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Cabot (COG) Beats on Earnings, Revenue Estimates in Q1

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Domestic energy explorer Cabot Oil & Gas Corp. reported first quarter earnings per share – adjusted for special items – of 19 cents, surpassing the Zacks Consensus Estimate of 16 cents. Further, it compares favorably with the year-ago quarter’s adjusted loss of 15 cents.

Better results were driven by improvement in the commodity pricing environment that led to higher realized natural gas prices. Reduced expenses and increased revenues also led to improved results.

Houston, TX-based Cabot’s quarterly revenues improved 83.6% year over year to $316.5 million and was above the Zacks Consensus Estimate of $472 million.

 

Volume Analysis

Cabot’s overall production during the quarter totaled 170.1 billion cubic feet equivalent (Bcfe) – 96.2% gas – up 6% from the prior-year quarter volume of 160.3 Bcfe. Natural gas output was 163.8 Bcf, while crude oil production came in at 921 thousand barrels (MBbl) and natural gas liquids came at 123.5 thousand barrels (MBbl).

Realized Prices

The average realized natural gas price improved 77% from the year-ago quarter to $2.64 per thousand cubic feet, while average crude/condensate price realization rose 14% to $46.73 per barrel. Meanwhile, natural gas liquids fetched $20.71 per barrel, an increase of 187% compared to the first quarter of 2016.

Costs & Expenses

Total operating expenses were 4% lower than the first quarter of 2016, rising to $756.2 million. In particular general and administrative expenses were down 10% to $15.4 million. Further, Cabot’s depreciation, depletion and amortization expenses were down by 16.5% from the year-ago period to $135.1 million.

Drilling Statistics, Capital Expenditure & Balance Sheet

Cabot drilled 21 net wells and completed 24 during the quarter. Operating cash flows were $269.3 million for the quarter as against $67.1 million in the prior-year quarter. Capital expenditures totaled $208.4 million (up 126%). As of Dec 31, 2016, the company had $1,520.9 million in long-term debt with a debt-to-capitalization ratio of 36%.

Share Performance: Shares rallied 3.3% year to date, while the Zacks categorized Oil & Gas - U.S. Exploration & Production industry lost 15.14% over the same period.

Cabot Oil & Gas Corporation Price, Consensus and EPS Surprise

Zacks Rank & Key Picks

Cabot is independent oil and gas exploration company with producing properties mainly in the continental U.S. Cabot focuses on high-impact natural gas-focused drilling in the Marcellus Shale and supplements it with Eagle Ford-based liquids program in Texas. The company currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the broader industry include Penn Virginia Corp. , Bellatrix Exploration Ltd and Cenovus Energy Inc. (CVE - Free Report) . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn Virginia posted a positive average surprise of 36.67% in the last four quarters.

Bellatrix posted a positive average surprise of 58.54% in the last four quarters.

Cenovus posted a positive average surprise of 74.89% in the last four quarters.

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