HOUSTON, April 24, 2014 /PRNewswire/ -- Cabot Oil
& Gas Corporation (NYSE: COG) today reported its financial and
operating results for the first quarter of 2014. Highlights for the
quarter include:
- Production of 119.9 billion cubic feet equivalent (Bcfe), an
increase of 34 percent over last year's comparable quarter
- Discretionary cash flow of $319.5
million, an increase of 36 percent over last year's
comparable quarter
- Net income excluding selected items of $109.7 million, an increase of 102 percent over
last year's comparable quarter
- Total unit costs (including financing) of $2.66 per thousand cubic feet equivalent (Mcfe),
a 19 percent improvement over last year's comparable quarter
First Quarter 2014 Financial Results
Equivalent production in the first quarter of 2014 was 119.9
Bcfe, consisting of 115.8 billion cubic feet (Bcf) of natural gas
and 686,000 barrels of liquids (crude oil/condensate/natural gas
liquids). Equivalent production for the quarter represents a 34
percent increase over the first quarter of 2013 on an absolute
basis and a 39 percent increase when adjusting for the
Mid-Continent and West Texas asset
sales in 2013. "Our daily production levels for the quarter posted
a slight increase sequentially, in line with our guidance, despite
unscheduled downtime on compressor stations in our Marcellus
operating area resulting from severe winter weather," commented
Dan O. Dinges, Chairman, President,
and Chief Executive Officer.
Cash flow from operations in the first quarter of 2014 was
$255.4 million, compared to
$212.7 million in the first quarter
of 2013. Discretionary cash flow in the first quarter of 2014 was
$319.5 million, compared to
$234.4 million in the first quarter
of 2013. Net income in the first quarter of 2014 was $107.0 million, or $0.26 per share, compared to $42.8 million, or $0.10 per share, in the first quarter of 2013.
Excluding the effect of selected items (detailed in the table
below), net income was $109.7
million, or $0.26 per share,
in the first quarter of 2014, compared to $54.2 million, or $0.13 per share, in the first quarter of 2013.
Higher equivalent production and realized natural gas prices drove
the quarter's overall improvement, partially offset by lower
realized oil prices and increased operating expenses associated
with higher production.
Natural gas price realizations, including the effect of hedges,
were $3.74 per thousand cubic feet
(Mcf) in the first quarter of 2014, up 8 percent compared to the
first quarter of 2013. "Cabot's Marcellus natural gas price
realizations for the first quarter, before the effect of hedges,
were in line with our expectations of $0.60
to $0.65 below NYMEX settlement prices," stated Dinges. Oil
price realizations, including the effect of hedges, were
$97.76 per barrel (Bbl), down 6
percent compared to the first quarter of 2013.
Total per unit costs (including financing) decreased to
$2.66 per Mcfe in the first quarter
of 2014, down 19 percent from $3.29
per Mcfe in the first quarter of 2013. All operating expense
categories decreased on a per unit basis relative to last year's
comparable quarter except for exploration expense, which was flat
relative to the first quarter of 2013, and transportation and
gathering expense, which increased as a result of slightly higher
transportation rates and new transportation agreements in the
Marcellus.
Operational Highlights
Marcellus Shale
During the first quarter of 2014, the Company averaged 1,209
million cubic feet (Mmcf) per day of net Marcellus production, an
increase of 44 percent over the prior year's comparable quarter.
Subsequent to the end of the first quarter, Cabot reached a
milestone of one trillion cubic feet (Tcf) of cumulative production
from its Marcellus Shale asset in
less than six years. "This is a tremendous accomplishment,
especially considering the Company's maximum rig count in the
Marcellus during this period was six rigs, with no more than 290
horizontal wells producing, highlighting the productivity of this
asset," said Dinges.
Cabot has averaged approximately 1,480 Mmcf per day of gross
Marcellus production during the month of April, which includes a
new gross Marcellus production record of 1,538 Mmcf per day. These
levels compare to an average of approximately 1,410 Mmcf per day
during the first quarter of 2014. "Second quarter production in the
Marcellus has started out strong thanks to the continued efforts by
our team in the field in tandem with our midstream provider to
maximize our deliverability into the interstate pipelines,"
commented Dinges. "As a result, we expect sequential growth in
the second quarter versus our prior expectation of flat
production."
Eagle Ford Shale
Cabot's net production in the Eagle Ford during the first
quarter of 2014 was 7,271 barrels of oil equivalent (Boe) per day,
an increase of 42 percent over the prior year's comparable quarter.
This included 6,839 barrels of liquids per day, an increase of 49
percent over the prior year's comparable quarter.
Subsequent to the quarter end, Cabot placed its first six-well
pad in the Eagle Ford on production. The six wells had an average
completed lateral length of 6,658' and were completed with an
average of 25 stages. The wells achieved an average peak 24-hour
initial production (IP) rate of 1,045 Boe per day per well (89%
oil) during the first ten days on production and the rates continue
to improve. As a result of pad-drilling efficiencies, including a
new record of ten stages completed in a 24-hour period, the Company
realized approximately $600,000 of
cost savings per well on this six-well pad.
"We have been very pleased with the strides our Eagle Ford team
has made over the last six months. Based on the continued
improvement in production rates and realized cost savings, which
have resulted in higher rates of return, we are adding a third rig
to our Eagle Ford program beginning in the third quarter,"
explained Dinges. "This additional rig will be focused on
multi-well pads and is expected to have minimal impact on 2014
production but will materially impact our estimated 2015 oil
production volumes."
During the first quarter, Cabot added approximately 4,000 net
acres to its Eagle Ford position through organic leasing efforts
and is actively pursuing additional acreage.
Financial Position and Liquidity
As of March 31, 2014, the
Company's net debt to adjusted capitalization ratio was 34.5
percent, compared to 33.8 percent at December 31, 2013 (detailed in the table below).
The Company's total debt was $1,222
million, of which $535 million
is outstanding under the Company's revolving credit facility.
Effective April 15, 2014, the
lenders under the Company's revolving credit facility approved an
increase in the Company's borrowing base from $2.3 billion to $3.1
billion as part of the annual redetermination process. Total
lender commitments under the revolving credit facility remain
unchanged at $1.4 billion, with
$864 million of available credit
under the facility at March 31,
2014.
2014 Guidance Update
As a result of positive momentum in the Company's Eagle Ford
program and the corresponding increase in rig count from two to
three rigs beginning in the third quarter, Cabot's 2014 capital
budget guidance has increased to $1.375 -
$1.475 billion. The Company has also tightened its
production guidance range for 2014 from 519 - 598 Bcfe to 530 - 585
Bcfe and initiated 2015 production growth guidance at 20 - 30
percent.
Cabot's Marcellus natural gas price realizations for the month
of April, before the effect of hedges, have averaged between
$0.75 and $0.80 below the NYMEX
settlement price, which is in line with the Company's expectations.
For further disclosure on price realization guidance for 2014,
please see the current investor presentation in the Investor
Relations section of the Company's website.
Conference Call
A conference call is scheduled for Thursday, April 24, 2014, at 9:30 a.m. Eastern Time to discuss first quarter
2014 financial and operating results. To access the live audio
webcast, please visit the Investor Relations section of the
Company's website at www.cabotog.com. A replay of the call
will also be available on the Company's website. The latest
financial guidance, including the Company's hedge positions, is
also available in the Investor Relations section of the Company's
website.
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 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.
FOR MORE INFORMATION CONTACT
Matt Kerin (281) 589-4642
OPERATING
DATA
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2014
|
|
2013
|
PRODUCED NATURAL
GAS (Bcf) & LIQUIDS (Mbbl)
|
|
|
|
|
Natural
Gas
|
|
|
|
|
Appalachia
|
|
112.8
|
|
79.9
|
Other
|
|
3.0
|
|
5.3
|
Total
|
|
115.8
|
|
85.2
|
|
|
|
|
|
Crude/Condensate/NGL
|
|
686
|
|
691
|
|
|
|
|
|
Equivalent Production
(Bcfe)
|
|
119.9
|
|
89.3
|
|
|
|
|
|
PRICES(1)
|
|
|
|
|
Average Produced Gas
Sales Price ($/Mcf)
|
|
|
|
|
Appalachia
|
$
|
3.71
|
$
|
3.49
|
Other
|
$
|
4.97
|
$
|
2.79
|
Total
|
$
|
3.74
|
$
|
3.45
|
|
|
|
|
|
Average
Crude/Condensate Price ($/Bbl)
|
$
|
97.76
|
$
|
104.03
|
|
|
|
|
|
WELLS
DRILLED
|
|
|
|
|
Gross
|
|
27
|
|
32
|
Net
|
|
27
|
|
26
|
Gross success
rate
|
|
100%
|
|
97%
|
|
|
|
|
|
(1)
These realized prices include the realized impact of derivative
instrument settlements.
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2014
|
|
2013
|
Realized Impacts to Gas
Pricing
|
|
$ (0.61)
|
|
$
0.16
|
Realized Impacts to Oil
Pricing
|
|
$ (0.36)
|
|
$
3.24
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2014
|
|
2013
|
Operating
Revenues
|
|
|
|
Natural
gas
|
$ 432,809
|
|
$ 293,793
|
Crude oil and
condensate
|
59,144
|
|
65,655
|
Brokered
natural gas
|
13,153
|
|
10,893
|
Other
|
4,697
|
|
2,944
|
|
509,803
|
|
373,285
|
Operating
Expenses
|
|
|
|
Direct
operations
|
35,834
|
|
31,497
|
Transportation
and gathering
|
77,765
|
|
46,221
|
Brokered
natural gas
|
11,860
|
|
8,389
|
Taxes other
than income
|
13,044
|
|
11,687
|
Exploration
|
6,474
|
|
4,024
|
Depreciation,
depletion and amortization
|
147,418
|
|
148,653
|
General and
administrative (excluding stock-based compensation)
|
18,465
|
|
17,035
|
Stock-based
compensation(1)
|
3,171
|
|
18,669
|
|
314,031
|
|
286,175
|
Gain / (loss) on sale
of assets
|
(1,285)
|
|
(96)
|
Income from
Operations
|
194,487
|
|
87,014
|
Interest expense and
other
|
16,557
|
|
16,255
|
Income before income
taxes
|
177,930
|
|
70,759
|
Income tax
expense
|
70,899
|
|
27,935
|
Net
Income
|
$ 107,031
|
|
$
42,824
|
Earnings per share
- Basic
|
$
0.26
|
|
$
0.10
|
Weighted average
common shares outstanding
|
416,900
|
|
420,300
|
|
|
(1)
|
Includes the impact
of the Company's performance share awards, restricted stock, stock
appreciation rights and expense associated with the Supplemental
Employee Incentive Plan.
|
CONDENSED
CONSOLIDATED BALANCE SHEET (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
2014
|
|
2013
|
Assets
|
|
|
|
Current
assets
|
$
373,830
|
|
$
378,899
|
Properties and
equipment, net
|
4,710,569
|
|
4,546,227
|
Other
assets
|
61,376
|
|
55,954
|
Total
assets
|
$
5,145,775
|
|
$
4,981,080
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
$
432,628
|
|
$
407,905
|
Long-term
debt
|
1,222,000
|
|
1,147,000
|
Deferred income
taxes
|
1,074,497
|
|
1,067,912
|
Other
liabilities
|
147,859
|
|
153,661
|
Stockholders'
equity
|
2,268,791
|
|
2,204,602
|
Total
liabilities and stockholders' equity
|
$
5,145,775
|
|
$
4,981,080
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2014
|
|
2013
|
Cash Flows From
Operating Activities
|
|
|
|
Net income
|
$
107,031
|
|
$
42,824
|
Deferred income tax
expense
|
57,603
|
|
23,574
|
(Gain) / loss
on sale of assets
|
1,285
|
|
96
|
Exploration
expense
|
2,040
|
|
666
|
Income charges not
requiring cash
|
151,573
|
|
167,205
|
Changes in assets and
liabilities
|
(64,154)
|
|
(21,680)
|
Net cash provided by
operations
|
255,378
|
|
212,685
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(338,701)
|
|
(260,169)
|
Proceeds from sale of
assets
|
108
|
|
486
|
Restricted
cash
|
8,382
|
|
-
|
Investment in equity
method investment
|
(5,937)
|
|
(1,250)
|
Net cash used in
investing
|
(336,148)
|
|
(260,933)
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Net increase
(decrease) in debt
|
75,000
|
|
40,000
|
Dividends
paid
|
(8,332)
|
|
(4,201)
|
Stock-based
compensation tax benefit
|
16,043
|
|
2,138
|
Other
|
90
|
|
32
|
Net cash provided by
(used in) financing
|
82,801
|
|
37,969
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
2,031
|
|
$
(10,279)
|
Selected Item
Review and Reconciliation of Net Income and Earnings Per
Share
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2014
|
|
2013
|
As
reported - net income
|
$
107,031
|
|
$
42,824
|
Reversal
of selected items, net of tax:
|
|
|
|
(Gain) / loss on sale of assets
|
775
|
|
58
|
Stock-based compensation expense
|
1,913
|
|
11,337
|
Net
income excluding selected items
|
$
109,719
|
|
$
54,219
|
As
reported - earnings per share
|
$
0.26
|
|
$
0.10
|
Per
share impact of reversing selected items
|
-
|
|
0.03
|
Earnings
per share including reversal of selected
items
|
$
0.26
|
|
$
0.13
|
Weighted
average common shares outstanding
|
416,900
|
|
420,300
|
|
|
|
|
|
|
|
|
Discretionary Cash
Flow Calculation and Reconciliation
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2014
|
|
2013
|
Discretionary Cash Flow
|
|
|
|
As
reported - net income
|
$
107,031
|
|
$
42,824
|
Plus /
(less):
|
|
|
|
Deferred
income tax expense
|
57,603
|
|
23,574
|
(Gain) /
loss on sale of assets
|
1,285
|
|
96
|
Exploration expense
|
2,040
|
|
666
|
Income
charges not requiring cash
|
151,573
|
|
167,205
|
Discretionary Cash Flow
|
319,532
|
|
234,365
|
Changes
in assets and liabilities
|
(64,154)
|
|
(21,680)
|
Net cash
provided by operations
|
$
255,378
|
|
$
212,685
|
|
|
|
|
|
|
|
|
Net Debt
Reconciliation
|
(In
thousands)
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
Long-term debt
|
$
1,222,000
|
|
$
1,147,000
|
Stockholders' equity
|
2,268,791
|
|
2,204,602
|
Total
Capitalization
|
$
3,490,791
|
|
$
3,351,602
|
|
|
|
|
Total
debt
|
$
1,222,000
|
|
$
1,147,000
|
Less: Cash and cash equivalents
|
(25,431)
|
|
(23,400)
|
Net
Debt
|
$
1,196,569
|
|
$
1,123,600
|
|
|
|
|
Net
debt
|
$
1,196,569
|
|
$
1,123,600
|
Stockholders' equity
|
2,268,791
|
|
2,204,602
|
Total
Adjusted Capitalization
|
$
3,465,360
|
|
$
3,328,202
|
|
|
|
|
Total debt to
total capitalization ratio
|
35.0%
|
|
34.2%
|
Less: Impact of cash and cash equivalents
|
0.5%
|
|
0.4%
|
Net
Debt to Adjusted Capitalization Ratio
|
34.5%
|
|
33.8%
|
SOURCE Cabot Oil & Gas Corporation