CABOT OIL'A'USD : Cabot Oil & Gas Announces Second Quarter Results
07/22/2010| 09:05am US/Eastern
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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
Six Months
Quarter Ended 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)
December
June 30, 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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