HOUSTON, April 29, 2016 /PRNewswire/ -- Cabot Oil
& Gas Corporation (NYSE: COG) ("Cabot" or the "Company") today
reported financial and operating results for the first quarter of
2016.
"Cabot's results for the quarter highlight our commitment to
financial discipline, which was evident by our ability to fully
fund our investing activities with operating cash flow and proceeds
from a non-core divestiture," said Dan O.
Dinges, Chairman, President and Chief Executive Officer.
"Our positive results for the quarter were due in large part to
continued enhancements to our industry-leading cost structure and
improvements in our natural gas price differentials, which exceeded
our expectations for the quarter. Based on our current outlook for
the remainder of the year, we are well-positioned to deliver
production growth while spending within our operating cash flow,
which differentiates Cabot in this challenged market
environment."
First Quarter 2016 Financial Results
Equivalent production in the first quarter of 2016 was 160.3
billion cubic feet equivalent (Bcfe), consisting of 153.1 billion
cubic feet (Bcf) of natural gas, 1.1 million barrels (Mmbbls) of
crude oil and condensate, and 92,000 barrels (Bbls) of natural gas
liquids (NGLs).
Cash flow from operations in the first quarter of 2016 was
$62.1 million, compared to
$267.4 million in the first quarter
of 2015. Discretionary cash flow in the first quarter of 2016 was
$71.2 million, compared to
$240.2 million in the first quarter
of 2015. Net loss in the first quarter of 2016 was $51.2 million, or $0.12 per share, compared to net income of
$40.3 million, or $0.10 per share, in the first quarter of 2015.
Excluding the effect of selected items (detailed in the table
below), net loss in the first quarter of 2016 was $55.4 million, or $0.13 per share, compared to net income of
$49.2 million, or $0.12 per share, in the first quarter of 2015.
EBITDAX in the first quarter of 2016 was $100.9 million, compared to $279.4 million in the first quarter of 2015. See
the supplemental tables at the end of this press release for a
reconciliation of non-GAAP measures including discretionary cash
flow, net income excluding selected items, EBITDAX and net debt to
adjusted capitalization ratio.
Natural gas price realizations were $1.49 per thousand cubic feet (Mcf) in the first
quarter of 2016, down 39 percent compared to the first quarter of
2015. Natural gas price realizations for the quarter implied a
$0.60 discount to NYMEX settlement
prices compared to a $0.75 discount
to NYMEX settlement prices in the first quarter of 2015 (excluding
the impact of hedges). Oil price realizations were $27.65 per Bbl, down 37 percent compared to the
first quarter of 2015. NGL price realizations were $7.22 per Bbl, down 35 percent compared to the
first quarter of 2015.
Operating expenses (including financing) decreased to
$2.26 per thousand cubic feet
equivalent (Mcfe) in the first quarter of 2016, a 3 percent
improvement compared to $2.33 per
Mcfe in the first quarter of 2015. Cash operating expenses
(excluding depreciation, depletion and amortization; stock-based
compensation; exploratory dry hole cost; and amortization of debt
issuance costs) decreased to $1.18
per Mcfe in the first quarter of 2016, a 6 percent improvement
compared to $1.26 per Mcfe in the
first quarter of 2015.
Cabot drilled 10 net wells and completed 21 net wells during the
first quarter of 2016, incurring a total of $91.7 million in capital expenditures associated
with activity during this period.
Operational Highlights
Marcellus Shale
During the first quarter of 2016, the Company averaged 1,628
million cubic feet (Mmcf) per day of net Marcellus production
(1,913 gross operated Mmcf per day), an increase of 10 percent
sequentially compared to the fourth quarter of 2015. During the
first quarter, the Company drilled 7 net wells, completed 12 net
wells and placed 8 net wells on production.
Cabot is currently operating 1 rig 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 2016 was 12,975 barrels of oil equivalent (Boe) per day,
a decrease of 13 percent sequentially compared to the fourth
quarter of 2015. Net oil production during the quarter was 11,908
Bbls per day, a decrease of 6 percent sequentially compared to the
fourth quarter of 2015. In addition to natural production declines
resulting from reduced operating activity, the primary driver of
the lower sequential equivalent production was unscheduled downtime
at a third-party processing plant which impacted natural gas and
NGL volumes for a significant portion of the quarter. During the
first quarter, the Company drilled 3 net wells and completed and
placed on production 9 net wells, the majority of which were placed
on production late in the quarter.
Cabot is not currently operating a rig in the Eagle Ford Shale
and plans to drill 3 additional wells in 2016, all of which are
scheduled for the second half of the year.
Non-Core Asset Sale
During the first quarter of 2016, the Company completed the
divestiture of certain non-core oil and gas properties in
East Texas to an undisclosed buyer
for approximately $57 million. At
December 31, 2015, proved reserves
associated with these properties were 16.7 Bcfe (80% natural gas /
15% NGLs / 5% oil).
Financial Position and Liquidity
During the first quarter of 2016, Cabot closed on an offering of
50.6 million shares of its common stock (including the
over-allotment option) for net proceeds of $995.6 million. The Company used a portion of the
net proceeds to repay borrowings outstanding under its revolving
credit facility.
As of March 31, 2016, Cabot had
total debt of $1.6 billion and cash
on hand of $579.3 million. The
Company's net debt to adjusted capitalization ratio and net debt to
trailing twelve months EBITDAX ratio were 25.8 percent and 1.6x,
respectively, compared to 50.1 percent and 2.5x as of December 31, 2015.
Effective April 19, 2016, Cabot's
borrowing base was unanimously approved by its 20 lenders at
$3.2 billion. With $1.6 billion of senior notes outstanding, this
leaves the Company with approximately $1.6
billion of available commitments under the $1.8 billion credit facility. The Company
currently has no debt outstanding under the credit facility,
resulting in approximately $2.2
billion of liquidity. Cabot's next annual borrowing base
redetermination is scheduled for April
2017.
2016 Derivative Position Update
The Company has approximately 52 Bcf of natural gas swaps for
the period of April to October 2016
at a weighted average price of approximately $2.51 per Mcf and 1.4 Mmbbls of crude oil collars
for the period of April to December
2016 at a weighted average floor and ceiling price of
$38.00 per Bbl and $47.28 per Bbl, respectively.
Second Quarter and Full Year 2016 Guidance
Cabot has provided second quarter net production guidance of
1,575 to 1,600 Mmcf per day for natural gas; 11,500 to 12,250 Bbls
per day for crude oil and condensate; and 1,400 to 1,600 Bbls per
day for NGLs. The Company expects its natural gas price
realizations (before the impact of hedges) to average between
$0.50 and $0.55 below NYMEX
settlement prices for the second quarter based on current market
indications.
Cabot has reaffirmed its $325
million capital budget and its production growth guidance
range of 2 to 7 percent for 2016. The Company has also adjusted its
2016 guidance range for contributions to its equity method
investments in the Constitution and Atlantic Sunrise pipelines to
$30 million to $35 million, down from
$80 million to $150 million, to
reflect the current expectation for a second half of 2017
in-service date for Atlantic Sunrise and a second half of 2018
in-service date for Constitution. For further disclosure on Cabot's
natural gas pricing exposure by index and updated unit cost
guidance for the second quarter, 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 29, 2016, at 9:30 a.m. Eastern Time to discuss first quarter
2016 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 website 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,
|
|
|
2016
|
|
2015
|
|
PRODUCTION
VOLUMES
|
|
|
|
|
|
Natural gas
(Bcf)
|
|
153.1
|
|
|
161.8
|
|
|
Crude/condensate
(Mbbl)
|
|
1,110.0
|
|
|
1,428.0
|
|
|
Natural gas liquids
(NGLs) (Mbbl)
|
|
92.0
|
|
|
166.0
|
|
|
Equivalent production
(Bcfe)
|
|
160.3
|
|
|
171.4
|
|
|
|
|
|
|
|
AVERAGE SALES
PRICE
|
|
|
|
|
|
Natural gas,
including hedges ($/Mcf)
|
|
$
|
1.49
|
|
|
$
|
2.46
|
|
|
Natural gas,
excluding hedges ($/Mcf)
|
|
$
|
1.49
|
|
|
$
|
2.23
|
|
|
Crude/condensate,
including hedges ($/Bbl)
|
|
$
|
27.65
|
|
|
$
|
43.82
|
|
|
Crude/condensate,
excluding hedges ($/Bbl)
|
|
$
|
27.65
|
|
|
$
|
43.82
|
|
|
NGL
($/Bbl)
|
|
$
|
7.22
|
|
|
$
|
11.06
|
|
|
|
|
|
|
|
AVERAGE UNIT COSTS
($/Mcfe)
|
|
|
|
|
|
Direct
operations
|
|
$
|
0.16
|
|
|
$
|
0.21
|
|
|
Transportation and
gathering
|
|
0.68
|
|
|
0.71
|
|
|
Taxes other than
income
|
|
0.04
|
|
|
0.07
|
|
|
Exploration
|
|
0.04
|
|
|
0.05
|
|
|
Depreciation,
depletion and amortization
|
|
1.01
|
|
|
1.02
|
|
|
General and
administrative (excluding stock-based compensation)
|
|
0.11
|
|
|
0.10
|
|
|
Stock-based
compensation
|
|
0.07
|
|
|
0.03
|
|
|
Interest
expense
|
|
0.15
|
|
|
0.14
|
|
|
|
$
|
2.26
|
|
|
$
|
2.33
|
|
|
|
|
|
|
|
|
|
|
|
|
WELLS
DRILLED
|
|
|
|
|
|
Gross
|
|
10
|
|
|
43
|
|
|
Net
|
|
10
|
|
|
42
|
|
|
Gross success
rate
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
WELLS
COMPLETED
|
|
|
|
|
|
Gross
|
|
21
|
|
|
39
|
|
|
Net
|
|
21
|
|
|
39
|
|
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
|
|
(In thousands, except
per share amounts)
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
OPERATING
REVENUES
|
|
|
|
|
Natural
gas
|
$
|
227,578
|
|
|
$
|
360,191
|
|
|
Crude
oil and condensate
|
30,676
|
|
|
62,558
|
|
|
Gain
(loss) on derivative instruments
|
18,994
|
|
|
34,123
|
|
|
Brokered
natural gas
|
3,180
|
|
|
4,827
|
|
|
Other
|
1,513
|
|
|
3,066
|
|
|
281,941
|
|
|
464,765
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
Direct
operations
|
26,035
|
|
|
36,017
|
|
|
Transportation and gathering
|
109,652
|
|
|
121,235
|
|
|
Brokered
natural gas
|
2,566
|
|
|
3,739
|
|
|
Taxes
other than income
|
5,994
|
|
|
11,280
|
|
|
Exploration
|
6,383
|
|
|
8,732
|
|
|
Depreciation, depletion and amortization
|
161,887
|
|
|
175,497
|
|
|
General
and administrative (excluding stock-based compensation)
|
17,770
|
|
|
16,619
|
|
|
Stock-based compensation(1)
|
10,606
|
|
|
5,910
|
|
|
340,893
|
|
|
379,029
|
|
|
Earnings (loss) on
equity method investments
|
2,009
|
|
|
1,421
|
|
|
Gain (loss) on sale
of assets
|
1,354
|
|
|
138
|
|
|
INCOME (LOSS) FROM
OPERATIONS
|
(55,589)
|
|
|
87,295
|
|
|
Interest
expense
|
24,375
|
|
|
23,566
|
|
|
Income (loss) before
income taxes
|
(79,964)
|
|
|
63,729
|
|
|
Income tax expense
(benefit)
|
(28,770)
|
|
|
23,474
|
|
|
NET INCOME
(LOSS)
|
$
|
(51,194)
|
|
|
$
|
40,255
|
|
|
Earnings (loss) per
share - Basic
|
$
|
(0.12)
|
|
|
$
|
0.10
|
|
|
Weighted-average
common shares outstanding
|
431,841
|
|
|
413,344
|
|
|
|
|
|
|
|
(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,
2016
|
|
December 31,
2015
|
|
ASSETS
|
|
|
|
|
Current
assets
|
$
|
720,687
|
|
|
$
|
144,786
|
|
|
Properties and
equipment, net (Successful efforts method)
|
4,837,814
|
|
|
4,976,879
|
|
|
Other
assets
|
144,207
|
|
|
131,373
|
|
|
$
|
5,702,708
|
|
|
$
|
5,253,038
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
$
|
199,382
|
|
|
$
|
235,552
|
|
|
Long-term debt, net
(excluding current maturities)
|
1,583,192
|
|
|
1,996,139
|
|
|
Deferred income
taxes
|
780,295
|
|
|
807,236
|
|
|
Other
liabilities
|
195,779
|
|
|
204,923
|
|
|
Stockholders'
equity
|
2,944,060
|
|
|
2,009,188
|
|
|
$
|
5,702,708
|
|
|
$
|
5,253,038
|
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
|
|
(In
thousands)
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net income
(loss)
|
$
|
(51,194)
|
|
|
$
|
40,255
|
|
|
Deferred income tax
expense (benefit)
|
(28,973)
|
|
|
15,081
|
|
|
(Gain) loss on sale
of assets
|
(1,354)
|
|
|
(138)
|
|
|
Exploratory dry hole
cost
|
—
|
|
|
162
|
|
|
(Gain) loss on
derivative instruments
|
(18,994)
|
|
|
(34,123)
|
|
|
Net cash received
(paid) in settlement of derivative instruments
|
—
|
|
|
37,685
|
|
|
Income charges not
requiring cash
|
171,675
|
|
|
181,254
|
|
|
Changes in assets and
liabilities
|
(9,070)
|
|
|
27,205
|
|
|
Net cash provided by
operating activities
|
62,090
|
|
|
267,381
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital
expenditures
|
(92,237)
|
|
|
(395,242)
|
|
|
Proceeds from sale of
assets
|
49,828
|
|
|
3,081
|
|
|
Investment in equity
method investments
|
(11,652)
|
|
|
(5,078)
|
|
|
Net cash used in
investing activities
|
(54,061)
|
|
|
(397,239)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Net increase
(decrease) in debt
|
(413,000)
|
|
|
125,000
|
|
|
Sale of common stock,
net
|
995,278
|
|
|
—
|
|
|
Dividends
paid
|
(8,282)
|
|
|
(8,263)
|
|
|
Stock-based
compensation tax benefit
|
—
|
|
|
3,437
|
|
|
Capitalized debt
issuance costs
|
(3,223)
|
|
|
—
|
|
|
Other
|
—
|
|
|
2,678
|
|
|
Net cash provided by
financing activities
|
570,773
|
|
|
122,852
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
|
578,802
|
|
|
$
|
(7,006)
|
|
|
Selected Item
Review and Reconciliation of Net Income and Earnings Per
Share
|
|
(In thousands, except
per share amounts)
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
As reported - net
income (loss)
|
$
|
(51,194)
|
|
|
$
|
40,255
|
|
|
Reversal of selected
items, net of tax:
|
|
|
|
|
(Gain) loss on sale of
assets
|
(862)
|
|
|
(87)
|
|
|
(Gain) loss on derivative
instruments (1)
|
(12,087)
|
|
|
2,246
|
|
|
Drilling rig
termination fees
|
2,028
|
|
|
3,059
|
|
|
Stock-based compensation
expense
|
6,749
|
|
|
3,726
|
|
|
Net income (loss)
excluding selected items
|
$
|
(55,366)
|
|
|
$
|
49,199
|
|
|
As reported -
earnings (loss) per share
|
$
|
(0.12)
|
|
|
$
|
0.10
|
|
|
Per share impact of
reversing selected items
|
(0.01)
|
|
|
0.02
|
|
|
Earnings per share
including reversal of selected items
|
$
|
(0.13)
|
|
|
$
|
0.12
|
|
|
Weighted average
common shares outstanding
|
431,841
|
|
|
413,344
|
|
|
|
|
|
|
|
(1)
|
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,
|
|
2016
|
|
2015
|
|
As reported - net
income (loss)
|
$
|
(51,194)
|
|
|
$
|
40,255
|
|
|
Plus
(less):
|
|
|
|
|
Deferred income tax
expense (benefit)
|
(28,973)
|
|
|
15,081
|
|
|
(Gain) loss on sale of
assets
|
(1,354)
|
|
|
(138)
|
|
|
Exploratory dry hole
cost
|
—
|
|
|
162
|
|
|
(Gain) loss on
derivative instruments
|
(18,994)
|
|
|
(34,123)
|
|
|
Net cash received
(paid) in settlement of derivative instruments
|
—
|
|
|
37,685
|
|
|
Income charges not
requiring cash
|
171,675
|
|
|
181,254
|
|
|
Discretionary Cash
Flow
|
71,160
|
|
|
240,176
|
|
|
Changes in assets and
liabilities
|
(9,070)
|
|
|
27,205
|
|
|
Net cash provided by
operations
|
$
|
62,090
|
|
|
$
|
267,381
|
|
|
EBITDAX
Calculation and Reconciliation
|
|
(in
thousands)
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
As reported - net
income (loss)
|
$
|
(51,194)
|
|
|
$
|
40,255
|
|
|
Plus
(less):
|
|
|
|
|
Interest
expense
|
24,375
|
|
|
23,566
|
|
|
Income tax expense
(benefit)
|
(28,770)
|
|
|
23,474
|
|
|
Depreciation, depletion
and amortization
|
161,887
|
|
|
175,497
|
|
|
Exploration
|
6,383
|
|
|
8,732
|
|
|
(Gain) loss on sale of
assets
|
(1,354)
|
|
|
(138)
|
|
|
Non-cash (gain) loss on
derivative instruments
|
(18,994)
|
|
|
3,562
|
|
|
(Earnings) loss on
equity method investments
|
(2,009)
|
|
|
(1,421)
|
|
|
Stock-based
compensation
|
10,606
|
|
|
5,910
|
|
|
EBITDAX
|
$
|
100,930
|
|
|
$
|
279,437
|
|
|
Net Debt
Reconciliation
|
|
(In
thousands)
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Current portion of
long-term debt
|
$
|
20,000
|
|
|
$
|
20,000
|
|
|
Long-term debt,
net
|
1,583,192
|
|
|
1,996,139
|
|
|
Total debt
|
$
|
1,603,192
|
|
|
$
|
2,016,139
|
|
|
Stockholders'
equity
|
2,944,060
|
|
|
2,009,188
|
|
|
Total
Capitalization
|
$
|
4,547,252
|
|
|
$
|
4,025,327
|
|
|
|
|
|
|
Total debt
|
$
|
1,603,192
|
|
|
$
|
2,016,139
|
|
|
Less: Cash and cash
equivalents
|
(579,316)
|
|
|
(514)
|
|
|
Net Debt
|
$
|
1,023,876
|
|
|
$
|
2,015,625
|
|
|
|
|
|
|
Net debt
|
$
|
1,023,876
|
|
|
$
|
2,015,625
|
|
|
Stockholders'
equity
|
2,944,060
|
|
|
2,009,188
|
|
|
Total Adjusted
Capitalization
|
$
|
3,967,936
|
|
|
$
|
4,024,813
|
|
|
|
|
|
|
Total debt to total
capitalization ratio
|
35.3
|
%
|
|
50.1
|
%
|
|
Less: Impact of cash
and cash equivalents
|
9.5
|
%
|
|
—
|
%
|
|
Net Debt to Adjusted
Capitalization Ratio
|
25.8
|
%
|
|
50.1
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cabot-oil--gas-corporation-announces-first-quarter-2016-financial-and-operating-results-300259862.html
SOURCE Cabot Oil & Gas Corporation