Cabot Announces 2nd Quarter 2013 Results

Cabot put out its 2nd Quarter 2013 results today (you can read the full release below) and we wanted to highlight some pretty incredible numbers that are coming out of our Marcellus operations in Susquehanna County.

From the press release below:

  • Cabot’s total production in the Marcellus, Eagle Ford and Marmaton totaled 95.2 billion cubic feet equivalent (Bcfe) –  an increase of 52 percent over last year’s comparable quarter.
    • That number includes 90.7 BCF of natural gas and 763,000 barrels of liquids

From the Earnings Conference Call on 7/25/13:

  • 2nd Quarter 2013 was the best Quarter in Cabot’s history – both financially and operationally.
  • Current gross production rate in the Marcellus is approximately 1.2 BCFper day
    • Several new wells turned in line and the Central Compressor Station contributed to this number.
  • Cabot will be adding a sixth rig in the Marcellus which is scheduled to spud its first well next month

Additionally, you can read more by clicking over to our Marcellus Marketing Supplementary Materials.

Dan O. Dinges, Chairman, President and Chief Executive Officer said it best:

Our success for the quarter was primarily attributable to the Company’s Marcellus Shale drilling program, where operating efficiencies continue to reduce our already low cost structure.

——-

HOUSTON, July 24, 2013 /PRNewswire/ — Cabot Oil & Gas Corporation (NYSE: COG) today reported its financial results for the second quarter of 2013. Highlights for the quarter include:

  • Production of 95.2 billion cubic feet equivalent (Bcfe), an increase of 52 percent over last year’s comparable quarter.
  • Cash flow from operations of $277.3 million and discretionary cash flow of $297.1 million.
  • Net income of $89.1 million, or $0.42 per share.
  • Net income excluding selected items of $95.0 million, or $0.45 per share.
  • Total unit costs were $3.10 per thousand cubic feet equivalent (Mcfe), a 28 percent decline over last year’s comparable quarter.

“During the second quarter, Cabot continued to deliver strong financial performance as evidenced by increases in net income and discretionary cash flow of 148 percent and 109 percent, respectively, over last year’s comparable quarter,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “Our success for the quarter was primarily attributable to the Company’s Marcellus Shale drilling program, where operating efficiencies continue to reduce our already low cost structure.  Our ability to fund the Company’s peer-leading production growth within cash flow, as we did in the second quarter, differentiates Cabot.”

Second Quarter 2013

Production in the second quarter of 2013 was 95.2 Bcfe, consisting of 90.7 billion cubic feet (Bcf) of natural gas and 763,000 barrels of liquids. These figures represent a 52 percent increase in equivalent production compared to the second quarter of 2012 and an increase of 7 percent sequentially over the first quarter of 2013. “Marcellus production during the second quarter outperformed our expectations, due in large part to strong well performance and the coordinated effort between our team and our infrastructure partner to manage line pressure across the field,” stated Dinges.

Cash flow from operations in the second quarter of 2013 was $277.3 million, compared to $159.4 million in the second quarter of 2012. Discretionary cash flow in the second quarter of 2013 was$297.1 million, compared to $142.1 million in the second quarter of 2012. 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.

Net income in the second quarter of 2013 was $89.1 million, or $0.42 per share, compared to$35.9 million, or $0.17 per share, in the second quarter of 2012. Excluding the effect of selected items (detailed in the table below), net income was $95.0 million, or $0.45 per share, in the second quarter of 2013, compared to $10.2 million, or $0.05 per share, in the second quarter of 2012.

Natural gas price realizations, including the effect of hedges, were $4.06 per thousand cubic feet (Mcf) in the second quarter of 2013, up 20 percent compared to the second quarter of 2012.  “Although certain basis locations in the Marcellus play experienced some pricing weakness during the second quarter, the net effect on Cabot’s realized price was negligible,” commented Dinges.  “Looking ahead, we believe gas price differentials will remain soft for the short term throughout the entire Marcellus area.  However, new takeaway projects slated for this fall should bring differentials closer to their historical averages.  We anticipate that this weakness will have a minimal effect on our realized prices in the third quarter.”  Oil price realizations, including the effect of hedges, were $101.39 per barrel (Bbl), down 1 percent compared to the second quarter of 2012.

Total unit costs (including financing) decreased to $3.10 per Mcfe in the second quarter of 2013, down 28 percent from $4.29 per Mcfe in the second quarter of 2012. All operating expense categories decreased on a per unit basis relative to last year’s comparable quarter except for transportation and gathering expense, which increased 4 percent from $0.53 per Mcfe in the second quarter of 2012 to $0.55 per Mcfe in the second quarter of 2013, primarily as a result of increased natural gas production volumes in the Marcellus Shale.

Year-to-Date 2013

Production during the six-month period ended June 30, 2013, was 184.5 Bcfe, consisting of 175.8 Bcf of natural gas and 1.5 million barrels of liquids. These figures represent increases of 51 percent, 52 percent, and 29 percent, respectively, compared to the six-month period ended June 30, 2012.

For the six-month period ended June 30, 2013, cash flow from operations was $490.0 million, compared to $291.1 million for the six-month period ended June 30, 2012. Discretionary cash flow was $531.5 million for the six-month period ended June 30, 2013, compared to $280.7 million for the six-month period ended June 30, 2012. Higher equivalent production and, to a lesser extent, higher realized natural gas and oil prices drove the period’s overall improvement, partially offset by increased operating expenses associated with higher production.

For the six-month period ended June 30, 2013, net income was $131.9 million, or $0.63 per share, compared to $54.3 million, or $0.26 per share, for the six-month period ended June 30, 2012.  Excluding the effect of selected items (detailed in the table below), net income was $149.1 million, or $0.71 per share, compared to $38.7 million, or $0.19 per share, for the six-month period ended June 30, 2012.

Financial Position and Liquidity

At June 30, 2013, the Company’s total debt was $1.1 billion, of which $380 million is outstanding under the Company’s credit facility. Total lender commitments under the Company’s credit facility remained at $900 million, resulting in $519 million of available credit under its facility at June 30, 2013.

As of June 30, 2013, the Company’s net debt to adjusted capitalization ratio was 32.4 percent, compared to 33.2 percent at December 31, 2012 (detailed in the table below).

Conference Call

Listen in live to Cabot Oil & Gas Corporation’s second quarter financial and operating results discussion with financial analysts on Thursday, July 25, 2013, at 9:30 a.m. EDT (8:30 a.m. CDT) at www.cabotog.comTo aid in the discussion on the conference call, the Company has posted a presentation entitled “Marcellus Marketing Supplementary Materials”, which provides an overview of the Company’s marketing strategy in the Marcellus Shale as well as commentary on infrastructure and pricing.  This can be found in the Presentations section of the website under the Investor Info tab. Additionally, the latest financial guidance, including the Company’s hedge positions, along with a replay of the webcast, which will be archived for one year, are available in the Investor Info 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 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               
Quarter Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
PRODUCED NATURAL GAS (Bcf) & LIQUIDS (MBbl)
Natural Gas
Appalachia 85.4 52.4 165.2 102.0
Other 5.3 6.8 10.6 13.7
  Total 90.7 59.2 175.8 115.7
Crude/Condensate/NGL 763 593 1,454 1,131
Equivalent Production (Bcfe) 95.2 62.8 184.5 122.4
PRICES(1)
Average Produced Gas Sales Price ($/Mcf)
Appalachia $ 4.09 $ 3.52 $ 3.81 $ 3.64
Other $ 3.63 $ 2.34 $ 3.05 $ 2.58
  Total $ 4.06 $ 3.39 $ 3.77 $ 3.52
Average Crude/Condensate Price ($/Bbl) $ 101.39 $ 102.61 $ 102.65 $ 99.76
WELLS DRILLED 
  Gross 51 35 83 66
  Net 43.8 28 69.7 51
  Gross success rate 96% 97% 96% 99%
(1)  These realized prices include the realized impact of derivative instrument settlements.
Quarter Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Realized Impacts to Gas Pricing $     – $  1.18 $  0.07 $ 1.10
Realized Impacts to Oil Pricing $  3.02 $  5.55 $  3.12 $ 1.66
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Operating Revenues
  Natural gas $ 368,391 $ 201,051 $ 662,184 $ 407,833
  Crude oil and condensate 70,226 57,466 135,881 107,447
  Brokered natural gas 8,244 5,149 19,137 18,593
  Other 2,819 1,991 5,763 3,920
449,680 265,657 822,965 537,793
Operating Expenses
  Direct operations 36,978 29,306 68,475 56,626
  Transportation and gathering 52,648 33,139 98,869 63,397
  Brokered natural gas 6,704 4,250 15,093 16,122
  Taxes other than income 11,364 10,854 23,051 29,437
  Exploration 4,529 16,244 8,553 20,245
  Depreciation, depletion and amortization 151,389 114,616 300,042 224,973
  General and administrative (excluding stock-based compensation) 11,565 35,475 28,600 56,369
  Stock-based compensation(1) 10,043 11,397 28,712 13,052
285,220 255,281 571,395 480,221
Gain (loss) on sale of assets 276 67,703 180 67,168
Income from Operations 164,736 78,079 251,750 124,740
Interest expense and other 16,701 18,495 32,956 35,412
Income before income taxes 148,035 59,584 218,794 89,328
Income tax expense 58,921 23,647 86,856 35,073
Net Income $   89,114 $   35,937 $ 131,938 $   54,255
Earnings per share – Basic $       0.42 $       0.17 $       0.63 $       0.26
Weighted average common shares outstanding 210,349 209,512 210,250 209,320
(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. The increase in expense for the first six months of 2013 compared to the first six months of 2012 is due to the Company’s higher stock price and the resulting mark-to-market for liability awards.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
  (In thousands)
June 30, December 31,
2013 2012
Assets
Current assets $          403,193 $           270,310
Properties and equipment, net 4,558,207 4,310,977
Other assets 56,536 35,026
   Total assets $       5,017,936 $        4,616,313
Liabilities and Stockholders’ Equity
Current liabilities $          494,391 $           444,139
Long-term debt, excluding current maturities 1,067,000 1,012,000
Deferred income taxes 1,015,493 882,672
Other liabilities 154,811 146,055
Stockholders’ equity 2,286,241 2,131,447
   Total liabilities and stockholders’ equity $       5,017,936 $        4,616,313
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
  (In thousands)
Quarter Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Cash Flows From Operating Activities
Net income $            89,114 $             35,937 $      131,938 $       54,255
Deferred income tax expense 46,088 17,349 69,662 27,073
(Gain) / loss on sale of assets (276) (67,703) (180) (67,168)
Exploration expense 140 10,876 806 10,925
Unrealized (gain) / loss on derivatives 342 300
Income charges not requiring cash 162,034 145,343 329,239 255,294
Changes in assets and liabilities (19,818) 17,218 (41,498) 10,463
Net cash provided by operations 277,282 159,362 489,967 291,142
Cash Flows From Investing Activities
Capital expenditures (263,887) (222,780) (524,056) (411,327)
Proceeds from sale of assets 420 131,435 906 132,715
Investment in equity method investment (3,000) (2,088) (4,250) (2,088)
Net cash used in investing (266,467) (93,433) (527,400) (280,700)
Cash Flows From Financing Activities
Net increase (decrease) in debt 15,000 (40,000) 55,000 22,000
Stock-based compensation tax benefit 5,210 7,348
Dividends paid (4,206) (4,191) (8,407) (8,368)
Capitalized debt issuance cost (5,005) (5,005)
Other 1 (420) 33 (339)
Net cash provided by (used in) financing 16,005 (49,616) 53,974 8,288
Net increase (decrease) in cash and cash equivalents $            26,820 $             16,313 $        16,541 $       18,730
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,
2013 2012 2013 2012
   As reported – net income $         89,114 $         35,937 $ 131,938 $   54,255
   Reversal of selected items, net of tax:
(Gain) / loss on sale of assets (166) (41,434) (109) (41,107)
Stock-based compensation expense 6,046 6,975 17,314 7,988
Pension expense (1) 8,470 12,294
Unrealized (gain) / loss on derivatives 210 184
Pennsylvania impact fee (2) 5,067
Net income excluding selected items $         94,994 $         10,158 $ 149,143 $   38,681
As reported – earnings per share $             0.42 $             0.17 $       0.63 $       0.26
Per share impact of reversing selected items 0.03 (0.12) 0.08 (0.07)
Earnings per share including reversal
of selected items $             0.45 $             0.05 $       0.71 $       0.19
Weighted average common shares outstanding 210,349 209,512 210,250 209,320
(1) On July 28, 2010, the Company notified its employees of its plan to terminate its qualified pension plan, effective September 30, 2010. These amounts represent pension expenses related to the plan termination, including settlement costs and expenses related to the acceleration of amortization of priorservice costs and actuarial losses over the period. Final distribution of the qualified pension plan occurred as of the end of the second quarter 2012. Pension expense is included in General and administrative expense in the Condensed Consolidated Statement of Operations.
(2) In February 2012, the Pennsylvania state legislature authorized the assessment of an impact fee on Marcellus Shale production. This amount represents the initial year accrual related to our 2011 and prior wells. Expenses associated with the impact fee are included in Taxes other than income in theCondensed Consolidated Statement of Operations.
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
Quarter Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
   Discretionary Cash Flow
   As reported – net income $         89,114 $         35,937 $ 131,938 $   54,255
   Plus / (less):
   Deferred income tax expense 46,088 17,349 69,662 27,073
   (Gain) / loss on sale of assets (276) (67,703) (180) (67,168)
   Exploration expense 140 10,876 806 10,925
   Unrealized (gain) / loss on derivatives 342 300
   Income charges not requiring cash 162,034 145,343 329,239 255,294
   Discretionary Cash Flow 297,100 142,144 531,465 280,679
   Changes in assets and liabilities (19,818) 17,218 (41,498) 10,463
   Net cash provided by operations $       277,282 $       159,362 $ 489,967 $ 291,142
Net Debt Reconciliation
(In thousands)
June 30, December 31,
2013 2012
   Current portion of long-term debt $         75,000 $         75,000
   Long-term debt $    1,067,000 $    1,012,000
   Total debt $    1,142,000 $    1,087,000
   Stockholders’ equity 2,286,241 2,131,447
        Total Capitalization $ 3,428,241 $ 3,218,447
   Total debt $    1,142,000 $    1,087,000
   Less:  Cash and cash equivalents (47,277) (30,736)
        Net Debt $ 1,094,723 $ 1,056,264
   Net debt $    1,094,723 $    1,056,264
   Stockholders’ equity 2,286,241 2,131,447
        Total Adjusted Capitalization $ 3,380,964 $ 3,187,711
  Total debt to total capitalization ratio 33.3% 33.8%
   Less:  Impact of cash and cash equivalents 0.9% 0.6%
        Net Debt to Adjusted Capitalization Ratio 32.4% 33.2%

 

SOURCE Cabot Oil & Gas Corporation

 

Hitting the Radio Waves for CNG
Cabot partners with WNEP TV
Brittany Ramos

Brittany was born and raised in Pittsburgh, Pennsylvania and attended Pennsylvania State University where she earned degrees in Public Relations and Psychology. She recently earned her Masters in Sociology from Sam Houston State University. Brittany works in the External Affairs for Cabot where she manages communications and outreach projects to community members, elected officials, media and online supporters.

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