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News Release

Cabot Oil & Gas Announces Record Full Year and Fourth Quarter Results
 

Unprecedented Natural Gas Price Realizations Drive Performance

HOUSTON, Jan. 24 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced 2000 net income available to common shareholders of $30.2 million, or $1.10 per share, and discretionary cash flow of $125.0 million, or $4.56 per share, before taking into account certain selected items. This compares favorably to the 1999 net income available to common shareholders of $385,000, or $.02 per share, and discretionary cash flow of $73.4 million, or $2.97 per share, before the impact of selected items. (See Income Statement detail for a list of selected items for both the full year and quarter periods.)

In terms of the fourth quarter results, Cabot reported net income available to common shareholders of $18.7 million, or $.64 per share, and discretionary cash flow of $52.5 million, or $1.81 per share, excluding the impact of selected items. For the fourth quarter of 1999, Cabot reported net income of $3.0 million, or $.12 per share, and discretionary cash flow of $22.7 million, or $.92 per share, excluding the benefit from certain selected items.

"Higher realized natural gas prices contributed heavily to the record results for Cabot as well as many of our industry peers," stated Ray Seegmiller, Chairman and Chief Executive Officer. "The 2000 results highlight Cabot's substantial increased earnings and cash flow potential created by a $1.00 per Mcf increase in realized gas prices. Cabot's $3.19 per Mcf realization for 2000 (versus $2.22 per Mcf in 1999) generated almost a $30 million increase in earnings and $50 million in additional discretionary cash flow, which begins to highlight the incremental value of Cabot's asset base in a strong price environment."

Cabot Oil & Gas realized a natural gas price for the fourth quarter of $4.58 per Mcf, 75% above last year's comparable level. "While these prices are historical highs, for 2001 we have hedged (utilizing "costless collars") roughly half of our gas production from February through October at levels that exceed the prices realized in 2000, specifically at a $5.50 per Mcf floor and a ceiling of $9.55 per Mcf," explained Seegmiller.

Due to production delays early in 2000, daily production averaged 180.5 Mmcfe per day during the first nine months of the year before increasing to 185 Mmcfe per day during October and November. December was the first month that reached maximized production rates from the exploration successes in south Louisiana, bringing the average for December to 197 Mmcfe per day. As a result, quarter-over-quarter production grew 4%, from 16.8 Bcfe in 1999 to 17.4 Bcfe in 2000.

Seegmiller added, "In addition, I am pleased with the improvement we have made this year in our financial structure. In addition to reducing debt by $24.0 million since year-end 1999, we were successful in retiring our preferred stock. These actions, combined with our record earnings, resulted in an improved capitalization ratio of 52.6% versus 61.1% at year-end 1999."

Reserves

Total proved reserves are expected to exceed 1 Tcfe at the end of 2000. This is an increase from 979 Bcfe at year-end 1999. The increase is attributed to the Company's successful drilling program, in particular the exploration success experienced in 2000. Reserve replacement is projected to surpass earlier estimates which were 140% of production at a preliminary finding cost of approximately $1.00 per Mcfe for the year.

Outlook

"Record high commodity prices have given us the financial flexibility to increase our capital program by 36% over the prior year to $167 million for 2001. This includes $112 million for drilling, 42% of which will be for exploration and 58% for development," said Seegmiller. "As we have over the last several years, we intend to continue to build on our exploration activities in the Gulf Coast and Rocky Mountains."

Listen in live to Cabot Oil & Gas Corporation's fourth quarter and 2000 annual earnings discussion with financial analysts on Thursday, January 25, at 9:30 AM EDT at www.cabotog.com. A post-view replay is also available at (800) 633-8284, reservation number 15644047. The audio webcast replay and teleconference post-view replay will be available from January 25 to February 1, 2001.

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        Year Ended
                                           December 31,        December 31,
                                          2000      1999      2000      1999
    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Appalachia                           4.3       4.6      17.8      20.7
      West                                 7.0       7.0      29.0      29.3
      Gulf Coast                           4.2       3.8      14.1      15.5
      Total                               15.5      15.4      60.9      65.5

    Crude/Condensate                       297       225       953       929

    Natural Gas Liquids                     19        15        37        34

    Equivalent Production (Bcfe)          17.4      16.8      66.9      71.3

    PRICES
    Average Produced Gas Sales Price
     ($/Mcf)
      Appalachia                         $4.62     $3.26     $3.24     $2.53
      West                               $4.08     $2.15     $2.86     $1.96
      Gulf Coast                         $5.41     $2.66     $3.79     $2.29
      Total                              $4.58     $2.61     $3.19     $2.22

    Crude/Condensate Price ($/Bbl)      $30.23    $20.92    $26.81    $17.22

    WELLS DRILLED
      Gross                                 44        24       129        73
      Net                                 30.3      14.5      91.6      45.4
      Gross Success Rate                    82%       79%       86%       84%


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

                                          Quarter Ended        Year Ended
                                           December 31,       December 31,
                                           2000     1999      2000      1999
    Net Operating Revenues
      Natural Gas Production             $71,097  $40,029  $194,185  $145,495
      Crude Oil and Condensate             8,976    4,612    25,544    15,909
      Brokered Natural Gas Margin          1,604    1,546     5,385     4,390
      Other                                  420   13,655     7,837    16,079
                                          82,097   59,842   232,951   181,873
    Operating Expenses
      Operations - Field & Pipeline        9,436    9,246    35,727    33,357
      Exploration                          7,771    4,057    19,858    11,490
      Taxes Other Than Income              7,470    4,418    23,041    16,988
      Administrative                       4,886    6,501    20,421    20,136
      Bad Debt                             2,096        0     2,096         0
      Depreciation, Depletion and
       Amortization                       16,595   13,066    57,809    57,307
      Impairment of Long-Lived Assets          0    7,047     9,143     7,047
                                          48,254   44,335   168,095   146,325
    Gain (Loss) on Sale of Assets            (17)  (1,069)      (39)    3,950
    Income from Operations                33,826   14,438    64,817    39,498
    Interest Expense                       5,834    6,144    22,878    25,818
    Income Before Income Taxes            27,992    8,294    41,939    13,680
    Income Tax Expense                    10,920    2,823    16,467     5,161
    Net Income                            17,072    5,471    25,472     8,519
    Dividend Requirement on Preferred
     Stock                                     0      850    (3,749)    3,402
    Net Income Applicable to Common      $17,072   $4,621   $29,221    $5,117
    Net Income Per Common Share - Basic    $0.59    $0.19     $1.07     $0.21
    Average Common Shares Outstanding     29,032   24,770    27,384    24,726

    Results from Recurring Operations
      As Reported - Net Income
       Applicable to Common              $17,072   $4,621   $29,221    $5,117
      After-Tax Impact for Selected
       Items:
        Impairment of Long-Lived Assets             4,320     5,605     4,320
        Negative Preferred Stock
         Dividend                                            (5,100)
        Gain (Loss) on Sale of Assets                 654              (2,422)
        Contract Settlements                 306   (6,630)   (1,432)   (6,630)
        Bad Debt Expense                   1,285              1,285
        Severance Costs                                         582
      Net Income from Recurring
       Operations                        $18,663   $2,965   $30,161      $385
      Net Income per Common Share          $0.64    $0.12     $1.10     $0.02
      Discretionary Cash Flow (DCF)      $52,488  $22,657  $124,990   $73,418
       DCF per Common Share                $1.81    $0.92     $4.56     $2.97


                CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                  (In Thousands)
                                                    Dec. 31,       Dec. 31,
                                                      2000           1999
    Assets
    Current Assets                                  $110,269        $66,640
    Property, Equipment and Other Assets             625,365        592,840
      Total Assets                                  $735,634       $659,480

    Liabilities and Stockholders' Equity
    Current Liabilities                             $118,108        $89,938
    Long-Term Debt                                   253,000        277,000
    Deferred Income Taxes                            108,174         95,012
    Other Liabilities                                 13,847         11,034
    Stockholders' Equity                             242,505        186,496
      Total Liabilities and Stockholders' Equity    $735,634       $659,480


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

                                           Quarter Ended       Year Ended
                                              Dec. 31,          Dec. 31,
                                            2000     1999     2000      1999
    Cash Flows From Operating Activities
    Net Income                            $17,072   $5,471   $25,472   $8,519
    Income Charges Not Requiring Cash      16,657   20,880    68,091   66,793
    (Gain) Loss on Sale of Assets              17    1,069        39   (3,950)
    Deferred Income Taxes                   8,988    2,629    13,163    9,060
    Changes in Assets and Liabilities      (5,330)  (1,292)   (7,613)     576
    Exploration Expense                     7,771    4,057    19,858   11,490
    Net Cash Provided by Operations        45,175   32,814   119,010   92,488

    Cash Flows From Investing Activities
    Capital Expenditures                  (27,685) (21,211)  (99,359) (82,191)
    Proceeds from Sale of Assets              487     (645)    3,150   56,328
    Restricted Cash                             0   36,812         0        0
    Exploration Expense                    (7,771)  (4,057)  (19,858) (11,490)
    Net Cash Provided (Used) by
     Investing                            (34,969)  10,899  (116,067) (37,353)

    Cash Flows From Financing Activities
    Sale of Common Stock                    3,507      354    85,104    1,738
    Retirement of Preferred Stock               0        0   (51,600)       0
    Decrease in Debt                       (7,000) (42,000)  (24,000) (50,000)
    Preferred Dividends                         0     (850)   (2,202)  (3,402)
    Common Dividends                       (1,161)  (1,004)   (4,350)  (3,992)
    Net Cash Provided (Used) by Financing  (4,654) (43,500)    2,952  (55,656)

    Net Increase (Decrease) in Cash and
      Cash Equivalents                     $5,552     $213    $5,895    $(521)

    Discretionary Cash Flow (*)           $50,505  $33,257  $124,421  $84,018

    (*)  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