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Cabot (COG) Gives Preliminary Update on Q4 Output & Capex
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Cabot Oil & Gas Corporation issued an operational update on the fourth quarter of 2020.
The company’s production volume for the December quarter is likely to have outpaced theprior projected range of 2,300-2,350 million cubic feet equivalent (Mmcfe) per day and is expected to be around 2,375 Mmcfe. For the full year, the company anticipates its production to be approximately 2,344 Mmcfe per day, higher than its prior guided range of 2,325-2,340 Mmcfe.
For the fourth quarter, natural gas price realizations excluding the impact of hedges are estimated to be $1.89 per Mcf while for the full year, the same is anticipated to be $1.64.
Cabot’s capital spending related to fourth-quarter activities is projected to be around $106 million. On the basis of this quarterly capex prediction, the company believes to have incurred nearly $570 million as capital investment during 2020, lower than its previous guidance of $575 million.
2021 Outlook
For the current year, the company projects to deliver a net production of 2,350 Mmcfe per day, on average. Capex for 2021 is estimated in the $530-$540 million band, indicating a 6% drop from the mid-point of the prior year's expected range.
For the first quarter of this year, Cabot expects its production to be sequentially lower and in the 2,250-2,300 Mmcfe per day range due to a decline in the operating activity levels as well as capital expenditure during the second half of 2020.
Dan O. Dinges, chairman, president and CEO of Cabot, believes that "Our plan for 2021 highlights our commitment to disciplined capital allocation and free cash flow generation with a focus on maintaining our production flat year-over-year despite the expectation for a higher natural gas price environment this year". This 2021 maintenance capital program, in turn, will trigger growth in Cabot's free cash flow next year, thus allowing the company to utilize the excess amount for the increased return of capital to its shareholders and debt repayment.
Cabot is scheduled to release fourth-quarter 2020 results on Thursday Feb 18, after the market closes. The current Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 28 cents per share and the same for revenues stands at $435.35 million.
About the Company
Founded in 1989, this Houston-based player is an independent gas exploration company with producing properties, mainly in the continental United States. It concentrates on high-impact natural gas-focused drilling in the Marcellus Shale. The company sells its products to local distribution companies, industrial clients, power-generation facilities and gas marketers through pipelines and gathering systems.
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Cabot (COG) Gives Preliminary Update on Q4 Output & Capex
Cabot Oil & Gas Corporation issued an operational update on the fourth quarter of 2020.
The company’s production volume for the December quarter is likely to have outpaced theprior projected range of 2,300-2,350 million cubic feet equivalent (Mmcfe) per day and is expected to be around 2,375 Mmcfe. For the full year, the company anticipates its production to be approximately 2,344 Mmcfe per day, higher than its prior guided range of 2,325-2,340 Mmcfe.
For the fourth quarter, natural gas price realizations excluding the impact of hedges are estimated to be $1.89 per Mcf while for the full year, the same is anticipated to be $1.64.
Cabot’s capital spending related to fourth-quarter activities is projected to be around $106 million. On the basis of this quarterly capex prediction, the company believes to have incurred nearly $570 million as capital investment during 2020, lower than its previous guidance of $575 million.
2021 Outlook
For the current year, the company projects to deliver a net production of 2,350 Mmcfe per day, on average. Capex for 2021 is estimated in the $530-$540 million band, indicating a 6% drop from the mid-point of the prior year's expected range.
For the first quarter of this year, Cabot expects its production to be sequentially lower and in the 2,250-2,300 Mmcfe per day range due to a decline in the operating activity levels as well as capital expenditure during the second half of 2020.
Dan O. Dinges, chairman, president and CEO of Cabot, believes that "Our plan for 2021 highlights our commitment to disciplined capital allocation and free cash flow generation with a focus on maintaining our production flat year-over-year despite the expectation for a higher natural gas price environment this year". This 2021 maintenance capital program, in turn, will trigger growth in Cabot's free cash flow next year, thus allowing the company to utilize the excess amount for the increased return of capital to its shareholders and debt repayment.
Cabot is scheduled to release fourth-quarter 2020 results on Thursday Feb 18, after the market closes. The current Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 28 cents per share and the same for revenues stands at $435.35 million.
About the Company
Founded in 1989, this Houston-based player is an independent gas exploration company with producing properties, mainly in the continental United States. It concentrates on high-impact natural gas-focused drilling in the Marcellus Shale. The company sells its products to local distribution companies, industrial clients, power-generation facilities and gas marketers through pipelines and gathering systems.
Zacks Rank & Key Picks
Cabot currently carries a Zacks Rank #4 (Sell).
Some better-ranked players in the energy space are Matador Resources Company (MTDR - Free Report) , Plains Group Holdings, L.P. (PAGP - Free Report) and Denbury Inc. , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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