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News Release

Cabot Oil & Gas Announces Second Quarter Results
 

HOUSTON, July 25 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced second quarter net income available to common shareholders of $2.6 million, or $.10 per share, and discretionary cash flow of $20.9 million, or $.78 per share, before taking into account certain nonrecurring items. This compares favorably with last year's second quarter loss of $487,000, or $.02 per share, and discretionary cash flow of $17.8 million, or $.72 per share, before nonrecurring items.

The nonrecurring items (after-tax) for the second quarter of 2000 include a $5.1 million benefit resulting from the repurchase of the Company's outstanding preferred stock at less than stated value. This gain is offset by a $5.6 million impairment of the Beaurline field in south Texas and $580,000 for costs associated with the previously announced closing of the Company's Pittsburgh office. Including the impact of nonrecurring items, Cabot reported second quarter 2000 net income available to common shareholders of $1.5 million, or $.05 per share, compared to $110,000 in last year's second quarter.

The quarterly results were affected primarily by higher realized prices for both natural gas and oil. Natural gas prices in the quarter increased 28% and oil prices increased 40% over the prior year period. "The reported realized prices of $2.66 per Mcf and $22.66 per barrel were reduced by the impact of our hedged volumes," commented Ray Seegmiller, Chairman and Chief Executive Officer. "Combining physical forward sales and collars, Cabot had 78% of its second quarter production hedged. Based on anticipated production levels, we are 62% hedged for the third quarter and approximately 20% hedged in the fourth quarter, with nearly all of our hedges expiring in October."

Production of 15.9 Bcfe during the second quarter was 2.6 Bcfe below last year's corresponding period. This resulted primarily from asset sales in the third quarter of 1999 and delays associated with the completion of the Etouffee production facilities in south Louisiana. By the end of the second quarter these facilities had been completed. Seegmiller said, "Production from the discovery well and first offset well is gradually being increased, while drilling of the second offset is continuing and looks very encouraging."

In terms of cost comparisons (on a recurring basis), the Company experienced increases in taxes other than income due to the strong price environment and in administrative expenses primarily due to rent associated with the relocation of the corporate office. Operations and exploration expense also moved higher with the expansion of the Gulf Coast operations year-over-year. Benefits from this expansion will be realized starting in the third quarter. However, these increases were offset by reductions in interest expense and preferred dividends, along with lower DD&A expense in the quarter. Lower DD&A resulted from lower production volume between comparable quarters.

Year-to-date

For the six months ended June 30, 2000, Cabot Oil & Gas reported a profit of $5.4 million, or $.21 per share, and discretionary cash flow of $43.1 million, or $1.68 per share, before nonrecurring items. Including the first and second quarter nonrecurring items, year-to-date results improved to $6.0 million, or $.23 per share, for net income available to common shareholders, and to $44.5 million, or $1.73 per share, for discretionary cash flow.

For comparison, last year's first half results, excluding nonrecurring items, were a net loss applicable to common of $3.8 million, or $.15 per share, and discretionary cash flow of $30.5 million, or $1.23 per share. Reported results for this period in 1999, including the nonrecurring items, were a net loss applicable to common shareholders of $3.2 million, or $.13 per share. A 31% increase in the realized price of natural gas and a 61% increase in oil price realizations were the primary drivers for the year-over-year improvement.

As of June 30, 2000, Cabot Oil & Gas had reduced its total debt to $265.0 million, an $85.0 million reduction since last year's comparable period, and $28.0 million lower than December 31, 1999. In addition, the Company retired its preferred stock during the second quarter, therefore eliminating a $3.4 million annual dividend going forward.

Seegmiller stated, "The exploration discoveries, Augen and Bon Ton (both in south Louisiana), are scheduled to be turned in-line by mid August, with maximum production being reached within a month after turn-in. Also, July is the first month we will see significant volumes from the Etouffee prospect. These and other drilling successes in our Gulf Coast drilling program provide the catalyst for the anticipated significant increase in production levels during the second half of 2000 compared to the first half of the year."

Seegmiller added, "Because of the elimination of the preferred stock and the reductions in debt, we have improved our financial flexibility significantly. We intend to utilize a portion of this year's anticipated excess cash flow (that was previously targeted for debt and preferred dividend payments) to capitalize on drilling certain additional exploration and development prospects over the next few months."

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 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,
                                            2000     1999     2000     1999

    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
     Appalachia                               4.5      5.2     9.0     10.8
     West                                     7.2      7.4    14.5     14.8
     Gulf Coast                               3.0      4.4     6.4      7.5
     Total                                   14.7     17.0    29.9     33.1

    Crude/Condensate                          205      237     400      467

    Natural Gas Liquids                         6        6      13       15

    Equivalent Production (Bcfe)             15.9     18.5    32.4     36.0

    PRICES
    Average Produced Gas Sales Price ($/Mcf)
     Appalachia                           $  2.63  $  2.31 $  2.85  $  2.28
     West                                 $  2.51  $  1.86 $  2.38  $  1.79
     Gulf Coast                           $  3.05  $  2.16 $  2.78  $  1.99
     Total                                $  2.66  $  2.08 $  2.61  $  1.99

    Crude/Condensate Price ($/Bbl)        $ 22.66  $ 16.20 $ 22.42  $ 13.90

    WELLS DRILLED
     Gross                                     35       11      60       26
     Net                                     28.8      5.5    43.5     14.9
     Gross Success Rate                        94%      91%     92%      85%


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

                                       Quarter Ended     Six Months Ended
                                         June 30,            June 30,
                                       2000      1999      2000      1999

    Net Operating Revenues
     Natural Gas Production          $ 38,903  $ 35,339  $ 77,989  $ 65,958
     Crude Oil and Condensate           4,649     3,842     8,974     6,492
     Brokered Natural Gas Margin        1,101     1,056     2,552     1,939
     Other                              1,872       824     6,644     1,952
                                       46,525    41,061    96,159    76,341
    Operating Expenses
     Operations - Field & Pipeline      9,062     7,762    17,573    15,609
     Exploration                        4,162     2,015     7,395     4,440
     Taxes Other Than Income            4,954     4,165     9,555     7,803
     Administrative                     5,331     4,426    10,218     8,717
     Depreciation, Depletion and
      Amortization                     13,427    15,512    27,035    29,748
     Impairment of Long-Lived Assets    9,143         0     9,143         0
                                       46,079    33,880    80,919    66,317
    Gain (Loss) on Sale of Assets         (26)      974       (47)      975
    Income from Operations                420     8,155    15,193    10,999
    Interest Expense                    5,365     6,450    11,336    13,168
    Income (Loss) Before Income
     Taxes                             (4,945)    1,705     3,857    (2,169)
    Income Tax Expense (Benefit)       (1,863)      745     1,594      (687)
    Net Income (Loss)                  (3,082)      960     2,263    (1,482)
    Dividend Requirement on Preferred
     Stock                             (4,600)      850    (3,749)    1,701
    Net Income (Loss) Available to
     Common                           $ 1,518   $   110   $ 6,012   $(3,183)
    Net Income (Loss) Per Common
     Share - Basic                    $  0.05   $  0.00   $  0.23   $ (0.13)
    Average Common Shares Outstanding  26,694    24,702    25,746    24,684

    Results from Normalized
     Operations (*)
     Net Income Available to Common   $ 2,605   $  (487)  $ 5,360   $(3,780)
     Net Income per Common Share      $  0.10   $ (0.02)  $  0.21   $ (0.15)
     Discretionary Cash Flow (DCF)    $20,926   $17,849   $43,131   $30,484
     DCF per Common Share             $  0.78   $  0.72   $  1.68   $  1.23

    (*)  For the quarter ended June 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 repurchase of the preferred stock and
         $950,000 in severance costs ($520,000  in operations, $130,000 in
         exploration and $300,000 in administration).  For the six months
         ended June 30, 2000, also excludes the $2.8 million benefit resulting
         primarily from a contract settlement.


               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In Thousands)
                                                   June 30,       Dec. 31,
                                                     2000           1999
    Assets
    Current Assets                                 $  72,339      $  66,640
    Property, Equipment and Other Assets             602,888        592,840
     Total Assets                                  $ 675,227      $ 659,480

    Liabilities and Stockholders' Equity
    Current Liabilities                            $ 103,599      $  89,938
    Long-Term Debt                                   249,000        277,000
    Deferred Income Taxes                             95,619         95,012
    Other Liabilities                                 12,721         11,034
    Stockholders' Equity                             214,288        186,496
     Total Liabilities and Stockholders' Equity    $ 675,227      $ 659,480


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

                                       Quarter Ended      Six Months Ended
                                         June 30,             June 30,
                                     2000       1999       2000      1999

    Cash Flows From Operating Activities
    Net Income (Loss)              $ (3,082)  $    960   $  2,263  $ (1,482)
    Income Charges Not Requiring
     Cash                            22,310     16,028     36,433    31,004
    Gain (Loss) on Sale of Assets        26       (974)        47      (975)
    Deferred Income Taxes            (1,994)       670        607      (802)
    Changes in Assets and
     Liabilities                     (5,650)     3,137      4,462      (283)
    Exploration Expense               4,162      2,015      7,395     4,440
    Net Cash Provided by Operations  15,772     21,836     51,207    31,902

    Cash Flows From Investing Activities
    Capital Expenditures            (23,115)   (14,850)   (42,060)  (41,363)
    Proceeds from Sale of Assets        258      9,375      1,781     9,376
    Exploration Expense              (4,162)    (2,015)    (7,395)   (4,440)
    Net Cash Used by Investing      (27,019)    (7,490)   (47,674)  (36,427)

    Cash Flows From Financing Activities
    Sale of Common Stock             78,817        729     80,048       916
    Retirement of Preferred Stock   (51,600)         0    (51,600)        0
    Increase (Decrease) in Debt     (13,000)   (13,000)   (28,000)    7,000
    Preferred Dividends              (1,351)      (850)    (2,202)   (1,701)
    Common Dividends                 (1,026)    (1,000)    (2,029)   (1,986)
    Net Cash Provided (Used) by
     Financing                       11,840    (14,121)    (3,783)    4,229

    Net Increase (Decrease) in Cash and
    Cash Equivalents               $    593   $    225   $   (250) $   (296)

    Discretionary Cash Flow (*)    $ 20,071   $ 17,849   $ 44,543  $ 30,484

    (*)  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