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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

Commission file number 1-10447

CABOT OIL & GAS CORPORATION

(Exact name of registrant as specified in its charter)

1200 Enclave Parkway, Houston, Texas 77077

(Address of principal executive offices including ZIP code)

(281) 589-4600

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  x    No  ¨

The aggregate market value of Common Stock, par value $.10 per share (“Common Stock”), held by non-affiliates (based upon the closing sales price on the New York Stock Exchange on June 30, 2004), the last business day of registrant’s most recently completed second fiscal quarter was approximately $1.4 billion.

As of January 31, 2005, there were 32,414,760 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held April 28, 2005 are incorporated by reference into Part III of this report.

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The statements regarding future financial and operating performance and results, market prices, future hedging activities, and other statements that are not historical facts contained in this report are forward-looking statements. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “budget,” “plan,” “forecast,” “predict,” “may,” “should,” “could,” “will” and similar expressions are also intended to identify forward-looking statements. These statements involve risks and uncertainties, including, but not limited to, market factors, market prices (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 this document and in our other Securities and Exchange Commission filings. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those included in this document.

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PART I

ITEM 1. BUSINESS

OVERVIEW

Cabot Oil & Gas is an independent oil and gas company engaged in the exploration, development, acquisition and exploitation of oil and gas properties located in North America. The five principal areas of operation are Appalachian Basin, Rocky Mountains, Anadarko Basin, onshore and offshore the Texas and Louisiana Gulf Coast, and the gas basin of West Canada. Operationally, we have four regional offices located in the East region, the West region, which is comprised of the Rocky Mountains and Mid-Continent areas, the Gulf Coast region and Canada.

In 2004, energy commodity prices remained strong throughout the year. This strong price environment allowed us to pursue our largest organic capital program ever while still maintaining our financial flexibility. This flexibility should provide us the ability to take advantage of attractive acquisition opportunities that may arise. At December 31, 2004, our debt to total capital ratio was 37%, down from 43% at the end of 2003. Natural gas production increased to 72.8 Bcf in 2004 from 71.9 Bcf in 2003. This growth was directly related to our 2003 drilling program which focused on natural gas projects. On an equivalent basis, our production level in 2004 was down slightly from 2003. We produced 84.8 Bcfe, or 232.3 Mmcfe per day, this year, as compared to 89.0 Bcfe, or 243.8 Mmcfe per day, in 2003. The growth in natural gas production was offset by the loss of production associated with the late 2003 sale of non-strategic properties and natural decline in oil production in south Louisiana. Our 2004 realized natural gas price was $5.20 per Mcf, compared to a 2003 price of $4.51. Our realized crude oil price was $31.55 per Bbl, compared to a 2003 price of $29.55. Our average hedged prices on natural gas and crude oil for 2005 anticipated production are expected to be higher than comparable prices realized from hedging in 2004. To lock in prices above historical levels for a portion of our production as a result of the strong commodity prices, we layered in oil and gas hedge instruments throughout 2004 to cover production in 2004 and 2005. At December 31, 2004, 44% and 25% of our natural gas and crude oil anticipated production, respectively, are hedged for 2005 through the use of derivatives that qualify for hedge accounting. Including our range swaps, which do not qualify for hedge accounting, 75% of our crude oil production is hedged for 2005. No derivatives are in place for 2006. Our decision to hedge 2005 production fits with our risk management strategy and allows the Company to lock in the benefit of high commodity prices on a portion of our anticipated production.

Net income of $88.4 million or $2.72 per share exceeded last year by $67.2 million or $2.06 per share. The year over year net income increase was achieved due to higher natural gas revenues from higher commodity prices. Operating Revenues increased by $21.0 million or 4% due to strong commodity prices. Natural gas production revenues increased by $57.1 million over the prior year; this increase was partially offset by a decrease in crude oil and condensate revenues of $21.0 million and a decrease in brokered natural gas revenues of $11.4 million. In addition, operating expenses decreased between 2004 and 2003 as a result of the 2003 non-cash pre-tax impairment charge of $93.8 million. Also contributing to the decrease were lower brokered natural gas cost and lower exploration expense. Net income in 2003 was also reduced by a $6.8 million cumulative effect of accounting change related to SFAS 143.

For the year ended December 31, 2004, we drilled 256 gross wells with a success rate of 95% compared to 173 gross wells with a success rate of 89% for the comparable period of the prior year. Our 2004 capital and exploration spending was $259.5 million compared to $188.2 million in 2003. We concentrated our 2004 capital spending program on projects balancing acceptable risk with the strongest economics. In the past, we have used a portion of the cash flow from our long-lived East and Mid-Continent natural gas reserves to fund our exploration and development efforts in the Gulf Coast and Rocky Mountain areas. In 2004, we continued that practice to a lesser extent as we increased our capital expenditures in the East in response to the success of the 2003 drilling program. The main recipient of these dollars was Canada where we commenced our drilling program with a $16.2 million investment. In 2005, we plan to spend approximately $280 million which includes a layer of investment for new projects or property acquisitions that may arise during 2005.

Our proved reserves totaled approximately 1,202 Bcfe at December 31, 2004, of which 94% was natural gas. This reserve level was up slightly from 1,142 Bcfe at December 31, 2003 on the strength of results from our drilling program and the lack of reserve sales during the year.

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The following table presents certain information as of December 31, 2004.

EAST REGION

Our East activities are concentrated in West Virginia, and to a lesser extent in New York. In this region, our assets include a large undeveloped acreage position, a high concentration of wells, natural gas gathering and pipeline systems, and storage capacity. Capital and exploration expenditures were $75.2 million for 2004, or 29% of our total 2004 capital spending, and $40.6 million for 2003. For 2005, we have budgeted $75.3 million for capital and exploration expenditures in the region.

At December 31, 2004, we had 2,584 wells (2,393.3 net), of which 2,497 wells are operated by us. There are multiple producing intervals that include the Big Lime, Weir, Berea, Devonian Shale and Oriskany formations at depths primarily ranging from 1,000 to 9,500 feet. Average net daily production in 2004 was 53.6 Mmcfe. While natural gas production volumes from East reservoirs are relatively low on a per-well basis compared to other areas of the United States, the productive life of East reserves is relatively long. At December 31, 2004, we had 550.5 Bcfe of proved reserves (substantially all natural gas) in the East region, constituting 46% of our total proved reserves. This region is managed from our office in Charleston, West Virginia.

In 2004, we drilled 171 wells (167.5 net) in the East region, of which 166 wells (163 net) were development and extension wells. In 2005, we plan to drill approximately 200 wells.

In 2004, we produced and marketed approximately 80 barrels of crude oil/condensate per day in the East region at market responsive prices.

Ancillary to our exploration, development and production operations, we operate a number of gas gathering and transmission pipeline systems with interconnects to three interstate transmission systems, seven local distribution companies and numerous end users as of the end of 2004. The majority of our pipeline infrastructure in West Virginia is regulated by the Federal Energy Regulatory Commission (FERC). As such, the transportation rates and terms of service of our pipeline subsidiary, Cranberry Pipeline Corporation, are subject to the rules and regulations of the FERC. Our natural gas gathering and transmission pipeline systems enable us to connect new wells quickly and to transport natural gas from the wellhead directly to interstate pipelines, local distribution companies and industrial end users. Control of our gathering and transmission pipeline systems also enables us to purchase, transport and sell natural gas produced by third parties. In addition, we can engage in development drilling without relying upon third parties to transport our natural gas and incur only the incremental costs of pipeline and compressor additions to our system.

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We have two natural gas storage fields located in West Virginia with a combined working capacity of approximately 4 Bcf. We use these storage fields to take advantage of the seasonal variations in the demand for natural gas and the higher prices typically associated with winter natural gas sales, while maintaining production at a nearly constant rate throughout the year. The storage fields also enable us to increase for shorter intervals of time the volume of natural gas that we can deliver by more than 40% above the volume that we could deliver solely from our production in the East region. The pipeline systems and storage fields are fully integrated with our operations.

The principal markets for our East region natural gas are in the northeast United States. We sell natural gas to industrial customers, local distribution companies and gas marketers both on and off our pipeline and gathering system. Cabot Oil & Gas Marketing, our subsidiary, purchases gas from local third-party producers and other suppliers to aggregate larger volumes of gas for resale.

Approximately 65% of our natural gas sales volume in the East region is sold at index-based prices under contracts with a term of one year or greater. In addition, spot market sales are made under month-to-month contracts, while industrial and utility sales generally are made under year-to-year contracts. Approximately 2% of East production is sold on fixed price contracts that typically renew annually.

WEST REGION

Our activities in the West region are managed by a regional office in Denver. At December 31, 2004, we had 426.9 Bcfe of proved reserves (96% natural gas) in the West region, constituting 36% of our total proved reserves.

Rocky Mountains

Our Rocky Mountains activities are concentrated in the Green River, Wind River and Big Horn Basins in Wyoming and Paradox Basin in Colorado. At December 31, 2004, we had 237.6 Bcfe of proved reserves (95% natural gas) in the Rocky Mountain area, 20% of our total proved reserves. Capital and exploration expenditures in the Rocky Mountains were $41.5 million for 2004, or 16% of our total capital and exploration expenditures, and $22.3 million for 2003. Spending for 2004 included $30.5 million for drilling activity and $7.5 million of dry hole expense and geophysical and geological procedures. For 2005, we have budgeted $33.6 million for capital and exploration expenditures in the area.

We had 533 wells (242.6 net) in the Rocky Mountains area as of December 31, 2004, of which 282 wells are operated by us. Principal producing intervals in the Rocky Mountains area are in the Almond, Frontier, Dakota and Honaker Trail formations at depths ranging from 5,500 to 15,000 feet. Average net daily production in the Rocky Mountains during 2004 was 35.9 Mmcfe.

In 2004, we drilled 29 wells (14.3 net) in the Rocky Mountains, of which 26 wells (13.0 net) were development wells. In 2005, we plan to drill 30 wells.

Mid-Continent

Our Mid-Continent activities are concentrated in the Anadarko Basin in southwest Kansas, Oklahoma and the panhandle of Texas. Capital and exploration expenditures were $12.1 million for 2004, or 5% of our total 2004 capital and exploration expenditures, and $11.2 million for 2003. For 2005, we have budgeted $8.5 million for capital and exploration expenditures in the area.

As of December 31, 2004, we had 650 wells (452.9 net) in the Mid-Continent area, of which 508 wells are operated by us. Principal producing intervals in the Mid-Continent are in the Chase, Morrow, Red Fork and Chester formations at depths ranging from 2,200 to 10,000 feet. Average net daily production in 2004 was 26.5 Mmcfe. At December 31, 2004, we had 189.3 Bcfe of proved reserves (97% natural gas) in the Mid-Continent area, 16% of our total proved reserves.

In 2004, we drilled 21 wells (18.9 net) in the Mid-Continent, all of which were development and extension wells. In 2005, we plan to drill 11 wells.

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Our principal markets for West region natural gas are in the northwest and midwest United States. We sell natural gas to power generators, natural gas processors, local distribution companies, industrial customers and marketing companies. Currently, approximately 75% of our natural gas production in the West region is sold primarily under contracts with a term of one to three years at index-based prices. Another 23% of the natural gas production is sold under short-term arrangements at index-based prices and the remaining 2% is sold under certain fixed-price contracts. The West region properties are connected to the majority of the midwest and northwest interstate and intrastate pipelines, affording us access to multiple markets.

In 2004, we produced and marketed approximately 450 barrels of crude oil/condensate per day in the West region at market responsive prices.

GULF COAST REGION

Our exploration, development and production activities in the Gulf Coast region are primarily concentrated in north and south Louisiana, south Texas and the Gulf of Mexico. A regional office in Houston manages the operations. Principal producing intervals are in the Cotton Valley, Hosston, Miocene and Frio age formations in Louisiana and the Frio, Vicksburg and Wilcox formations in Texas at depths ranging from 3,000 to 25,000 feet. Capital and exploration expenditures were $112.6 million for 2004, or 43% of our total capital and exploration expenditures, and $111.6 million for 2003. For 2005, we have budgeted $105.0 million of our total budget for capital and exploration expenditures in the region. Our 2005 Gulf Coast drilling program will continue to emphasize impact exploration opportunities both on and offshore, augmented by development activity in our focus areas of south Texas and throughout coastal Louisiana.

In 2004, we drilled 31 wells (17.6 net) in the Gulf Coast region, of which 20 wells (12.4 net) were development wells. In 2005 we plan to drill 42 wells. We had 751 wells (495.4 net) in the Gulf Coast region as of December 31, 2004, of which 558 wells are operated by us. Average daily production in 2004 was 115.3 Mmcfe, compared to 124.1 Mmcfe in 2003. The decline is the result of lower production from our properties in south Louisiana, offset partially by increased production from the coastal Texas area. At December 31, 2004, we had 217.1 Bcfe of proved reserves (78% natural gas) in the Gulf Coast region, which represented 18% of our total proved reserves.

Our principal markets for Gulf Coast region natural gas are in the industrialized Gulf Coast area and the northeast United States. We sell natural gas to intrastate pipelines, natural gas processors and marketing companies. Currently, approximately 40% of our natural gas sales volumes in the Gulf Coast region are sold at index-based prices under contracts with terms of one to three years. The remaining 60% of our sales volumes are sold at index-based prices under short-term agreements. The Gulf Coast properties are connected to various processing plants in Texas and Louisiana with multiple interstate and intrastate deliveries, affording us access to multiple markets.

In 2004, we produced and marketed approximately 5,000 barrels of crude oil/condensate per day in the Gulf Coast region at market responsive prices.

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CANADA REGION

Our activities in the Canada region are managed by a regional office in Calgary, Alberta. Our Canadian exploration, development and producing activities are concentrated in the Provinces of Alberta and British Columbia. At December 31, 2004, we had 7.9 Bcfe of proved reserves (91% natural gas) in the Canada region, constituting less than 1% of our total proved reserves.

Capital and exploration expenditures in Canada were $16.2 million for 2004, or 6% of our total capital and exploration expenditures, and $0.8 million for 2003. For 2005, we have budgeted $16.0 million for capital and exploration expenditures in the area.

We had 14 wells (1.5 net) in the Canada region as of December 31, 2004, of which 3 wells are operated by us. Principal producing intervals in the Canada region are in the Falher, Bluesky, Cadomin and the Swan Hills formations at depths ranging from 9,500 to 16,000 feet. Average net daily production in Canada during 2004 was 1.0 Mmcfe.

In 2004, we drilled 4 wells (1.5 net) in Canada, of which 3 wells (1.1 net) were development and extension wells. In 2005, we plan to drill 10 wells.

In 2004, we produced and marketed approximately 10 barrels of crude oil/condensate per day in the Canada region at market responsive prices.

RISK MANAGEMENT

From time to time, when we believe that market conditions are favorable, we use certain derivative financial instruments to manage price risks associated with our production in all of our regions. While there are many different types of derivatives available, in 2004 we primarily employed natural gas and oil price swap and collar agreements to attempt to manage price risk more effectively. The price swaps call for payments to, or receipts from, counterparties based on whether the market price of natural gas or crude oil for the period is greater or less than the fixed price established for that period when the swap is put in place. The collar arrangements are put and call options used to establish floor and ceiling commodity prices for a fixed volume of production during a certain time period. They provide for payments to counterparties if the index price exceeds the ceiling and payments from the counterparties if the index price is below the floor.

We will continue to evaluate the benefit of employing derivatives in the future. Please read Management’s Discussion and Analysis of Financial Condition and Results of Operations – Commodity Price Swaps and Options for further discussion concerning our use of derivatives.

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RESERVES

Current Reserves

The following table presents our estimated proved reserves at December 31, 2004.

The proved reserve estimates presented here were prepared by our petroleum engineering staff and reviewed by Miller and Lents, Ltd., independent petroleum engineers. Miller and Lents concluded the following: In their judgment 1) we have an effective system for gathering data and documenting information required to estimate our proved reserves and project our future revenues, 2) we used appropriate engineering, geologic and evaluation principles in making our estimates and projections and 3) our total proved reserves are reasonable. For additional information regarding estimates of proved reserves, the review of such estimates by Miller and Lents, Ltd., and other information about our oil and gas reserves, see the Supplemental Oil and Gas Information to the Consolidated Financial Statements included in Item 8. A copy of the review letter by Miller and Lents, Ltd. has been filed as an exhibit to this Form 10-K. Our estimates of proved reserves in the table above are consistent with those filed by us with other federal agencies. Our reserves are sensitive to natural gas and crude oil sales prices and their effect on economic producing rates. Our reserves are based on oil and gas index prices in effect on the last day of December 2004.

There are a number of uncertainties inherent in estimating quantities of proved reserves, including many factors beyond our control such as commodity pricing. Therefore, the reserve information in this Form 10-K represents only estimates. Reserve engineering is a subjective process of estimating underground accumulations of crude oil and natural gas that can not be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates of different engineers may vary. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revising the original estimate. Accordingly, initial reserve estimates are often different from the quantities of crude oil and natural gas that are ultimately recovered. The meaningfulness of such estimates depends primarily on the accuracy of the assumptions upon which they were based. Except to the extent we acquire additional properties containing proved reserves or conduct successful exploration and development activities or both, our proved reserves will decline as reserves are produced.

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Historical Reserves

The following table presents our estimated proved reserves for the periods indicated.

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Volumes and Prices; Production Costs

The following table presents regional historical information about our net wellhead sales volume for natural gas and oil (including condensate and natural gas liquids), produced natural gas and oil sales prices, and production costs per equivalent.

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Leasehold Acreage

Mineral Fee Acreage

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Total Net Acreage by Region of Operation

Total Net Undeveloped Acreage Expiration by Region of Operation

The following table presents our net undeveloped acreage expiring over the next three years by operating region as of December 31, 2004. The figures below assume no future successful development or renewal of undeveloped acreage.

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Well Summary

The following table presents our ownership at December 31, 2004, in natural gas and oil wells in the Gulf Coast region (consisting primarily of various fields located in Louisiana and Texas), in the West region (consisting of various fields located in Oklahoma, Kansas, Colorado and Wyoming), in the East region (consisting of various fields located in West Virginia, Virginia and Ohio) and in the Canada region (consisting of various fields located in the Provinces of Alberta and British Columbia). This summary includes natural gas and oil wells in which we have a working interest.

Drilling Activity

We drilled wells, participated in the drilling of wells, or acquired wells as indicated in the region table below.

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Competition

Competition in our primary producing areas is intense. Price, contract terms and quality of service, including pipeline connection times, distribution efficiencies and reliable delivery records, affect competition. We believe that our extensive acreage position, existing natural gas gathering and pipeline systems and storage fields enhance our competitive position over other producers in the East region who do not have similar systems or facilities in place. We also believe that our competitive position in the East region is enhanced by the lack of significant competition from major oil and gas companies. We also actively compete against other companies with substantially larger financial and other resources, particularly in the West and Gulf Coast regions and Canada.

OTHER BUSINESS MATTERS

Major Customer

In 2004, approximately 11% of our total sales were made to one customer. In 2003 and 2002, approximately 11% and 14%, respectively, of our total sales were made to one customer. In 2002, this customer operated certain properties in which we have interests in the Gulf Coast and purchased all of the production from these wells. This customer would resell the natural gas and oil to third parties with whom we would deal directly if the customer either ceased to exist or stopped buying our portion of the production.

Seasonality

Demand for natural gas has historically been seasonal, with peak demand and typically higher prices occurring during the colder winter months.

Regulation of Oil and Natural Gas Exploration and Production

Exploration and production operations are subject to various types of regulation at the federal, state and local levels. This regulation includes requiring permits to drill wells, maintaining bonding requirements to drill or operate wells, and regulating the location of wells, the method of drilling and casing wells, the surface use and restoration of properties on which wells are drilled, and the plugging and abandoning of wells. Our operations are also subject to various conservation laws and regulations. These include the regulation of the size of drilling and spacing units or proration units, the density of wells that may be drilled in a given field, and the unitization or pooling of oil and natural gas properties. Some states allow the forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells, generally prohibiting the venting or flaring of natural gas and imposing certain requirements regarding the ratability of production. The effect of these regulations is to limit the amounts of oil and natural gas we can produce from our wells, and to limit the number of wells or the locations where we can drill. Because these statutes, rules and regulations undergo constant review and often are amended, expanded and reinterpreted, we are unable to predict the future cost or impact of regulatory compliance. The regulatory burden on the oil and gas industry increases its cost of doing business and, consequently, affects its profitability. We do not believe, however, we are affected differently by these regulations than others in the industry.

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Natural Gas Marketing, Gathering and Transportation

Federal legislation and regulatory controls have historically affected the price of the natural gas we produce and the manner in which our production is transported and marketed. Under the Natural Gas Act of 1938, the FERC regulates the interstate sale for resale of natural gas and the transportation of natural gas in interstate commerce, although facilities used in the production or gathering of natural gas in interstate commerce are generally exempted from FERC jurisdiction. Effective January 1, 1993, the Natural Gas Wellhead Decontrol Act deregulated natural gas prices for all “first sales” of natural gas, which definition covers all sales of our own production. In addition, as part of the broad industry restructuring initiatives described below, the FERC has granted to all producers such as us a “blanket certificate of public convenience and necessity” authorizing the sale of gas for resale without further FERC approvals. As a result, all of our produced natural gas may now be sold at market prices, subject to the terms of any private contracts that may be in effect.

Our natural gas sales prices nevertheless continue to be affected by intrastate and interstate gas transportation regulation, because the prices we receive for our production are affected by the cost of transporting the gas to the consuming market. Through a series of comprehensive rulemakings, beginning with Order No. 436 in 1985 and continuing through Order No. 636 in 1992 and Order No. 637 in 2000, the FERC has adopted regulatory changes that have significantly altered the transportation and marketing of natural gas. These changes were intended by the FERC to foster competition by, among other things, transforming the role of interstate pipeline companies from wholesale marketers of gas to the primary role of gas transporters, and by increasing the transparency of pricing for pipeline services. The FERC has also developed rules governing the relationship of the pipelines with their marketing affiliates, and implemented standards relating to the use of electronic data exchange by the pipelines to make transportation information available on a timely basis and to enable transactions to occur on a purely electronic basis.

In light of these statutory and regulatory changes, most pipelines have divested their gas sales functions to marketing affiliates, which operate separately from the transporter and in direct competition with all other merchants, and most pipelines have also implemented the large-scale divestiture of their gas gathering facilities to affiliated or non-affiliated companies. Interstate pipelines thus now generally provide unbundled, open and nondiscriminatory transportation and transportation-related services to producers, gas marketing companies, local distribution companies, industrial end users and other customers seeking such services. Sellers and buyers of gas have gained direct access to the particular pipeline services they need, and are better able to conduct business with a larger number of counterparties. We believe these changes generally have improved our access to markets while, at the same time, substantially increasing competition in the natural gas marketplace.

Certain of our pipeline systems and storage fields in West Virginia are regulated for safety compliance by the U.S. Department of Transportation (DOT) and the West Virginia Public Service Commission. In 2002, Congress enacted the Pipeline Safety Improvement Act of 2002, which contains a number of provisions intended to increase pipeline operating safety. The DOT’s final regulations implementing the act became effective February 2004. Among other provisions, the regulations require that pipeline operators implement a pipeline integrity management program that must at a minimum include an inspection of gas transmission pipeline facilities within the next ten years, and at least every seven years thereafter.

We cannot predict what new or different regulations the FERC and other regulatory agencies may adopt, or what effect subsequent regulations may have on our activities. Similarly, it is impossible to predict what proposals, if any, that affect the oil and natural gas industry might actually be enacted by Congress or the various state legislatures and what effect, if any, such proposals might have on us. Similarly, and despite the recent trend toward federal deregulation of the natural gas industry, whether or to what extent that trend will continue, or what the ultimate effect will be on our sales of gas, cannot be predicted.

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Federal Regulation of Petroleum

Our sales of oil and natural gas liquids are not regulated and are at market prices. The price received from the sale of these products is affected by the cost of transporting the products to market. Much of that transportation is through interstate common carrier pipelines. Effective January 1, 1995, the FERC implemented regulations generally grandfathering all previously approved interstate transportation rates and establishing an indexing system for those rates by which adjustments are made annually based on the rate of inflation, subject to certain conditions and limitations. These regulations may tend to increase the cost of transporting oil and natural gas liquids by interstate pipeline, although the annual adjustments may result in decreased rates in a given year. These regulations have generally been approved on judicial review. Every five years, the FERC must examine the relationship between the annual change in the applicable index and the actual cost changes experienced in the oil pipeline industry. The first such review was completed in December 2000, where the FERC concluded that the rate index reasonably reflected actual pipeline costs. Upon judicial review, the pipeline transportation rates established under the index were increased slightly. The next review is scheduled in July 2005. Another FERC proceeding that may impact our transportation costs relates to an ongoing proceeding to determine whether and to what extent pipelines should be permitted to include in their transportation rates an allowance for income taxes attributable to non-corporate partnership interests. We are not able to predict with certainty the effect upon us of these relatively new federal regulations, or of the periodic review by the FERC of the index, or the ongoing review of the income tax allowance.

Environmental Regulations

General. Our operations are subject to extensive federal, state and local laws and regulations relating to the generation, storage, handling, emission, transportation and discharge of materials into the environment. Permits are required for the operation of our various facilities. These permits can be revoked, modified or renewed by issuing authorities. Governmental authorities enforce compliance with their regulations through fines, injunctions or both. Government regulations can increase the cost of planning, designing, installing and operating oil and gas facilities. Although we believe that compliance with environmental regulations will not have a material adverse effect on us, risks of substantial costs and liabilities related to environmental compliance issues are part of oil and gas production operations. No assurance can be given that significant costs and liabilities will not be incurred. Also, it is possible that other developments, such as stricter environmental laws and regulations, and claims for damages to property or persons resulting from oil and gas production could result in substantial costs and liabilities to us.

The transition zone and shallow-water areas of the U.S. Gulf Coast are ecologically sensitive. Environmental issues have led to higher drilling costs and a more difficult and lengthy well permitting process. U.S. laws and regulations applicable to our operations include those controlling the discharge of materials into the environment, requiring removal and cleanup of materials that may harm the environment, requiring consistency with applicable coastal zone management plans, or otherwise relating to the protection of the environment.

Outer Continental Shelf Lands Act. The federal Outer Continental Shelf Lands Act (OCSLA) and regulations promulgated pursuant thereto impose a variety of regulations relating to safety and environmental protection applicable to lessees, permits and other parties operating on the Outer Continental Shelf. Specific design and operational standards may apply to Outer Continental Shelf vessels, rigs, platforms, vehicles and structures. Violations of lease conditions or regulations issued pursuant to the Outer Continental Shelf Lands Act can result in substantial civil and criminal penalties as well as potential court injunctions curtailing operations and the cancellation of leases. Such enforcement liabilities can result from either governmental or citizen prosecution. We believe that we substantially comply with the OCSLA and its regulations.

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Solid and Hazardous Waste. We currently own or lease, and have in the past owned or leased, numerous properties that were used for the production of oil and gas for many years. Although operating and disposal practices that were standard in the industry at the time may have been utilized, it is possible that hydrocarbons or other solid wastes may have been disposed of or released on or under the properties currently owned or leased by us. State and federal laws applicable to oil and gas wastes and properties have become more strict over time. Under these increasingly stringent requirements, we could be required to remove or remediate previously disposed wastes (including wastes disposed or released by prior owners and operators) or clean up property contamination (including groundwater contamination by prior owners or operators) or to perform plugging operations to prevent future contamination. We generate some hazardous wastes that are already subject to the Federal Resource Conservation and Recovery Act (RCRA) and comparable state statutes. The Environmental Protection Agency (EPA) has limited the disposal options for certain hazardous wastes. It is possible that certain wastes currently exempt from treatment as hazardous wastes may in the future be designated as hazardous wastes under RCRA or other applicable statutes. We could, therefore, be subject to more rigorous and costly disposal requirements in the future than we encounter today.

Superfund. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the “Superfund” law, imposes liability, without regard to fault or the legality of the original conduct, on certain persons with respect to the release of hazardous substances into the environment. These persons include the owner and operator of a site and any party that disposed of or arranged for the disposal of hazardous substances found at a site. CERCLA also authorizes the EPA, and in some cases, private parties, to undertake actions to clean up such hazardous substances, or to recover the costs of such actions from the responsible parties. In the course of business, we have generated and will continue to generate wastes that may fall within CERCLA’s definition of hazardous substances. We may also be an owner or operator of sites on which hazardous substances have been released. As a result, we may be responsible under CERCLA for all or part of the costs to clean up sites where such wastes have been disposed.

Oil Pollution Act. The federal Oil Pollution Act of 1990 (OPA) and resulting regulations impose a variety of obligations on responsible parties related to the prevention of oil spills and liability for damages resulting from such spills in waters of the United States. The term “waters of the United States” has been broadly defined to include inland water bodies, including wetlands and intermittent streams. The OPA assigns liability to each responsible party for oil removal costs and a variety of public and private damages. We believe that we substantially comply with the Oil Pollution Act and related federal regulations.

Clean Water Act. The Federal Water Pollution Control Act (FWPCA or Clean Water Act) and resulting regulations, which are implemented through a system of permits, also govern the discharge of certain contaminants into waters of the United States. Sanctions for failure to comply strictly with the Clean Water Act are generally resolved by payment of fines and correction of any identified deficiencies. However, regulatory agencies could require us to cease construction or operation of certain facilities that are the source of water discharges. We believe that we substantially comply with the Clean Water Act and related federal and state regulations.

Clean Air Act. Our operations are subject to local, state and federal laws and regulations to control emissions from sources of air pollution. Payment of fines and correction of any identified deficiencies generally resolve penalties for failure to comply strictly with air regulations or permits. Regulatory agencies could also require us to cease construction or operation of certain facilities that are air emission sources. We believe that we substantially comply with the emission standards under local, state, and federal laws and regulations.

Employees

As of December 31, 2004, Cabot Oil & Gas had 346 active employees. We recognize that our success is significantly influenced by the relationship we maintain with our employees. Overall, we believe that our relations with our employees are satisfactory. The Company and its employees are not represented by a collective bargaining agreement.

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Website Access to Company Reports

We make available free of charge through our website, www.cabotog.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission. Information on our website is not a part of this report.

Corporate Governance Matters

The Company’s Corporate Governance Guidelines, Code of Business Conduct, Corporate Governance and Nominations Committee Charter, Compensation Committee Charter and Audit Committee Charter are available on the Company’s website at www.cabotog.com, under the “Corporate Governance” section and a copy will be provided, without charge, to any shareholder upon request.

Other

Our profitability depends on certain factors that are beyond our control, such as natural gas and crude oil prices. Please see Items 7 and 7A. We face a variety of hazards and risks that could cause substantial financial losses. Our business involves a variety of operating risks, including blowouts, cratering, explosions and fires, mechanical problems, uncontrolled flows of oil, natural gas or well fluids, formations with abnormal pressures, pollution and other environmental risks, and natural disasters. We conduct operations in shallow offshore areas, which are subject to additional hazards of marine operations, such as capsizing, collision and damage from severe weather.

Our operation of natural gas gathering and pipeline systems also involves various risks, including the risk of explosions and environmental hazards caused by pipeline leaks and ruptures. Any of these events could result in loss of human life, significant damage to property, environmental pollution, impairment of our operations and substantial losses to us. The location of pipelines near populated areas, including residential areas, commercial business centers and industrial sites, could increase these risks. In accordance with customary industry practice, we maintain insurance against some, but not all, of these risks and losses. The occurrence of any of these events not fully covered by insurance could have a material adverse effect on our financial position and results of operations. The costs of these insurance policies are somewhat dependent on our historical claims experience and also the areas in which we choose to operate. During the past few years, we have invested a higher percentage of our drilling dollars in the Gulf Coast, where insurance rates are significantly higher than in other regions such as the East. At December 31, 2004, we owned or operated approximately 3,300 miles of natural gas gathering and transmission pipeline systems throughout the United States. As part of our normal maintenance program, we have identified certain segments of our pipelines that we believe may require repair, replacement or additional maintenance, and we schedule this maintenance as appropriate.

The sale of our oil and gas production depends on a number of factors beyond our control. The factors include the availability and capacity of transportation and processing facilities. Our failure to access these facilities and obtain these services on acceptable terms could materially harm our business.

ITEM 2. PROPERTIES

See Item 1. Business.

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ITEM 3. LEGAL PROCEEDINGS

We are a party to various legal proceedings arising in the normal course of our business. All known liabilities are fully accrued based on management’s best estimate of the potential loss. While the outcome and impact on us cannot be predicted with certainty, management believes that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on our consolidated financial position. Operating results and cash flow, however, could be significantly impacted in the reporting periods in which such matters are resolved.

Wyoming Royalty Litigation

In June 2000, we were sued by two overriding royalty owners in Wyoming state court for unspecified damages. The plaintiffs requested class certification and alleged that we had improperly deducted costs of production from royalty payments to the plaintiffs and other similarly situated persons. Additionally, the suit claimed that we had failed to properly inform the plaintiffs and other similarly situated persons of the deductions taken from royalties. At a mediation held in April 2003, the plaintiffs in this case claimed total damages of $9.5 million plus attorney fees. We settled the case for a total of $2.25 million and the State District Court Judge entered his order approving the settlement in the fourth quarter of 2003. The class included all private fee royalty and overriding royalty owners of the Company in the State of Wyoming except those in the suit discussed below and one owner who opted out of the settlement. It also includes provisions for the method of valuation of gas for royalty payment purposes going forward and for reporting of royalty payments, which should prevent further litigation of these issues by the class members.

In January 2002, 13 overriding royalty owners sued us in Wyoming federal district court. The plaintiffs in the federal case have made the same general claims pertaining to deductions from their overriding royalty as the plaintiffs in the Wyoming state court case but have not asked for class certification.

The federal district court judge certified two questions of state law for decision by the Wyoming State Supreme Court, which recently answered both questions. The Wyoming Supreme Court ruled that certain deductions taken by us from the plaintiffs were not proper and that the statutes of limitations advanced by us are discovery statutes and accordingly do not begin to run until the plaintiffs knew, or had reason to know, of the violation. We believe we have properly reported to the plaintiffs and, that if we did not, the plaintiffs knew or should have known the reporting was improper and the nature of the deductions, thus triggering the statutes of limitations. We still intend to raise defenses to the alleged failure to report claims. There is also a dispute as to how the interest should be calculated.

The federal judge refused to certify a question relating to the issue of the proper calculation of damages for failure to provide certain information required by statute on overriding royalty owner check stubs that had been decided adversely to our position in a state district court letter decision in a separate case. After the federal judge’s refusal to certify this issue, the plaintiffs reduced the damages they were claiming. Based upon recent communication from the plaintiffs, they are now claiming $26.2 million in total damages which consists of $20.3 million for alleged violations of the check stub reporting statute and $5.9 million for all other damages.

In the opinion of our outside counsel, Brown, Drew & Massey, LLP, the likelihood of the plaintiffs recovering $20.3 million for the check stub reporting statute is remote. However, a reserve that management believes is adequate to provide for the check stub reporting statute and all other damages has been established based on management’s estimate at this time of the probable outcome of this case.

West Virginia Royalty Litigation

In December 2001, we were sued by two royalty owners in West Virginia state court for an unspecified amount of damages. The plaintiffs have requested class certification under the West Virginia Rules of Civil Procedure and allege that we failed to pay royalty based upon the wholesale market value of the gas produced, that it had taken improper deductions from the royalty and failed to properly inform the plaintiffs and other similarly situated persons of deductions taken from the royalty. The plaintiffs have also claimed that they are entitled to a  ¹/8th royalty share of the gas sales contract settlement that we reached with Columbia Gas Transmission Corporation in the 1995 Columbia Gas Transmission Corporation bankruptcy proceeding.

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Discovery and pleadings necessary to place the class certification issue before the state court have been ongoing. A hearing on the plaintiffs’ motion for class certification was held on October 20, 2003, and proposed findings of fact and conclusions of law were submitted to the court on December 5, 2003. A status conference was held with the court and the court advised it intends to issue a ruling on the class certification motion. The court was expected to rule by December 2004, and we are still awaiting a decision. Discovery is proceeding on the claims pending the ruling on the class certification motion. Discovery is to be completed by April 1, 2005, and the trial is currently scheduled for August 15, 2005. If a class is certified it is expected this trial date will be continued to a later date.

The investigation into this claim continues and it is in the discovery phase. We are vigorously defending the case. We have a reserve that management believes is adequate based on its estimate at this time of the probable outcome of this case.

Texas Title Litigation

On January 6, 2003, we were served with Plaintiffs’ Second Amended Original Petition in Romeo Longoria, et al. v. Exxon Mobil Corporation, et al. in the 79th Judicial District Court of Brooks County, Texas. Plaintiffs filed their First Supplemental Original Petition on March 17, 2004 and their Second Supplemental Petition on November 12, 2004. The significant change in the second Supplemental Petition is that plaintiffs appear to limit their claim to the mineral estate, rather than making claims to both the surface and mineral estate. The plaintiffs allege that they are the rightful owners of a one-half undivided mineral interest in and to certain lands in Brooks County, Texas. As Cody Energy, LLC, we acquired certain leases and wells from Wynn-Crosby 1996, Ltd. in 1997 and 1998 and we subsequently acquired a 320 acre lease from Hector and Gloria Lopez in 2001. The plaintiffs allege that they are entitled to be declared the rightful owners of an undivided interest in minerals and all improvements on the lands on which we acquired these leases. The plaintiffs also assert claims for trespass to try title, action to remove a cloud on the title, failure to properly account for royalty, fraud, trespass, conversion, all for unspecified actual and exemplary damages. The original trial date of May 19, 2003 was cancelled and a new trial date has not been set. We have not had the opportunity to conduct discovery in this matter. We estimate that production revenue from this field since its predecessor, Cody Energy, LLC, acquired title and since we acquired its lease is approximately $14.9 million. The carrying value of this property is approximately $34 million. Co-defendants Shell Oil Company and Shell Western E&P filed a motion for summary judgment seeking dismissal of plaintiffs’ causes of action on multiple grounds. The original plaintiffs’ attorneys asked permission from the Court to withdraw from the representation. The Court granted that request, and new attorneys for some, but not all of the plaintiffs have recently entered the case. The motion for summary judgment was reset and a hearing was held in December of 2003. We joined in the motion. After a second hearing, the Court denied the motion for summary judgment. The defendants have moved to add parties whose title interests are being challenged by the plaintiffs, and who are therefore necessary to the case, or in the alternative, abate the proceeding until the plaintiffs join all parties whose interests may be affected by plaintiffs’ claims.

Although the investigation into this claim is in its early stages, we intend to vigorously defend the case. Should we receive an adverse ruling in this case, an impairment review would be assessed to ensure the carrying value of the property is recoverable. Management cannot currently determine the likelihood of an unfavorable outcome or range of any potential loss should the outcome be unfavorable. Accordingly, there has been no reserve established for this matter.

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Raymondville Area

In April 2004, our wholly owned subsidiary, Cody Energy, LLC, filed suit in Willacy County, Texas against certain of our co-working interest owners in the Raymondville Area, located in Kenedy and Willacy Counties. In early 2003, Cody had proposed a new prospect to certain of these co-working interest owners located within jointly owned oil and gas leases. Some of the co-working interest owners elected to participate and some did not. The initial well was successful and subsequent wells have been drilled to exploit the discovery made in the first well.

In December 2003, certain of the co-working interest owners who elected not to participate in the initial well notified Cody that they believed that they had the right to participate in subsequent wells. Cody contends that, under the terms of the agreements between the parties, the co-working interest owners that elected not to participate in the initial well in the prospect were required to assign their interest in the proposed prospect to those who elected to participate. Alternatively, Cody contends that such owners lost their right to participate in subsequent wells within a 1,200 foot radius of the initial well.

The defendants have filed a counter claim against us and one of the defendants has filed a lien against Cody’s interest in the leases in the Raymondville Area. Cody contends that this lien is improper and has sought damages for its filing. Cody is vigorously prosecuting this case which is in its early stage of discovery. No trial date has been set by the court.

Certain of the defendants filed a Motion for Partial Summary Judgment contending that they did not have adequate notice of the prospect proposal. Cody is contesting this Motion. In addition, in late December 2004, Cody filed a Motion for Final Summary Judgment asking the court to find that, under the terms of the agreements, Cody and the participating working interest owners are entitled to an assignment of the interests of the co-working interest owners who elected not to participate in the prospect. No hearing date has been set by the court.

Management cannot currently determine the likelihood of an unfavorable outcome or range of any potential loss should the outcome be unfavorable. Accordingly, there has been no reserve established for this matter.

Commitment and Contingency Reserves

We have established reserves for certain legal proceedings. The establishment of a reserve involves an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that we could incur approximately $11.1 million of additional loss with respect to those matters in which reserves have been established. Future changes in the facts and circumstances could result in the actual liability exceeding the estimated ranges of loss and amounts accrued.

While the outcome and impact on us cannot be predicted with certainty, management believes that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on our consolidated financial position. Operating results and cash flow, however, could be significantly impacted in the reporting periods in which such matters are resolved.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of 2004.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following table shows certain information about our executive officers as of February 18, 2005, as such term is defined in Rule 3b-7 of the Securities Exchange Act of 1934, and certain of our other officers.

All officers are elected annually by our Board of Directors. Except for the following, all of the executive officers have been employed by Cabot Oil & Gas Corporation for at least the last five years.

Dan O. Dinges joined Cabot Oil & Gas Corporation as President and Chief Operating Officer and as a member of the Board of Directors in September 2001. He was promoted to his current position of Chairman, President and Chief Executive Officer in May 2002. Mr. Dinges came to Cabot after a 20-year career with Samedan Oil Corporation, a subsidiary of Noble Affiliates, Inc. The last three years, Mr. Dinges served as Samedan’s Senior Vice President, as well as Division General Manager for the Offshore Division, a position he held since August 1996. He also served as a member of the Executive Operating Committee for Samedan. Mr. Dinges started his career as a Landman for Mobil Oil Corporation covering Louisiana, Arkansas and the central Gulf of Mexico. After four years of expanding responsibilities at Mobil he joined Samedan as a Division Landman – Offshore. Over the years, Mr. Dinges held positions of increasing responsibility at Samedan including Division Manager, Vice President and ultimately Senior Vice President. Mr. Dinges received his BBA degree in Petroleum Land Management from The University of Texas.

Thomas S. Liberatore joined Cabot in January 2002 as Regional Manager, East and was promoted to his current position in July 2003. Prior to joining the Company, Liberatore served as vice president exploration and production for North Coast Energy. He began his career as a geologist and has held various positions of increasing responsibility for Presidio Oil Company and Belden & Blake Corporation. Liberatore received his B.S. in Geology from West Virginia University.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Common Stock is listed and principally traded on the New York Stock Exchange under the ticker symbol “COG”. The following table presents the high and low closing sales prices per share of the Common Stock during certain periods, as reported in the consolidated transaction reporting system. Cash dividends paid per share of the Common Stock are also shown.

As of January 31, 2005, there were 693 registered holders of the Common Stock. Shareholders include individuals, brokers, nominees, custodians, trustees, and institutions such as banks, insurance companies and pension funds. Many of these hold large blocks of stock on behalf of other individuals or firms.

On February 28, 2005, the Company announced that the Board of Directors had declared a 3-for-2 split on the Company’s Common Stock in the form of a stock distribution. The stock dividend will be distributed on March 31, 2005 to shareholders of record on March 18, 2005. In lieu of issuing fractional shares, the Company will pay cash based on the closing price of the Common stock on the record date.

Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities (1)

(1) On August 13, 1998, the Company announced that its Board of Directors authorized the repurchase of two million shares of the Company’s stock in the open market or in negotiated transactions. All purchases executed have been through open market transactions. There is no expiration date associated with the authorization to repurchase securities of the Company.

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ITEM 6. SELECTED HISTORICAL FINANCIAL DATA

The following table summarizes selected consolidated financial data for Cabot Oil & Gas for the periods indicated. This information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related Notes.