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News Release

Cabot Oil & Gas Announces Second Quarter Results
 

HOUSTON, July 24 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced second quarter net income of $2.1 million, or $.07 per share, and discretionary cash flow of $40.8 million, or $1.29 per share. These results compare to net income of $13.6 million, or $.46 per share, and discretionary cash flow of $56.8 million, or $1.92 per share, that was reported for the 2001 second quarter.

Production increased 29% between 2001 and 2002 second quarters to help reduce the impact of lower commodity prices. Realized natural gas prices were down 38%, while realized oil prices declined 13%. The production volume increase between second quarters was driven by last year's third quarter acquisition of Cody Energy, which contributed 3.2 Bcfe, and organic growth from the Company's drilling program that provided an incremental 1.9 Bcfe. Sequentially, production also increased slightly from 22.5 Bcfe in the first quarter to 22.8 Bcfe in the second quarter.

"We are pleased with our overall results to date, especially our 11% organic production growth since the second quarter last year," said Dan O. Dinges, Chairman and Chief Executive Officer. "We are cautiously optimistic about the remainder of the year and as such have maintained our original capital plans while continuing to work diligently to expand our prospect inventory and evaluate impact opportunities."

Expenses for the quarter included the previously announced charge (included in G&A) relating to the retirement of Chairman and Chief Executive Officer Ray Seegmiller in May. In addition to the $2.2 million after-tax amount associated with Seegmiller's retirement, Cabot also recorded an after-tax charge of $0.3 million for the anticipated future impact of the Company's hedges under SFAS 133. After removing these selected items, second quarter results would be net income of $4.7 million, or $.15 per share, and discretionary cash flow of $41.4 million, or $1.30 per share.

Year-to-Date

For the six months ended June 30, 2002, Cabot Oil & Gas reported net income of $1.3 million, or $.04 per share, while discretionary cash flow was $75.2 million, or $2.38 per share. For comparison, last year's first half results were a profit of $52.7 million, or $1.79 per share, and discretionary cash flow of $132.3 million, or $4.50 per share. After taking into account the impact of selected items, which included SFAS 133 (in 2001 and 2002), impairment of two small producing fields (first quarter 2002) and the executive retirement (second quarter 2002), net income in 2002 improves by $3.6 million, or $.12 per share, and discretionary cash flow moves higher by $0.6 million, or $.01 per share. (See Condensed Consolidated Statement of Operations for the detailed listing.)

As of June 30, 2002, the Company's total debt stood at $397 million. This compares to $412 million at March 31, 2002, and $393 million at December 31, 2001. "As part of this year's overall program, our goal is to reduce the Company's debt level year-over-year," said Dinges. "The $15 million reduction during the second quarter positions Cabot to achieve this goal and continue to evaluate the type of opportunities that expose Cabot to further growth potential."

Exploration Update

The East Cameron 113 wildcat well (44% working interest) located offshore Louisiana was a dry hole. The 12,000 foot prospect found the objective Cib Carst sands to be absent resulting in approximately $1.7 million of exploration expense in the quarter. Also impacting exploration expense in the quarter was a $4.5 million investment for seismic. Included in this total is the cost associated with Cabot's new 53 square mile 3-D seismic shoot in Aransas and San Patricio counties in Texas. "This is the first time this large area, which lies adjacent to our successful drilling in Aransas Pass and Redfish Bay, has been shot with 3-D seismic," stated Dinges.

Shareholder Notice

Effective July 1, 2002, the name of Cabot Oil & Gas Corporation's Class A Common Stock was changed simply to Common Stock. At the same time, the Class B Common Stock (no shares of which have been outstanding since 1991) was eliminated. This action was approved by the shareholders of Cabot Oil & Gas Corporation at its 2002 annual meeting. "There has been no issuance of additional stock or exchange of stock, this is a name change for the stock," stated Dinges. Also, no replacement certificates will be issued.

Listen in live to Cabot Oil & Gas Corporation's second quarter earnings discussion with financial analysts on Thursday, July 25 at 9:30 AM EDT (8:30 AM CDT) at www.cabotog.com . A teleconference replay is also available at (888) 203-1112 (international (719) 457-0820), reservation number 754486. The audio webcast and teleconference replay will be available from July 25 at 12:30 PM EDT until August 1 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 Commission filings.

                                OPERATING DATA

                                          Quarter Ended      Six Months Ended
                                             June 30,            June 30,
                                          2002      2001      2002      2001
    NATURAL GAS (Bcf) & OIL (MBbl)
    Produced Natural Gas
      Gulf Coast                           7.7       4.7      15.2       9.5
      West                                 6.4       6.4      12.8      12.8
      East                                 4.4       4.2       8.9       8.3
      Total                               18.5      15.3      36.9      30.6

    Crude/Condensate
      Gulf Coast                           656       324     1,266       651
      West                                  53        63       103       131
      East                                   8         7        16        16
      Total                                717       394     1,385       798

    Natural Gas Liquids                      5         9        20        28

    Equivalent Production (Bcfe)          22.8      17.7      45.3      35.6

    PRICES
    Average Produced Gas Sales
     Price ($/Mcf)
      Gulf Coast                        $ 3.35    $ 5.16    $ 2.99    $ 6.26
      West                              $ 2.40    $ 4.11    $ 2.27    $ 5.10
      East                              $ 3.31    $ 5.44    $ 3.08    $ 5.94
      Total                             $ 2.99    $ 4.79    $ 2.76    $ 5.68

    Crude/Condensate Price ($/Bbl)
      Gulf Coast                        $24.13    $27.52    $22.41    $28.18
      West                              $25.23    $29.90    $23.17    $28.58
      East                              $21.87    $24.79    $19.18    $26.14
      Total                             $24.19    $27.86    $22.43    $28.21

    WELLS DRILLED
      Gross                                 33        53        54        96
      Net                                 24.2      38.2      36.5      70.7
      Gross Success Rate                    94%       85%       94%       88%


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

                                          Quarter Ended     Six Months Ended
                                             June 30,           June 30,
                                          2002     2001      2002      2001
    Net Operating Revenues
      Natural Gas Production           $ 55,300 $ 73,411  $101,806  $174,136
      Crude Oil and Condensate           17,348   10,964    31,066    22,520
      Brokered Natural Gas               15,687   27,273    29,385    62,695
      Change in Derivative Fair Value      (564)  (4,988)   (1,180)    1,211
      Other                               1,813      946     3,580     1,936
                                         89,584  107,606   164,657   262,498

    Operating Expenses
      Brokered Natural Gas Cost          14,581   26,323    26,848    60,479
      Production and Pipeline
       Operations                        11,921    9,650    24,156    17,870
      Exploration                        10,824   14,540    17,880    25,313
      Taxes Other Than Income             7,475    6,715    13,627    16,617
      Administrative                      9,572    5,691    15,311    11,638
      Depreciation, Depletion and
       Amortization                      25,790   17,680    51,337    35,053
      Impairment of Long-Lived Assets         0        0     1,063         0
                                         80,163   80,599   150,222   166,970
    Gain (Loss) on Sale of Assets           429      (31)      411       (27)
    Income from Operations                9,850   26,976    14,846    95,501
    Interest Expense and Other            6,331    4,704    12,557     9,409
    Income Before Income Taxes            3,519   22,272     2,289    86,092
    Income Tax Expense                    1,398    8,679       966    33,438
    Net Income                         $  2,121 $ 13,593  $  1,323  $ 52,654
    Net Income Per Share - Basic       $   0.07 $   0.46  $   0.04  $   1.79
    Average Common Shares Outstanding    31,737   29,509    31,671    29,414

    Results from Operations Excluding
     Selected Items
       As Reported - Net Income
        Applicable to Common           $  2,121 $ 13,593  $  1,323  $ 52,654
       After-Tax Impact for Selected
        Items:
         Retirement of Executive Officer (2,204)            (2,205)
         Change in Derivative Fair Value   (346)  (3,057)     (729)      742
         Impairment of Long-Lived Assets                      (652)
       Net Income Excluding Selected
        Items                          $  4,671 $ 16,650  $  4,909  $ 51,912
       Net Income per Common Share     $   0.15 $   0.56  $   0.16  $   1.76


               CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                (In Thousands)

                                               June 30,        Dec. 31,
                                                 2002            2001
    Assets
    Current Assets                           $   87,439      $   84,987
    Property, Equipment and Other Assets        977,641         984,044
       Total Assets                          $1,065,080      $1,069,031

    Liabilities and Stockholders' Equity
    Current Liabilities                      $  109,501      $  110,240
    Long-Term Debt                              397,000         393,000
    Deferred Income Taxes                       198,522         200,859
    Other Liabilities                            13,076          18,380
    Stockholders' Equity                        346,981         346,552
       Total Liabilities
        and Stockholders' Equity             $1,065,080      $1,069,031


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

                                            Quarter Ended    Six Months Ended
                                               June 30,         June 30,
                                            2002     2001     2002     2001
    Cash Flows From Operating Activities
    Net Income                           $  2,121 $ 13,593 $  1,323  $ 52,654
    Income Charges Not Requiring Cash      27,897   24,348   56,487    35,223
    (Gain) Loss on Sale of Assets            (429)      31     (411)       27
    Deferred Income Taxes                     422    4,242      (49)   19,107
    Changes in Assets and Liabilities      12,644      741    7,799    34,769
    Exploration Expense                    10,824   14,540   17,880    25,313
    Net Cash Provided by Operations        53,479   57,495   83,029   167,093

    Cash Flows From Investing Activities
    Capital Expenditures                  (30,126) (29,008) (71,188)  (63,754)
    Proceeds from Sale of Assets            3,445      302    3,443       739
    Exploration Expense                   (10,824) (14,540) (17,880)  (25,313)
    Net Cash Used by Investing            (37,505) (43,246) (85,625)  (88,328)

    Cash Flows From Financing Activities
    Sale of Common Stock                    3,031    3,182    3,136     7,376
    Increase (Decrease) in Debt           (15,000) (12,000)   4,000   (82,000)
    Common Dividends                       (1,271)  (1,181)  (2,536)   (2,354)
    Net Cash Provided (Used) by
     Financing                            (13,240)  (9,999)   4,600   (76,978)

    Net Increase in Cash and
     Cash Equivalents                    $  2,734 $  4,250 $  2,004  $  1,787

    Discretionary Cash Flow (*)          $ 40,835 $ 56,753 $ 75,230  $132,324

     (*) Net income plus non-cash charges and exploration.  Excludes net
         proceeds on property sales.

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SOURCE Cabot Oil & Gas Corporation
Web site: http: //www.cabotog.com
Company News On-Call: http: //www.prnewswire.com/comp/129660.html
CONTACT: Scott Schroeder of Cabot Oil & Gas Corporation, +1-281-589-4993