From Cabot Oil & Gas on Wednesday:
|Cabot Oil & Gas Corporation Announces Second Quarter 2013 Results, Equivalent Production Increases 52 Percent Year-Over-Year|
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:
"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.
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).
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.com. To 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.
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SOURCE Cabot Oil & Gas Corporation
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
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