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[STK] NYSE:COG
[IN] UTI OIL GAS
[SU] ERN ERP CCA
TO BUSINESS, AND ENERGY EDITORS:
Cabot Oil & Gas Corporation Announces First Quarter 2014 Financial and
Operating Results
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
-0- 04/24/2014
/Web Site: http://www.cabotog.com
(NYSE:COG) /
CO: Cabot Oil & Gas Corporation
ST: Texas
IN: UTI OIL GAS
SU: ERN ERP CCA
PRN
-- LA11130 --
0000 04/24/2014 11:30:00 EDT http://www.prnewswire.com
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