HOUSTON, Feb. 4, 2020 /PRNewswire/ -- Cabot Oil &
Gas Corporation (NYSE: COG) ("Cabot" or the "Company") today
provided an operational update for the fourth quarter of 2019 and
announced updated 2020 guidance. Additionally, the Company provided
an update on its share repurchase program.
Fourth Quarter 2019 Operational Update
Cabot expects production for the fourth quarter of 2019 to be
approximately 2,457 million cubic feet equivalent (Mmcfe) per day,
exceeding the high-end of the Company's guidance range for the
quarter. Natural gas price realizations, including the impact of
derivatives, are expected to be $2.15
per thousand cubic feet (Mcf) in the fourth quarter of 2019.
Excluding the impact of derivatives, natural gas price realizations
for the quarter are expected to be $2.05 per Mcf, representing a $0.45 discount to NYMEX settlement prices.
Additionally, Cabot expects to incur between $160 and $170
million of capital expenditures during the fourth quarter of
2019.
Updated 2020 Guidance
Given the continued weakness in natural gas prices throughout
the winter heating season and the corresponding degradation in the
NYMEX futures curve for 2020, Cabot has elected to adopt its
previously disclosed maintenance capital plan as the Company's
official budget for 2020. This plan is expected to deliver an
average net production rate of approximately 2.4 billion cubic feet
(Bcf) per day for the year from a capital program of $575 million. This plan assumes a moderate amount
of curtailments throughout the year based on an expectation of
normal pipeline maintenance, higher line pressures, and weaker spot
market prices. At a $2.25 average
NYMEX price, this program is expected to deliver between
$275 and $300
million of free cash flow and generate a return on capital
employed between 11 and 12 percent. "Our decision to reduce capital
spending by approximately 27 percent year-over-year highlights our
continued commitment to disciplined capital allocation. We believe
that by substantially reducing our drilling and completion activity
in 2020, we are taking the necessary steps to adapt to the current
uncertainty in the natural gas markets and we are prepared to
maintain these reduced activity levels as long as this lower price
environment persists. While we still expect to generate positive
free cash flow, cover our dividend commitments, deliver corporate
returns that exceed our cost of capital, and maintain a strong
balance sheet in the current price environment, we are by no means
immune to the significant decline in natural gas prices we have
experienced since May of last year. We are encouraged by the
reduction in horizontal rig counts across the Marcellus, Utica and
Haynesville—which are collectively down 39 percent since their
recent peaks in the second quarter of 2019—and are hopeful that
market forces will continue to move natural gas supply and demand
toward a more sustainable balance; however, we will continue to
evaluate the potential for additional capital reductions if prices
erode further," stated Dan O.
Dinges, Chairman, President and Chief Executive Officer.
Share Repurchase Program Update
During the fourth quarter of 2019, Cabot repurchased 10 million
shares at a weighted-average share price of $17.22, representing an additional 5 million
shares repurchased subsequent to the Company's previous update on
November 18, 2019. Since reactivating
the share repurchase program in the second quarter of 2017, Cabot
has reduced its shares outstanding by over 14 percent to
approximately 398 million shares. The Company currently has 11
million remaining shares authorized under its share repurchase
program (or approximately three percent of its current shares
outstanding).
Fourth Quarter and Year-End 2019 Earnings Release and
Conference Call
Cabot will host its fourth quarter and year-end 2019 earnings
conference call on Friday, February 21,
2020 at 9:30 a.m. Eastern
Time. The Company plans to issue its financial and
operating results on Thursday, February 20,
2020 after the market closes. To access the live audio
webcast, please visit the Investor Relations section of the
Company's website at www.cabotog.com. A replay of the call will
also be available on the Company's website.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent
natural gas producer with its entire resource base located in the
continental United States. For
additional information, visit the Company's website at
www.cabotog.com.
This press release includes forward‐looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The statements regarding future financial and operating
performance and results, returns to shareholders, strategic
pursuits and goals, market prices, future hedging and risk
management activities, and other statements that are not historical
facts contained in this report are forward-looking statements. The
words "expect", "project", "estimate", "believe", "anticipate",
"intend", "budget", "plan", "forecast", "outlook", "predict",
"may", "should", "could", "will" and similar expressions are also
intended to identify forward-looking statements. Such statements
involve risks and uncertainties, including, but not limited to,
market factors, market prices (including geographic basis
differentials) of natural gas and crude oil, results of future
drilling and marketing activity, future production and costs,
pipeline projects, legislative and regulatory initiatives,
electronic, cyber or physical security breaches and other factors
detailed herein and in our other Securities and Exchange Commission
(SEC) filings. See "Risk Factors" in Item 1A of the Form 10-K and
subsequent public filings for additional information about these
risks and uncertainties. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those
indicated. Any forward-looking statement speaks only as of
the date on which such statement is made, and the Company does not
undertake any obligation to correct or update any forward-looking
statement, whether as the result of new information, future events
or otherwise, except as required by applicable law.
FOR MORE INFORMATION CONTACT
Matt Kerin (281) 589-4642
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SOURCE Cabot Oil & Gas Corporation