CABOT OIL & GAS CORP - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - CABOT OIL & GAS CORP	d8k.htm

Exhibit 99.1

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FOR RELEASE		FOR MORE INFORMATION CONTACT
July 22, 2010		Scott Schroeder (281) 589-4993

Cabot Oil & Gas Announces Second Quarter Results

HOUSTON, July 22, 2010 - Cabot Oil & Gas Corporation (NYSE: COG) today reported second quarter net income of $21.7 million, or $0.21 per share, as compared to net income of $25.5 million, or $0.25 per share, in the second quarter of 2009. Removing the selected items in both periods, (which are detailed in the Selected Items Table and include the impact-related to the sale of assets, stock compensation and derivatives), the 2010 quarter’s net income was $19.9 million, or $0.19 per share, as compared to $39.1 million, or $0.38 per share, for the second quarter of 2009.

Cash flow from operations for the 2010 second quarter totaled $127.1 million, while discretionary cash flow was $109.5 million. Comparatively, 2009 second quarter cash flow from operations was $147.9 million, and discretionary cash flow was $133.6 million.

Driving these results were lower natural gas realized prices partially offset by higher realized oil prices and higher production levels. “Our second quarter production level of 30.5 Bcfe is the highest quarterly level ever reported and was approximately 20 percent higher than the volumes reported in last year’s second quarter,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “Directionally this is very positive for Cabot and reflects only two weeks of production from phase one of the new compressor station in Pennsylvania.” In terms of pricing, realized natural gas prices were $5.48 per Mcf in the 2010 second quarter versus $7.25 per Mcf in the 2009 second quarter that benefited from a significantly large hedge gain. Realized oil prices for the period increased 15 percent to $96.70 per barrel over last year’s second quarter.

In terms of cost comparisons, per unit levels improved in this second quarter for nearly all of the expense categories versus last year’s second quarter.

Year-to-Date

In the six months ended June 30, 2010, Cabot reported net income of $50.4 million, or $0.49 per share, compared to $73.1 million, or $0.71 per share, for the same period last year. The cash flow comparisons for the six months ended June 30, 2010 and June 30, 2009, respectively, are cash flow from operations of $243.2 million versus $300.4 million and discretionary cash flow of $241.0 million versus $271.7 million. The 2010 six-month net income figure, after removal of the selected items, was $50.4 million, or $0.49 per share, versus $81.3 million, or $0.78 per share, for the six-month period ended June 30, 2009.

- 1 -

“The same dynamic that drove the quarter results apply to the year-to-date periods – increased production and lower natural gas price realizations,” stated Dinges. “Production was up approximately 12 percent for the six-month comparable periods while natural gas prices fell 19 percent and oil prices increased 22 percent.” Per unit expenses, other than DD&A and exploration expense which was flat, were down between the year-to-date six-month comparable periods.

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s second quarter financial and operating results discussion with financial analysts on Thursday, July 22, 2010 at 4:00 p.m. EDT (3:00 p.m. 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 84971115. The replay will be available through Saturday, July 24, 2010. 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 www.cabotog.com.

Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer with its entire resource base located in the continental United States. For additional information, visit the Company’s Internet homepage at www.cabotog.com.

The statements regarding future financial performance and results and the other statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, market factors, the market price (including regional basis differentials) of natural gas and oil, results of future drilling and marketing activity, future production and costs, and other factors detailed in the Company’s Securities and Exchange Commission filings.

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CABOT OIL & GAS RESULTS -- Page 3

OPERATING DATA


	Quarter Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)
Natural Gas
North		17.1			11.9			31.5			22.6
South		11.8			12.0			22.8			25.3
Canada		-			0.4			-			1.0

Total		28.9			24.3			54.3			48.9


Crude/Condensate/Ngl
North		28.0			32.0			51.0			59.0
South		221.0			163.0			416.0			328.0
Canada		-			2.0			-			6.0

Total		249.0			197.0			467.0			393.0


Equivalent Production (Bcfe)		30.5			25.5			57.1			51.2

PRICES
Average Produced Gas Sales Price ($/Mcf)
North	$	4.47		$	6.29		$	4.98		$	6.72
South	$	6.95		$	8.30		$	7.38		$	8.12
Canada	$	-		$	3.22		$	-		$	3.40
Total ⁽¹⁾	$	5.48		$	7.25		$	5.99		$	7.38

Average Crude/Condensate Price ($/Bbl)
North	$	67.27		$	52.61		$	67.63		$	42.73
South	$	100.65		$	90.15		$	100.75		$	86.72
Canada	$	-		$	45.14		$	-		$	36.46
Total ⁽¹⁾	$	96.70		$	83.76		$	97.04		$	79.55

WELLS DRILLED
Gross		21			33			45			82
Net		21			28			41			65
Gross Success Rate		100	%		100	%		98	%		98	%

⁽¹⁾ These realized prices include the realized impact of derivative instrument settlements.

	Quarter Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Realized Impacts to Gas Pricing	$	1.44		$	4.15		$	1.29		$	3.74
Realized Impacts to Oil Pricing	$	21.82		$	30.78		$	22.09		$	34.87

CABOT OIL & GAS RESULTS -- Page 4

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)


	Quarter Ended June 30,					Six Months Ended June 30,
	2010		2009			2010		2009
Operating Revenues
Natural Gas Production	$	159,761	$	176,213		$	325,842	$	360,735
Brokered Natural Gas		13,348		11,704			38,221		45,085
Crude Oil and Condensate		21,211		16,210			41,193		30,452
Other		1,154		697			2,774		2,491

		195,474		204,824			408,030		438,763
Operating Expenses
Brokered Natural Gas Cost		11,793		10,684			33,061		40,433
Direct Operations - Field and Pipeline		24,347		23,073			47,330		48,552
Exploration		10,233		10,397			18,659		16,863
Depreciation, Depletion and Amortization		76,726		61,838			150,224		126,930
General and Administrative (excluding Stock-Based Compensation)		10,469		10,946			22,991		22,882
Stock-Based Compensation ⁽¹⁾		2,384		6,171			5,608		11,300
Taxes Other Than Income		11,841		10,914			22,646		23,812

		147,793		134,023			300,519		290,772
Gain (Loss) on Sale of Assets ⁽²⁾		4,387		(16,562	)		5,146		(3,855	)

Income from Operations		52,068		54,239			112,657		144,136
Interest Expense and Other		15,769		15,046			30,681		29,272

Income Before Income Taxes		36,299		39,193			81,976		114,864
Income Tax Expense		14,617		13,691			31,598		41,782

Net Income	$	21,682	$	25,502		$	50,378	$	73,082

Net Earnings Per Share - Basic	$	0.21	$	0.25		$	0.49	$	0.71
Weighted Average Common Shares Outstanding		103,915		103,640			103,855		103,581

⁽¹⁾	Includes the impact of the Company’s performance share awards and restricted stock amortization as well as expense related to stock options and stock appreciation rights. Also includes expense for the Supplemental Employee Incentive Plans which commenced in 2008.

⁽²⁾

The gain on sale of assets in 2010 primarily relates to the sale of the Woodford Shale Prospect offset by an impairment charge related to properties held for sale. The loss on sale in 2009 primarily relates to the sale of our Canadian properties in April 2009, partially offset by a gain on sale of assets from the first quarter 2009 sale of Thornwood properties in the North region.

CABOT OIL & GAS RESULTS -- Page 5

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands)


	June 30, 2010		December 31, 2009
Assets
Current Assets	$	248,257	$	281,502
Property, Equipment and Other Assets		3,621,943		3,401,899

Total Assets	$	3,870,200	$	3,683,401


Liabilities and Stockholders’ Equity
Current Liabilities	$	226,833	$	308,741
Long-Term Debt		1,015,000		805,000
Deferred Income Taxes		675,824		644,801
Other Liabilities		106,639		112,345
Stockholders’ Equity		1,845,904		1,812,514

Total Liabilities and Stockholders’ Equity	$	3,870,200	$	3,683,401

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In thousands)


	Quarter Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Cash Flows From Operating Activities
Net Income	$	21,682		$	25,502		$	50,378		$	73,082
Unrealized (Gain) Loss on Derivatives		(942	)		126			(355	)		(815	)
Income Charges Not Requiring Cash		79,802			69,151			158,579			140,443
(Gain) Loss on Sale of Assets		(4,387	)		16,562			(5,146	)		3,855
Deferred Income Tax Expense		13,375			11,903			29,091			38,252
Changes in Assets and Liabilities		17,551			14,210			2,205			28,705
Exploration Expense		-			10,397			8,426			16,863

Net Cash Provided by Operations		127,081			147,851			243,178			300,385


Cash Flows From Investing Activities
Capital Expenditures		(218,741	)		(132,338	)		(454,143	)		(309,833	)
Proceeds from Sale of Assets		15,940			64,604			16,742			79,667

Net Cash Used in Investing		(202,801	)		(67,734	)		(437,401	)		(230,166	)


Cash Flows From Financing Activities
Net Increase (Decrease) in Debt		100,000			(62,000	)		210,000			(52,000	)
Capitalized Debt Issuance Costs		(1,986	)		(10,409	)		(1,986	)		(10,409	)
Dividends Paid		(3,117	)		(3,110	)		(6,228	)		(6,213	)
Other		3			1			(36	)		150

Net Cash Provided by (Used in) Financing		94,900			(75,518	)		201,750			(68,472	)


Net Increase in Cash and Cash Equivalents	$	19,180		$	4,599		$	7,527		$	1,747

CABOT OIL & GAS RESULTS -- Page 6

Selected Item Review and Reconciliation of Net Income and Earnings Per Share

(In thousands, except per share amounts)


	Quarter Ended June 30,					Six Months Ended June 30,
	2010			2009		2010			2009
As Reported - Net Income	$	21,682		$	25,502	$	50,378		$	73,082
Reversal of Selected Items, Net of Tax:
(Gain) Loss on Sale of Assets ⁽¹⁾		(2,720	)		9,596		(3,191	)		1,629
Stock-Based Compensation Expense		1,478			3,875		3,477			7,091
Unrealized Loss (Gain) on Derivatives ⁽²⁾		(584	)		79		(220	)		(511	)

Net Income Excluding Selected Items	$	19,856		$	39,052	$	50,444		$	81,291

As Reported - Net Earnings Per Share	$	0.21		$	0.25	$	0.49		$	0.71
Per Share Impact of Reversing Selected Items		(0.02	)		0.13		-			0.07

Net Earnings Per Share Including Reversal of Selected Items	$	0.19		$	0.38	$	0.49		$	0.78

Weighted Average Common Shares Outstanding		103,915			103,640		103,855			103,581

⁽¹⁾

⁽²⁾

This unrealized loss (gain) is included in Natural Gas Production Revenues in the Condensed Consolidated Statement of Operations and represents the mark to market change related to the Company’s natural gas basis swaps.

Discretionary Cash Flow Calculation and Reconciliation

(In thousands)


	Quarter Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Discretionary Cash Flow
As Reported - Net Income	$	21,682		$	25,502		$	50,378		$	73,082
Plus / (Less):
Unrealized Loss (Gain) on Derivatives		(942	)		126			(355	)		(815	)
Income Charges Not Requiring Cash		79,802			69,151			158,579			140,443
(Gain) Loss on Sale of Assets		(4,387	)		16,562			(5,146	)		3,855
Deferred Income Tax Expense		13,375			11,903			29,091			38,252
Exploration Expense		-			10,397			8,426			16,863

Discretionary Cash Flow		109,530			133,641			240,973			271,680
Changes in Assets and Liabilities		17,551			14,210			2,205			28,705

Net Cash Provided by Operations	$	127,081		$	147,851		$	243,178		$	300,385


Net Debt Reconciliation
(In thousands)

	June 30, 2010			December 31, 2009

Long-Term Debt	$	1,015,000		$	805,000
Stockholders’ Equity		1,845,904			1,812,514

Total Capitalization	$	2,860,904		$	2,617,514

Total Debt	$	1,015,000		$	805,000
Less: Cash and Cash Equivalents		(47,685	)		(40,158	)

Net Debt	$	967,315		$	764,842

Net Debt	$	967,315		$	764,842
Stockholders’ Equity		1,845,904			1,812,514

Total Adjusted Capitalization	$	2,813,219		$	2,577,356

Total Debt to Total Capitalization Ratio		35.5	%		30.8	%
Less: Impact of Cash and Cash Equivalents		1.1	%		1.1	%

Net Debt to Adjusted Capitalization Ratio		34.4	%		29.7	%

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