Cabot Oil & Gas Corporation announces full year 2012 results
Friday, Feb 22, 2013

HOUSTON, Feb. 21, 2013 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) today reported its financial results for the fourth quarter and full-year ended December 31, 2012. Highlights for the year include:

  • Record production of 267.7 billion cubic feet equivalent (Bcfe), an increase of 43 percent over 2011.

    Achieved production growth greater than 40 percent for the second consecutive year.

    Record revenues of $1.2 billion, the first time Cabot has surpassed the billion dollar mark.

    Record cash flow from operations of $652.1 million, an increase of 30 percent over 2011.

    Record discretionary cash flow of $680.1 million, an increase of 24 percent over 2011.

    "2012 was one of our best years ever as we delivered top level production growth with best in class finding costs from a 100 percent organic growth investment program," said Dan O. Dinges, Chairman, President and Chief Executive Officer.  "Despite a challenging natural gas price environment we were able to achieve record revenues and cash flows, while maintaining a strong balance sheet."

    Full-Year 2012
    Equivalent production was 267.7 Bcfe in 2012, with 253.2 billion cubic feet (Bcf) of natural gas production and 2.4 million barrels of liquids production. These figures represent increases of 43 percent, 42 percent, and 67 percent, respectively, compared to 2011.  "Excluding property sales, we achieved an annual equivalent production growth rate of approximately 49 percent for 2012," commented Dinges.

    Cash flow from operations was $652.1 million in 2012, compared to cash flow from operations of $501.8 million in 2011. Discretionary cash flow was $680.1 million in 2012, compared to discretionary cash flow of $549.2 million in 2011. Higher equivalent production and higher realized crude oil prices drove the overall improvement in cash flow from operations and discretionary cash flow compared to 2011. This was partially offset by lower realized natural gas prices and increased operating expenses associated with higher production.

    Net income was $131.7 million in 2012, or $0.63 per share, compared to net income of $122.4 million, or $0.59 per share, in 2011. Excluding the effect of selected items (detailed in the table below), net income was $138.9 million, or $0.66 per share, in 2012, compared to $139.2 million, or $0.67 per share, in 2011. Net income excluding selected items was down slightly compared to 2011 primarily due to a change in the treatment of deferred income taxes as a special item.

    Natural gas price realizations, including the effect of hedges, were $3.67 per thousand cubic feet (Mcf) in 2012, down 18 percent compared to 2011. Oil price realizations, including the effect of hedges, were $101.65 per barrel (Bbl) in 2012, up 12 percent compared to 2011.

    While total expenses trended higher between years primarily as a result of higher production volumes, aggregate per unit costs (including financing) decreased to $3.69 per thousand cubic feet equivalent (Mcfe) in 2012, down 9 percent compared to 2011. All operating expense categories decreased on a per unit basis in 2012 except for transportation and gathering expense and taxes other than income expense. Transportation and gathering expense per unit was $0.54 per Mcfe in 2012, up 38 percent from $0.39 per Mcfe in 2011.This resulted primarily from increased production in the Company's Marcellus Shale operations along with marginal increases in gathering and transportation rates. Taxes other than income expense per unit was $0.18 per Mcfe in 2012, up 20 percent from $0.15 per Mcfe in 2011.This resulted primarily from the assessment of an impact fee on Marcellus Shale production that was implemented in early 2012 by the state of Pennsylvania.

    Fourth Quarter 2012
    Production in the fourth quarter of 2012 was 78.8 Bcfe, with 74.8 Bcf of natural gas production and 647 thousand barrels of liquids production. These figures represent a 44 percent increase in equivalent production compared to the fourth quarter of 2011, driven by a 45 percent increase in natural gas production over the same period.  Natural gas production for the fourth quarter increased 19 percent over the third quarter as the Company completed a record number of frac stages and brought on additional infrastructure capacity during the quarter.  "The exceptional efforts from our employees, in conjunction with the dedicated work from our Marcellus service and infrastructure partners during the quarter made this possible," Dinges stated.

    Cash flow from operations in the fourth quarter of 2012 was $197.0 million, compared to cash flow from operations of $126.5 million in the fourth quarter of 2011. Discretionary cash flow in the fourth quarter of 2012 was $223.7 million, compared to discretionary cash flow of $121.0 million in the fourth quarter of 2011. Higher equivalent production and higher realized crude oil prices drove the quarter's overall improvement, partially offset by lower realized natural gas prices and increased operating expenses associated with higher production.

    Net income in the fourth quarter of 2012 was $40.9 million, or $0.19 per share, compared to net income of $26.4 million, or $0.13 per share, in the fourth quarter of 2011. Excluding the effect of selected items (detailed in the table below), net income was $57.1 million, or $0.27 per share, in the fourth quarter of 2012, compared to $40.3 million, or $0.20 per share, in the fourth quarter of 2011.

    Natural gas price realizations, including the effect of hedges, were $3.91 per Mcf in the fourth quarter of 2012, down 3 percent compared to the fourth quarter of 2011. Oil price realizations, including the effect of hedges, were $105.40 per Bbl, up 15 percent compared to the fourth quarter of 2011.

    imilar to full-year 2012 results, total expenses trended higher between comparable quarters primarily as a result of higher production volumes; however, aggregate per unit costs (including financing) decreased to $3.25 per Mcfe in the fourth quarter of 2012, down 12 percent compared to the fourth quarter of 2011.

    Financial Position and Liquidity
    At December 31, 2012, the Company's total debt was $1,087 million, of which $325 million is outstanding under the Company's credit facility. Total lender commitments under the Company's credit facility are $900 million, with $574 million of available credit under its facility at December 31, 2012.

    As of December 31, 2012, the Company's net debt to adjusted capitalization ratio was 33.2%, compared to 30.4% at December 31, 2011 (see attached table for the calculation).

    SOURCE Cabot Oil & Gas Corporation

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