HOUSTON, April 24, 2015 /PRNewswire/ -- Cabot Oil &
Gas Corporation (NYSE: COG) today reported its financial and
operating results for the first quarter of 2015. Highlights for the
quarter when compared to the first quarter of 2014 include:
- Production of 171.4 billion cubic feet equivalent (Bcfe), an
increase of 43 percent
- Liquids production (crude oil/condensate/natural gas liquids)
of 1.6 million barrels (Mmbbls), an increase of 132 percent
- Total unit costs (including financing) of $2.33 per thousand cubic feet equivalent (Mcfe),
a 12 percent improvement
- Total cash unit costs (including financing) of $1.22 per Mcfe, a 10 percent improvement
- Subsequent to the end of the first quarter, the Company closed
an amendment to its revolving credit facility that increased the
borrowing base to $3.4 billion;
increased the lenders' commitments to $1.8
billion; extended the maturity date three additional years;
and reduced the drawn and undrawn pricing based on current leverage
levels. As of the end of the first quarter, the Company had
$265 million of borrowings
outstanding under its revolving credit facility
First Quarter 2015 Financial Results
Equivalent production in the first quarter of 2015 was 171.4
Bcfe, consisting of 161.8 billion cubic feet (Bcf) of natural gas
and 1.6 Mmbbls of liquids. These figures represent increases of 43
percent, 40 percent, and 132 percent, respectively, compared to the
first quarter of 2014. "Cabot delivered an impressive operational
performance in the first quarter, highlighted by the 15 percent
sequential growth in daily production volumes over the fourth
quarter of last year," commented Dan O.
Dinges, Chairman, President, and Chief Executive Officer.
"Our robust production levels were predicated on higher base-load
volumes in the Marcellus during the quarter driven by increased
seasonal demand and favorable natural gas sales contracts for the
winter heating season; however, as we have communicated in the
past, our plan is to reduce production levels beginning in the
second quarter in response to the current environment throughout
Appalachia."
Cash flow from operations in the first quarter of 2015 was
$267.4 million, compared to
$255.4 million in the first quarter
of 2014. Discretionary cash flow in the first quarter of 2015 was
$240.2 million, compared to
$319.5 million in the first quarter
of 2014. Net income in the first quarter of 2015 was $40.3 million, or $0.10 per share, compared to $107.0 million, or $0.26 per share, in the first quarter of 2014.
Excluding the effect of selected items (detailed in the table
below), net income was $49.2 million,
or $0.12 per share, in the first
quarter of 2015, compared to $109.7
million, or $0.26 per share,
in the first quarter of 2014. Significant reductions in realized
prices for both natural gas and oil were the primary drivers for
the lower results in the quarter, partially offset by higher
equivalent production.
Natural gas price realizations, including the effect of hedges,
were $2.46 per thousand cubic feet
(Mcf) in the first quarter of 2015, down 34 percent compared to the
first quarter of 2014. Excluding the impact of hedges, natural gas
price realizations for the quarter were $2.23 per Mcf, representing a $0.75 discount to NYMEX settlement prices
compared to a $0.59 discount in the
first quarter of 2014. Oil price realizations were $43.82 per barrel (Bbl), down 55 percent compared
to the first quarter of 2014.
Total per unit costs (including financing) decreased to
$2.33 per Mcfe in the first quarter
of 2015, an improvement of 12 percent from $2.66 per Mcfe in the first quarter of 2014. 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 primarily as a result of
slightly higher transportation rates and the commencement of
various transportation and gathering agreements in the Marcellus
Shale. Cash unit costs (including financing) decreased to
$1.22 per Mcfe in the first quarter
of 2015, an improvement of 10 percent from $1.35 per Mcfe in the first quarter of 2014.
Operational Highlights
Marcellus Shale
During the first quarter of 2015, the Company averaged 1,727
million cubic feet (Mmcf) per day of net Marcellus production, an
increase of 43 percent over the prior year's comparable quarter and
a 16 percent sequential increase over the fourth quarter of 2014.
These production levels were primarily the result of an average
gross operated Marcellus production rate of 2,018 Mmcf per day
during the first quarter. Cabot plans to reduce its average gross
operated Marcellus volumes in the second quarter of 2015 to between
1,550 and 1,600 Mmcf per day as the Company monitors the supply and
demand balance in Appalachia.
"While pricing pressure remains a challenge for Marcellus gas in
the near-term, Cabot's operating efficiencies in the play continue
to exceed expectations," noted Dinges. During the quarter, Cabot
drilled 26 wells to total depth in the Marcellus Shale and averaged
15.0 drilling days for spud-to-rig release, representing the
Company's best quarter since inception of the program.
Year-to-date, the Company's Marcellus Shale program has realized a
15 to 20 percent decrease in drilling and completion costs as
compared to the 2014 program.
Cabot is currently operating three rigs in the Marcellus Shale
and plans to remain at this level for the remainder of the
year.
Eagle Ford Shale
Cabot's net production in the Eagle Ford Shale during the first
quarter of 2015 was 17,831 barrels of oil equivalent (Boe) per day,
an increase of 145 percent over the prior year's comparable
quarter. This included 17,017 barrels of liquids per day, an
increase of 149 percent over the prior year's comparable quarter.
"Our daily Eagle Ford Shale liquids production increased 19 percent
sequentially over the fourth quarter of last year, driven by strong
performance from the 20 wells that were placed-on-production during
the quarter including six wells that were located on the acreage we
acquired in 2014," explained Dinges. "These six wells, in addition
to four wells we placed on production during the fourth quarter,
have outperformed the previous operators' cumulative oil production
at 30, 60 and 90 days by over 50 percent on average, highlighting
the value-enhancing proposition of these bolt-on acquisitions."
Cabot's Eagle Ford Shale program continues to realize
significant improvements in operating efficiencies and cost
savings. During the quarter, Cabot drilled 24 wells in the Eagle
Ford Shale to total depth and averaged 10.6 drilling days for
spud-to-rig release, a 25 percent reduction compared to the 2014
program. On the completions side, the Company averaged 6.4
completed frac stages per crew day during the first quarter of
2015, an increase from 5.5 completed frac stages per crew day for
the 2014 program. Year-to-date, the Company's Eagle Ford Shale
program has realized a 20 to 30 percent decrease in drilling and
completion costs as compared to the 2014 program.
Cabot is currently operating two rigs in the Eagle Ford Shale
and plans to reduce to one rig by the end of May.
Financial Position and Liquidity
As of March 31, 2015, the
Company's net debt to adjusted capitalization ratio was 46.1
percent, compared to 44.7 percent at December 31, 2014 (detailed in the table below).
The Company's total debt was $1,877
million, of which $265 million
was outstanding under the Company's revolving credit facility.
Effective April 17, 2015, Cabot
closed an amendment to its revolving credit facility that provides
for, among other things: an increase in the borrowing base from
$3.1 billion to $3.4 billion; an increase in the lenders'
commitments from $1.4 billion to
$1.8 billion; an extension of the
maturity date three additional years to 2020; and a reduction in
the drawn and undrawn pricing based on current leverage levels. A
total of 20 lenders participated in the Company's facility.
Second Quarter and Full-Year 2015 Guidance
The Company has provided second quarter net production guidance
of 1,375 to 1,425 Mmcf per day and 17,500 to 18,250 Bbls per day
for natural gas and liquids, respectively. Cabot's full-year
production growth guidance range of 10 to 18 percent remains
unchanged. The Company expects its natural gas price realizations
before the impact of hedges to average between $0.82 and $0.92 below NYMEX settlement prices for
the second quarter.
Cabot's 2015 capital program remains unchanged at $900 million. As a result of a higher rig count
and more completion activity during the first half of 2015, the
Company estimates approximately 65 percent of its capital budget
will be incurred in the first half of the year with the remaining
35 percent to be spent evenly between the third and fourth
quarters.
For further disclosure on Cabot's natural gas pricing exposure
by index for the second quarter of 2015 and updated unit cost
guidance, please see the current Guidance slide in the Investor
Relations section of the Company's website.
Conference Call
A conference call is scheduled for Friday, April 24, 2015, at 9:30 a.m. Eastern Time to discuss first quarter
2015 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,
|
|
2015
|
|
2014
|
PRODUCED NATURAL
GAS (Bcf) & LIQUIDS (Mbbl)
|
|
|
|
Natural
Gas
|
|
|
|
Appalachia
|
159.0
|
|
|
112.8
|
|
Other
|
2.8
|
|
|
3.0
|
|
Total
|
161.8
|
|
|
115.8
|
|
|
|
|
|
Crude/Condensate/NGL
|
1,594
|
|
|
686
|
|
|
|
|
|
Equivalent Production
(Bcfe)
|
171.4
|
|
|
119.9
|
|
|
|
|
|
PRICES(1)
|
|
|
|
Average Produced Gas
Sales Price ($/Mcf)
|
|
|
|
Appalachia
|
$
|
2.45
|
|
|
$
|
3.71
|
|
Other
|
$
|
2.98
|
|
|
$
|
4.97
|
|
Total
|
$
|
2.46
|
|
|
$
|
3.74
|
|
|
|
|
|
Average
Crude/Condensate Price ($/Bbl)
|
$
|
43.82
|
|
|
$
|
97.76
|
|
|
|
|
|
WELLS
DRILLED
|
|
|
|
Gross
|
43
|
|
|
27
|
|
Net
|
42
|
|
|
27
|
|
Gross success
rate
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
(1) These realized prices include
the realized impact of derivative instrument
settlements.
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Realized Impacts to
Gas Pricing
|
$
|
0.23
|
|
|
$
|
(0.61)
|
|
Realized Impacts to
Oil Pricing
|
$
|
—
|
|
|
$
|
(0.36)
|
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
OPERATING
REVENUES
|
|
|
|
Natural
gas
|
$
|
360,191
|
|
|
$
|
432,809
|
|
Crude
oil and condensate
|
62,558
|
|
|
59,144
|
|
Gain
(loss) on derivative instruments
|
34,123
|
|
|
—
|
|
Brokered
natural gas
|
4,827
|
|
|
13,153
|
|
Other
|
3,066
|
|
|
4,697
|
|
|
464,765
|
|
|
509,803
|
|
OPERATING
EXPENSES
|
|
|
|
Direct
operations
|
36,017
|
|
|
35,834
|
|
Transportation and gathering
|
121,235
|
|
|
77,765
|
|
Brokered
natural gas
|
3,739
|
|
|
11,860
|
|
Taxes
other than income
|
11,280
|
|
|
13,044
|
|
Exploration
|
8,732
|
|
|
6,474
|
|
Depreciation, depletion and amortization
|
175,497
|
|
|
147,418
|
|
General and
administrative (excluding stock-based compensation)
|
16,619
|
|
|
18,465
|
|
Stock-based
compensation(1)
|
5,910
|
|
|
3,171
|
|
|
379,029
|
|
|
314,031
|
|
Earnings (loss) on
equity method investments
|
1,421
|
|
|
—
|
|
Gain (loss) on sale
of assets
|
138
|
|
|
(1,285)
|
|
INCOME FROM
OPERATIONS
|
87,295
|
|
|
194,487
|
|
Interest
expense
|
23,566
|
|
|
16,557
|
|
Income before income
taxes
|
63,729
|
|
|
177,930
|
|
Income tax
expense
|
23,474
|
|
|
70,899
|
|
NET
INCOME
|
$
|
40,255
|
|
|
$
|
107,031
|
|
Earnings per share
- Basic
|
$
|
0.10
|
|
|
$
|
0.26
|
|
Weighted average
common shares outstanding
|
413,344
|
|
|
416,900
|
|
|
(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,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Current
assets
|
$
|
349,403
|
|
|
$
|
413,447
|
|
Properties and
equipment, net (Successful efforts method)
|
5,058,804
|
|
|
4,925,711
|
|
Other
assets
|
104,116
|
|
|
98,558
|
|
Total
assets
|
$
|
5,512,323
|
|
|
$
|
5,437,716
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
$
|
402,746
|
|
|
$
|
499,018
|
|
Long-term
debt
|
1,877,000
|
|
|
1,752,000
|
|
Deferred income
taxes
|
851,649
|
|
|
843,876
|
|
Other
liabilities
|
205,397
|
|
|
200,089
|
|
Stockholders'
equity
|
2,175,531
|
|
|
2,142,733
|
|
Total liabilities and
stockholders' equity
|
$
|
5,512,323
|
|
|
$
|
5,437,716
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
|
(In
thousands)
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Cash Flows From
Operating Activities
|
|
|
|
Net income
|
$
|
40,255
|
|
|
$
|
107,031
|
|
Deferred income tax
expense
|
15,081
|
|
|
57,603
|
|
(Gain) loss on sale
of assets
|
(138)
|
|
|
1,285
|
|
Exploration
expense
|
162
|
|
|
2,040
|
|
(Gain) loss on
derivative instruments
|
3,562
|
|
|
—
|
|
Income charges not
requiring cash
|
181,254
|
|
|
151,573
|
|
Changes in assets and
liabilities
|
27,205
|
|
|
(64,154)
|
|
Net cash provided by
operations
|
267,381
|
|
|
255,378
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(395,242)
|
|
|
(338,701)
|
|
Proceeds from sale of
assets
|
3,081
|
|
|
108
|
|
Restricted
cash
|
—
|
|
|
8,382
|
|
Investment in equity
method investments
|
(5,078)
|
|
|
(5,937)
|
|
Net cash used in
investing
|
(397,239)
|
|
|
(336,148)
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Net increase
(decrease) in debt
|
125,000
|
|
|
75,000
|
|
Dividends
paid
|
(8,263)
|
|
|
(8,332)
|
|
Stock-based
compensation tax benefit
|
3,437
|
|
|
16,043
|
|
Other
|
2,678
|
|
|
90
|
|
Net cash provided by
financing
|
122,852
|
|
|
82,801
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
$
|
(7,006)
|
|
|
$
|
2,031
|
|
Selected Item
Review and Reconciliation of Net Income and Earnings Per
Share
|
(In thousands, except
per share amounts)
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
As reported - net
income
|
$
|
40,255
|
|
|
$
|
107,031
|
|
Reversal of selected
items, net of tax:
|
|
|
|
(Gain) loss on sale
of assets
|
(87)
|
|
|
775
|
|
(Gain) loss on
derivative instruments (1)
|
2,246
|
|
|
—
|
|
Drilling Rig
Termination Fees
|
3,059
|
|
|
—
|
|
Stock-based
compensation expense
|
3,726
|
|
|
1,913
|
|
Net income excluding
selected items
|
$
|
49,199
|
|
|
$
|
109,719
|
|
As reported -
earnings per share
|
$
|
0.10
|
|
|
$
|
0.26
|
|
Per share impact of
reversing selected items
|
0.02
|
|
|
—
|
|
Earnings per share
including reversal of selected items
|
$
|
0.12
|
|
|
$
|
0.26
|
|
Weighted average
common shares outstanding
|
413,344
|
|
|
416,900
|
|
|
(1) Effective April 1, 2014, the
Company elected to discontinue hedge accounting for its commodity
derivatives on a prospective basis. This amount represents the
non-cash mark-to-market changes of our commodity derivative
instruments recorded in gain (loss) on derivative instruments in
the Condensed Consolidated Statement of Operations.
|
Discretionary Cash
Flow Calculation and Reconciliation
|
(In
thousands)
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Discretionary Cash
Flow
|
|
|
|
As reported - net
income
|
$
|
40,255
|
|
|
$
|
107,031
|
|
Plus
(less):
|
|
|
|
Deferred income tax
expense
|
15,081
|
|
|
57,603
|
|
(Gain) loss on sale
of assets
|
(138)
|
|
|
1,285
|
|
Exploration
expense
|
162
|
|
|
2,040
|
|
(Gain) loss on
derivative instruments
|
3,562
|
|
|
—
|
|
Income charges not
requiring cash
|
181,254
|
|
|
151,573
|
|
Discretionary Cash
Flow
|
240,176
|
|
|
319,532
|
|
Changes in assets and
liabilities
|
27,205
|
|
|
(64,154)
|
|
Net cash provided by
operations
|
$
|
267,381
|
|
|
$
|
255,378
|
|
Net Debt
Reconciliation
|
(In
thousands)
|
|
|
March 31,
2015
|
|
December 31,
2014
|
Long-term
debt
|
$
|
1,877,000
|
|
|
$
|
1,752,000
|
|
Stockholders'
equity
|
2,175,531
|
|
|
2,142,733
|
|
Total
Capitalization
|
$
|
4,052,531
|
|
|
$
|
3,894,733
|
|
|
|
|
|
Total debt
|
$
|
1,877,000
|
|
|
$
|
1,752,000
|
|
Less: Cash and cash
equivalents
|
(13,948)
|
|
|
(20,954)
|
|
Net
Debt
|
$
|
1,863,052
|
|
|
$
|
1,731,046
|
|
|
|
|
|
Net debt
|
$
|
1,863,052
|
|
|
$
|
1,731,046
|
|
Stockholders'
equity
|
2,175,531
|
|
|
2,142,733
|
|
Total Adjusted
Capitalization
|
$
|
4,038,583
|
|
|
$
|
3,873,779
|
|
|
|
|
|
Total debt to total
capitalization ratio
|
46.3
|
%
|
|
45.0
|
%
|
Less: Impact of cash
and cash equivalents
|
0.2
|
%
|
|
0.3
|
%
|
Net Debt to
Adjusted Capitalization Ratio
|
46.1
|
%
|
|
44.7
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cabot-oil--gas-corporation-announces-first-quarter-2015-financial-and-operating-results-increases-borrowing-base-and-amends-credit-facility-300071495.html
SOURCE Cabot Oil & Gas Corporation