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Cabot Oil (COG) Q2 Earnings and Revenues Miss Estimates

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Cabot Oil & Gas Corporation’s second-quarter 2021 net income per share — adjusted for special items — of 26 cents missed the Zacks Consensus Estimate of 27 cents due to lower-than-anticipated production volumes. However, the figure improved from the year-ago quarter’s bottom line of 5 cents per share, attributable to a year-over-year increase in realized natural gas prices and reined-in costs.

The company’s quarterly revenues of $324.67 million missed the Zacks Consensus Estimate of $440 million and fell from the year-ago sales of $332.35 million.

Production, Prices, Costs & Drilling Statistics

In the quarter under review, Cabot’s overall production summed 200.6 billion cubic feet equivalent (Bcfe) comprising 100% natural gas. The figure lagged the Zacks Consensus Estimate of 205 Bcfe as well as dipped 1.13% from the prior-year volume of 202.9Bcfe. 

Average realized natural gas price (excluding hedges) rose to $2.05 per thousand cubic feet from the year-ago quarter’s $1.42.

Total operating expenses were $270.8 million, down 2.7% from the figure reported in second-quarter 2020. The depreciation and amortization costs fell 3.2% year over year to $91.55 million.

Total average unit costs decreased to $1.41 per thousand cubic feet equivalent (Mcfe) from the year-ago figure of $1.44.

Cabot drilled 28 wells and completed 27 during the quarter.

Cabot Oil & Gas Corporation Price, Consensus and EPS Surprise

Cabota Oil & Gas Corporation Price, Consensus and EPS Surprise

Cabot Oil & Gas Corporation price-consensus-eps-surprise-chart | Cabot Oil & Gas Corporation Quote

Financial Position

Operating cash flows were $178.9 million (up 31.2% year over year) while capital expenditures totaled $151.3 million (down 17.1%). As of Jun 30, 2021, the company had cash and cash equivalents worth $158.1 million and a total debt of $946.3 million with debt-to-capitalization of 29.2%.

In the quarter under review, Cabot entered into a definitive agreement with Cimarex Energy Co. to merge in an all-stock deal. Per the terms of the deal, which is unanimously approved by both companies' board members, Cimarex shareholders will receive 4.0146 Cabot common stock for each Cimarex common stock they hold.

The Cabot-Cimarex merger will combine two leading industry operators, and world-class gas and oil facilities to form a diversified energy giant, thus creating an opportunity for more free cash flow throughout the market cycle and higher returns for investors.

Guidance

For the third quarter of 2021, Cabot projects its net production outlook in the range of 2,275-2,325 million cubic feet equivalent a day (Mmcfe).

For 2021, this Houston-based company reiterates its production guidance of 2,350 Mmcfe per day from an expected capital program of $530-$540 million. 

Zacks Rank & Other Key Picks

Cabot currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.


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