Cabot Oil & Gas Details 2014 Capex Budget, Year-end 2013 Financial Results

Cabot Oil & Gas Corp. (NYSE: COG) detailed its 2014 capex budget, and also detailed its year-end 2013 financial update, on Feb. 21.

The current year’s capex budget will be reduced to the range of $1.3-$1.4 billion, down from the $1.375-$1.475 billion range, due to an effort to hold the Marcellus rig count at six rigs for the year, the company said.

Regarding 2014 production guidance, it remains at 519-598 billion cubic feet equivalent (Bcfe), on 30%-50% production growth at the midpoint of 2013’s production guidance, the company said. This year, 1.2 billion cubic feet per day (Bcf/d) of natural gas will be hedged at a weighted average floor of $4.11 per thousand cubic feet (Mcf), the company said. Cabot has added hedges to cover 2,000 barrels a day of oil for the year, at $97 per barrel, the company added.

Regarding year-end 2013 financial results, there was “record production growth,” according to Dan O. Dinges, chairman, president and CEO. This growth, through drilling and production, resulted in “a three-year compounded annual production growth rate of 47%,” he said.

Cash flow at year-end 2013 was $1.025 billion, up from year-end 2012’s $652 million, the company said. Higher equivalent production, partly offset by lower natural gas and oil prices, as well as higher operating costs, drove this increase, the company said.

Net income was $279.8 million, up from 2012’s $131.7 million, the company said, noting that the amounts were at 67 cents and 31 cents per share, respectively.

In commodities, natural gas prices at the end of 2013 were down 3% from the end of 2012, at $3.56/Mcf when hedged, the company said. Oil prices for 2013 were $101.13 per barrel, down 1% from 2012 when hedged, the company added.

In A&D, Cabot received roughly $324 million of gross proceeds from previously announced, noncore asset Midcontinent and Permian sales, the company said. Proceeds from these sales, along with cash flow, funded the company’s $1.195 billion 2013 capex budget, as well as its $165 million in share repurchases, the company added.

By Dec. 31, 2013, Cabot’s net adjusted debt was $1,147 million, at 33.8%, the company said, noting this percentage was higher than Dec. 31, 2012’s 33.2%. The year-end 2013 debt had $460 million outstanding under credit facility, the company added.