Cabot Oil & Gas Announces Second Quarter Results
HOUSTON, July 22, /PRNewswire-FirstCall/ -- 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.
"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.
OPERATING DATA |
|||||||||
Quarter Ended |
Six Months Ended |
||||||||
June 30, |
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 |
Six Months Ended |
||||||||
June 30, |
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 |
|||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) |
|||||||||
(In thousands, except per share amounts) |
|||||||||
Quarter Ended |
Six Months Ended |
||||||||
June 30, |
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. |
|||||||||
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) |
||||
(In thousands) |
||||
June 30, |
December 31, |
|||
2010 |
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 |
Six Months Ended |
|||||||
June 30, |
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 |
||||
Selected Item Review and Reconciliation of Net Income and Earnings Per Share |
||||||||
(In thousands, except per share amounts) |
||||||||
Quarter Ended |
Six Months Ended |
|||||||
June 30, |
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) 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. |
||||||||
(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 |
Six Months Ended |
|||||||
June 30, |
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, |
December 31, |
|||
2010 |
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% |
||
SOURCE Cabot Oil & Gas Corporation
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