Cabot Oil & Gas Corporation (COG) last week reported financial and operating results for the third quarter of 2014.
Highlights From The Quarter:
- Production of 132.4 billion cubic feet equivalent (Bcfe), an increase of 24 percent over last year's comparable quarter
- Liquids production (crude oil/condensate/natural gas liquids) of 961,000 barrels (Bbls), an increase of 7 percent over last year's comparable quarter as reported and an increase of 32 percent pro forma for last year's Mid-Continent and West Texas asset sales
- Net income excluding selected items of $85.0 million, an increase of 14 percent over last year's comparable quarter
- Cash flow from operations of $358.3 million, an increase of 29 percent over last year's comparable quarter
- Total unit costs (including financing) of $2.53 per thousand cubic feet equivalent (Mcfe), a 15 percent improvement over last year's comparable quarter
Management Comments:
"The results posted in the most recently completed quarter once again highlight the quality of our operations and assets," said Dan O. Dinges, chairman, president and chief executive officer. "We made improvements in every key category, even in the face of strong headwinds."
Operating And Financial Results From The Third Quarter:
Equivalent production in the third quarter of 2014 was 132.4 Bcfe, consisting of 126.7 billion cubic feet (Bcf) of natural gas and 961,000 Bbls of liquids. These figures represent increases of 24 percent, 25 percent, and 7 percent, respectively.
Net income in the third quarter of 2014 was $100.8 million, or $0.24 per share, compared to $69.9 million, or $0.17 per share, in the third quarter of 2013. Excluding the effect of selected items, net income was $85.0 million, or $0.20 per share, in the third quarter of 2014, compared to $74.6 million, or $0.18 per share, in the third quarter of 2013. Cash flow from operations in the third quarter of 2014 was $358.3 million, compared to $276.7 million in the third quarter of 2013. Discretionary cash flow in the third quarter of 2014 was $296.0 million, compared to $282.3 million in the third quarter of 2013.
Natural gas price realizations, including the effect of hedges, were $3.06 per thousand cubic feet (Mcf) in the third quarter of 2014, down 9 percent compared to the third quarter of 2013. Excluding the impact of hedges, natural gas price realizations for the quarter were $2.92 per Mcf, representing a $1.14 discount to NYMEX settlement prices. Oil price realizations, including the effect of hedges, were $94.79 per Bbl, down 9 percent compared to the third quarter of 2013.
Total per unit costs (including financing) decreased to $2.53 per Mcfe in the third quarter of 2014, a 15 percent improvement compared to $2.98 per Mcfe in the third quarter of 2013. All operating expense categories decreased on a per unit basis relative to last year's comparable quarter except for transportation and gathering, which increased as a result of slightly higher transportation rates and the commencement of new transportation agreements and exploration expense. Production during the nine-month period ended September 30, 2014 was 379.9 Bcfe, consisting of 364.3 Bcf of natural gas and 2.6 million Bbls of liquids. These figures represent increases of 30 percent, 31 percent, and 11 percent, respectively, compared to the nine-month period ended September 30, 2013.
During the third quarter of 2014, the Company averaged 1,298 million cubic feet (Mmcf) per day of net Marcellus production, an increase of 30 percent over the prior year's comparable quarter. "Our Marcellus volumes increased three percent sequentially relative to the second quarter and were slightly ahead of the guidance we provided a month ago," commented Dinges. "We continue to remain confident in our production outlook for the fourth quarter based on a robust schedule of wells to be placed on production between now and the end of the year."
