HOUSTON, Aug. 29 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation
(NYSE: COG) today announced a definitive agreement to sell its offshore
portfolio and its south Louisiana properties, which include the once prolific
Etouffee field. Citing its growing emphasis on its resource-focused
portfolio, Dan O. Dinges, Chairman, President and CEO commented, "In a market
where there is a significant disconnect between asset sales values and implied
stock prices, we took advantage of an opportunity to accelerate our
realizations on these assets and further solidify our long-term objectives."
In this transaction Cabot will sell the properties to Phoenix Exploration
Company LP for total cash consideration of $340 million. The sale is expected
to close September 29, 2006, subject to due diligence and other customary
closing conditions. With the total proceeds, Cabot intends to repurchase
shares of common stock, fund its operations, repay a portion of its
outstanding debt and pay the resulting tax bill.
At year-end 2005, the assets to be sold totaled 73 Bcfe in Cabot's proved
reserve report. "Between the 2005 year-end and the August 1, 2006 effective
date, Cabot identified 30 Bcfe of new proved undeveloped reserves, had 6 Bcfe
of positive reserve revisions and produced 11 Bcfe making the reserves at the
effective date 98 Bcfe. Due to our decision to sell these assets and our
history of reconciling proved undeveloped reserves only at year-end, the
reserves to be sold aggregate 68 Bcfe on Cabot's books at the effective date,"
"For the last year, as we have spoken about our move toward a more
predictable portfolio of opportunities, we have been asked repeatedly about
selling these reserves," said Dinges. "We received significantly more value
for these reserves than their current valuation within our Company as
indicated by our current stock price."
The assets averaged 49.4 Mmcfe per day of production for the first seven
months of this year. Subsequent to the sale, Cabot's total proved reserve
portfolio and its production profile will be approximately 96 percent natural
"With this sale, the Company still expects to show year-over-year
production growth in absolute terms," stated Dinges. "On a pro forma basis,
removing the sold production from this year and all of last year, the growth
rate for production will be double digits for 2006. New guidance has been
posted for the Gulf Coast on our website for 2006, with guidance for 2007 to
be provided at the third quarter teleconference," added Dinges.
The Company was assisted in this transaction by Goldman, Sachs & Co. and
Fulbright & Jaworski, L.L.P.
The Company will host a conference call to further discuss the details of
this decision. Listen in live on Tuesday, August 29, 2006, at 9:30 am EDT
(8:30 am CDT) at www.cabotog.com. A teleconference replay will also be
available at (800) 642-1687 (U.S./Canada) or (706) 645-9291 (International),
pass code 5384161. The replay will be available through Thursday, August 31.
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
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading
independent natural gas producer with substantial interests onshore Gulf
Coast; the West, with the Rocky Mountains and Mid-Continent; the East and in
Canada. For additional information, visit the Company's Internet homepage at
The statements regarding future production, 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.
SOURCE Cabot Oil & Gas Corporation
CONTACT: Scott Schroeder for Cabot Oil & Gas Corporation,
3847 08/29/2006 08:30 EDT http://www.prnewswire.com