Cabot Oil & Gas Corporation Announces 2009 Results Record Production Levels
HOUSTON, Feb. 21 /PRNewswire-FirstCall/ -- Cabot Oil & Gas Corporation (NYSE: COG) today announced its 2009 financial results including net income of $148.3 million, or $1.43 per share, cash flow from operations of $614.1 million and discretionary cash flow of $604.6 million. Excluding the selected items (detailed in the attached tables), net income for the full year would have been $177.8 million, or $1.72 per share.
These results compare to 2008 net income of $211.3 million, or $2.10 per share, cash flow from operations of $634.4 million and discretionary cash flow of $608.7 million. Net income, excluding selected items, for 2008 was $232.8 million, or $2.31 per share.
“Although 2008 was a better overall financial year due to the higher level of natural gas pricing in that year, 2009 had its accomplishments and record setting performance,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “What is most important is that we set a new production high for the year and posted an 8.2 percent growth level.”
For 2009 equivalent production surpassed the 100 Bcfe mark for the first time, recording 103 Bcfe for the year. Production from both commodities grew, with natural gas up 8.4 percent and oil up 6.4 percent. The improvement in production was more than offset by lower commodity prices. The price comparison for natural gas realizations was $7.47 per Mcf in 2009 versus $8.39 per Mcf in 2008, while oil declined four percent year-over-year to $85.52 per barrel. Gains associated with the hedge portfolio added significantly to these 2009 realizations and improved overall revenues by $395.0 million. Total operating expenses declined year-over-year.
Fourth Quarter
The reported 2009 fourth quarter figures included net income of $36.4 million, or $0.35 per share, $196.9 million for cash flow from operations and $174.1 million for discretionary cash flow. These compare to net income of $43.7 million, or $0.42 per share, cash flow from operations of $209.7 million and discretionary cash flow of $162.2 million in the previous year. Removing the selected items, net income improved to $53.8 million or $0.52 per share for the 2009 fourth quarter versus $45.8 million, or $0.44 per share in the comparable 2008 period. Higher commodity prices, higher production and overall lower expenses drove the results. “While results for the first three quarters of 2009 were down in comparison to the prior year due to lower commodity prices, the 2009 fourth quarter comparison shows year-over-year improvement after removing selected items,” stated Dinges.
Balance Sheet
During 2009 the Company reduced its overall debt level, driven primarily by the cash proceeds related to its Canadian asset sale, to $805.0 million. “Financially, we continue to have a solid balance sheet and we retain a significant level of flexibility as evident by our 30.8 percent debt to total capital ratio,” added Dinges.
Conference Call
Listen in live to Cabot Oil & Gas Corporation's 2009 year-end and fourth quarter financial and operating results discussion with financial analysts on Monday, February 22, 2010 at 9:30 a.m. EST (8:30 a.m. CST) at www.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), pass code 52769718. The replay will be available through Wednesday, February 24, 2010. The latest financial guidance, including the Company's hedge positions, along with a replay of the web cast, which will be archived for one year, are available in the investor relations section of the Company's website at www.cabotog.com.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer, with its entire resource base located in the continental United States. For additional information, visit the Company’s Internet homepage at www.cabotog.com.
OPERATING DATA
Twelve Months
Quarter Ended Ended
December 31, December 31,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
PRODUCED NATURAL GAS
(Bcf) & OIL (Mbbl)
--------------------
Natural Gas
North 13.4 10.4 48.2 39.7
South 11.6 13.2 48.8 46.6
Canada - 0.7 1.0 4.1
--- --- --- ---
Total 25.0 24.3 98.0 90.4
==== ==== ==== ====
Crude/Condensate/Ngl
North 26 30 118 118
South 194 171 720 655
Canada - 4 7 21
--- --- --- ---
Total 220 205 845 794
=== === === ===
Equivalent Production (Bcfe) 26.3 25.6 103.0 95.2
PRICES
------
Average Produced Gas Sales
Price ($/Mcf)
North $6.67 $7.41 $6.59 $7.95
South $8.94 $8.01 $8.42 $8.84
Canada $- $6.66 $3.72 $7.62
Total (1) $7.73 $7.71 $7.47 $8.39
Average Crude/Condensate
Price ($/Bbl)
North $75.16 $54.24 $54.11 $93.62
South $96.64 $75.97 $90.86 $88.46
Canada $- $50.04 $33.97 $85.08
Total (1) $94.23 $72.41 $85.52 $89.11
WELLS DRILLED
--------------
Gross 24 99 143 432
Net 22 78 119 355
Gross Success Rate 83% 92% 95% 97%
(1) These realized prices include the realized impact of derivative
instrument settlements.
Twelve Months
Quarter Ended Ended
December 31, December 31,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Realized Impacts to Gas Pricing $3.47 $1.88 $3.80 $0.20
Realized Impacts to Oil Pricing $21.40 $18.71 $28.25 $(6.33)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Twelve Months
Quarter Ended Ended
December 31, December 31,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
Operating Revenues
Natural Gas Production $191,192 $189,228 $729,734 $758,755
Brokered Natural Gas 21,166 27,557 75,283 114,220
Crude Oil and Condensate 19,910 14,622 69,936 69,711
Other 1,224 1,059 4,323 3,105
----- ----- ----- -----
233,492 232,466 879,276 945,791
Operating Expenses
Brokered Natural Gas Cost 18,811 25,128 67,030 100,449
Direct Operations - Field
and Pipeline 22,421 26,738 93,985 91,839
Exploration 19,526 12,436 50,784 31,200
Depreciation, Depletion
and Amortization 62,293 74,840 251,260 226,915
Impairment of Oil & Gas
Properties 17,622 35,700 17,622 35,700
General and Administrative
(excluding Stock-Based
Compensation) 10,725 8,350 43,236 39,615
Stock-Based Compensation(1) 8,546 4,994 25,138 34,570
Taxes Other Than Income 10,118 9,791 44,649 66,540
------ ----- ------ ------
170,062 197,977 593,704 626,828
Gain / (Loss) on Sale of
Assets and Settlement
of Dispute (2) (20) 52,648 (3,303) 53,049
--- ------ ------ ------
Income from Operations 63,410 87,137 282,269 372,012
Interest Expense and Other 14,850 13,705 58,979 36,389
------ ------ ------ ------
Income Before Income Taxes 48,560 73,432 223,290 335,623
Income Tax Expense 12,196 29,732 74,947 124,333
------ ------ ------ -------
Net Income $36,364 $43,700 $148,343 $211,290
======= ======= ======== ========
Net Earnings Per Share
- Basic $0.35 $0.42 $1.43 $2.10
Weighted-Average Common
Shares Outstanding 103,654 103,354 103,616 100,737
(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 loss on sale of assets in 2009 primarily relates to a loss on
our April 2009 sale of our Canadian properties, partially offset
by a gain on sale of assets from the first quarter 2009 sale of
the Thornwood properties in the North. The gain in 2008 includes
post-closing transactions associated with the sale in the third
quarter of 2006 of offshore and certain south Louisiana properties
and a gain associated with the Company's settlement of a dispute
in the fourth quarter of 2008. The dispute settlement includes
the value of cash and properties received.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
December 31, December 31,
2009 2008
------------ ------------
Assets
Current Assets $281,502 $460,551
Property, Equipment and Other Assets 3,401,899 3,241,113
---------- ----------
Total Assets $3,683,401 $3,701,664
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities $308,741 $378,913
Long-Term Debt, excluding
Current Maturities 805,000 831,143
Deferred Income Taxes 644,801 599,106
Other Liabilities 112,345 101,940
Stockholders' Equity 1,812,514 1,790,562
--------- ---------
Total Liabilities and
Stockholders' Equity $3,683,401 $3,701,664
========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
Quarter Ended Twelve Months Ended
December 31, December 31,
------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Cash Flows From Operating
Activities
Net Income $36,364 $43,700 $148,343 $211,290
Unrealized (Gain) /
Loss on Derivatives 1,536 (1,649) 1,954 -
Impairment of Oil & Gas
Properties 17,622 35,700 17,622 35,700
Income Charges Not Requiring
Cash 71,958 80,092 280,819 242,538
(Gain) / Loss on Sale of
Assets and Settlement
of Dispute 20 (32,448) 3,303 (32,849)
Deferred Income Tax Expense 27,042 24,392 101,815 120,851
Changes in Assets and
Liabilities 23,559 47,176 23,202 36,408
Stock-Based Compensation Tax
Benefit (705) 320 (13,790) (10,691)
Exploration Expense 19,526 12,436 50,784 31,200
------ ------ ------ ------
Net Cash Provided by Operations 196,922 209,719 614,052 634,447
------- ------- ------- -------
Cash Flows From Investing
Activities
Capital Expenditures (165,504) (258,849) (560,423) (1,423,188)
Proceeds from Sale of Assets - 949 80,180 2,099
Exploration Expense (19,526) (12,436) (50,784) (31,200)
------- ------- ------- -------
Net Cash Used in Investing (185,030) (270,336) (531,027) (1,452,289)
-------- -------- -------- ----------
Cash Flows From Financing
Activities
Sale of Common Stock Proceeds - 1 83 316,230
Net Increase / (Decrease) in
Debt (5,000) 47,000 (62,000) 517,000
Capitalized Debt Issuance Costs - (2,237) (10,409) (4,403)
Stock-Based Compensation Tax
Benefit 705 (320) 13,790 10,691
Dividends Paid (3,109) (3,100) (12,432) (12,073)
------ ------ ------- -------
Net Cash Provided by /
(Used in) Financing (7,404) 41,344 (70,968) 827,445
------ ------ ------- -------
Net Increase / (Decrease) in
Cash and Cash Equivalents $4,488 $(19,273) $12,057 $9,603
====== ======== ======= ======
Selected Item Review and Reconciliation of Net Income
and Earnings Per Share
(In thousands, except per share amounts)
Twelve Months
Quarter Ended Ended
December 31, December 31,
------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
As Reported - Net Income $36,364 $43,700 $148,343 $211,290
Reversal of Selected Items,
Net of Tax:
Impairment of Oil & Gas
Properties and Other Assets 11,102 22,384 11,102 22,384
Impairment of Unproved
Properties (1) - 10,653 - 10,653
(Gain) / Loss on Sale of Assets and
Settlement of Dispute (2) 13 (33,010) 1,283 (33,263)
Stock-Based Compensation Expense 5,384 3,131 15,798 21,756
Unrealized (Gain) / Loss on
Derivatives (3) 968 (1,040) 1,231 -
--- ------ ----- ---
Net Income Excluding Selected Items $53,831 $45,818 $177,757 $232,820
======= ======= ======== ========
As Reported - Net Earnings Per Share $0.35 $0.42 $1.43 $2.10
Per Share Impact of Reversing
Selected Items 0.17 0.02 0.29 0.21
---- ---- ---- ----
Net Earnings Per Share Including
Reversal of Selected Items $0.52 $0.44 $1.72 $2.31
===== ===== ===== =====
Weighted-Average Common
Shares Outstanding 103,654 103,354 103,616 100,737
(1) The impairment of unproved properties in 2008 represents a portion
of the total impairment relating to the accelerated recognition
of impairments on exploratory prospects in Mississippi, North Dakota
and Montana that have been recognized due to the unprecedented
decline in oil price making the Company abandon its exploration
plans.
(2) The loss on sale of assets in 2009 primarily relates to a loss on our
April 2009 sale of our Canadian properties, partially offset by a
gain on sale of assets from the first quarter 2009 sale of the
Thornwood properties in the North. The gain in 2008 includes
post-closing transactions associated with the sale in the third
quarter of 2006 of offshore and certain south Louisiana properties
and a gain associated with the Company's settlement of a dispute in
the fourth quarter of 2008. The dispute settlement includes the
value of cash and properties received.
(3) This unrealized (gain) / loss 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 Twelve Months Ended
December 31, December 31,
------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Discretionary Cash Flow
As Reported - Net Income $36,364 $43,700 $148,343 $211,290
Plus / (Less):
Unrealized (Gain) / Loss on
Derivatives 1,536 (1,649) 1,954 -
Impairment of Oil & Gas Properties 17,622 35,700 17,622 35,700
Income Charges Not Requiring Cash 71,958 80,092 280,819 242,538
(Gain) / Loss on Sale of Assets
and Settlement of Dispute 20 (32,448) 3,303 (32,849)
Deferred Income Tax Expense 27,042 24,392 101,815 120,851
Exploration Expense 19,526 12,436 50,784 31,200
------ ------ ------ ------
Discretionary Cash Flow 174,068 162,223 604,640 608,730
Changes in Assets and Liabilities 23,559 47,176 23,202 36,408
Stock-Based Compensation Tax Benefit (705) 320 (13,790) (10,691)
---- --- ------- -------
Net Cash Provided by Operations $196,922 $209,719 $614,052 $634,447
======== ======== ======== ========
Net Debt Reconciliation
(In thousands)
December 31, December 31,
2009 2008
------------ ------------
Current Portion of Long-Term Debt $- $35,857
Long-Term Debt 805,000 831,143
------- -------
Total Debt $805,000 $867,000
Stockholders' Equity 1,812,514 1,790,562
--------- ---------
Total Capitalization $2,617,514 $2,657,562
Total Debt $805,000 $867,000
Less: Cash and Cash Equivalents (40,158) (28,101)
------- -------
Net Debt $764,842 $838,899
Net Debt $764,842 $838,899
Stockholders' Equity 1,812,514 1,790,562
--------- ---------
Total Adjusted Capitalization $2,577,356 $2,629,461
Total Debt to Total Capitalization Ratio 30.8% 32.6%
Less: Impact of Cash and Cash Equivalents 1.1% 0.7%
--- ---
Net Debt to Adjusted Capitalization Ratio 29.7% 31.9%
SOURCE Cabot Oil & Gas Corporation
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