Cabot Oil & Gas Corp. (COG, Financial) filed Quarterly Report for the period ended 2009-03-31.
Cabot Oil & Gas Corp. is an independent oil and gas company engaged in the exploration development acquisition and exploitation of oil and gas properties located in four areas of the United States: the onshore Texas and Louisiana Gulf Coast; the Rocky Mountains; Appalachia; and the Mid-Continent or Anadarko Basin. Cabot Oil & Gas Corp. has a market cap of $3.13 billion; its shares were traded at around $30.19 with a P/E ratio of 14.9 and P/S ratio of 3.4. The dividend yield of Cabot Oil & Gas Corp. stocks is 0.4%. Cabot Oil & Gas Corp. had an annual average earning growth of 16.2% over the past 10 years. GuruFocus rated Cabot Oil & Gas Corp. the business predictability rank of 4-star.
Investing Activities. The primary uses of cash in investing activities were capital spending and exploration expenses. We established the budget for these amounts based on our current estimate of future commodity prices. Due to the volatility of commodity prices and new opportunities which may arise, our capital expenditures may be periodically adjusted during any given year. Cash flows used in investing activities increased by $29.2 million from the first quarter of 2008 compared to the first quarter of 2009. The increase was due to an increase of $42.9 million in capital expenditures and an increase of $1.4 million in exploration expenditures, partially offset by $15.1 million of proceeds from the sale of assets.
Financing Activities. Cash flows provided by financing activities decreased by $16.9 million from the first quarter of 2008 compared to the first quarter of 2009. This was primarily due to a decrease of $10 million in borrowings under our revolving credit facility ($10 million of net borrowings in the first quarter of 2009 compared to $20 million of net borrowings in the first quarter of 2008). Additionally, there was no tax benefit realized for stock-based compensation in the first quarter of 2009, which resulted in a decrease of $4.6 million, net proceeds from the sale of common stock decreased by $2.1 million and dividends paid increased by $0.2 million.
At March 31, 2009, we had $195 million of borrowings outstanding under our then-existing unsecured credit facility at a weighted-average interest rate of 4.0%. The credit facility provided for an available credit line of $350 million. In April 2009, we entered into a new revolving credit facility and terminated our prior credit facility (see Notes 4 and 11 to the Condensed Consolidated Financial Statements for further details). The new credit facility provides for an available credit line of $500 million and contains an accordion feature allowing us to increase the available credit line to $600 million, if any one or more of the existing banks or new banks agree to provide such increased commitment amount. The available credit line is subject to adjustment on the basis of the present value of estimated future net cash flows from proved oil and gas reserves (as determined by the banks based on our reserve reports and engineering reports) and certain other assets. We strive to manage our debt at a level below the available credit line in order to maintain excess borrowing capacity. Our revolving credit facility includes a covenant limiting our total debt. Management believes that we have the capacity to finance our spending plans and maintain our liquidity. At the same time, we will closely monitor the capital markets. As a result of market conditions and our increased level of borrowings, we may experience increased costs associated with future debt.
We reported net income in the first quarter of 2009 of $47.6 million, or $0.46 per share. For the first quarter of 2008, we reported net income of $46.0 million, or $0.47 per share. Net income increased in the first quarter of 2009 by $1.6 million, primarily due to an increase in operating revenues and gain on sale of assets in the first quarter of 2009, partially offset by increased operating, interest and income tax expenses. Operating revenues increased by $14.3 million, largely due to an increase in natural gas production revenues, partially offset by decreased brokered natural gas revenues and crude oil and condensate revenues. Operating expenses increased by $13.2 million between periods due to increases in depreciation, depletion and amortization, impairments of unproved properties, direct operations and exploration expense, partially offset by decreased general and administrative expenses, taxes other than income and brokered natural gas costs. In addition, net income was impacted by gain on sale of assets of $12.7 million as well as an increase in expenses of $12.2 million resulting from a combination of increased income tax expense and interest and other expenses. Income tax expense was higher in the first quarter of 2009 as a result of an increase in the effective tax rate.
Our average total company realized natural gas production sales price, including the realized impact of derivative instruments, was $7.51 per Mcf for the three months ended March 31, 2009 compared to $7.92 per Mcf for the comparable period of the prior year. These prices include the realized impact of derivative instrument settlements, which increased the price by $3.34 per Mcf in 2009 and by $0.03 per Mcf in 2008. The following table excludes the unrealized gain from the change in fair value of our basis swaps of $0.9 million, which has been included within Natural Gas Production Revenues in the Condensed Consolidated Statement of Operations for the quarter ended March 31, 2009. There was no revenue impact from the unrealized change in natural gas derivative fair value for the three months ended March 31, 2008.
Read the The complete ReportCOG is in the portfolios of Robert Rodriguez of FPA Capital, Robert Rodriguez of FPA Capital.
Cabot Oil & Gas Corp. is an independent oil and gas company engaged in the exploration development acquisition and exploitation of oil and gas properties located in four areas of the United States: the onshore Texas and Louisiana Gulf Coast; the Rocky Mountains; Appalachia; and the Mid-Continent or Anadarko Basin. Cabot Oil & Gas Corp. has a market cap of $3.13 billion; its shares were traded at around $30.19 with a P/E ratio of 14.9 and P/S ratio of 3.4. The dividend yield of Cabot Oil & Gas Corp. stocks is 0.4%. Cabot Oil & Gas Corp. had an annual average earning growth of 16.2% over the past 10 years. GuruFocus rated Cabot Oil & Gas Corp. the business predictability rank of 4-star.
Highlight of Business Operations:
Operating revenues for the quarter ended March 31, 2009 increased by $14.3 million, or seven percent, from the quarter ended March 31, 2008. Natural gas production revenues increased by $18.0 million, or 11%, for the quarter ended March 31, 2009 as compared to the quarter ended March 31, 2008 due to increases in production in the Gulf Coast and, to a lesser extent, in the East, partially offset by decreased realized natural gas prices and natural gas production in the West and Canada. Crude oil and condensate revenues decreased by $2.2 million, or 14%, for the first quarter of 2009 as compared to the first quarter of 2008 due to a decrease in realized crude oil prices and, to a lesser extent, decreased crude oil production in all regions except for the Gulf Coast. Brokered natural gas revenues decreased by $2.2 million due to decreases in both sales price and, to a lesser extent, brokered volumes.Investing Activities. The primary uses of cash in investing activities were capital spending and exploration expenses. We established the budget for these amounts based on our current estimate of future commodity prices. Due to the volatility of commodity prices and new opportunities which may arise, our capital expenditures may be periodically adjusted during any given year. Cash flows used in investing activities increased by $29.2 million from the first quarter of 2008 compared to the first quarter of 2009. The increase was due to an increase of $42.9 million in capital expenditures and an increase of $1.4 million in exploration expenditures, partially offset by $15.1 million of proceeds from the sale of assets.
Financing Activities. Cash flows provided by financing activities decreased by $16.9 million from the first quarter of 2008 compared to the first quarter of 2009. This was primarily due to a decrease of $10 million in borrowings under our revolving credit facility ($10 million of net borrowings in the first quarter of 2009 compared to $20 million of net borrowings in the first quarter of 2008). Additionally, there was no tax benefit realized for stock-based compensation in the first quarter of 2009, which resulted in a decrease of $4.6 million, net proceeds from the sale of common stock decreased by $2.1 million and dividends paid increased by $0.2 million.
At March 31, 2009, we had $195 million of borrowings outstanding under our then-existing unsecured credit facility at a weighted-average interest rate of 4.0%. The credit facility provided for an available credit line of $350 million. In April 2009, we entered into a new revolving credit facility and terminated our prior credit facility (see Notes 4 and 11 to the Condensed Consolidated Financial Statements for further details). The new credit facility provides for an available credit line of $500 million and contains an accordion feature allowing us to increase the available credit line to $600 million, if any one or more of the existing banks or new banks agree to provide such increased commitment amount. The available credit line is subject to adjustment on the basis of the present value of estimated future net cash flows from proved oil and gas reserves (as determined by the banks based on our reserve reports and engineering reports) and certain other assets. We strive to manage our debt at a level below the available credit line in order to maintain excess borrowing capacity. Our revolving credit facility includes a covenant limiting our total debt. Management believes that we have the capacity to finance our spending plans and maintain our liquidity. At the same time, we will closely monitor the capital markets. As a result of market conditions and our increased level of borrowings, we may experience increased costs associated with future debt.
We reported net income in the first quarter of 2009 of $47.6 million, or $0.46 per share. For the first quarter of 2008, we reported net income of $46.0 million, or $0.47 per share. Net income increased in the first quarter of 2009 by $1.6 million, primarily due to an increase in operating revenues and gain on sale of assets in the first quarter of 2009, partially offset by increased operating, interest and income tax expenses. Operating revenues increased by $14.3 million, largely due to an increase in natural gas production revenues, partially offset by decreased brokered natural gas revenues and crude oil and condensate revenues. Operating expenses increased by $13.2 million between periods due to increases in depreciation, depletion and amortization, impairments of unproved properties, direct operations and exploration expense, partially offset by decreased general and administrative expenses, taxes other than income and brokered natural gas costs. In addition, net income was impacted by gain on sale of assets of $12.7 million as well as an increase in expenses of $12.2 million resulting from a combination of increased income tax expense and interest and other expenses. Income tax expense was higher in the first quarter of 2009 as a result of an increase in the effective tax rate.
Our average total company realized natural gas production sales price, including the realized impact of derivative instruments, was $7.51 per Mcf for the three months ended March 31, 2009 compared to $7.92 per Mcf for the comparable period of the prior year. These prices include the realized impact of derivative instrument settlements, which increased the price by $3.34 per Mcf in 2009 and by $0.03 per Mcf in 2008. The following table excludes the unrealized gain from the change in fair value of our basis swaps of $0.9 million, which has been included within Natural Gas Production Revenues in the Condensed Consolidated Statement of Operations for the quarter ended March 31, 2009. There was no revenue impact from the unrealized change in natural gas derivative fair value for the three months ended March 31, 2008.
Read the The complete ReportCOG is in the portfolios of Robert Rodriguez of FPA Capital, Robert Rodriguez of FPA Capital.
