Cabot Oil & Gas Corp. built its reputation as a U.S. natural gas producer. But under the leadership of its new chairman, president and chief executive officer Dan Dinges, the Houston independent may expand its operations into Canada in the next two years. "We have placed intelligence in Canada," Dinges told reporters in Houston. He conceded that Cabot is well aware of the "train wrecks" that can happen to a U.S. company in Canada if it is not aware of the differences in the business environment there. But Dinges thinks the deep gas plays in Canada can help propel Cabot's growth in 2004 and beyond. In the meantime, Cabot is maintaining its tight focus on the U.S. Gulf Coast, the Rocky Mountains, the Midcontinent and Appalachia. Dinges, who was elected to his position on May 2, aims to continue the company's trend toward a larger project inventory and a lower ratio of debt and preferred stock to total capital. In 1995, Cabot's debt-to-capital ratio was 86%. It had no prospect inventory and was focused on development drilling in Appalachia. Its drilling investment was $19 million. But by 2001, Cabot's debt ratio was 53%, the drilling investment was $144 million-focused on the Gulf Coast-and there were 80 prospects in its inventory. From 1995 to 2001, Cabot's production rose to 81 billion cu. ft. of gas equivalent (Bcfe). Reserves leapt to 1.15 trillion cu. ft. of gas equivalent (Tcfe). And the company's enterprise value rose to $1.12 billion. Going forward, Dinges aims to boost Cabot's reserves to 2 Tcfe and lower its debt-to-capital ratio to about 40%. He aims to position the company to be able to take advantage of acquisition opportunities in a down market, and will continuously buy seismic and acreage to boost the company's exploration prospects.
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