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| Cabot Oil & Gas Announces Record Second Quarter Financial Results |
HOUSTON, July 29 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced second quarter net income of $17.9 million, or $.56 per share, and discretionary cash flow of $62.5 million. These results compare favorably to net income of $2.1 million, or $.07 per share, and discretionary cash flow of $40.8 million for the 2002 second quarter. Also for the second quarter of 2003, cash flow from operations was $80.3 million, up 50 percent, versus $53.5 million in the comparable period for last year. Higher realized commodity prices drove the significant increases in net income and cash flow over last year's comparable quarter. Realized natural gas prices averaged $4.50 per Mcf in the second quarter of 2003, up 51 percent, versus the $2.99 per Mcf reported during the same period last year. Oil prices exhibited strong gains with a $29.27 per barrel realization for the 2003 second quarter versus $24.19 per barrel during last year's comparable period. Consistent with the Company's public guidance, daily production was down slightly in the second quarter of 2003 versus the level reported in the second quarter of 2002, with the Company recording production of 245.3 Mmcfe per day versus 250.8 Mmcfe per day, respectively. Production was up 1 percent sequentially compared to the 242.9 Mmcfe per day produced during the first three months of 2003. "This was our best second quarter ever in terms of both earnings and cash flow," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "The strong prices, consistent production volumes and lower debt levels made this a standout quarter." In terms of expenses, the strength of commodity prices was more than enough to offset a 28 percent increase in benefit costs that impacted the Direct Operations and General and Administrative expense categories, a 45 percent increase in exploration expense and a 16 percent rise in production taxes due to these high prices. "The increase in exploration expense was a direct result of the significantly larger exploration program the Company has planned for this year, including more seismic investment and dry hole exposure," commented Dinges. Last year's second quarter General and Administrative expense included a $3.6 million impact of a chief executive officer retirement. Year-to-Date For the first six months of the year, the Company recorded a net loss of $21.3 million, or $.67 per share, and discretionary cash flow of $130.1 million. For comparison, last year's first half results were a profit of $1.3 million, or $.04 per share, and discretionary cash flow of $75.2 million. Cash flow from operations was $139.8 million in the first half of 2003 versus $83 million in the comparable period for last year. The period January through June 2003 encompasses the first quarter effects of the Kurten field impairment, a $54.4 million after-tax charge, and the adoption of SFAS No. 143 "Accounting for Asset Retirement Obligations," a $6.8 million after-tax item. Excluding the impact of these non-cash selected items, Cabot's net income was $39.9 million, or $1.25 per share, for the first six months. "We expect, based on our existing hedge positions and the continuing strength of commodity prices, Cabot will realize a profit for the year, overcoming the $61.2 million in (after-tax) non-cash selected items incurred in the first quarter," added Dinges. As of June 30, 2003, the Company's long-term debt was $304 million, down from $397 million at June 30, 2002. "The $93 million reduction in debt year- over-year and a $61 million reduction in the first six months have been made possible by higher realized prices and our ongoing commitment to prudent spending," said Dinges. "Our debt to total capitalization ratio now stands at 49 percent. We have focused on strengthening our financial position and pursuing opportunities that expose Cabot to further growth potential, including adding to our capital program." Listen in live to Cabot Oil & Gas Corporation's second quarter earnings discussion with financial analysts on Wednesday, July 30 at 9:30 AM EDT (8:30 AM CDT) at http://www.cabotog.com . A teleconference replay will also be available at (888) 203-1112 (international (719) 457-0820), reservation number 472122. The audio webcast and teleconference replay will be available beginning July 30 at 12:30 PM EDT. The latest financial guidance and replay of the webcast, which will be archived for one year, are available in the investor relations section of the Company's website at http://www.cabotog.com . Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer with substantial interests in the Gulf Coast, including Texas and Louisiana; the West, with the Rocky Mountains and Mid- Continent; and the East. For additional information, visit the Company's Internet homepage at http://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 Six Months Ended June 30, June 30, 2003 2002 2003 2002 PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) Natural Gas Gulf Coast 7.4 7.7 14.1 15.2 West 6.0 6.4 12.1 12.8 East 4.6 4.4 9.0 8.9 Total 18.0 18.5 35.2 36.9 Crude/Condensate Gulf Coast 648 656 1,344 1,266 West 51 53 100 103 East 7 8 13 16 Total 706 717 1,457 1,385 Natural Gas Liquids 6 5 35 20 Equivalent Production (Bcfe) 22.3 22.8 44.2 45.3 PRICES Average Produced Gas Sales Price ($/Mcf) Gulf Coast $4.96 $3.35 $4.92 $2.99 West $3.60 $2.40 $3.61 $2.27 East $4.92 $3.31 $5.13 $3.08 Total $4.50 $2.99 $4.52 $2.76 Crude/Condensate Price ($/Bbl) Gulf Coast $29.30 $24.16 $30.10 $22.41 West $28.47 $25.23 $30.22 $23.17 East $31.83 $21.87 $29.05 $19.18 Total $29.27 $24.19 $30.10 $22.43 WELLS DRILLED Gross 43 33 68 54 Net 37.1 24.2 55.6 36.5 Gross Success Rate 95% 94% 93% 94% CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In Thousands, Except Per Share Amounts) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 Operating Revenues Natural Gas Production $81,113 $55,300 $159,286 $101,806 Brokered Natural Gas 23,370 15,687 55,220 29,385 Crude Oil and Condensate 20,663 17,348 43,837 31,066 Change in Derivative Fair Value (650) (564) (1,194) (1,180) Other 2,260 1,813 5,523 3,580 126,756 89,584 262,672 164,657 Operating Expenses Brokered Natural Gas Cost 21,539 14,581 49,800 26,848 Direct Operations - Field and Pipeline 13,825 11,921 24,751 24,156 Exploration 15,663 10,824 29,054 17,880 Depreciation, Depletion and Amortization 26,101 25,790 51,945 51,337 Impairment of Long-Lived Assets --- --- 87,926 1,063 General and Administrative 6,172 9,572 12,767 15,311 Taxes Other Than Income 8,651 7,475 18,875 13,627 91,951 80,163 275,118 150,222 Gain on Sale of Assets 45 429 605 411 Income (Loss) from Operations 34,850 9,850 (11,841) 14,846 Interest Expense and Other 5,952 6,331 11,577 12,557 Income (Loss) Before Income Taxes 28,898 3,519 (23,418) 2,289 Income Tax Expense (Benefit) 10,994 1,398 (8,946) 966 Net Income (Loss) Before Cumulative Effect of Accounting Change 17,904 2,121 (14,472) 1,323 Cumulative Effect of Accounting Change (A) --- --- (6,847) --- Net Income (Loss) $17,904 $2,121 $(21,319) $1,323 Net Earnings (Loss) Per Share - Basic $0.56 $0.07 $(0.67) $0.04 Average Common Shares Outstanding 31,980 31,737 31,909 31,671 (A) Cumulative effect of accounting change relates to the adoption of SFAS 143, "Accounting for Asset Retirement Obligations." CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (In Thousands) June 30, Dec. 31, 2003 2002 Assets Current Assets $109,997 $93,121 Property, Equipment and Other Assets 897,334 978,767 Total Assets $1,007,331 $1,071,888 Liabilities and Stockholders' Equity Current Liabilities $169,173 $121,890 Long-Term Debt 304,000 365,000 Deferred Income Taxes 160,549 200,207 Other Liabilities 57,855 34,134 Stockholders' Equity 315,754 350,657 Total Liabilities and Stockholders' Equity $1,007,331 $1,071,888 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In Thousands) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 Cash Flows From Operating Activities Net Income (Loss) $17,904 $2,121 $(21,319) $1,323 Cumulative Effect of Accounting Change --- --- 6,847 --- Change in Derivative Fair Value 650 564 1,194 1,180 Impairment of Long-Lived Assets --- --- 87,926 1,063 Income Charges Not Requiring Cash 26,572 27,333 52,278 54,244 Gain on Sale of Assets (45) (429) (605) (411) Deferred Income Taxes 1,762 422 (25,248) (49) Changes in Assets and Liabilities 17,751 12,644 9,677 7,799 Exploration Expense 15,663 10,824 29,054 17,880 Net Cash Provided by Operations 80,257 53,479 139,804 83,029 Cash Flows From Investing Activities Capital Expenditures (30,078) (30,126) (51,399) (71,188) Proceeds from Sale of Assets 758 3,445 2,360 3,443 Exploration Expense (15,663) (10,824) (29,054) (17,880) Net Cash Used by Investing (44,983) (37,505) (78,093) (85,625) Cash Flows From Financing Activities Sale of Common Stock 1,960 3,031 2,458 3,136 Increase (Decrease) in Debt (34,000) (15,000) (61,000) 4,000 Dividends Paid (1,195) (1,271) (2,468) (2,536) Net Cash Provided (Used) by Financing (33,235) (13,240) (61,010) 4,600 Net Increase in Cash and Cash Equivalents $2,039 $2,734 $701 $2,004 Selected Item Review and Reconciliation of Net Income (Loss) and Earnings (Loss) Per Share (In Thousands, Except Per Share Amounts) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 As Reported - Net Income (Loss) $17,904 $2,121 $(21,319) $1,323 Reversal of Selected Items, Net of Tax: Retirement of Executive Officer --- 2,204 --- 2,204 Impairment of Long-Lived Assets --- --- 54,338 652 Cumulative Effect of Accounting Change --- --- 6,847 --- Net Income Including Reversal of Selected Items $17,904 $4,325 $39,866 $4,179 As Reported - Net Earnings (Loss) Per Share $0.56 $0.07 $(0.67) $0.04 Per Share Impact of Reversing Selected Items 0.00 0.07 1.92 0.09 Net Earnings Per Share Including Reversal of Selected Items $0.56 $0.14 $1.25 $0.13 Average Common Shares Outstanding 31,980 31,737 31,909 31,671 Discretionary Cash Flow Calculation and Reconciliation (In Thousands) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 Discretionary Cash Flow As Reported - Net Income (Loss) $17,904 $2,121 $(21,319) $1,323 Plus: Cumulative Effect of Accounting Change --- --- 6,847 --- Change in Derivative Fair Value 650 564 1,194 1,180 Impairment of Long-Lived Assets --- --- 87,926 1,063 Income Charges Not Requiring Cash 26,572 27,333 52,278 54,244 Gain on Sale of Assets (45) (429) (605) (411) Deferred Income Taxes 1,762 422 (25,248) (49) Exploration Expense 15,663 10,824 29,054 17,880 Discretionary Cash Flow 62,506 40,835 130,127 75,230 Plus: Changes in Assets and Liabilities 17,751 12,644 9,677 7,799 Net Cash Provided by Operations $80,257 $53,479 $139,804 $83,029SOURCE Cabot Oil & Gas Corporation
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CONTACT:
Scott Schroeder of Cabot Oil & Gas
Corporation, +1-281-589-4993
