HOUSTON, July 27, 2011 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today reported its second quarter results that included an overall growth in production of 47.5 percent between comparable second quarter periods. "This production growth clearly was the leading driver of our financial results and operational gains," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "An indicator of our significant momentum on this front was not only the 49.1 percent increase in natural gas but also the 21.7 percent increase in crude/condensate/NGL volumes, which resulted in Cabot's highest quarterly production."
Second quarter net income was $54.7 million, or $0.53 per share, as compared to net income of $21.7 million, or $0.21 per share, in the second quarter of 2010. Removing selected items in both periods (which are detailed in the Selected Items Table and include the impact of the sale of assets, stock compensation, pension and derivatives), the 2011 quarter's net income was $42.9 million, or $0.41 per share, as compared to $19.9 million, or $0.19 per share, for the second quarter of 2010.
Cash flow from operations for the 2011 second quarter totaled $129.5 million, while discretionary cash flow was $146.9 million. Comparatively, 2010 second quarter cash flow from operations was $127.1 million, and discretionary cash flow was $109.5 million.
For the quarter, realized prices for both natural gas and oil were below last year's second quarter postings. Natural gas was $4.67 per Mcf, down 17.3 percent from last year's $5.65 per Mcf, while oil was off slightly at $95.17 per barrel versus $96.70 per barrel. Operating expenses and financing cost, in absolute terms, together increased 11 percent between comparable second quarters.
"However, on the strength of Cabot's record quarterly production volumes, we have realized a 25 percent reduction in these costs per unit between second quarters," commented Dinges.
Year-to-Date
In the six months ended June 30, 2011, Cabot reported net income of $67.6 million, or $0.65 per share, compared to $50.4 million, or $0.49 per share, for the same period last year. The cash flow comparisons for the six months ended June 30, 2011 and June 30, 2010, respectively, are cash flow from operations of $220.7 million versus $243.2 million and discretionary cash flow of $255.5 million versus $241.0 million. The 2011 six-month net income figure, after removal of the selected items, was $63.7 million, or $0.61 per share, versus $50.4 million, or $0.49 per share, for the six-month period ended June 30, 2010.
"The same dynamic that drove the second quarter results applies to the year-to-date periods - increased production and lower natural gas price realizations," stated Dinges. "Production was up approximately 45 percent for the six-month comparable periods while natural gas prices fell 24.1 percent and oil prices dropped 5 percent."
From a balance sheet perspective, the Company's net debt to adjusted capital stands at 34.9% as of June 30, 2011. So far this year, Cabot has added $120 million to its outstanding borrowings to fund its investment efforts. "With our assets sales helping to fund our 2011 program, we have spent a net $350 million through six months," commented Dinges. "And with our ongoing asset rationalization efforts, our full year net 2011 program will remain at, or below, original expectations."
Conference Call
Listen in live to Cabot Oil & Gas Corporation's second quarter financial and operational results discussion with financial analysts on Thursday, July 28, 2011 at 9:30 a.m. EDT (8:30 a.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 75438015. The replay will be available for 48 hours. 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.
FOR MORE INFORMATION CONTACT | ||
Scott Schroeder (281) 589-4993 | ||
OPERATING DATA | |||||||||||
Quarter Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | |||||||||||
Natural Gas | |||||||||||
North | 34.6 | 17.1 | 61.7 | 31.5 | |||||||
South | 8.5 | 11.8 | 17.8 | 22.8 | |||||||
Total | 43.1 | 28.9 | 79.5 | 54.3 | |||||||
Crude/Condensate/Ngl | |||||||||||
North | 22.0 | 28.0 | 43.0 | 51.0 | |||||||
South | 281.0 | 221.0 | 486.0 | 416.0 | |||||||
Total | 303.0 | 249.0 | 529.0 | 467.0 | |||||||
Equivalent Production (Bcfe) | 45.0 | 30.5 | 82.7 | 57.1 | |||||||
PRICES (1) | |||||||||||
Average Produced Gas Sales Price ($/Mcf) | |||||||||||
North | $ | 4.56 | $ | 4.68 | 4.58 | $ | 5.19 | ||||
South | $ | 5.12 | $ | 7.05 | 4.98 | $ | 7.47 | ||||
Total | $ | 4.67 | $ | 5.65 | 4.67 | $ | 6.15 | ||||
Average Crude/Condensate Price ($/Bbl) | |||||||||||
North | $ | 97.00 | $ | 67.27 | 94.08 | $ | 67.63 | ||||
South | $ | 95.03 | $ | 100.65 | 91.62 | $ | 100.75 | ||||
Total | $ | 95.17 | $ | 96.70 | 91.80 | $ | 97.04 | ||||
WELLS DRILLED | |||||||||||
Gross | 28 | 21 | 52 | 45 | |||||||
Net | 22 | 21 | 40 | 41 | |||||||
Gross Success Rate | 100% | 100% | 100% | 98% | |||||||
(1) These realized prices include the realized impact of derivative instrument settlements. | |||||||||||
Quarter Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
Realized Impacts to Gas Pricing | $ 0.32 | $ 1.44 | $ 0.34 | $ 1.29 | |||||||
Realized Impacts to Oil Pricing | $ (1.74) | $ 21.82 | $ (1.61) | $ 22.09 | |||||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Quarter Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
Operating Revenues | |||||||||||
Natural Gas. | $ 200,357 | $ 164,528 | $ 370,455 | $ 334,399 | |||||||
Brokered Natural Gas | 11,072 | 13,348 | 29,480 | 38,221 | |||||||
Crude Oil and Condensate | 28,042 | 21,211 | 46,634 | 41,193 | |||||||
Other. | 1,225 | 1,154 | 3,153 | 2,774 | |||||||
240,696 | 200,241 | 449,722 | 416,587 | ||||||||
Operating Expenses | |||||||||||
Brokered Natural Gas Cost | 9,796 | 11,793 | 25,158 | 33,061 | |||||||
Direct Operations | 22,579 | 24,347 | 49,586 | 47,330 | |||||||
Transportation and Gathering | 16,074 | 4,767 | 28,942 | 8,557 | |||||||
Taxes Other Than Income | 5,877 | 11,841 | 14,028 | 22,646 | |||||||
Exploration | 4,592 | 10,233 | 10,900 | 18,659 | |||||||
Depreciation, Depletion and Amortization | 83,225 | 76,726 | 160,349 | 150,224 | |||||||
General and Administrative (excluding Stock-Based Compensation) | 14,828 | 10,469 | 30,989 | 22,991 | |||||||
Stock-Based Compensation (1) | 11,178 | 2,384 | 19,316 | 5,608 | |||||||
168,149 | 152,560 | 339,268 | 309,076 | ||||||||
Gain (Loss) on Sale of Assets | 34,071 | 4,387 | 32,554 | 5,146 | |||||||
Income from Operations | 106,618 | 52,068 | 143,008 | 112,657 | |||||||
Interest Expense and Other | 18,044 | 15,769 | 35,411 | 30,681 | |||||||
Income Before Income Taxes | 88,574 | 36,299 | 107,597 | 81,976 | |||||||
Income Tax Expense | 33,897 | 14,617 | 40,034 | 31,598 | |||||||
Net Income | $ 54,677 | $ 21,682 | $ 67,563 | $ 50,378 | |||||||
Earnings Per Share - Basic | $ 0.53 | $ 0.21 | $ 0.65 | $ 0.49 | |||||||
Weighted Average Common Shares Outstanding | 104,264 | 103,915 | 104,204 | 103,855 | |||||||
(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. | |
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) | |||||||||
(In thousands) | |||||||||
June 30, | December 31, | ||||||||
2011 | 2010 | ||||||||
Assets | |||||||||
Current Assets . | $ 235,838 | $ 203,008 | |||||||
Properties and Equipment, Net | 3,967,716 | 3,762,760 | |||||||
Other Assets | 46,606 | 39,263 | |||||||
Total Assets | $ 4,250,160 | $ 4,005,031 | |||||||
Liabilities and Stockholders' Equity | |||||||||
Current Liabilities | $ 286,724 | $ 303,835 | |||||||
Long-Term Debt, excluding Current Maturities | 1,095,000 | 975,000 | |||||||
Deferred Income Taxes | 757,612 | 714,953 | |||||||
Other Liabilities | 144,625 | 138,543 | |||||||
Stockholders' Equity | 1,966,199 | 1,872,700 | |||||||
Total Liabilities and Stockholders' Equity | $ 4,250,160 | $ 4,005,031 | |||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) | |||||||||
(In thousands) | |||||||||
Quarter Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Cash Flows From Operating Activities | |||||||||
Net Income | $ 54,677 | $ 21,682 | $ 67,563 | $ 50,378 | |||||
Unrealized (Gain) Loss on Derivatives . | 903 | (942) | 886 | (355) | |||||
Income Charges Not Requiring Cash | 94,998 | 79,802 | 182,178 | 158,579 | |||||
Loss (Gain) on Sale of Assets | (34,071) | (4,387) | (32,554) | (5,146) | |||||
Deferred Income Tax Expense | 30,343 | 13,375 | 36,886 | 29,091 | |||||
Changes in Assets and Liabilities | (17,373) | 17,551 | (34,762) | 2,205 | |||||
Exploration Expense | 11 | - | 504 | 8,426 | |||||
Net Cash Provided by Operations | 129,488 | 127,081 | 220,701 | 243,178 | |||||
Cash Flows From Investing Activities | |||||||||
Capital Expenditures | (201,045) | (218,741) | (404,214) | (454,143) | |||||
Proceeds from Sale of Assets | 49,293 | 15,940 | 54,336 | 16,742 | |||||
Net Cash Used in Investing | (151,752) | (202,801) | (349,878) | (437,401) | |||||
Cash Flows From Financing Activities | |||||||||
Net Increase in Debt | 40,000 | 100,000 | 120,000 | 210,000 | |||||
Dividends Paid | (3,128) | (3,117) | (6,250) | (6,228) | |||||
Other | (190) | (1,983) | (1,208) | (2,022) | |||||
Net Cash Provided by Financing | 36,682 | 94,900 | 112,542 | 201,750 | |||||
Net Increase / (Decrease) in Cash and Cash Equivalents | $ 14,418 | $ 19,180 | $ (16,635) | $ 7,527 | |||||
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, | |||||||||
2011 | 2010 | 2011 | 2010 | |||||||
As Reported - Net Income | $ 54,677 | $ 21,682 | $ 67,563 | $ 50,378 | ||||||
Reversal of Selected Items, Net of Tax: | ||||||||||
(Gain) Loss on Sale of Assets | (21,124) | (2,720) | (20,183) | (3,191) | ||||||
Stock-Based Compensation Expense | 6,930 | 1,478 | 11,976 | 3,477 | ||||||
Pension Expense (1) | 1,879 | - | 3,751 | - | ||||||
Unrealized Loss (Gain) on Derivatives (2) | 560 | (584) | 549 | (220) | ||||||
Net Income Excluding Selected Items | $ 42,922 | $ 19,856 | $ 63,656 | $ 50,444 | ||||||
As Reported - Earnings Per Share | $ 0.53 | $ 0.21 | $ 0.65 | $ 0.49 | ||||||
Per Share Impact of Reversing Selected Items | (0.12) | (0.02) | (0.04) | - | ||||||
Earnings Per Share Including Reversal | ||||||||||
of Selected Items | $ 0.41 | $ 0.19 | $ 0.61 | $ 0.49 | ||||||
Weighted Average Common Shares Outstanding | 104,264 | 103,915 | 104,204 | 103,855 | ||||||
(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. This amount represents 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. 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 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, | |||||||||
2011 | 2010 | 2011 | 2010 | |||||||
Discretionary Cash Flow | ||||||||||
As Reported - Net Income | $ 54,677 | $ 21,682 | $ 67,563 | $ 50,378 | ||||||
Plus / (Less): | ||||||||||
Unrealized Loss (Gain) on Derivatives | 903 | (942) | 886 | (355) | ||||||
Income Charges Not Requiring Cash | 94,998 | 79,802 | 182,178 | 158,579 | ||||||
Loss (Gain) on Sale of Assets | (34,071) | (4,387) | (32,554) | (5,146) | ||||||
Deferred Income Tax Expense | 30,343 | 13,375 | 36,886 | 29,091 | ||||||
Exploration Expense | 11 | - | 504 | 8,426 | ||||||
Discretionary Cash Flow | 146,861 | 109,530 | 255,463 | 240,973 | ||||||
Changes in Assets and Liabilities | (17,373) | 17,551 | (34,762) | 2,205 | ||||||
Net Cash Provided by Operations | $ 129,488 | $ 127,081 | $ 220,701 | $ 243,178 | ||||||
Net Debt Reconciliation | ||||||||||
(In thousands) | ||||||||||
June 30, | December 31, | |||||||||
2011 | 2010 | |||||||||
Long-Term Debt | $ 1,095,000 | $ 975,000 | ||||||||
Stockholders' Equity | 1,966,199 | 1,872,700 | ||||||||
Total Capitalization | $ 3,061,199 | $ 2,847,700 | ||||||||
Total Debt | $ 1,095,000 | $ 975,000 | ||||||||
Less: Cash and Cash Equivalents | (39,314) | (55,949) | ||||||||
Net Debt | $ 1,055,686 | $ 919,051 | ||||||||
Net Debt | $ 1,055,686 | $ 919,051 | ||||||||
Stockholders' Equity | 1,966,199 | 1,872,700 | ||||||||
Total Adjusted Capitalization | $ 3,021,885 | $ 2,791,751 | ||||||||
Total Debt to Total Capitalization Ratio | 35.8% | 34.2% | ||||||||
Less: Impact of Cash and Cash Equivalents | 0.9% | 1.3% | ||||||||
Net Debt to Adjusted Capitalization Ratio | 34.9% | 32.9% | ||||||||
SOURCE Cabot Oil & Gas
