Cabot Oil & Gas Corporation Announces First Quarter Profits, Record Quarterly Production Volumes

CABOT OIL & GAS RESULTS -- Page 3

 OPERATING DATA               

Quarter Ended

March 31,

2012

2011

PRODUCED NATURAL GAS (Bcf) & OIL (MBbl)

Natural Gas

 Appalachia

49.6

27.1

 Other

6.8

9.3

 Total

56.4

36.4

Crude/Condensate/NGL

538

226

Equivalent Production (Bcfe)

59.7

37.7

PRICES ⁽¹⁾

Average Produced Gas Sales Price ($/Mcf)

 Appalachia

$

3.77

$

4.62

 Other

$

2.82

$

4.85

Total 

$

3.65

$

4.68

Average Crude/Condensate Price ($/Bbl)

$

96.67

$

87.15

WELLS DRILLED 

  Gross

31

24

  Net

23

17

  Gross Success Rate

100%

100%

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

Quarter Ended

March 31,

2012

2011

     Realized Impacts to Gas Pricing

$         1.00

$           0.37

     Realized Impacts to Oil Pricing

$       (2.57)

$         (1.42)

CABOT OIL & GAS RESULTS -- Page 4  

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

Quarter Ended

March 31,

2012

2011

Operating Revenues

  Natural Gas

$       206,782

$  170,098

  Brokered Natural Gas

13,444

18,408

  Crude Oil and Condensate

49,981

18,592

  Other

1,929

1,928

272,136

209,026

Operating Expenses

  Brokered Natural Gas Cost

11,872

15,362

  Direct Operations

27,320

27,007

  Transportation and Gathering

30,258

12,868

  Taxes Other Than Income

18,583

8,151

  Exploration

4,001

6,308

  Depreciation, Depletion and Amortization

110,357

77,124

  General and Administrative (excluding Stock-Based Compensation) 

20,894

16,161

  Stock-Based Compensation(1)

1,655

8,138

224,940

171,119

Gain (Loss) on Sale of Assets

(535)

(1,517)

Income from Operations

46,661

36,390

Interest Expense and Other 

16,917

17,367

Income Before Income Taxes

29,744

19,023

Income Tax Expense

11,426

6,137

Net Income

$         18,318

$    12,886

Earnings Per Share - Basic(2)

$              0.09

$         0.06

Weighted Average Common Shares Outstanding(2)

209,128

208,288

(1)

Includes the impact of the Company's performance share awards and restricted stock amortization as well as expense related to stock appreciation rights.  Also includes expense for the Supplemental Employee Incentive Plan.

(2)

All Earning Per Share and Weighted Average Common Share figures have been retroactively adjusted for the 2-for-1 split of the Company's common stock effective January 25, 2012.

CABOT OIL & GAS RESULTS -- Page 5

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

  (In thousands)

March 31,

December 31,

2012

2011

Assets

Current Assets

$          339,727

$           345,800

Properties and Equipment, Net

4,011,203

3,934,584

Other Assets

51,864

51,109

   Total Assets

$       4,402,794

$        4,331,493

Liabilities and Stockholders' Equity

Current Liabilities

$          322,154

$           343,344

Long-Term Debt, excluding Current Maturities

1,012,000

950,000

Deferred Income Taxes

814,189

802,592

Other Liabilities

129,495

130,789

Stockholders' Equity

2,124,956

2,104,768

   Total Liabilities and Stockholders' Equity

$       4,402,794

$        4,331,493

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

  (In thousands)

Quarter Ended

March 31,

2012

2011

Cash Flows From Operating Activities

Net Income

$            18,318

$             12,886

Deferred Income Tax Expense

9,724

6,543

Loss (Gain) on Sale of Assets

535

1,517

Exploration Expense

49

493

Unrealized (Gain) Loss on Derivatives

(42)

(17)

Income Charges Not Requiring Cash

109,951

90,858

Changes in Assets and Liabilities

(6,755)

(21,067)

Net Cash Provided by Operations

131,780

91,213

Cash Flows From Investing Activities

Capital Expenditures

(188,547)

(203,169)

Proceeds from Sale of Assets

1,280

5,043

Net Cash Used in Investing

(187,267)

(198,126)

Cash Flows From Financing Activities

Net Increase (Decrease) in Debt

62,000

80,000

Dividends Paid

(4,177)

(3,122)

Other

81

(1,018)

Net Cash Provided by Financing

57,904

75,860

Net Increase / (Decrease) in Cash and Cash Equivalents

$              2,417

$            (31,053)

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

March 31,

2012

2011

   As Reported - Net Income

$           18,318

$           12,886

   Reversal of Selected Items, Net of Tax:

(Gain) Loss on Sale of Assets

327

941

Stock-Based Compensation Expense

1,013

5,046

Pension Expense (1)

3,824

1,872

Unrealized Loss (Gain) on Derivatives(2)

(26)

(11)

Pennsylvania Impact Fee(3)

5,067

-

   Net Income Excluding Selected Items

$          28,523

$          20,734

   As Reported - Earnings Per Share(4)

$               0.09

$               0.06

   Per Share Impact of Reversing Selected Items (4)

0.05

0.04

   Earnings Per Share Including Reversal

of Selected Items(4)

$               0.14

$               0.10

   Weighted Average Common Shares Outstanding(4)

209,128

208,288

(1)

On July 28, 2010, the Company notified its employees of its plan to terminate its qualified and non-qualified pension

plans, effective September 30, 2010. The quarter ended March 31, 2012 and 2011 amounts represent pension expenses

related to the plan terminations and expenses related to the acceleration of amortization of prior service costs and

actuarial losses over the expected amortization period until final distribution of assets from each plan. Final distribution

is expected to occur at the end of the second quarter 2012, at which time the accounting for the costs associated with

the pension termination will be complete. Pension expense is included in General and Administrative expense in the

Condensed Consolidated Statement of Operations. 

(2)

This unrealized loss (gain) is included in Natural Gas Revenues in the Condensed Consolidated Statement of Operations

and represents the change in fair value related to derivatives not designated as hedging instruments.

(3)

In February 2012, the Pennsylvania state legislature authorized the assessment of an impact fee on Marcellus shale

production. This amount represents the adjustment related to our 2011 and prior wells. Expense associated with the impact fee

is included in Taxes Other Than Income in the Condensed Consolidated Statement of Operations.

(4)

All Earning Per Share and Weighted Average Common Share figures have been retroactively adjusted for the 2-for-1 split

of the Company's common stock effective January 25, 2012.

Discretionary Cash Flow Calculation and Reconciliation  

(In thousands)

Quarter Ended

March 31,

2012

2011

   Discretionary Cash Flow

   As Reported - Net Income

$           18,318

$           12,886

   Plus / (Less): 

   Deferred Income Tax Expense

9,724

6,543

   Loss (Gain) on Sale of Assets

535

1,517

   Exploration Expense

49

493

   Unrealized Loss (Gain) on Derivatives

(42)

(17)

   Income Charges Not Requiring Cash

109,951

90,858

   Discretionary Cash Flow

138,535

112,280

   Changes in Assets and Liabilities

(6,755)

(21,067)

   Net Cash Provided by Operations

$         131,780

$           91,213

Net Debt Reconciliation

(In thousands)

March 31,

December 31,

2012

2011

   Total Debt

$    1,012,000

$        950,000

   Stockholders' Equity

2,124,956

2,104,768

        Total Capitalization

$    3,136,956

$    3,054,768

   Total Debt

$    1,012,000

$       950,000

   Less:  Cash and Cash Equivalents

(32,328)

(29,911)

        Net Debt

$       979,672

$       920,089

   Net Debt

$       979,672

$       920,089

   Stockholders' Equity

2,124,956

2,104,768

        Total Adjusted Capitalization

$    3,104,628

$    3,024,857

  Total Debt to Total Capitalization Ratio

32.3%

31.1%

   Less:  Impact of Cash and Cash Equivalents

0.7%

0.7%

        Net Debt to Adjusted Capitalization Ratio

31.6%

30.4%